2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Hangzhou GreatStar Industrial Co., Ltd.
2022 Annual Report
2023-013
April 2023
1
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
2022 Annual Report
Section I Important Notes, Contents and Definitions
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 in this annual report, and that there are no false records, misleading
statements, or material omissions, and assume individual and joint legal responsibilities.
Qiu Jianping, the person in charge of the Company, and Ni Shuyi, the chief accountant and
the head of accounting department, declare that they guarantee the truthfulness, accuracy,
and completeness of the financial information in this annual report.
All the Directors have attended the Board Meeting at which this report was deliberated.
This annual report involves forward-looking statements such as future plans, which do not
constitute a material commitment of the Company to investors. Investors and related
parties shall maintain adequate risk awareness and understand the differences among plans,
forecasts and commitments.
This report details the potential risks that the Company will face in the future in “Section
III Management Discussion and Analysis, (XI) Prospects for the Company’s Future
Development: Potential Risks”. Investors shall be aware of the investment risks.
The profit distribution plan deliberated and approved by the Company at the Board
Meeting is as follows: Based on the amount of CNY 1,194,478,182.00, the Company will
distribute a cash dividend of CNY 1.66 (tax included) for every 10 shares to all the
shareholders and issue 0 bonus shares (tax included), without carrying out conversion of
capital reserve into share capital.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Contents
Section I Important Notes, Contents and Definitions ........................................................................................... 3
Section II Company Profile and Key Financial Results ....................................................................................... 7
Section III Management Discussion and Analysis ...............................................................................................11
Section IV Corporate Governance ....................................................................................................................... 50
Section V Environmental and Social Responsibility ........................................................................................... 72
Section VI Important Matters .............................................................................................................................. 74
Section VII Changes in Shares and Information about Shareholders ............................................................ 103
Section VIII Preferred Shares .............................................................................................................................113
Section IX Information about Bond ....................................................................................................................114
Section X Financial Statements ...........................................................................................................................115
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Documents Available for Reference
I. Financial statements signed and sealed by the person in charge of the Company, the chief
accountant and the head of accounting department.
II. Original audit reports signed and sealed by the accounting firm and certified public accountant.
III. Original copies of all the Company’s documents and announcements publicly disclosed in
newspapers and periodicals designated by China Securities Regulatory Commission (CSRC)
during the reporting period.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Definitions
Item refers to Definition
From January 1, 2022 to December 31,
Reporting period refers to
2022
Company, the Company, the Public
refers to Hangzhou GreatStar Industrial Co., Ltd.
Company and GreatStar
Hangzhou GreatStar Sheffield Trading
Sheffield refers to
Co., Ltd.
Guozi refers to Zhejiang Guozi Robotics Co., Ltd.
Arrow refers to Arrow Fastener Co., LLC
Changzhou Huada Kejie Opto-Electro
Huada Kejie refers to
Instrument Co., Ltd
Ole-Systems refers to Hangzhou Ole-Systems Co., Ltd.
NDHB refers to Ningbo Donghai Bank Co., Ltd.
PT refers to PRIM'TOOLS LIMITED
GreatStar Group refers to GreatStar Holding Group Co., Ltd.
Lista refers to Lista Holding AG
Prime-Line refers to Prime-Line Products, LLC
Lianhe refers to Hangzhou Lianhe Machinery Co., Ltd.
Haining GreatStar Intelligent Equipment
Haining GreatStar refers to
Co., Ltd.
Hangzhou Zhongce Haichao Enterprise
Zhongce Haichao refers to
Management Co., Ltd.
Hangcha Group refers to Hangcha Group Co., Ltd.
Hangzhou Haichao Enterprise
Hangzhou Haichao refers to Management Partnership (Limited
Partnership)
GreatStar Europe refers to GreatStar Europe AG
JFB AG and BeA refers to Joh. Friedrich Behrens AG
Geelong refers to Geelong Holdings Limited
GDR refers to Global Depository Receipts
CSRC refers to China Securities Regulatory Commission
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Section II Company Profile and Key Financial Results
I. Company information
Stock abbreviation GreatStar Stock code 002444
Stock exchange on which
Shenzhen Stock Exchange
shares are listed
Name of the Company in
Hangzhou GreatStar Industrial Co., Ltd.
Chinese
Chinese abbreviation GreatStar
Name of the Company in
Hangzhou GreatStar Industrial Co., Ltd.
English (if any)
English abbreviation (if any) GreatStar
Legal representative of the
Qiu Jianping
Company
Registered address 35 Jiuhuan Road, Shangcheng District, Hangzhou City
Postal code of the registered
310019
address
Historical changes of the
Changed from 35 Jiuhuan Road, Jianggan District, Hangzhou City to 35 Jiuhuan Road,
registered address of the
Shangcheng District, Hangzhou City
Company
Office address 35 Jiuhuan Road, Shangcheng District, Hangzhou City
Postal code of the office
310019
address
Website of the Company https://www.greatstartools.com/
E-mail zq@greatstartools.com
II. Contact persons and contact methods
Secretary to the Board of Directors Representative of Securities Affairs
Name Zhou Siyuan Lu Haidong
35 Jiuhuan Road, Shangcheng District, 35 Jiuhuan Road, Shangcheng District,
Contact address
Hangzhou City Hangzhou City
Telephone 0571-81601076 0571-81601076
Fax 0571-81601088 0571-81601088
E-mail zq@greatstartools.com zq@greatstartools.com
III. Information disclosure and the place where the report is available
Stock exchange website where companies disclose annual
http://www.szse.cn/
reports
Website of the stock exchange on which the annual report of Securities Times, Securities Daily, cninfo
the Company is published (http://www.cninfo.com.cn)
Place where the Company’s annual report is available Office for the Board of Directors of the Company
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
IV. Change of registration
Unified social credit code 91330000731506099D
Change of the Company's main business since its listing (if
None
any)
Change of controlling shareholders (if any) None
V. Other relevant information
Accounting firms engaged by the Company
Pan-China Certified Public Accountants LLP (Special General
Name
Partnership)
T2 Office Building, Runao Business Center, Intersection of
Office address Boao Road and Pinglan Road, Yingfeng Street, Xiaoshan
District, Hangzhou City, Zhejiang Province
Name of signing accountant Fei Fanghua and Li Xi
Sponsors engaged by the Company to perform continuous supervision duties during the reporting period
□ Applicable N/A
Financial advisors engaged by the Company to perform continuous supervision duties during the reporting period
□ Applicable N/A
VI. Principal accounting data and financial indicators
Whether the Company needs to retroactively adjust or restate the accounting data of prior years
□Yes No
2022 2021 YOY increase/decrease 2020
Operating proceeds
12,610,189,590.33 10,919,683,344.37 15.48% 8,544,440,154.30
(CNY)
Net profits attributable
to shareholders of the
1,419,559,507.10 1,270,003,396.40 11.78% 1,350,132,516.91
Public Company
(CNY)
Net profits attributable
to shareholders of the
Public Company after
1,454,643,772.32 1,073,557,965.88 35.50% 1,233,758,395.96
deducting non-
recurring gains and
losses (CNY)
Net cash flows from
operating activities 1,631,836,642.39 18,632,169.67 8,658.17% 771,150,625.24
(CNY)
Basic earnings per
1.24 1.13 9.73% 1.27
share (CNY/share)
Diluted earnings per
1.24 1.13 9.73% 1.25
share (CNY/share)
Weighted average
12.31% 12.70% -0.39% 16.67%
return on equity (ROE)
As at the end of 2022 As at the end of 2021 Change As at the end of 2020
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Total assets (CNY) 18,579,554,796.77 17,307,154,886.67 7.35% 13,677,779,045.68
Net assets attributable
to shareholders of the
13,397,947,543.83 10,598,896,746.70 26.41% 8,826,190,578.28
Public Company
(CNY)
The lower of the Company's net profits before and after deducting non-recurring gains and losses is negative in the last three fiscal
years, and the audit report of the latest fiscal year shows that there is uncertainty in the Company's sustainable operation ability
□Yes No
The lower of the net profits before and after deducting non-recurring gains and losses is negative
□Yes No
VII. Differences in accounting data by domestic and overseas accounting standards
1. Differences in the net profits and net assets disclosed in the financial reports prepared under the
international accounting standards and Chinese accounting standards
□ Applicable N/A
2. Difference in the net profits and net assets disclosed in the financial reports prepared under the
overseas accounting standards and Chinese accounting standards
□ Applicable N/A
VIII. Quarterly principal financial indicators
Unit: CNY
Q1 Q2 Q3 Q4
Operating proceeds 2,875,588,357.88 3,358,609,094.36 3,600,569,974.82 2,775,422,163.27
Net profits attributable
to shareholders of the 182,880,976.76 458,662,642.78 621,565,034.54 156,450,853.02
Public Company
Net profits attributable
to shareholders of the
Public Company after
192,168,174.10 432,121,803.36 610,004,863.57 220,348,931.29
deducting non-
recurring gains and
losses
Net cash flows from
42,355,099.74 269,267,134.98 133,185,327.92 1,187,029,079.75
operating activities
Whether there is any material difference between the above financial indicators or their totals and those disclosed by the Company
in the quarterly and semi-annual reports
□Yes No
IX. Items and amounts of non-recurring gains and losses
Applicable □ N/A
Unit: CNY
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Item Amount in 2022 Amount in 2021 Amount in 2020 Remarks
Gains or losses on disposal of non-current
assets (including write-off of provision -24,332,379.79 -4,813,678.28 -688,830.06
for assets impairment)
Government grants accounted for, in the
profit or loss for the current period
(except for the government grants closely
related to the business of the Company 46,471,430.13 43,080,948.70 30,007,164.80
and continuously given at a fixed amount
or quantity in accordance with certain
standards)
Gains in fair value of identifiable net
assets attributable to invested units at the
time of acquisition over investment costs 82,984,773.90 53,341,459.79
for acquiring subsidiaries, associates and
joint ventures by the enterprise
Gains or losses on assets entrusted for
2,368,356.03 1,808,120.10 1,792,735.16
investment or management
Gains or losses on changes in fair value
of held-for-trading financial assets, held-
for-trading financial liabilities and
investment income from disposal of held-
for-trading financial assets, held-for- -66,784,931.44 95,687,869.64 62,235,238.75
trading financial liabilities and available-
for-sale financial assets, excluding those
arising from hedging business related to
operating activities
Other non-operational income and
expenditure in addition to the items listed -12,290,983.36 -127,210.71 -632,799.21
above
Other items of gains and losses that fall
into the category of non-recurring gains 12,733,584.83 502,892.56 267,035.13
and losses
Less: Income tax impact -9,422,034.54 17,156,521.94 25,137,742.09
Non-controlling interests impact
2,671,376.16 5,521,763.45 4,810,141.32
(after tax)
Total -35,084,265.22 196,445,430.52 116,374,120.95 --
Details of other items of gains and losses that fall into the category of non-recurring gains and losses:
□ Applicable N/A
The Company has no other items of gains and losses that fall into the category of non-recurring gains and losses.
Remarks on the situation that non-recurring profit and loss items listed in the Explanatory Announcement No. 1 of Information
Disclosure of Companies Offering Securities to the Public – Non-recurring Profit and Loss are defined as recurring profit and loss
items
□ Applicable N/A
There is no situation that non-recurring profit and loss items listed in the Explanatory Announcement No. 1 of Information
Disclosure of Companies Offering Securities to the Public – Non-recurring Profit and Loss are defined as recurring profit and loss
items.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Section III Management Discussion and Analysis
I. Situation of the industry in which the Company is operating during the reporting period
The Company is operating in the tools & storage industry. Its main products include hand tools & storage as
well as power tools & laser measurement & power stations, which are primarily used for family housing
maintenance, construction engineering, vehicle maintenance, surveying and mapping, home energy
management, etc. Family housing and related maintenance are the most important sector where tool products
are most widely applied.
In most parts of North America and Europe, due to the extensive use of freestanding buildings and the large
floor area per capita, the maintenance of residential houses is costly and time-consuming. On account of the
relatively high labor cost, residents in Europe and North America are more willing to carry out the maintenance
work of their houses and attached buildings by themselves, thus giving rise to the famous European and
American DIY culture. Meanwhile, European and American families have a large number of cars, and the daily
maintenance of cars, covering the inspection and replacement of parts, is an important part of the European and
American DIY culture. There are heavy professional and DIY-related demands for various tools which are one
of the necessities for maintenance in North America and Europe. Therefore, North America and Europe have
become the most important markets for the global tool industry, with the highest proportion of potential
customers.
With the longest history, the tool industry can be said to have evolved with the birth and development of human
beings. In recent centuries, with the ever-increasing global population, the tool industry has been scaling up at a
stable growth rate due to the rigid demand for and short replacement cycle of tool products. Besides, it still
showed a sustained positive growth trend after a short-lived fluctuation caused by the financial crisis in 2008.
According to the reports released by Frost & Sullivan, the global tool market grew steadily from 2018 to 2022,
with the market size increasing from USD 82 billion to USD 103 billion, representing a compound annual
growth rate of 5.9%. From 2020 to 2021, the global tool market experienced temporary fluctuations in raw
material prices and supply chains. Due to the lockdown of professional maintenance shops, customers,
especially local residents in North America and Europe, were in greater and greater demand for professional
tools and warehouses used in daily household maintenance. The problem that global tool manufacturing
capabilities were lagging in 2020 got solved in 2021, which contributed to strong growth in the size of the
global tool market in 2021. Due to customers’ overspending on tool products in 2021, the market demand for
such products slowed down significantly in 2022. The surge in tool shipments led to inventory accumulation in
2021, so local tool dealers paid more attention to inventory optimization. The growth rate of the global tool
market decreased temporarily from 10.8% in 2021 to 3.2% in 2022. In Europe and America, the main markets
for tool products, the actual expenditures on tools and hardware fell by 11.7% without regard to inflation, with
the lowest year-on-year growth rate over the past 30 years.
In the future, with the recovery of real estate and manufacturing industries as well as the economic growth, the
demand for tools and warehousing products is expected to increase continuously, and the size of the global tool
market is expected to reach USD 131 billion by 2027 at a CAGR of 4.7% compared to 2023.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
II. Main business carried out by the Company during the reporting period
During the reporting period, the Company continued to develop its main business in the global consumer
market of tools. The hand tools & storage business expanded steadily, and important breakthroughs were made
in channels and new categories for the power tools business. Moreover, non-tool consumer goods became the
highlight of the Company's performance. At present, the Company's main products include hand tools & storage
as well as power tools & laser measurement & power stations, which are primarily used for family housing
maintenance, construction engineering, vehicle maintenance, surveying and mapping, home energy
management, etc.
During the reporting period, the Company continued to maintain its dominant position in the hand tools &
storage industry, promoting its sales through product innovation and accelerating category expansion to further
gain market share. The power tools business continued to grow at a high rate, becoming an important growth
point for the Company’s performance. A breakthrough was achieved in the home energy storage business,
which proved the Company's ability to develop and expand new categories. Furthermore, the Company obtained
important orders for consumer goods other than tools, which is expected to become a new growth point in the
future. The cross-border e-commerce business continued to grow rapidly, and the Company's overall market
share increased steadily. During the reporting period, the Company achieved operating proceeds of CNY
12,610,189,600.00, up 15.48% year-on-year. In 2022, the Company's net profits attributable to shareholders of
the Public Company were CNY 1,419,559,500.00, and the net profits attributable to shareholders of the Public
Company after deducting non-recurring gains and losses were CNY 1,454,643,800.00, achieving a year-on-year
growth rate of 35.50%.
III. Analysis of core competitiveness
1. Innovation advantage
Innovation has always been the soul of the Company's development. The Company has an experienced R&D
team for professional tool products and non-tool consumer goods, which is always committed to development
and innovation of new products and upholds the concept that details determine success or failure to improve
product functionality and added value, as well as to ensure the Company's long-term core competitiveness.
During the reporting period, the Company invested CNY 319 million in R&D, designing 2,105 new products.
The numbers of new patents applied for and patents granted both exceeded 300. Besides, the Company was
approved as a high-tech enterprise, innovatively developing automatic lifting and shifting vice series, 12V and
20V lithium battery products, 360-degree surround measuring and light-emitting torches with handles and many
other products which received good market feedback. The project of "Intelligent Robot System for Bulk
Handling and Its Application" declared by Ole-Systems, one of the Company’s subsidiaries, jointly with Jinling
Institute of Technology in Jiangsu won the Jiangsu Provincial Science and Technology Achievement Award.
During the reporting period, the Company continued to carry out large-scale innovation of power tools,
especially lithium battery power tools. With a large number of highly cost-effective innovative products, the
Company obtained orders of 12V power tools from a large retail company in the United States. Meanwhile, the
Company successfully achieved a breakthrough in home energy storage products, relying on its own
professional product team. In the face of constant changes in the global tool industry, the Company timely
responded to and seized market opportunities with its innovation advantage, continuing to gain market share
and maintaining long-term and stable development.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
2. Channel advantage
The Company has its own sales channels, highly trusted by customers. This is the guarantee for GreatStar’s
continuous development. The diversified product mix and sustainable innovation ability of the Company can
not only meet the one-stop purchasing needs of channel customers to the greatest extent, but also constantly
save their purchasing and management costs and continuously improve channel customer loyalty. The Company
has become one of the largest suppliers of tools and storage for many large supermarket chains such as HOME
DEPOT, WALMART and LOWES in the United States, Kingfisher in Europe and CTC in Canada, and has
been expanding new product categories. In a global context, there are currently more than 20,000 large
supermarket chains such as those for hardware, building materials and auto parts, selling a wide range of the
Company’s products. These channels effectively ensure the rapid development of various innovative products
of the Company. Meanwhile, the Company makes continuous efforts in the new sales channel of cross-border e-
commerce. The direct sales model based on cross-border e-commerce has become the most important sales
channel for GreatStar, in addition to 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 brands,
but also gives better play to the Company’s advantage of rapid innovation. Relying on the above channel
advantage, the Company can constantly develop and expand new product categories with good market
prospects. Historically, it has successfully achieved breakthroughs in such major categories as laser
measurement, storage, power tools and home energy storage.
3. Supply chain advantage
After decades of development, the Company has established a global supply chain management system with
China at its core, and has built good cooperative relationships with thousands of suppliers worldwide, ensuring
that the Company will not be restricted by its own production capacity and can quickly respond to market
demands and timely complete the delivery of various large orders. Relying on China's global supply chain
system with the most complete basic categories and the growing global supplier network, the Company can
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
realize global purchasing and global manufacturing, enabling the Company to maintain a stable supply capacity
in the context of short global shipping cycles and laying a foundation for it to continuously increase its market
share. Meanwhile, given the high efficiency arising from China's ultra-wide and ultra-fine supply chain network
as well as the strong resilience, the Company can also achieve centralized purchasing in China and global
distribution, greatly reducing the comprehensive purchasing cost and improving the market competitiveness of
the Company's products. At present, the Company has 20 manufacturing bases worldwide, which can fully meet
various needs and cope with the complicated external environment.
4. Brand advantage
The main products of the Company are durable consumer goods for households and industrial products for
professionals. Brand is the most effective guarantee for the Company to provide consumers with products and
services for a long time, so the Company is always committed to the creation and development of its own
brands. During the reporting period, the Company made great efforts to develop its own brands, enhance the
brand influence and strengthen the brand advantage. Its own brands, especially e-commerce brands, continued
to grow. The sales revenues of WORKPRO, DURATECH, SWISSTECH, Prexiso and other brands increased
significantly year-on-year. Besides, the sales revenues of the Company’s own brands accounted for more than
40% for the first time. The brand advantage not only further enhances the international competitiveness of the
Company's products, but also effectively improves the Company's gross profit margin and business stability,
providing a guarantee for the long-term healthy development of the Company.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
5. International advantage
During the reporting period, domestic and international economic patterns were complicated. As a company
with international development planning, GreatStar made full use of manufacturing capacities and sales markets
in different regions worldwide, actively coping with risks and seeking opportunities.
During the reporting period, the Company positively promoted the full production of manufacturing bases in
Southeast Asia and constantly optimized the division and planning of manufacturing work on a global scale,
fully reflecting the advantage of the Company's international layout and flexibility of production capacity. At
present, the Company’s factories in Southeast Asia have all been put into use, and the layout of production
capacity has preliminarily taken shape in Southeast Asia. Meanwhile, in the face of poor staff mobility on an
international scale during the reporting period, the Company actively made use of the advantages of local teams
in Europe and America, continuing to provide customers with a well-established nearby service system and
guaranteeing the matching between orders and after-sales services. The international advantage effectively
ensures that the Company can not only give play to the superiority of China's manufacturing clusters, but also
make use of the strengths in manufacturing costs in Southeast Asia and local channel services in the European
and American markets when facing other international competitors, so as to build stronger core competitiveness.
The Company is accelerating to become a global resource allocation company integrating local services in
Europe and America, manufacturing based on industrial chains in Asia and R&D management in China.
IV. Analysis of main business
1. Overview
During the reporting period, the total demand of the global tool market slowed down and the overall overseas
product inventory was high, leading to a sharp decline in the gross sales. Due to inflation, the growth rate of the
industry scale still increased, and online channels as well as some best-selling products provided good growth
opportunities for the Company. The Company seized the opportunities and effectively guaranteed the
unimpeded supply chains and order delivery with its innovation, supply chain integration and channel
expansion abilities, achieving substantial growth in some new businesses and products. Online channels
continued to grow at a high rate, and the Company’s overall market share increased steadily. Meanwhile, drastic
fluctuations in the CNY exchange rate and favorable changes in global logistics costs had a positive impact on
the Company's profitability. During the reporting period, the Company achieved operating proceeds of CNY
12,610,189,600.00, up 15.48% year-on-year. In 2022, the Company's net profits attributable to shareholders of
the Public Company were CNY 1,419,559,500.00, and the net profits attributable to shareholders of the Public
Company after deducting non-recurring gains and losses were CNY 1,454,643,800.00, achieving a year-on-year
growth rate of 35.50%. The performance of each business segment is as follows:
1. Hand tools & storage
During the reporting period, the influence of the Company’s own brands gradually improved, and the orders of
some brands increased more than expected. The sales of the Company’s own brands accounted for more than 40%
for the first time. Besides, in the face of market changes, the product strategy was adjusted timely, and
substantial growth was realized in some products, especially outdoor tools. The Company reinforced the
development of markets in the Belt and Road countries and achieved some results in channel construction. The
cross-border e-commerce business maintained a high growth rate while categories and product lines were
constantly improved. The self-built stations of the Company’s own brands were put into operation for the first
time, and the channel expansion continued to deepen with improvements in online live-streaming channels as
well as a continuous increase in the brand popularity and fan base. Combined with the development direction of
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
the Company, the export department took the initiative to analyze and tap the potential of customers. While
ensuring the steady growth of main tool products, it actively sought opportunities for non-tool consumer goods
and signed important purchase agreements for non-tool household goods.
The storage business achieved rapid growth, with new categories and products launched at an accelerated pace.
The production bases in Thailand were fully put into operation, laying a foundation for further increasing the
market share. Zhongshan Geelong took the initiative to adjust its own business strategy and achieved growth
more than expected all year round. Lista, located in Europe, seized the opportunities of the market demand
recovery in Europe and the rising import demand to maintain steady growth.
2. Power tools & laser measurement & power stations
During the reporting period, the Company obtained the purchase order confirmation of power tools from a large
retail company for the first time after restarting the power tools business, reaching the ceiling for growth in the
power tool business. It proactively adjusted the product supply according to market demand and gave priority to
providing customers with heating equipment and home energy storage equipment, so as to meet consumers'
immediate needs, extend the Company's product lines, and achieve significant breakthroughs especially in the
home energy storage products. Moreover, the Company continued to innovate in power tool product lines for
online channels, setting up an important channel for the power tool business.
For the laser measurement business, the focus is on new products and channel construction. Based on the
readjusted brand positioning and business direction, the awareness of the Company’s own brands and products
was improved, and the new series of products launched obtained good market feedback. Besides, the Company
opened up marketing channels based on short videos and expanded the online sales business scale. The laser
radar business maintained rapid growth year on year, with increasing product application scenarios and
channels, and the Company completed the iterative design of some products according to the changing needs of
the industry and customers.
2. Revenue and costs
(1) Composition of operating proceeds
Unit: CNY
2022 2021
YOY increase or
Percentage in Percentage in decrease
Amount Amount
operating proceeds operating proceeds
Total 12,610,189,590.33 100% 10,919,683,344.37 100% 15.48%
Business segment
Tools and
12,545,286,576.78 99.49% 10,849,925,564.41 99.36% 15.63%
hardware
Other operating
64,903,013.55 0.51% 69,757,779.96 0.64% -6.96%
proceeds
Product
Hand tools &
10,004,744,537.61 79.34% 8,911,550,156.07 81.61% 12.27%
storage
Power tools &
laser measurement 2,540,542,039.17 20.15% 1,909,689,643.58 17.49% 33.03%
& power stations
Personal protective
0.00 0.00% 28,685,764.76 0.26% -100.00%
equipment
Other operating
64,903,013.55 0.51% 69,757,779.96 0.64% -6.96%
proceeds
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Region
America 7,892,263,869.75 62.59% 7,521,994,025.83 68.88% 4.92%
Europe 3,296,852,123.29 26.14% 2,399,120,860.68 21.97% 37.42%
Others 634,667,980.89 5.03% 510,223,523.81 4.67% 24.39%
Domestic (China) 721,502,602.85 5.72% 418,587,154.09 3.83% 72.37%
Other operating
64,903,013.55 0.51% 69,757,779.96 0.64% -6.96%
proceeds
Sales model
OBM 5,087,869,546.67 40.35% 3,836,999,428.09 35.14% 32.60%
ODM 7,457,417,030.11 59.14% 7,012,926,136.32 64.22% 6.34%
Other operating
64,903,013.55 0.51% 69,757,779.96 0.64% -6.96%
proceeds
(2) Business segments, products, regions and sales models that account for more than 10% of the Company's operating
proceeds or operating profit
Applicable □ N/A
Unit: CNY
YOY increase YOY increase
YOY increase
Operating Gross profit or decrease of or decrease of
Operating costs or decrease of
proceeds margin operating gross profit
operating costs
proceeds margin
Business segment
Tools and 12,545,286,576 9,244,404,166.
26.31% 15.63% 13.46% 1.40%
hardware .78 19
Product
Hand tools & 10,004,744,537 7,332,189,779.
26.71% 12.27% 9.84% 1.62%
storage .61 90
Power tools &
laser 2,540,542,039. 1,912,214,386.
24.73% 33.03% 32.10% 0.53%
measurement & 17 29
power stations
Region
7,892,263,869. 5,744,738,104.
America 27.21% 4.75% 1.52% 2.32%
75 68
3,296,852,123. 2,362,455,830.
Europe 28.34% 37.42% 34.95% 1.31%
29 12
Sales model
5,087,869,546. 3,831,561,078.
OBM 24.69% 32.60% 33.54% -0.53%
67 82
7,457,417,030. 5,412,843,087.
ODM 27.42% 6.34% 2.47% 2.74%
11 37
In case of any adjustment in the statistical standards for the Company’s main business data during the reporting period, the
Company’s main business data in the prior year based on the statistical standards adjusted at the end of the reporting period shall
prevail
□ Applicable N/A
(3) Whether the Company's revenue from physical product sales is greater than its service revenue
Yes □ No
Business segment Item Unit 2022 2021 YOY increase or
17
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
decrease
Sales volume PCS 513,462,176 444,440,557 15.53%
Production
Tools and PCS 523,831,646 497,037,108 5.39%
quantity
hardware
Inventory level PCS 123,945,263 113,575,793 9.13%
Reasons for any year-on-year increase or decrease of relevant data by more than 30%
□ Applicable N/A
(4) Performance of major sales contracts and purchase contracts signed by the Company as of the reporting period
□ Applicable N/A
(5) Composition of operating costs
Business segment and product
Unit: CNY
2022 2021
Business YOY increase
Item Percentage in Percentage in
segment Amount Amount or decrease
operating costs operating costs
Tools and 9,244,404,166. 8,147,389,910.
/ 99.76% 99.65% 13.46%
hardware 19 45
Other operating
/ 22,518,138.56 0.24% 28,733,758.05 0.35% -21.63%
costs
Unit: CNY
2022 2021
YOY increase
Product Item Percentage in Percentage in
Amount Amount or decrease
operating costs operating costs
Hand tools & 7,332,189,779. 6,675,528,068.
/ 79.12% 81.65% 9.84%
storage 90 48
Power tools &
laser 1,912,214,386. 1,447,529,390.
/ 20.63% 17.70% 32.10%
measurement & 29 12
power stations
Personal
protective / 0.00 0.00% 24,332,451.85 0.30% -100.00%
equipment
Other operating
/ 22,518,138.56 0.24% 28,733,758.05 0.35% -21.63%
costs
Notes
None
(6) Whether there was any change in the consolidation scope during the reporting period
Yes □ No
For details, see the notes in VIII, Section X.
18
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
(7) Major changes or adjustments in the Company's business segments, products or services during the reporting period
□ Applicable N/A
(8) Major customers and suppliers
Major customers
Total sales revenue from the top five customers (CNY) 6,056,269,323.22
Proportion of the total sales revenue from the top five
48.03%
customers in the total annual sales revenue
Proportion of the sales revenue from the affiliated parties
0.00%
thereof in the total annual sales revenue
Information of the Company's top five customers
Proportion in the total annual
No. Name Sales revenue (CNY)
sales revenue
1 Customer 1 3,057,264,391.78 24.24%
2 Customer 2 1,578,675,477.75 12.52%
3 Customer 3 862,130,369.56 6.84%
4 Customer 4 346,410,830.38 2.75%
5 Customer 5 211,788,253.75 1.68%
Total -- 6,056,269,323.22 48.03%
Other information on major customers
□ Applicable N/A
Major suppliers
Total acquisition cost paid to the top five suppliers (CNY) 519,819,828.17
Proportion of the total acquisition cost paid to the top five
5.61%
suppliers in the total annual acquisition cost
Proportion of the acquisition cost paid to the affiliated parties
0.00%
thereof in the total annual acquisition cost
Information of the Company's top five suppliers
Proportion in the total annual
No. Name Acquisition cost (CNY)
acquisition cost
1 Supplier 1 163,104,790.91 1.76%
2 Supplier 2 96,702,638.71 1.04%
3 Supplier 3 95,133,654.01 1.03%
4 Supplier 4 89,906,569.94 0.97%
5 Supplier 5 74,972,174.60 0.81%
Total -- 519,819,828.17 5.61%
Other information on major suppliers
□ Applicable N/A
3. Expenses
Unit: CNY
19
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
YOY increase or Reasons for any
2022 2021
decrease material change
Mainly attributable to
the increase in
personnel
Sales expenses 757,228,439.80 593,003,103.68 27.69% compensation,
advertising and
promotion expenses
and office expenses
Mainly attributable to
Administrative the increase in
760,961,439.86 686,120,731.06 10.91%
expenses personnel
compensation
Mainly attributable to
the increase in
exchange earnings and
Financial expenses -110,855,174.76 64,801,716.03 -271.07%
interest income arising
from the depreciation
of CNY
R&D expenses 319,444,535.16 309,763,366.15 3.13%
4. R&D expenses
Applicable □ N/A
Expected impact on the
Item Purpose Progress Expected goal Company's future
development
R&D of two-axis laser To
To increase product To achieve good
level which can be enhance the
functionality or improve Completed economic benefits for
directly traced to laser Company’s market
performance the Company
wavelength competitiveness
To
R&D of laser instrument To increase product To achieve good
enhance the
which projects cross laser functionality or improve Completed economic benefits for
Company’s market
rays on four sides performance the Company
competitiveness
To
R&D of laser positioning To increase product To achieve good
enhance the
level for continuous functionality or improve Completed economic benefits for
Company’s market
measuring and positioning performance the Company
competitiveness
To
R&D of integrated laser To increase product To achieve good
enhance the
base assembly system functionality or improve Completed economic benefits for
Company’s market
technology for laser level performance the Company
competitiveness
To
To increase product To achieve good
R&D of multi-mode enhance the
functionality or improve Completed economic benefits for
control laser level Company’s market
performance the Company
competitiveness
R&D of cross line laser To
To increase product To achieve good
which can realize the enhance the
functionality or improve Completed economic benefits for
function of optical path Company’s market
performance the Company
alignment competitiveness
R&D of laser level for To
To increase product To achieve good
fixed-point horizontal enhance the
functionality or improve Completed economic benefits for
marking at arbitrary Company’s market
performance the Company
distance competitiveness
20
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
R&D and application of
To increase product
new multifunction tool To develop new products Completed To cut down on labor
lines
car
Development and
application of a high- To improve functionality or To ensure product To increase product
Completed
strength PC alloy in performance stability lines
toolbox
R&D and application of
high-performance To improve functionality or To ensure product To increase product
Completed
antibacterial dust-proof performance stability lines
coating materials
R&D of high-efficiency
wireless charging
technology in the To improve functionality or To ensure product To increase product
Uncompleted
application scenarios of performance stability lines
power tools and cabinet
products
R&D and application of To improve functionality or To ensure product To increase product
Completed
intelligent storage system performance stability lines
Development and
application of leak-proof To increase product
To develop new products Uncompleted
RFID technology in lines
cabinet products
Development and
application of multi- To improve functionality or To ensure product To increase product
Completed
station intelligent toolbox performance stability lines
production lines
Development and
application of multi-
To improve functionality or To ensure product To increase product
dimensional intelligent Completed
performance stability lines
bending machine in
toolbox products
Application of nano-level
To improve functionality or To ensure product To increase product
spraying technology in Completed
performance stability lines
toolbox
R&D and application of
To improve functionality or To ensure product To increase product
intelligent combination Uncompleted
performance stability lines
lock in combined cabinets
R&D of cable cutters with To make it easier to cut
To save the labor by To increase product
aluminum handles and cables than traditional Completed
20% lines
replaceable blades products
To resolve the problem of To enable cutting
R&D of copper pipe To increase product
cutting copper pipes in a Completed copper pipes in a
cutter for ratchets lines
narrow space narrow space
To facilitate driving hand- To make it available
R&D of dredging device To increase product
held and switchable power Completed for both hand and
with a steerable grip lines
tools power tools
R&D of multi-angle
To cut plates at different To cut materials at To increase product
functional scissors with Completed
angles several fixed angles lines
two-color handles
R&D of portable To develop small and
To develop portable and To increase product
multifunction straight Completed portable cutters with
multifunction cutters lines
plate cutter wrenching function
R&D of multi- To resolve the limitations To realize the rotation
To increase product
specification ratchet on the application of Completed of ratchet wrenches at
lines
wrench with large torque traditional ratchet wrenches multiple angles
R&D of fine crystal To increase product Completed To achieve To increase the
21
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
tandem rolling and functionality or improve breakthroughs in Company’s profits
hardening technology and performance existing products and
its application in grid processes
products
Application of fully To achieve
To increase product
automatic integrated breakthroughs in To increase the
functionality or improve Completed
drawer molding process existing products and Company’s profits
performance
in toolbox processes
R&D of power lithium
To achieve
battery packs for BMS To increase product
breakthroughs in To increase the
integrated control system functionality or improve Completed
existing products and Company’s profits
and their application in performance
processes
power tools
Research and application
of key technologies of
multi-mode 3D laser To achieve
To increase product
imaging for large-space breakthroughs in To increase the
functionality or improve Completed
and high-definition existing products and Company’s profits
performance
natural scenes – R&D of a processes
laser ranging module with
imaging function
To achieve
Application of PU To increase product
breakthroughs in To increase the
foaming materials in functionality or improve Completed
existing products and Company’s profits
cutting tools performance
processes
Application of 304 To achieve
To increase product
antibacterial materials breakthroughs in To increase the
functionality or improve Completed
containing copper in existing products and Company’s profits
performance
cutting tools processes
Development of anti-
To achieve
hydrogen embrittlement To increase product
breakthroughs in To increase the
high-strength vacuum functionality or improve Completed
existing products and Company’s profits
chrome-plated performance
processes
screwdriver
Feasibility research on To achieve
To increase product
high-power COB breakthroughs in To increase the
functionality or improve Completed
integrated light source existing products and Company’s profits
performance
module processes
To achieve
Application of wireless To increase product
breakthroughs in To increase the
and PD fast chargers in functionality or improve Completed
existing products and Company’s profits
POWER-BANK performance
processes
Research and application
of key technologies of
multi-mode 3D laser
imaging for large-space To achieve
To increase product
and high-definition breakthroughs in To increase the
functionality or improve Completed
natural scenes – R&D of existing products and Company’s profits
performance
high-definition laser processes
ranging products based on
12V lithium battery pack
platform
To achieve
R&D and application of To increase product
breakthroughs in To increase the
high-performance functionality or improve Completed
existing products and Company’s profits
polypropylene materials performance
processes
R&D of fluorinated To increase product Completed To achieve To increase the
22
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
coatings and their functionality or improve breakthroughs in Company’s profits
application in the tool performance existing products and
industry processes
To achieve
To increase product
R&D of nail guns with breakthroughs in To increase the
functionality or improve Completed
quick-change clips existing products and Company’s profits
performance
processes
To achieve
R&D of screw bits based To increase product
breakthroughs in To increase the
on "polymer magnetic functionality or improve Completed
existing products and Company’s profits
composite materials" performance
processes
Application of high wear-
To achieve
resistant super- To increase product
breakthroughs in To increase the
hydrophobic composite functionality or improve Completed
existing products and Company’s profits
coating in lighting performance
processes
products
To achieve
R&D of energy recovery To increase product
breakthroughs in To increase the
for high-speed functionality or improve Completed
existing products and Company’s profits
screwdrivers performance
processes
Application of adaptive To achieve
To increase product
control processing breakthroughs in To increase the
functionality or improve Completed
technology in hand tool existing products and Company’s profits
performance
products processes
Application of residual To achieve
To increase product
heat quenching process of breakthroughs in To increase the
functionality or improve Completed
hot rolled alloy steel in existing products and Company’s profits
performance
tool products processes
Design of precision,
To achieve
complex and long-life To increase product
breakthroughs in To increase the
injection mold based on functionality or improve Completed
existing products and Company’s profits
the control volume performance
processes
method
Intelligent storage SAAS To meet the needs of
To increase labor To increase the
cloud management Completed multi-mode business
productivity Company’s profits
platform expansion
Lean supply chain
To meet the needs of
business system software To increase labor To increase the
Completed multi-mode business
– lean supply chain productivity Company’s profits
expansion
system for domestic trade
R&D and industrialization To achieve
To increase product Duration:
of high-resolution 3D breakthroughs in To increase the
functionality or improve 2022.07-
vision sensors with a wide existing products and Company’s profits
performance 2023.12
imaging range processes
R&D of high-power and
To develop new
high-precision 3D laser To increase the added value
Completed customers and increase To enrich product lines
building instrument of products
revenue
platform
R&D of panoramic real-
To develop new
time indoor and outdoor To increase the added value To increase product
Completed customers and increase
removable space laser of products lines
revenue
measuring instrument
R&D on integration of To improve production
To reduce labor and To innovate in products
long-distance laser efficiency and develop
In progress improve construction and fill the gaps in the
ranging technology and products in a new mode of
efficiency market
cross line laser operation
R&D of large-angle and To develop a high-precision In progress To develop a platform To innovate in
23
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
high-precision attitude and high-value innovative technology and new platforms and fill the
control sensors for laser technology customers gaps in the market
measuring instrument
R&D of high-precision To innovate in
Application of full- To develop a platform
panoramic 3D laser platforms and increase
waveform measurement In progress technology for laser
imaging system based on the added value of
technology products
single-photon array products
To mass-produce new
R&D of folding trolley To develop new products Completed To increase income
products
R&D of multifunction To mass-produce new
To develop new products Completed To increase income
combined gas furnace products
Demountable service cart To mass-produce new
To develop new products Uncompleted To increase income
for barbecue products
R&D of environmental
To mass-produce new
waste sorting and To develop new products Completed To increase income
products
recycling bins
To mass-produce new
R&D of storage bins To develop new products Uncompleted To increase income
products
To mass-produce new
Folding miter saw bracket To develop new products Uncompleted To increase income
products
Practical application of
general-purpose dual
To raise the technical To increase the output To increase the
power supply system with Completed
requirements of products value Company’s profits
dry lithium battery in
lamps and lanterns
Technical solution of
To raise the technical To increase the output To increase the
LED applied in flexible Completed
requirements of products value Company’s profits
light strips
Application of wireless
bluetooth interconnection To raise the technical To increase the output To increase the
Completed
technology in lamps and requirements of products value Company’s profits
lanterns
R&D and application of
laser sensor module for
To improve the To increase the
intelligent equipment – 01 Completed To increase sales
technological process Company’s profits
development of special-
purpose laser sensor chip
R&D and application of
laser sensor module for
To improve the To increase the
intelligent equipment – 02 Completed To increase sales
technological process Company’s profits
development of opto-
mechatronics module
R&D and application of
laser sensor module for
intelligent equipment – 03 To improve the To increase the
Completed To increase sales
development of technological process Company’s profits
algorithms matching
application scenarios
R&D and application of
laser sensor module for
To improve the To increase the
intelligent equipment – 04 Completed To increase sales
technological process Company’s profits
development of intelligent
laser sensor
R&D and application of
laser sensor module for To improve the To increase the
Completed To increase sales
intelligent equipment – 05 technological process Company’s profits
development of new
24
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
intelligent measuring
tools
RD11 – safety-certified To achieve
To develop new products
single-channel scanning breakthroughs in To increase the
and improve production Completed
and sensing laser existing products and Company’s profits
efficiency
detection device processes
RD12 – miniaturized mid-
To achieve
and long-range single- To develop new products
breakthroughs in To increase the
channel multi-angle and improve production Completed
existing products and Company’s profits
scanning and sensing efficiency
processes
laser detection device
To achieve
RD13 – phase-type long- To develop new products
breakthroughs in To increase the
range single-point laser and improve production Completed
existing products and Company’s profits
sensor detection device efficiency
processes
RD14 – multi-step laser- To achieve
To develop new products
receiving single-channel breakthroughs in To increase the
and improve production Completed
scanning and sensing existing products and Company’s profits
efficiency
laser detection device processes
RD15 – large-sized multi-
To achieve
channel multi-reflection To develop new products
2022.1.1- breakthroughs in To increase the
light path scanning and and improve production
2023.12.31 existing products and Company’s profits
sensing laser detection efficiency
processes
device
RD16 – heavy multi- To achieve
To develop new products
channel 3D space 2022.1.1- breakthroughs in To increase the
and improve production
scanning and sensing 2023.12.31 existing products and Company’s profits
efficiency
laser detection device processes
RD17 – lightweight ultra-
To achieve
small close-range multi- To develop new products
2022.1.1- breakthroughs in To increase the
angle scanning and and improve production
2023.12.31 existing products and Company’s profits
sensing laser detection efficiency
processes
device
R&D of six-claw energy- To independently develop
To develop new To increase revenue
efficient quick ratchet new product prototypes or Completed
products from product sales
wrenches sample products
R&D of aerospace To make general To increase product
To increase revenue
double-ended ring improvements for existing Completed functionality or
from product sales
spanner products and processes improve performance
To make general To increase product
R&D of toothed socket To increase revenue
improvements for existing Completed functionality or
ratchet wrench from product sales
products and processes improve performance
To make general To increase product
R&D of triple-purpose To increase revenue
improvements for existing Completed functionality or
wrench from product sales
products and processes improve performance
To independently develop
R&D of new water pipe To develop new To increase revenue
new technologies, processes Completed
wrench products from product sales
or construction methods
To independently develop
R&D of eight-in-one dog- To develop new To increase revenue
new technologies, processes Uncompleted
bone-shaped wrench products from product sales
or construction methods
To independently develop
To improve product To improve product
Ratchet wrench tester new technologies, processes Completed
quality quality
or construction methods
To independently develop
Assembly machine for To increase labor To increase labor
new technologies, processes Completed
ratchet retainer ring productivity productivity
or construction methods
25
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
R&D of numerically- To independently develop
To increase labor To increase labor
controlled pressing new technologies, processes Completed
productivity productivity
process or construction methods
Improvement and
To enhance the market To increase production To increase product
application of reverse nail Completed
competitiveness of products and output value lines
pulling process
Hammer handle spacing
lengthening and To enhance the market To increase production To increase product
Completed
appearance upgrading competitiveness of products and output value lines
process and its application
One-time forging and
To enhance the market To increase production To increase product
handle upgrading process Completed
competitiveness of products and output value lines
and its application
Torsion and tension
reinforcement process of To enhance the market To increase production To increase product
Completed
brick trowel handle and competitiveness of products and output value lines
its application
Development of
automatic loading and
To improve work efficiency
unloading process for Completed To reduce labor To save the cost
and reduce labor costs
grinding teeth of saws
based on robot technology
Research on single-edge
sharpening process of To shorten the time and To improve product
pipe cutter based on five- Completed improve the product quality and win more
axis CNC machining accuracy customers
technology
R&D of multi-station
To shorten the time and To shorten the
toothing process of hand Completed
improve the efficiency production time
cutter
R&D of NC precision
To improve product
single-sided grinding To improve the product
Completed quality and win more
process of plastering accuracy
customers
trowel
Development of semi-
To reduce labor and To save the cost and
automatic riveting
Completed improve product improve product
technology for pipe cutter
accuracy quality
holder
To develop new
Research on file cutting To increase the product
Completed products and sales
tools functionality
growth points
Research on pipe wrench
with opening size To develop new
To increase the product
adjustable quickly Completed products and sales
functionality
according to the outer growth points
pipe diameter
Development and
To improve product
industrialization of DLC To develop new
In progress quality and add new
film coating strengthening coating technologies
products
tool
To improve the
Development of 3-axis
machining precision,
technology upgrade to 4- To shorten the
In progress simplify the process
axis technology for production time
and improve the
machining center
production efficiency
R&D of saw tooth To realize automatic
In progress To save the cost
dividing machine machine feeding and
26
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
reduce the labor
To realize fully
Research on automatic To save production
automatic processing
polishing technology of In progress costs and improve
and reduce the
plastering tools product quality
dependency on labor
R&D of automatic
feeding technology of
To improve work efficiency
wire stripper for In progress To reduce labor To save the cost
and reduce labor costs
manipulator polishing and
forging
Development of
automatic feeding To improve work efficiency
In progress To reduce labor To save the cost
technology for stamping and reduce labor costs
parts
R&D and industrialization
of high-resolution 3D R&D of 3D vision
In progress To add new products
vision sensors with a wide sensor
imaging range
Research on multi-station To improve production
To increase product
automatic welding efficiency and reduce labor Completed To cut down on labor
lines
process of shelf brackets costs
To increase the
application highlights
Research on high-peel- of corresponding
strength thermoplastic To improve production products, improve the
elastomer for nylon efficiency and reduce labor Completed To cut down on labor Company's technical
handle cladding of hand costs strength, promote other
tools and its application products and enhance
the Company’s overall
competitiveness
To increase the
application highlights
Technical research on of corresponding
production lines for high- To improve production products, improve the
efficiency stamping of efficiency and reduce labor Completed To cut down on labor Company's technical
stainless steel plates for costs strength, promote other
putty knives products and enhance
the Company’s overall
competitiveness
To increase the
application highlights
Research on forming
of corresponding
process of low-shrinkage
To improve production products, improve the
polypropylene composite
efficiency and reduce labor Completed To cut down on labor Company's technical
filled with calcium
costs strength, promote other
carbonate and plastic
products and enhance
parts
the Company’s overall
competitiveness
PLC-based manipulator- To improve the
To improve production
operated material taking adhesion strength of
efficiency and reduce labor Completed To cut down on labor
and feeding system for product cladding. To
costs
screwdriver bits decrease the scrap rate.
Multi-specification
To improve the
injection mould for To improve production
adhesion strength of
screwdriver bits based on efficiency and reduce labor Completed To cut down on labor
product cladding. To
rapid positioning costs
decrease the scrap rate.
technology
27
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Research on
To improve the
manufacturing process of To improve production
adhesion strength of
folding prefabricated efficiency and reduce labor Completed To cut down on labor
product cladding. To
plastic operating table for costs
decrease the scrap rate.
woodworking decoration
Fine blanking die sets of
To improve production
nitrogen spring type and To increase product
efficiency and reduce labor Completed To cut down on labor
fine blanking of impact lines
costs
parts
Research on multi-station To improve production
To increase product
automatic welding efficiency and reduce labor Completed To cut down on labor
lines
technology and equipment costs
Precision mold for rapid
To improve production
prototyping and extruding To increase product
efficiency and reduce labor Completed To cut down on labor
of aluminum alloy with lines
costs
uneven wall thickness
Design and development
of continuous precision To improve production
To increase product
punching process and efficiency and reduce labor Completed To cut down on labor
lines
mold for stepless quick- costs
clamp high-carbon steel
To realize various
To realize various functions,
Drive circuit with a hand- functions, make
make products portable, as To increase product
held power bank and Uncompleted products portable, as
well as save energy and lines
multiple LED functions well as save energy and
electricity
electricity
To realize various
To realize various functions,
R&D of LED lamps with functions, make
make products portable, as To increase product
portable bluetooth Completed products portable, as
well as save energy and lines
speakers well as save energy and
electricity
electricity
R&D of integrated
To improve production
continuous die forging To increase product
efficiency and reduce labor Completed To cut down on labor
technology for sheet lines
costs
metal parts
R&D of fully automatic
To increase labor To further promote
assembly technology for Completed To reduce labor
productivity automatic production
L-shaped angle square
R&D of automatic To increase product
To reduce labor and To further promote
assembly technology for functionality or improve Completed
ensure quality stability automatic production
angle square performance
Research on the engine To promote new
To expand product
guarantee technology for To develop new products Completed products and
lines
yacht consignment technologies
Development of key To increase product
To increase the output To expand product
technologies of functionality or improve Completed
value lines
multifunction laser level performance
Development of key To increase product
To increase the output To expand product
technologies of display functionality or improve Completed
value lines
stand for fishing rods performance
R&D of fully automatic
dispensing and assembly To increase labor To reduce labor and To further promote
Completed
technology of level productivity ensure quality stability automatic production
production line
Development of several Product design-
To increase the output To expand product
key technologies of file To develop new products drawing
value lines
cutting completed
28
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
To mass-produce new
R&D of folding trolley To develop new products Completed To increase income
products
R&D of multifunction To mass-produce new
To develop new products Completed To increase income
combined gas furnace products
Demountable service cart To mass-produce new
To develop new products Uncompleted To increase income
for barbecue products
R&D of environmental
To mass-produce new
waste sorting and To develop new products Completed To increase income
products
recycling bins
To mass-produce new
R&D of storage bins To develop new products Uncompleted To increase income
products
To mass-produce new
Folding miter saw bracket To develop new products Uncompleted To increase income
products
R&D of adjustable
To nearly double the torque To improve product To obtain stable market
wrenches with helical Trial production
of adjustable wrenches performance orders
teeth
R&D of SK-type plier To achieve quick shift and To improve product To obtain stable market
Trial production
tools increase the torque performance orders
R&D employees
2022 2021 Turnover
Number of R&D employees
1,099 978 12.37%
(person-time)
As (%) in the total number of
10.41% 9.07% 1.34%
the Company’s employees
Educational background structure of R&D employees
Undergraduate 408 361 13.02%
Master's degree 24 20 20.00%
Age structure of R&D employees
Under 30 178 141 26.24%
30-40 599 378 58.47%
R&D expenses
2022 2021 Turnover
R&D expenses (CNY) 319,444,535.16 309,763,366.15 3.13%
As (%) in the operating
2.53% 2.84% -0.31%
proceeds
Capitalized R&D expenses
0.00 0.00 0.00%
(CNY)
As (%) in the R&D expenses 0.00% 0.00% 0.00%
Reasons for the significant changes in R&D employees and their impacts
□ Applicable N/A
Reasons for the significant changes in the proportion of the total R&D expenses in the operating proceeds compared with prior
year
□ Applicable N/A
Reasons for and reasonable explanation of the significant changes in capitalized R&D expenses
□ Applicable N/A
29
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
5. Cash flows
Unit: CNY
Item 2022 2021 YOY increase or decrease
Sub-total of cash inflows
13,850,370,894.60 11,353,982,165.74 21.99%
from operating activities
Sub-total of cash outflows
12,218,534,252.21 11,335,349,996.07 7.79%
from operating activities
Net cash flows from operating
1,631,836,642.39 18,632,169.67 8,658.17%
activities
Sub-total of cash inflows
345,733,789.20 576,965,254.73 -40.08%
from investing activities
Sub-total of cash outflows
860,100,111.16 1,790,034,046.53 -51.95%
from investment activities
Net cash flows from
-514,366,321.96 -1,213,068,791.80 -57.60%
investment activities
Sub-total of cash inflows
4,690,798,053.76 4,415,766,206.58 6.23%
from financing activities
Sub-total of cash outflows
5,300,549,759.79 2,884,992,006.99 83.73%
from financing activities
Net cash flows from financing
-609,751,706.03 1,530,774,199.59 -139.83%
activities
Net increase in cash and cash
792,240,939.29 270,923,023.10 192.42%
equivalents
Main influencing factors of the significant year-on-year changes in relevant data
Applicable □ N/A
The net cash flows from operating activities increased by 8,658.17% year on year, mainly due to the substantial increase in cash
received from sales of goods and provision of services.
The net cash flows from investing activities increased by 57.60% year on year, mainly due to the decrease in the net cash paid by
subsidiaries and other business units in the current year compared to the prior year.
The net cash flows from financing activities decreased by -139.83% year-on-year, mainly due to the increase in cash payments for
debt service.
Reasons for the significant differences between the net cash flows from the Company's operating activities and the net profits for
the current year during the reporting period
□ Applicable N/A
V. Analysis of non-core business
□ Applicable N/A
30
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
VI. Analysis of assets and liabilities
1. Material changes in composition of assets
Unit: CNY
As at the end of 2022 As at the beginning of 2022
Change in Reasons for any
Percentage in Percentage in percentage material change
Amount Amount
total assets total assets
Monetary 4,863,206,182. 4,033,707,240.
26.18% 23.31% 2.87%
assets 40 16
Accounts 1,896,685,590. 1,798,265,505.
10.21% 10.39% -0.18%
receivable 11 53
2,812,572,525. 2,835,777,996.
Inventories 15.14% 16.39% -1.25%
68 84
Investment real
122,158,556.01 0.66% 127,058,966.69 0.73% -0.07%
estate property
Long-term
2,544,523,517. 2,353,942,699.
equity 13.70% 13.60% 0.10%
55 80
investment
1,518,902,232. 1,494,547,487.
Fixed assets 8.18% 8.64% -0.46%
96 29
Construction in
304,599,362.46 1.64% 113,750,851.49 0.66% 0.98%
progress
Right-to-use
417,129,361.41 2.25% 411,722,761.66 2.38% -0.13%
assets
Mainly
attributable to
the decrease in
Short-term 1,379,062,713. 1,806,901,201. loans caused by
7.42% 10.44% -3.02%
loans 11 39 the rise in
market interest
rate of USD
loans
Contractual
131,898,420.14 0.71% 91,235,951.19 0.53% 0.18%
liabilities
Long-term 1,015,445,732.
798,604,951.84 4.30% 5.87% -1.57%
loans 07
Lease liabilities 318,221,349.99 1.71% 289,196,511.02 1.67% 0.04%
Mainly
attributable to
the repayment
Other amounts
21,198,376.32 0.11% 676,502,987.21 3.91% -3.80% of funds
payable
borrowed from
affiliated
parties
The overseas assets account for a relatively high proportion
Applicable □ N/A
Control Proportion Whether
Reason for Operation measures to Profitabilit of overseas there is a
Item Size Location
formation mode ensure the y assets in material
safety of the impairment
31
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
assets Company’s risk
net assets
Financial
100% supervision
20,607.23
shares of Independen and
Share (Unit: CNY Switzerlan
Lista t commissio Profitable 1.51% No
acquisition 10,000) d
Holding accounting ned
AG external
audit
Financial
100% supervision
shares of 46,131.71( Independen and
Share
Arrow Unit: CNY USA t commissio Profitable 3.39% No
acquisition
Fasterner 10,000) accounting ned
Co., LLC external
audit
2. Assets and liabilities measured at fair value
Applicable □ N/A
Unit: CNY
Changes in
Provision
fair value Cumulative
for Purchase Sales
recognised changes in
Opening impairment amount in amount in Other Closing
Item in profit or fair value
balance in the the current the current changes balance
loss for the recognised
current period period
current in equity
period
period
Financial assets
1. Held-
for-trading
financial
assets 188,000,00 128,000,00 60,000,000.
0.00
(excluding 0.00 0.00 00
derivative
financial
assets)
2.
Derivative 4,330,070.0 5,900,034.2 5,162,396,7 2,374,061,4 10,230,104.
financial 0 4 51.13 58.24 24
assets
4.
Investment
16,550,000. 16,550,000.
s in other
00 00
equity
instruments
Sub-total of
20,880,070. 5,900,034.2 5,350,396,7 2,502,061,4 86,780,104.
financial 0.00 0.00 0.00
00 4 51.13 58.24 24
assets
20,880,070. 5,900,034.2 5,350,396,7 2,502,061,4 86,780,104.
Total 0.00 0.00 0.00
00 4 51.13 58.24 24
-
Financial 48,413,710.
978,031.91 47,435,678.
liabilities 29
38
32
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Other changes
N/A
Whether there is a significant change in the measurement attribute of the Company's main assets during the reporting period
□Yes No
3. Restricted assets rights as at the end of the reporting period
Book value as at the end of
Item the reporting period Reason for restriction
(Unit: CNY）
Guarantee deposits for future foreign
Monetary assets 33,448,671.74
exchange settlement
Monetary assets 20,893,800.00 Guarantee deposits for short-term loans
Monetary assets 6,616,370.00 Guarantee deposits for letters of credit
Monetary assets 7,384,067.19 Guarantee deposits for bank acceptance bills
Monetary assets 1,393,093.00 Customs guarantee deposits
Monetary assets 43,000.00 Guarantee deposits for ETC
Used as collateral for drawing bank
Fixed assets 27,776,638.39
acceptance bills
Fixed assets 10,003,152.72 Used as collateral for bank loans
Used as collateral for drawing bank
Intangible assets 2,046,633.50
acceptance bills
Intangible assets 1,385,386.53 Used as collateral for bank loans
100% shares of Arrow Fastener Co., LLC (Note) 481,723,419.57 Used as collateral for bank loans
Total 592,714,232.64
(Note): The 100% shares of Arrow Fastener Co., LLC are the book balance of net assets as at the end of the reporting period
VII. Analysis of investment situation
1. General situation
Applicable □ N/A
Investment in the reporting period Investment in the same period of prior
Change
(CNY) year (CNY)
1,529,848,856.93 1,123,031,335.02 36.22%
2. Significant equity investments acquired during the reporting period
Applicable □ N/A
Unit: CNY
33
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Profit
or
loss Whet
Progr
Am from her it Date Index
Sour ess as
Name ount Term Proje inves is of of
Main Invest Share ce Prod of the
of the of Part of cted tment invol discl discl
busine ment holdin of uct balan
invest inve ner inves inco s in ved osure osure
ss mode g ratio fund type ce
ee stme tment me the in a (if (if
s sheet
nt curre lawsu any) any)
date
nt it
perio
d
Agric
Hangz ultural
hou scienti
Long Anno
Great fic Self- Estab
698, -term - - Dece unce
Star resear Newly own lishe
610, 100.0 Long equit 2,317 2,317 mber ment
Garde ch and establi ed / d and No
000. 0% -term y ,343. ,343. 17, No.:
n experi shed fund comp
00 inves 88 88 2022 2022-
Tools mental s leted
tment 093
Co., develo
Ltd. pment
;
Batter
y
manuf
acturi
ng;
Hangz atomic
Long Anno
hou - Self- Estab
349, -term - - Septe unce
Great power Newly own lishe
305, 100.0 Long equit 1,158 1,158 mber ment
Star equip establi ed / d and No
000. 0% -term y ,671. ,671. 24, No.:
Energ ment shed fund comp
00 inves 94 94 2022 2022-
y Co., manuf s leted
tment 067
Ltd. acturi
ng
based
on
new
energy
Whole
sale
Zhong sales
shan of
Long
Jilong hardw Self- Estab
21,0 -term
Import are Newly own lishe 2,035 2,035
65,0 100.0 Long equit
and produ establi ed / d and ,695. ,695. No
00.0 0% -term y
Export cts; shed fund comp 77 77
0 inves
Trade import s leted
tment
Co., and
Ltd. export
of
goods
Zhejia House 10,0 Self- Long Estab - -
Newly
ng hold 00,0 100.0 own Long -term lishe 1,036 1,036
establi / No
Shiwa applia 00.0 0% ed -term equit d and ,552. ,552.
shed
nke nce 0 fund y comp 73 73
34
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Electri manuf s inves leted
c acturi tment
Applia ng
nce
Co.,
Ltd.
1,07 - -
8,98 2,476 2,476
Total -- -- -- -- -- -- -- -- -- -- --
0,00 ,872. ,872.
0.00 78 78
3. Significant non-equity investments ongoing during the reporting period
Applicable □ N/A
Unit: CNY
Reaso
ns for
Actual
failure
invest Accum
to
ment ulated
Amou compl
amoun incom
Wheth nt ete the
t e Date Index
er it is Relate investe Project planne
Invest accum Source realize of of
a fixed d d in Progre ed d
Item ment ulated of d as at disclos disclos
asset industr this ss incom schedu
mode as at funds the end ure (if ure (if
invest y reporti e le and
the end of the any) any)
ment ng realize
of the reporti
period the
reporti ng
project
ng period
ed
period
incom
e
Annua
l
output
of
550,00 Laser 12,024 39,960
Self- Raised 40.00
0 sets Yes measur ,283.0 ,000.0 0.00 0.00 /
built funds %
of ement 2 0
laser
sensor
modul
es
Phase-
I
factory
constr
uction
of
68,380 92,216
GreatS Self- Hand Raised 92.00
Yes ,874.8 ,998.5 0.00 0.00 /
tar built tools funds %
1 9
Intellig
ent
Equip
ment
Co.,
Ltd. in
35
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Vietna
m
Intellig
ent
factory
with
an Raised
annual 19,200 &
Self- Power 3,749, 23.00
output Yes ,447.5 Self- 0.00 0.00 /
built tools 200.00 %
of 1 6 owned
million funds
sets of
new
power
tools
Constr
uction
of
toolbo Raised
x 11,233 116,49 and
Self- Toolbo 97.00
produc Yes ,233.8 3,835. self- 0.00 0.00 /
built x %
tion 7 50 owned
bases funds
in
Thaila
nd
110,83 252,42
Total -- -- -- 8,839. 0,034. -- -- 0.00 0.00 -- -- --
26 09
4. Investments in financial assets
(1) Securities investment
□ Applicable N/A
There is no securities investment in the reporting period.
(2) Investment in derivatives
Applicable □ N/A
1) Investment in derivatives for the purpose of hedging during the reporting period
Applicable □ N/A
Unit: CNY 10,000
Proportion of
Changes in
the closing
fair value Cumulative
Purchase amount in
Initial recognised in changes in Sales amount
amount in Closing the
Type investment profit or loss fair value in the current
the current amount Company’s
amount for the recognised in period
period net assets as
current equity
at the end of
period
the reporting
36
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
period
Future
28,062.46 -4,139.28 0 516,239.68 237,406.15 306,895.99 22.53%
exchange
Total 28,062.46 -4,139.28 0 516,239.68 237,406.15 306,895.99 22.53%
Reasons for
the
significant
changes in
the
accounting
policies and
specific
accounting
principles of Unchanged
hedging
business
during the
reporting
period
compared to
the same
period of
prior year
Realized
gains and
The gains or losses from investment in derivatives recognised during the reporting period are CNY -
losses during
25,565,069.36.
the reporting
period
During the reporting period, the Company adhered to the principle of exchange rate risk-neutral and signed
forward exchange contracts as hedging tools according to the amount of foreign exchange based on the sales
Description forecasts as well as the target cost of exchange rate, with the delivery time and the agreed delivery amount
of the effect matching the predicted amount cashed, so as to avoid the risks caused by exchange rate fluctuations. During this
of hedging report period, the changes of hedging tools in cash flows could offset the changes of the hedged items in cash
flows caused by the risk of exchange rate fluctuations, which met the hedging effectiveness requirements and
achieved the hedging target.
Source of
funds for
Self-owned funds
investment in
derivatives
Position risk 1. Market risk: The changes in the international and domestic economic conditions may cause large fluctuations
analysis and in the exchange rate, so forward exchange transactions will face certain market risks. The Company's forward
control exchange transactions are to lock in the settlement or sale price of foreign exchange and reduce the impact of
measures of exchange rate fluctuations on the Company's profits. The Company will closely track exchange rate changes and
derivatives determine the plan to sign forward exchange contracts based on the target exchange rate for transactions, the
during the research and judgment of foreign exchange rate trends, as well as the Company's forecasts of foreign exchange
reporting payment and ability to withstand price changes caused by exchange rate fluctuations, while implementing
period dynamic management on transactions to ensure a reasonable profit level.
(including 2. Liquidity risk: All foreign exchange transactions of the Company are based on reasonable estimates of the
but not Company's future imports and exports to meet the needs of transaction authenticity.
limited to 3. Bank default risk: If the cooperative bank closes down or any other defaults occur during the term of the
market risk, contract, the Company will not be able to deliver the original foreign exchange contract at the contract price,
liquidity risk, resulting in the risk of uncertain returns. Therefore, the banks that the Company chooses to carry out foreign
credit risk, exchange transactions with include the five major state-owned banks, Chinese-funded banks such as China
operational Merchants Bank, and foreign-funded banks such as HSBC and Standard Chartered Bank. These banks have
risk, legal strong strength and stable operations, and the risk of their closedown that may bring losses to the Company is
risk, etc.) very low.
37
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
4. Operational risk: The Company's forward exchange transactions may cause related risks due to improper
operation of handling personnel. The Company has formulated relevant management systems and specified the
operating procedures and responsible persons, which is conducive to preventing and controlling risks.
5. Legal risk: Legal disputes may arise when the Company conducts forward exchange transactions and signs
ambiguous contracts or agreements with banks on relevant transactions. The Company will legally strengthen the
review of relevant contracts and choose banks with good credit to carry out such transactions, so as to control
risks.
For the
changes in
the market
prices of the
invested
derivatives or
the fair
values of
products
during the
reporting
period, the The gains or losses from changes in fair value recognised during the reporting period are CNY -41,392,762.63.
analysis of The fair values of derivatives are measured with the notice of valuation given by banks and securities companies
the fair as a reasonable estimate of the fair value.
values of
derivatives
shall disclose
the specific
method used
and the
setting of
relevant
assumptions
and
parameters
Whether it is
involved in a
N/A
lawsuit (if
applicable)
Date of
announceme
nt of the
Board
Meeting on April 12, 2022
approval of
investment in
derivatives
(if any)
Date of
announceme
nt of the
Shareholders'
Meeting on May 10, 2022
approval of
investment in
derivatives
(if any)
Independent The Company carries out foreign-exchange derivative transactions, which meets the needs of the Company's
directors’ actual operation and can reduce the impact of exchange rate fluctuations on the Company's profits to a certain
38
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
special extent. The Company has established the Management System of Foreign-exchange Derivative Transactions and
opinions on effective risk control measures in accordance with relevant laws and regulations. We agree upon the Company's
the proposal to conduct foreign-exchange derivative transactions in 2022.
Company's
investment in
derivatives
and risk
control
2) Investment in derivatives for speculation purposes during the reporting period
□ Applicable N/A
There is no investment in derivatives for speculation purposes during the reporting period.
5. Use of raised funds
Applicable □ N/A
(1) Overall use of raised funds
Applicable □ N/A
Unit: CNY 10,000
Total Proporti
Total Amount
funds Total on of the
funds Total Use and of funds
repurpos accumul total
Year of Mode of Total used accumul Total whereab that have
ed ated accumul
fund- fund- funds during ated funds outs of been idle
during funds ated
raising raising raised the funds unused funds for more
the repurpos funds
current used unused than two
reporting ed repurpos
period years
period ed
Deposite
Issue of d in a
converti 20,275.4 74,006.3 13,494.4 25,991.9 special
2020 97,260 0 13.87% 0
ble 2 4 2 4 fund
bonds raising
account
20,275.4 74,006.3 13,494.4 25,991.9
Total -- 97,260 0 13.87% -- 0
2 4 2 4
Overall use of raised funds
According to the Reply on Approval of Public Issue of Convertible Bonds for Hangzhou GreatStar Industrial Co., Ltd. (ZJXK
(2019) No. 2656) from CSRC, the Company is authorized to issue convertible bonds not exceeding CNY 972,600,000.00. CITIC
Construction Securities Co., Ltd., the lead underwriter, shall give priority to the original shareholders of the Company for
placement, and the remaining part after the original shareholders' priority placing (including the part waived by the original
shareholders) shall be issued to public investors via the Internet. The part whose subscription amount is less than CNY
972,600,000.00 shall be exclusively sold by the lead underwriter. The Company actually issued 9,726,000 convertible bonds, each
with a face value of CNY 100.00, raising a total of CNY 972,600,000.00. After deducting the underwriting and sponsor fees of
CNY 5,188,679.25 (excluding tax), the raised funds reached CNY 967,411,320.75. These funds have been remitted by CITIC
Construction Securities Co., Ltd., the lead underwriter, to the Company's supervision account for raised funds on July 2, 2020. In
addition, after deducting the underwriting and sponsor fees, audit and capital verification fees, attorney fees, credit rating fees,
information disclosure fees for this issue, lottery fees, bond issuance registration fees and other external expenses directly related
to the issue of convertible bonds, with a total of CNY 2,289,867.92, the Company raised a net of CNY 965,121,452.83. The above
raised funds have been verified by Pan-China Certified Public Accountants LLP (Special General Partnership) with the
Verification Report issued (TJY (2020) No. 244).
39
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
As of December 31, 2022, the Company has invested a total of CNY 740,063,400.00 in the raised funds. The net income from
interest on funds is CNY 34,052,300.00, and the gains or losses from exchange of financial expenses are CNY 809,000.00. As of
December 31, 2022, the account balance of the raised funds is CNY 259,919,400.00.
(2) Commitments of raised funds
Applicable □ N/A
Unit: CNY 10,000
Cumulat Whether
Progress
Committ Whether Total ive Date of there is
as at the Benefits Whether
ed there is committ Total Amount investme achievin any
end of realized the
investme any ed investme invested nts as at g the significa
the during expected
nts and change investme nts in this the end conditio nt
reporting this benefits
over- (includin nts of adjusted reporting of the ns for change
period reporting are
raised g partial raised (1) period reporting intended in the
(3) = period achieved
funds changes) funds period use feasibilit
(2)/(1)
(2) y
Committed investments
Laser
measurin
g
instrume
nt and
smart Decemb
16,962.5
home No 20,426 20,426 8,368.39 83.04% er 31, N/A No
9
applianc 2023
e
producti
on base
construct
ion
Toolbox
producti
13,281.5 13,281.5
on base Yes 26,776 0 100.00% 2,311.3 N/A Yes
8 8
construct
ion
Intellige
nt
warehou
Decemb
sing and 22,542.1 22,542.1
No 246.87 7,717.06 34.23% er 31, N/A No
logistics 5 5
2023
base
construct
ion
R&D
Decemb
center
No 7,768 7,768 3,538.33 3,550.69 45.71% er 31, N/A No
construct
2023
ion
Capital
increase
of
13,494.4 13,494.4 July 2, 27,026.6
subsidiar No 8,121.83 100.00% N/A No
2 2 2021 9
ies and
acquisiti
on of the
40
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
100%
shares of
Geelong
Holding
s
Limited
held by
Geelong
Orchid
Holding
s Ltd
Sub-total
of
committ 77,512.1 77,512.1 20,275.4 55,006.3 29,337.9
-- -- -- -- --
ed 5 5 2 4 9
investme
nts
Over-raised funds
N/A
Addition
al
working -- 19,000 19,000 19,000 100.00% -- -- -- --
capital
(if any)
Sub-total
of over-
-- 19,000 19,000 19,000 -- -- -- --
raised
funds
96,512.1 96,512.1 20,275.4 74,006.3 29,337.9
Total -- -- -- -- --
5 5 2 4 9
Failures I. The reasons why the Company’s investments of raised funds did not reach the planned schedule are as follows:
to 1. The subjects of implementation for laser measuring instrument and smart home appliance production base
complete construction are the Company’s wholly-owned sub-subsidiary, Haining GreatStar Intelligent Equipment Co., Ltd., as
the well as wholly-owned subsidiaries, GreatStar Intelligent Equipment Co., Ltd. in Vietnam and Hangzhou GreatStar
planned Tools Co., Ltd. The implementation sites are located in Lianhang Economic and Technological Development Zone,
schedule Haining City, Zhejiang Province, Nanjianqiao Industrial Zone, Shuiyuan County, Haiphong City, Vietnam, and HZGC
and Lot 26 (2020), Jianggan District, Hangzhou City. The project was originally scheduled to be completed on December
realize 31, 2022. During the implementation of the project, the Company was restricted by the shortage of global shipping
the capacity in 2021 and the first half of 2022, and some raw materials and equipment could not be timely delivered to
projecte Vietnam. The COVID-19 pandemic affected the construction progress of the project to a certain extent, resulting in
d the delay of the completion time of the project. In order to better implement this project and ensure the maximization
income of project benefits, the 29th Meeting of the 5th Session of Board of Directors and the 1st Extraordinary General
and their Meeting of Shareholders of the Company in 2023 approved the extension of the project implementation period to
respectiv December 31, 2023.
e 2. The subject of implementation for intelligent warehousing and logistics base construction is the Company’s wholly-
reasons owned sub-subsidiary, Haining GreatStar Intelligent Equipment Co., Ltd. The implementation site is located in
(includin Lianhang Economic and Technological Development Zone, Haining City, Zhejiang Province. The project was
g the originally scheduled to be completed on December 31, 2022. During the implementation of this project, the
reasons Company's revenue scale and order size achieved rapid growth. The existing warehousing capacity cannot meet the
for N/A growing order demand, so the Company needs to increase the number of warehousing and logistics bases and improve
as to the overall warehousing and logistics capacity. In order to better implement the project and ensure the maximization
whether of project benefits, the 29th Meeting of the 5th Session of Board of Directors and the 1st Extraordinary General
the Meeting of Shareholders of the Company in 2023 have approved and decided to add Vietnam GreatStar Intelligence
expected Co., Ltd., a wholly-owned subsidiary, and Hangzhou GreatStar Energy Co., Ltd., a wholly-owned sub-subsidiary as
benefits one of the implementation subjects of the intelligent warehousing and logistics base project, and to add Nanjianqiao
are Industrial Zone, Shuiyuan County, Haiphong City, Vietnam, JG1601-43 Plot, Unit of Genbei New District,
41
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
achieved Shangcheng District, Hangzhou City, Zhejiang Province, and Chang'an Town, Haining City, Zhejiang Province as one
) of the implementation sites of the project, as well as to adjust the investment structure of the project while extending
the implementation period of the project to December 31, 2023.
3. The subject of implementation for R&D center construction is the Company, and the construction site is located at
the northwest corner of the intersection of Hongpu Road and Jiuheng Road, Jiupu Street, Shangcheng District,
Hangzhou City. The project was originally scheduled to be completed on December 31, 2022. During the
implementation of this project, new products combined endlessly, so it was necessary to adjust the R&D focus to
products more in line with the long-term development strategy of the Company. Meanwhile, after the Company
consolidated by combining its original wholly-owned subsidiary, Hangzhou Lianhe Machinery Co., Ltd., the planned
investments in equipment and software needed to be reevaluated, resulting in the failure to complete the relevant work
as planned. In order to make efficient use of the Company's R&D capability and ensure the maximization of project
benefits, the 29th Meeting of the 5th Session of Board of Directors and the 1st Extraordinary General Meeting of
Shareholders the Company in 2023 approved the extension of the project implementation period to December 31,
2023.
II. Description of the failure of raised funds investment project to be separately accounted for the benefits
The construction project of intelligent warehousing and logistics base is designed to meet the needs of the Company
to improve operation efficiency, expand business in the future and achieve sustainable development of the Company,
so the benefits cannot be calculated separately. The implementation of R&D center construction projects is mainly
based on product R&D design, product trial production and product testing, producing no direct economic benefits.
The supplementary working capital project is designed to meet the needs of working capital for the continuous
expansion of the Company's operating scale, so the benefits cannot be accounted separately.
Due to the shortage of global shipping capacity, some raw materials and equipment cannot be delivered to the
project’s implementation site in time, which has a certain impact on the construction progress of the Company's tool
storages production base project. As a result, the project’s completion date is delayed to some extent. According to the
Descripti
Company's long-term strategic planning and current development needs, in order to improve the use efficiency of
on of
raised funds, improve the Company's existing production capacity and supply capacity faster, and better meet
significa
customer needs, after deliberation and approval of the 7th meeting of 5th session of board of directors and the annual
nt
general meeting of shareholders in 2020, the Company used the uninvested raised funds of CNY 134,944,200.00 from
changes
the Toolbox cabinet production base construction project up to April 5, 2021 for the purchase of 100% equity of
in
Geelong Holdings Limited held by Geelong Orchid Holdings Ltd., and the construction project of the original toolbox
project
cabinet production base was terminated. In order to promote the smooth implementation of equity acquisition and
feasibilit
reduce transaction costs, the Company held its 10th meeting of 5th session of board of directors meeting on June 21,
y
2021, deliberated and approved the Proposal on Changing the Implementation Subjects of Some Raised Projects, and
agreed to change the implementation subjects of equity acquisition projects from the Company to Hong Kong
GreatStar International Co., Ltd., a wholly-owned subsidiary of the Company.
Amount,
purpose
and
progress N/A
of the
overraise
d funds
Applicable
Incurred in prior year
Change On July 22, 2020, the Company held the 37th Meeting of the 4th Session of Board of Directors, deliberated and
of the approved the Proposal on Adding the Implementation Subjects and Locations of the Raised Funds Investment project
impleme and Using Part of the Raised Funds to Increase Capital to the Wholly-owned Subsidiary. 1. Agreed to add Vietnam
ntation Giant Intelligence Co., Ltd., a wholly-owned subsidiary, as one of the implementation subjects of the laser measuring
location instrument and smart home production base construction project, and add Nanjianqiao Industrial Zone, Shuiyuan
of the County, Haiphong City, Vietnam, as one of the implementation locations of the project; 2. Agreed to add the wholly-
raised owned subsidiary Thailand New Land Co., Ltd. (renamed Geelong (Thailand) Co., Ltd.) as one of the implementation
funds subjects of the toolbox cabinet production base construction project, and add No. 54/5, Village 1, Mayangpong Town,
investme Baodan County, Rayong Province, Thailand, as one of the implementation locations of the project.
nt On April 14, 2021, the Company held the 8th meeting of the 5th Session of Board of Directors, deliberating and
project approving the Proposal on Changing the Implementation Subject and Location of the Raised Funds Investment
Project, Adjusting the Investment Structure of the Raised Project and Extending the Implementation Period. 1. Agreed
to add Hangzhou GreatStar Tool Co., Ltd., a wholly-owned subsidiary, as one of the implementation subjects of the
42
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
laser measuring instrument and smart home production base construction project, and add Hang Zheng Gong Chu
(2020) No. 26 Plot, Jianggan District, Hangzhou as one of the implementation sites of the project; 2. Agreed to change
the implementation subject of R&D center construction project to Hangzhou GreatStar Technology Co., Ltd.
On June 21, 2021, the Company held the 10th meeting of the 5th Session of Board of Directors, deliberated and
approved the Proposal on Changing the Implementation Subject of Some Raised Funds Investment Projects, agreeing
that the implementing entity for the Company's acquisition of 100% of the equity 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.
On December 30, 2022, the Company held the 29th meeting of the 5th Session of Board of Directors, deliberated and
approved the Proposal on Increasing the Implementation Subject and Implementation Location of the Raised Funds
Investment Projects, Adjusting the Investment Structure of the Raised Projects and Extending the Implementation
Period. Agreed to add Vietnam GreatStar Intelligence Co., Ltd., a wholly-owned subsidiary, and Hangzhou GreatStar
Energy Co., Ltd., a wholly-owned Sub-subsidiary, as one of the project implementation subjects. Meanwhile,
Nanjianqiao Industrial Zone, Shuiyuan County, Haiphong City, Vietnam, JG1601-43 Plot, Unit of Genbei New
District, Shangcheng District, Hangzhou City, Zhejiang Province, and Chang'an Town, Haining City, Zhejiang
Province are added as one of the implementation sites of this project.
Adjustm
ent of
impleme
ntation
methods
N/A
of raised
funds
investme
nt
project
Applicable
1. On July 22, 2020, the Company held the 37th meeting of the 4th Session of Board of Directors, deliberated and
approved the Proposal on Using Raised Funds to Replace Self-raised Funds of Pre-investment in the Project.
(1) The Company agreed to replace the self-raised funds pre-invested in the project with the raised funds of CNY
148,254,900.
(2) The Company agreed to replace the issuance fee of CNY 1.7238 million paid by the Company’s own funds with
the raised funds.
The expenses of the Company's R&D center construction project include employees' remunerations, bonuses, social
Advance
insurance premiums, housing provident funds and other expenses. In accordance with the relevant provisions of the
investme
People's Bank of China Administrative Rules for RMB Bank Settlement Accounts, the employees' remunerations can
nt and
not be paid via the Company's special account. And considering that the employees' social insurance premium and
replacem
housing provident fund are uniformly transferred or paid by the Company's own fund account, it is not feasible to pay
ent of
the personnel expenses involved in the raised funds investment project (hereinafter referred to as “Fund-raised
raised
Project”) directly via the special account for raising funds. Therefore, it is necessary to advance the payment with the
funds for
Company’s own funds, and then transfer the same amount from the fund raising account to the relevant deposit
investme
account of the Company. On September 23, 2022, the Company held the 24th meeting of the 5th Session of Board of
nt
Directors, deliberated and approved the Proposal on Using its Own Funds to Pay Part of the Subsequent Funds of the
projects
Raised Funds Investment Project in Exchange for the Same Amount of Raised Funds. It is agreed that during the
implementation of the raised funds investment project (hereinafter referred to as “Project”), the Company shall first
pay part of the project with its own funds (personnel expenses such as salary, bonus, social insurance premium,
housing provident fund, etc.), then make monthly statistics on the amount of funds paid for the project with its own
funds, and transfer the same amount from the raised funds special account to the Company's own funds account. As of
December 31, 2022, the Company paid the fund amount of the raised project with its own funds, and transferred the
same amount from the special fund raising account to the Company's own fund account, totaling CNY 20.1543
million.
Descripti
on of
temporar
N/A
y
replenish
ment of
43
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
working
capital
with idle
raised
funds
Amount Applicable
and
reasons
of raised The Company’s project of "capital increase to subsidiaries and acquisition of 100% equity of Geelong Holdings
fund Limited held through Geelong Orchid Holdings Ltd" has been implemented as planned. In order to facilitate the
surplus management of the fund collection special account, the Company has cancelled the raised fund special account of the
in the project. In addition, the saved raised funds (interest income) of USD 14.98 (discounted to CNY 100.00 according to
impleme the spot exchange rate of the trading day) will be transferred to its own fund account for permanent replenishment of
ntation working capital.
of the
project
Purpose
and
destinati By the end of the period, the balance of the unutilized raised funds is equivalent to CNY 259,919,400.00 (CNY
on of 34,052,300.00, including the cumulative bank deposit interest minus bank charges), which is deposited in the special
unutilize account for the raised funds.
d raised
funds
Problem
s or
other
circumst
ances in
the
N/A
utilizatio
n and
disclosur
e of the
raised
funds
(3) Projects involved with changes in raised fund
Applicable □ N/A
Unit: CNY 10,000
Total Whether
Actual Investme
funds to Date of the
Correspo Actual cumulativ nt Benefits Whether
be achieving project
nding investmen e progress realized the
Items invested the feasibility
original t amount investmen by the during expected
after in the condition has
commitm in this t amount end of the this benefits
change project s for changed
ent reporting at the end period reporting are
after intended significan
project period of the (3)=(2)/(1 period achieved
change use tly after
period (2) )
(1) change
Capital Toolbox
increase productio
July 2,
to n base 13,494.42 8,121.83 13,494.42 100.00% 27,026.69 N/A No
2021
subsidiary constructi
and on
44
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
acquisitio
n of
100%
stake in
Geelong
Holdings
Limited
through
Geelong
Orchid
Holdings
Ltd
Total -- 13,494.42 8,121.83 13,494.42 -- -- 27,026.69 -- --
According to the Company's long-term strategic planning and current development needs,
in order to improve the use efficiency of raised funds, improve the Company's existing
production capacity and supply capacity faster, and better meet customer needs, after
deliberation and approval of the 7th meeting of the 5th session of board of directors and
the annual general meeting of shareholders in 2020, the Company used the uninvested
raised funds of CNY 134,944,200.00 from the Toolbox cabinet production base
Description of reasons for change,
construction project up to April 5, 2021 for the purchase of 100% equity of Geelong
decision-making procedures and
Holdings Limited held by Geelong Orchid Holdings Ltd., and the construction project of
information disclosure (project-
the original toolbox cabinet production base was terminated. In order to promote the
wise)
smooth implementation of equity acquisition and reduce transaction costs, the Company
held it’s the 10th meeting of the 5th session of board of directors meeting on June 21,
2021, deliberated and approved the Proposal on Changing the Implementation Subjects of
Some Raised Projects, and agreed to change the implementation subjects of equity
acquisition projects from the Company to Hong Kong GreatStar International Co., Ltd., a
wholly-owned subsidiary of the Company.
Details and reasons for not achieving
the planned progress or expected N/A
earnings (project-wise)
Description of significant changes in
N/A
project feasibility after change
VIII. Sale of major assets and equity
1. Sale of major assets
□ Applicable N/A
No major assets were sold during the reporting period.
2. Sale of major equity
□ Applicable N/A
IX. Analysis of major holding and participating companies
Applicable □ N/A
Details of main subsidiaries and the participating companies which have more than 10% influence on the net profit of the
Company
Unit: CNY
Designatio Type Main Registered Total assets Net assets Operating Operating Net profit
45
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
n business capital proceeds profit
Hong Kong Hand tools,
GreatStar power tools 978,911,99 3,602,465,7 1,877,030,1 1,164,633,5 173,992,77 150,241,38
Subsidiary
Internation and 4.66 74.67 88.85 71.47 4.96 6.40
al Co., LTD storages
Acquisition and disposal information of subsidiaries during the reporting period
Applicable □ N/A
Acquisition and disposal method of Impact on overall production, operation
Companies
subsidiaries during the reporting period and performance
Zhongshan Jilong Import and Export
Established No significant impact
Trade Co., Ltd.
Zhejiang Shiwanke Electric Appliance
Established No significant impact
Co., Ltd.
Hangzhou GreatStar Energy Co., Ltd. Established No significant impact
Hangzhou GreatStar Garden Tools Co.,
Established No significant impact
Ltd.
SHOP-VAC VIETNAM CO.,LTD Established No significant impact
HUADA VIETNAM CO.,LTD Established No significant impact
Hangzhou Lianhe Machinery Co., Ltd. Cancelled No significant impact
Zhejiang GreatStar Intelligent Tool Co.,
Cancelled No significant impact
Ltd.
Hangzhou GreatStar Power Tools Co.,
Cancelled No significant impact
Ltd.
International Storage Solutions Limited Cancelled No significant impact
Description of major holding and participating companies
None
X. Structural subjects under control of the Company
□ Applicable N/A
XI. Prospect of the company's future development
(I) The Company's development strategy
The Company's overall development strategy is: to focus on the main business, base in China, pursue the global layout, and plan
long-term development.
“Focusing on the main business” means that the Company will continue to use the existing European and American large-scale
supermarkets and e-commerce self-operated channels to focus on the main business with TOOLS as the core product. Meanwhile,
the Company will continue 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 the extension of acquisitions, focusing on the development of non-hand tools including
power tools and outdoor products.
“Basing in China” means that the Company will rely on the Southeast Asia supply chain network with China as the core and the
know-how of Chinese engineers, leading global supply chain division of tool industry, continue to expand the leading position in
the industry, leading the development of international tool industry, and in the future, gradually take over the European and
American industrial transfer to create customer demand as the core of the innovative economic era.
“Pursuing the global layout” means that the Company will continue to strengthen the construction of its own brand service system
in Europe and America and the production capacity layout in Southeast Asia, select foreign high-quality companies for industrial
combination and integration, better access to international resources and international markets, and gradually upgrade the
46
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Company from an ODM company in China to an international OBM company designed in China, created in Asia and combined
with local services in Europe and America.
Finally, “Planning long-term development” means that the Company will respect the century-old development history of the tool
industry, rely on the characteristics of slow growth and stable cash flow in the field of durable consumer goods, plan its own
business and development path in a long period, gradually cultivate new business growth points, and eventually become a good
company with steady operation, sustained growth and healthy development that creates long-term value for society.
(II) Business plan
1. Overall business goals
The basic strategy of the Company is to focus on the main business, base in China, pursue the global layout and plan long-term
development. Since the three-year development goal was set in the annual report in 2019, the cumulative revenue had increased by
90.33% and non-profit increased by 77.13% in the past three years. The current global supply chain and industry pattern continue
to present rare strategic development opportunities. The international layout of the Company since 2018 will continue to
strengthen its position in the industry in the future. Meanwhile, the layout of power tool product line, especially household energy
storage products, will bring new growth points to the Company. The Company strives to achieve the cumulative 100% growth of
the main business in the next three years.
2. Development goal in private brands
The private brands are the long-term and stable core competitiveness of the Company. The Company will continue to maintain
investment in the promotion of private brand products, and ensure that the sales revenue proportion of private brand products will
continue to increase in 2023, striving to reach 50% of the revenue proportion.
3. Development goal in cross-border e-commerce
Cross-border e-commerce is the core of the Company's strategy for sustainable growth. The Company will actively integrate
internal advantageous resources, improve the product categories and service capabilities of cross-border e-commerce, and continue
to maintain the cross-border e-commerce business growth of nearly 50% in 2023.
4. Development goal in power tools
As a new business line after laser and cabinet, power tool will become the second growth curve of the Company in the future. The
Company will integrate domestic high-quality lithium power resources, orderly promote the power tool products with its own
characteristics, and strive to achieve more than 50% growth of power tool business in 2023.
(III) Possible risks
After a comprehensive analysis of the Company's external environment and actual situation, the main operating risks the Company
faces include:
1. Exchange rate fluctuation risk
At present, the Company's operating income basically comes from the overseas market. For example, the wide fluctuation of CNY
exchange rate will have a certain impact on the Company's operating income. Most of the Company's main business orders are
denominated in USD, and the fluctuations of the exchange rate between CNY and USD directly affect the price competitiveness of
products, thus affecting the Company's operating performance. In this regard, the Company will continue to strengthen overseas
layout and foreign exchange settlement regulation, 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 fluctuate greatly, resulting in the Company's production costs have fluctuated.
Although the Company's production capacity is dominated by outsourced production, which has a high ability of bargaining with
upstream outsourced manufacturers, if the price of raw materials continues to rise, the Company's profitability may still be affected
to some extent. In this regard, the Company will continue to strengthen procurement and cost control, establish strategic
cooperative relations with suppliers and sign long-term agreements to absorb the risk of raw material price fluctuations.
47
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Meanwhile, the Company will continue to optimize the product structure, strengthen the R&D of new products, and rely on
innovative products to determine reasonable prices, maintaining the product gross margin.
3. Risk of trade conflict
Currently, the United States is the largest single market of the Company, and most of the products exported by the Company to the
United States are still subject to 25% tariff, which has an adverse impact on the development of the Company. In this regard, the
Company will pay close attention to the international situation, continue to implement the internationalization strategy, promote
the construction of overseas manufacturing bases, cultivate overseas supply chains, and establish a global production capacity
layout and supply chain system to ensure the stable development of the Company's business.
XII. Reception of survey, communication and interview activities during the report period
Applicable □ N/A
Main contents
Reception Basic
Reception discussed and
Reception date Reception place object Reception object information
mode information
type index of survey
provided
The Company's The Company's
Institutional investors
January 17, Telephone 2021 annual 2021 annual
Company Others and individual
2022 communication performance performance
investors
forecast. forecast.
The Company's The Company's
Institutional investors
January 18, Telephone 2021 annual 2021 annual
Company Others and individual
2022 communication performance performance
investors
forecast. forecast.
The Company's The Company's
Institutional investors
January 19, Telephone 2021 annual 2021 annual
Company Others and individual
2022 communication performance performance
investors
forecast. forecast.
The Company's The Company's
Institutional investors 2021 annual 2021 annual
Telephone
April 26, 2022 Company Others and individual report and 2022 report and 2022
communication
investors quarterly quarterly
report. report.
The Company's The Company's
Institutional investors 2021 annual 2021 annual
Telephone
April 27, 2022 Company Others and individual report and 2022 report and 2022
communication
investors quarterly quarterly
report. report.
The Company's The Company's
Institutional investors 2021 annual 2021 annual
Telephone
April 28, 2022 Company Others and individual report and 2022 report and 2022
communication
investors quarterly quarterly
report. report.
Institutional investors The Company's The Company's
August 29, Telephone
Company Others and individual 2022 semi- 2022 semi-
2022 communication
investors annual report. annual report.
Institutional investors The Company's The Company's
August 30, Telephone
Company Others and individual 2022 semi- 2022 semi-
2022 communication
investors annual report. annual report.
Institutional investors The Company's The Company's
August 31, Telephone
Company Others and individual 2022 semi- 2022 semi-
2022 communication
investors annual report. annual report.
October 21, Company Telephone Others Institutional investors Company 2022 Company 2022
48
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
2022 communication and individual Q3 report. Q3 report.
investors
Institutional investors
October 24, Telephone Company 2022 Company 2022
Company Others and individual
2022 communication Q3 report. Q3 report.
investors
Institutional investors
October 25, Telephone Company 2022 Company 2022
Company Others and individual
2022 communication Q3 report. Q3 report.
investors
49
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Section IV Corporate Governance
I. Basic situation of corporate governance
During the reporting period, the Company continuously improved the corporate governance structure, established and improved
the internal management and control system, improved the corporate governance level, and standardized the operation of the
Company in strict accordance with the requirements of relevant laws and regulations such as the Company Law, Securities Law,
Governance Code for Listed Companies, and Rules for Stock Listing of Shenzhen Stock Exchange.
By the end of this report, the actual situation of corporate governance basically conforms to the requirements of the documents on
corporate governance of listed companies issued by China Securities Regulatory Commission.
(I) Situation of shareholders and general meetings of shareholders
In strict accordance with the requirements of the Opinions on the Shareholders' Meeting of Listed Companies, Articles of
Association and Rules of Procedure of the Shareholders' Meeting, the Company standardizes the convening, holding and voting
procedures of the shareholders' meeting, treats all shareholders equally, guarantees the right of all shareholders to know and
participate in the Company's major matters, and ensures that all shareholders can fully exercise their rights.
(II) Situation of directors and the board of directors
The Company elects directors in strict accordance with the appointment procedures stipulated in the Company Law and Articles of
Association. Currently, the Company has nine directors, including three independent directors, accounting for one-third of the total
directors. The number and composition of the board of directors of the Company meet the requirements of laws and regulations.
The board of directors consists of four special committees: Strategy and Development Committee, Compensation and Evaluation
Committee, Nomination Committee and Audit Committee. The board of directors carries out its work in strict accordance with the
Articles of Association, Rules of Procedure of the Board of Directors, Working System of Independent Directors, Rules of
Secretary of the Board of Directors, Guidelines on Self-Regulation of Listed Companies of Shenzhen Stock Exchange No. 1 --
Standardized Operation of Listed Companies on the Main Board, etc. All directors of the Company attend the board of directors
and general meeting of shareholders on time to perform the duties of director in good faith, diligence and due diligence.
(III) Situation of supervisors and the board of supervisors
The board of supervisors shall elect supervisors in strict accordance with the recruitment procedures of the Company Law, Articles
of Association and Rules of Procedure of the Board of Supervisors. The Board of Supervisors shall consist of three supervisors,
one of whom is the employee supervisor. The number and personnel composition of the board of supervisors shall meet the
requirements of laws and regulations. The Company's supervisors conscientiously perform their duties, in the spirit of being
responsible to all shareholders, and in accordance with the Rules of Procedure of the Board of Supervisors and other rules and
regulations, convene the board of supervisors, attend the general meeting of shareholders, sit on the board of directors, effectively
supervise the Company's major matters, related transactions, financial conditions, the performance of the directors and the
president and give independent opinions.
(IV) Situation of relationship between the controlling shareholder and the listed company
The Company and the controlling shareholder are separately independent in personnel, assets, finance, organization and business,
and the Company's board of directors, board of supervisors and internal organs can operate independently. The code of conduct of
the controlling shareholders of the Company is, through the general meeting of shareholders, to exercise shareholder rights, and
undertake corresponding obligations, not directly or indirectly intervene in the Company's decision-making and business activities
beyond the general meeting of shareholders, damage the legitimate rights and interests of the Company or other shareholders.
(V) Situation of performance evaluation and incentive and constraint mechanism
The Company has established a relatively comprehensive performance evaluation method, and the appointment of senior managers
is open, transparent and in accordance with relevant laws, regulations and internal rules and regulations of the Company. The
50
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Company has established a work performance evaluation system, so that employees' income is linked with their work performance.
In the future, the Company will explore more forms of incentive, form a multi-level comprehensive incentive mechanism, improve
performance evaluation standards, better mobilize the enthusiasm of managers, attract and stabilize outstanding management
talents and technical and business backbone.
(VI) Situation of relevant stakeholders
The Company fully respects and maintains the legitimate rights and interests of relevant stakeholders, achieves the balance of
interests of shareholders, employees, society and other parties, attaches great importance to social responsibility, and join tly
promotes the sustainable and healthy development of the Company with stakeholders.
(VII) Situation of information disclosure and transparency
In strict accordance with the provisions of relevant laws and regulations and the provisions of the Company’s Information
Disclosure Management System, the Company shall strengthen the management of information disclosure affairs, fulfill the
obligation of information disclosure, and appoint Securities Times, Securities Daily and www.cninfo.com.cn as the newspapers
and websites of the Company to disclose information truthfully, accurately, timely and completely, ensuring fair access to
company information for all investors. The Company will continue to improve various internal rules and regulations of corporate
governance, strengthen standardized operation and promote the sustainable and stable development of the Company in accordance
with the requirements of the Code of Governance for Listed Companies and Rules for Stock Listing of Shenzhen Stock Exchange.
Whether there is any material difference between the actual situation of corporate governance and laws, administrative regulations
and the regulations issued by the China Securities Regulatory Commission on the governance of listed companies
□Yes No
There is no material difference between the actual situation of corporate governance and laws, administrative regulations and the
regulations issued by the China Securities Regulatory Commission on the governance of listed companies.
II. Independence of the Company in terms of assets, personnel, finance, organization and
business, etc. relative to the controlling shareholders and actual controllers
During the reporting period, the Company and the controlling shareholder were completely separated from each other in terms of
business, assets, personnel, organization, finance, etc. The Company's production and operation was stable, its internal
organization was perfect, and it could operate independently:
(I) Independence of the Company's business
The Company has independent production, procurement and sales systems, and is completely independent from the controlling
shareholder in business. The controlling shareholder and its affiliated enterprises have no competition with the Company.
(II) Independence of the Company’s personnel
The Company’s personnel, personal affairs and wages are completely independent. The president, vice president, secretary of the
board of directors, chief financial officer and other senior management personnel of the Company all work in the Company and
receive remuneration, but do not hold any position or receive remuneration except director and supervisor in the controlling
shareholder and its subsidiaries.
(III) Integrity of the Company's assets
The property right 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 them. The assets of the Company are complete, with production
equipment, auxiliary production equipment, patents and other assets suitable for the scope of production and business. The
Company has complete control and dominance of all assets.
(IV) Independence of institutions
The Company's board of directors, board of supervisors, managers and other internal institutions operate independently, and each
functional department is completely separated from the controlling shareholder in terms of powers and responsibilities, personnel
and other aspects. There is no superior and subordinate relationship between the controlling shareholder and its functional
51
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
departments and the Company and its functional departments, and there is no phenomenon that the controlling shareholder affects
the independence of the Company's production, operation and management.
(V) Independence of finance
The Company has set up an independent financial department, and established a sound financial and accounting management
system for independent accounting. And there is no controlling shareholder’s intervention in the Company's financial and
accounting activities. The Company opens accounts in commercial banks independently and does not share bank accounts with
controlling shareholders. The Company independently declares its taxes and fulfills tax obligations in accordance with the law.
III. Competition among peers
□ Applicable N/A
IV. Description of annual and extraordinary general meetings of shareholders held during
the reporting period
1. General Meeting of shareholders during this reporting period
Investor
Session Type Date of convening Date of disclosure Resolution
participation ratio
Annual General Annual general Announcement
57.74% May 9, 2022 May 10, 2022
Meeting 2021 meeting No.: 2022-031
1st extraordinary Extraordinary
Announcement
general meeting general meeting of 59.30% August 3, 2022 August 4, 2022
No.: 2022-046
2022 shareholders
2nd extraordinary Extraordinary
Announcement
general meeting general meeting of 55.44% August 29, 2022 August 30, 2022
No.: 2022-060
2022 shareholders
3rd Extraordinary Extraordinary
Announcement
general meeting general meeting of 53.13% October 10, 2022 October 11, 2022
No.: 2022-069
2022 shareholders
2. Preferred shareholders whose voting rights have been restored request an extraordinary general
meeting of shareholders
□ Applicable N/A
V. Description of directors, supervisors and senior managers
1. Basic information
Numb Numb
Numb
er of er of Other
er of Ending
shares shares increas
shares numbe Reaso
Comm increas (shares e/decre
Emplo Expira (shares r of ns for
Positio Gende encem ed in ) ase
Name yment Age tion ) at the shares change
n r ent the reduce change
status date beginn held in
date current d in s
ing of (shares shares
period the (shares
the )
(shares current )
period
) period
52
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Chair
Qiu June August Increas
man of Incum 45,817 2,878, 48,696
Jianpin Male 61 16, 30, 0 0 ed
the bent ,500 958 ,458
g 2008 2023 shares
board
Vice
Chi Chair Januar August
Incum Femal 729,95 729,95
Xiaohe man & 48 y 12, 30, 0 0 0
bent e 0 0
ng Presid 2021 2023
ent
Direct
Wang or & June August
Incum Femal 12,950 12,950
Lingli Vice 61 16, 30, 0 0 0
bent e ,960 ,960
ng Presid 2008 2023
ent
Direct
or & August August
Li Incum 676,47 676,47
Vice Male 63 31, 30, 0 0 0
Zheng bent 0 0
Presid 2020 2023
ent
June August
Xu Direct Incum Femal
39 16, 30, 0 0 0 0 0
Zheng or bent e
2008 2023
Cen
Direct Incum
Zheng Male 61 0 0 0 0 0
or bent
ping
Indepe
August August
Wang ndent Incum
Male 47 31, 30, 0 0 0 0 0
Gang directo bent
2020 2023
r
Indepe
Chen August August
ndent Incum Femal
Zhimi 62 31, 30, 0 0 0 0 0
directo bent e
n 2020 2023
r
Indepe
August August
Shi ndent Incum Femal
59 31, 30, 0 0 0 0 0
Hong directo bent e
2020 2023
r
Chair
man of
the August August
Fu Incum Femal
Board 50 31, 30, 0 0 0 0 0
Yajuan bent e
of 2020 2023
Superv
isors
June August
Chen Superv Incum
Male 42 15, 30, 0 0 0 0 0
Jun isor bent
2011 2023
Huang August
Superv Incum Femal May 9,
Qiaozh 39 30, 0 0 0 0 0
isor bent e 2022
en 2023
Chief
June August
Ni financi Incum Femal
46 16, 30, 0 0 0 0 0
Shuyi al bent e
2008 2023
officer
Vice June August
Wang Incum 771,52 771,52
preside Male 53 16, 30, 0 0 0
Weiyi bent 5 5
nt 2008 2023
53
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Vice June August
Wang Incum 760,20 760,20
preside Male 51 16, 30, 0 0 0
Min bent 0 0
nt 2008 2023
Vice June August Increas
Li Incum 812,97 853,27
preside Male 48 16, 30, 40,300 0 0 ed
Feng bent 7 7
nt 2008 2023 shares
Secret
ary to
the Januar August Increas
Zhou Incum 600,00 600,00
Board Male 36 y 31, 30, 0 0 0 ed
Siyuan bent 0 0
of 2018 2023 shares
Direct
ors
Vice April August
Zhang Incum
preside Male 56 29, 30, 0 0 0 0 0
Ou bent
nt 2019 2023
Jiang Vice May August
Incum Femal
Saipin preside 51 10, 30, 0 0 0 0 0
bent e
g nt 2022 2023
Vice Januar August
Zhang Incum Femal
preside 43 y 27, 30, 2,900 0 0 0 2,900
Mao bent e
nt 2022 2023
62,522 3,519, 66,041
Total -- -- -- -- -- -- 0 0 --
,482 258 ,740
During the reporting period, whether there is any resignation of directors and supervisors and dismissal of senior management
personnel during their terms of office
□Yes No
Description of changes in directors, supervisors and senior managers of the Company
Applicable □ N/A
Name Position Type Date Cause
According to the needs
of the Company's
business development,
we aim to better
manage international e-
commerce business.
After being nominated
Zhang Mao Senior executive Appointment January 27, 2022 by the Company's
president, we have
agreed to appoint Ms.
Zhang Mao, the head
of the international e-
commerce department,
as the vice president of
the Company.
Due to the resignation
of the former
supervisor Jiang
Saiping, the Board of
Supervisors of the
Huang Qiaozhen Supervisor Elected May 9, 2022
Company has
nominated Ms. Huang
Qiaozhen as the
candidate of
shareholder
54
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
representative
supervisor of the 5th
Board of Supervisors.
In order to further
develop the Company's
own brand and key
account business, upon
the nomination of the
president of the
Jiang Saiping Senior executive Appointment May 10, 2022
Company, we have
agreed to appoint Ms.
Jiang Saiping, senior
Sales Director, as the
Vice President of the
Company.
Application for
resignation as chairman
Jiang Saiping Supervisor Quit May 9, 2022 of the Board of
Supervisors as a result
of the job.
2. Employment status
Professional background, main work experience and main responsibilities of directors, supervisors and senior managers of the
Company
Professional background, main work experience and main responsibilities of directors, supervisors and senior managers of the
Company
1. Directors
Mr. Qiu Jianping, Chairman of the board, Chinese nationality, has no right of permanent residence abroad. Born in 1962, he
graduated from Xi'an Jiaotong University in 1985 with a master's degree in mechanical casting. He served as Chairman and
President of the Company from June 2008 to January 2021, Chairman of the Board of Directors of the Company from January
2021 to present.
Ms. Chi Xiaoheng, Vice Chairman & President, Chinese nationality, no right of permanent residence abroad. Born in 1975,
college degree. Director and Vice President of the Company from June 2008 to August 2020. She served as Vice Chairman &
Vice President of the Company from August 2020 to January 2021. Vice Chairman & President of the Company from January
2021 to present.
Mr. Li Zheng, Director and Vice President, Chinese nationality, has no right of permanent residence abroad. Born in 1959, college
degree. Vice Chairman & Vice President of the Company from 2008 to August 2020, Director and Vice President of the Company
from August 2020 to present.
Ms. Wang Lingling, Director & Vice President, Chinese nationality, has no right of permanent residence abroad. Born in 1961,
bachelor’s degree, Director and Vice President of the Company from 2008 to present.
Ms. Xu Zheng, Director, Chinese nationality, has no right of permanent residence abroad. Born in 1984, bachelor’s degree. From
2008 to present, she has been secretary to the chairman of GreatStar Holding Group Co., Ltd. Director of Hangcha Group Co., Ltd.
from 2011 to present. She has been a director of the Company since 2008.
Mr. Cen Zhengping, Director of the Company, born in Hong Kong, China in 1962, master’s degree, professor-level senior
engineer. He has served as a director of the Company since May 2019.
Mr. Wang Gang, Independent Director, Chinese nationality, has no right of permanent residence abroad. Born in October 1975,
Master’s degree, Certified Public Accountant, senior economist. From August 2017 to now, he has served as Director, Deputy
55
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
General Manager and Secretary of the Board of Directors of Hangzhou Robam Appliances Co., Ltd. He has been an independent
director of the Company since August 2020.
Ms. Shi Hong, Independent Director, Chinese nationality, no right of permanent residence abroad. Born in July 1963, master’s
degree, associate professor. From September 2005 to July 2018, she served as Associate Professor and Director of Environmental
Engineering Laboratory, College of Marine Science and Engineering, Shanghai Maritime University. He has been an independent
director of the Company since August 2020.
Ms. Chen Zhimin, Independent Director, Chinese nationality, has no right of permanent residence abroad. Born in April 1960,
master’s degree. Currently, she is a director of Zhejiang Caitong Capital Investment Co., Ltd., a supervisor of Hangzhou Tigermed
Pharmaceutical Technology Co., Ltd., and Zhejiang Canaan Technology Co., Ltd., and an independent director of Hangzhou
Honghua Digital Technology Co., Ltd., and Tongkun Group Co., Ltd. He has been an independent director of the Company since
August 2020.
4.5.2.2 Supervisors
Ms. Fu Yajuan, Supervisor of the Company, Chinese nationality, has no right of permanent residence abroad. Born in September
1972, college degree, senior accountant, Deputy Chief Financial Officer of the Company from July 2008 to present.
Mr. Chen Jun, Supervisor, Chinese nationality, has no right of permanent residence abroad. Born in August 1980, bachelor’s
degree, intermediate engineer. Since 2009, he has been the manager of the Industrial Design Department of the Company, the
Deputy Secretary of the Enterprise Science and Technology Association of the Company, and the Secretary of the R&D and
Innovation Branch of the Communist Party of China GreatStar.
Ms. Huang Qiaozhen, Supervisor, Chinese nationality, has no right of permanent residence abroad. Born in November 1983,
bachelor’s degree. From January 2021 to now, she has served as secretary to the president of the Company and part-time deputy
director of the Office of the President.
4.5.2.3 Other senior managers
Mr. Zhou Siyuan, Secretary of the Board of Directors and Vice President, Chinese nationality, has no right of permanent residence
abroad. Born in 1986, master’s degree, Secretary of the Board of Directors from January 2018 to present.
Ms. Ni Shuyi, Chief Financial Officer, Chinese nationality, has no right of permanent residence abroad. Born in 1976, bachelor’s
degree. She has been the Chief Financial Officer of the Company since 2008.
Mr. Wang Weiyi, Vice President, Chinese nationality, has no right of permanent residence abroad. Born in 1970, he 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 one of the principal persons in
charge of the national laboratory.
Mr. Wang Min, Vice President, Chinese nationality, has no right of permanent residence abroad. Born in 1971, college degree,
Vice President of the Company from 2008 to present, responsible for the Company's product procurement business.
Mr. Li Feng, Vice President, Chinese nationality, has no right of permanent residence abroad. Born in 1975, college degree. From
2008 to present, he has been the Vice President of the Company, responsible for the external sales of the Company's products.
Mr. Zhang Ou, Vice President, Chinese nationality, no overseas permanent residence right, born in 1967, senior economist,
professor, Vice President of the Company from April 2019 to now, responsible for the operation of the Company's laser industry
sector.
Ms. Zhang Mao, Vice President Chinese nationality, no right of permanent residence abroad. Born in 1979, bachelor’s degree.
From May 2021 to January 2022, she served as Senior Director of International E-commerce Department of Hangzhou GreatStar
Technology Co., Ltd. Vice President of the Company from January 2022 to present, responsible for the Company's international e-
commerce business.
Ms. Jiang Saiping, Vice President, Chinese nationality, no right of permanent residence abroad. Born in November 1971,
bachelor’s degree. From December 2013 to May 2022, she served as the Director of Export Sales of the Company, Vice President
of the Company from May 2022 to present, responsible for the Company's private brand and key account business.
56
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Employment in the shareholder unit
Applicable □ N/A
Whether to receive
Position in the Commencement remuneration and
Name Shareholder unit Expiration date
shareholder unit date allowance in the
shareholder unit
GreatStar Holding Chairman of the
Qiu Jianping August 10, 2009 No
Group Co., Ltd. board
GreatStar Holding
Wang Lingling Vice Chairman January 10, 2020 No
Group Co., Ltd.
GreatStar Holding
Li Zheng Director August 10, 2009 No
Group Co., Ltd.
GreatStar Holding
Chi Xiaoheng Director August 10, 2009 No
Group Co., Ltd.
GreatStar Holding
Xu Zheng Manager January 1, 2016 Yes
Group Co., Ltd.
GreatStar Holding
Fu Yajuan Supervisor January 10, 2020 No
Group Co., Ltd.
Description of
employment in a None
shareholder unit
Employment in other organizations
Applicable □ N/A
Whether to receive
Position in other Commencement compensation and
Name Other units Expiration date
units date allowance in other
units
Zhejiang Hangcha Chairman &
Qiu Jianping February 2, 2011 No
Holding Co., Ltd. General Manager
Hangcha Group
Qiu Jianping Director February 2, 2011 No
Co., Ltd.
Zhejiang Zhongtai
Qiu Jianping GreatStar Real Director May 10, 2005 No
Estate Co., Ltd.
Hangzhou Haiwo
Qiu Jianping Executive Director March 19, 2011 No
Holding Co., Ltd.
Hangzhou
GreatStar
Chairman of the December 30,
Qiu Jianping Precision No
board 2006
Machinery Co.,
Ltd.
SMART SILVER
Qiu Jianping Director January 20, 2011 No
LIMITED
Hong Kong
Qiu Jianping Golden Deer Director January 20, 2011 No
Limited
Ruian Zhaowei
Qiu Jianping Director January 20, 2011 No
Co., Ltd.
Ruian Qihao Co.,
Qiu Jianping Director January 20, 2011 No
Ltd.
Ruian Junye Co.,
Qiu Jianping Director January 20, 2011 No
Ltd.
GreatStar
Qiu Jianping Executive Director June 20, 2013 No
Industries Co.,
57
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Ltd.
Jindao Investment
Qiu Jianping Director January 20, 2011 No
Co., Ltd.
Hangzhou Xihu
Tiandi
Qiu Jianping Director May 13, 2011 No
Development Co.,
Ltd.
Xinjiang Lianhe
Qiu Jianping Investment limited Managing partner January 10, 2012 No
partnership
Qiu Jianping Taifeng Co., Ltd. Director January 20, 2011 No
Hangzhou Kunxia
Investment
Management
Qiu Jianping Managing partner January 18, 2018 No
Partnership
(limited
partnership)
Zhejiang Equity
Qiu Jianping Service Group Co., Director November 8, 2017 No
Ltd.
Zhejiang Guozi September 26,
Qiu Jianping Director No
Robotics Co., Ltd. 2014
Zhejiang Private
Enterprise Joint
Qiu Jianping Director April 13, 2015 No
Investment Co.,
Ltd.
Hangzhou Lujing
November 26,
Qiu Jianping Cultural Creative Executive Director No
2015
Co., Ltd.
Zhejiang Youbang
December 25,
Qiu Jianping Small Loan Co., Director No
2009
Ltd.
Shanghai Haichao
Haoyun Enterprise
Management
Qiu Jianping Managing partner April 17, 2019 No
Partnership
(limited
partnership)
Shanghai Haichao
Wenxing
Enterprise
Qiu Jianping Management Managing partner January 7, 2021 No
Partnership
(limited
partnership)
Shanghai Haichao
Jinguan Enterprise
Management
Qiu Jianping Managing partner January 7, 2021 No
Partnership
(limited
partnership)
Hangzhou
Zhongce Haichao
Chairman of the
Qiu Jianping Enterprise April 17, 2019 No
board
Management Co.,
Ltd.
Qiu Jianping Zhejiang Xinchai Director December 26, No
58
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Co., Ltd. 2019
Zhongce Rubber
Qiu Jianping Director October 21, 2019 No
Group Co., Ltd.
Zhejiang Zhongtai
Qiu Jianping GreatStar Real Director May 10, 2005 No
Estate Co., Ltd.
Hangzhou
GreatStar
September 20,
Wang Lingling Precision Director No
2011
Machinery Co.,
Ltd.
Hangzhou Fuyang Executive Director
November 11,
Wang Lingling Chongsheng & General No
2013
Trading Co., Ltd. Manager
Zhejiang Zhongtai
Wang Lingling GreatStar Real Supervisor March 11, 2011 No
Estate Co., Ltd.
Zhejiang Hangcha
Wang Lingling Director January 27, 2012 No
Holding Co., Ltd.
Hangzhou Haiwo
Wang Lingling Supervisor February 17, 2022 No
Holding Co., Ltd.
Zhejiang Yunsong
Artificial
Wang Lingling Intelligence Supervisor May 20, 2022 No
Technology Co.,
Ltd.
Hangzhou
GreatStar
September 20,
Li Zheng Precision Director No
2011
Machinery Co.,
Ltd.
Hangzhou
Zhongce Haichao
Xu Zheng Enterprise Supervisor April 21, 2019 No
Management Co.,
Ltd.
Hangcha Group
Xu Zheng Director March 25, 2011 No
Co., Ltd.
Zhejiang Hangcha
Xu Zheng Supervisor January 27, 2012 No
Holding Co., Ltd.
Chairman of the
Zhongce Rubber
Xu Zheng Board of October 21, 2019 No
Group Co., Ltd.
Supervisors
Hanjia Design Chairman of the
Cen Zhengping March 18, 2007 No
Group Co., Ltd. board
Zhejiang
Chairman &
Cen Zhengping Chengjian Group February 15, 2006 No
General Manager
Co., Ltd.
Shanghai Hanjia
Chairman & September 12,
Cen Zhengping Investment Co., No
General Manager 2007
Ltd.
Zhejiang
Chengjian Real Chairman of the September 21,
Cen Zhengping Yes
Estate Group Co., board 2010
Ltd.
Zhejiang Hanjia Executive
Cen Zhengping October 20, 2010 No
Investment Co., Director, General
59
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Ltd. Manager
Zhejiang Dishang
Chairman of the
Cen Zhengping Investment Co., April 4, 2006 No
board
Ltd.
Zhejiang
Zhonglian Real
Cen Zhengping Estate Director July 25, 2005 No
Development Co.,
Ltd.
Hangzhou Hanjia
Xinde Investment
Cen Zhengping Managing partner August 28, 2014 No
Management
Partnership
Hangzhou Zheda
Cen Zhengping Zinc Electric Director June 21, 2017 No
Energy Co., Ltd.
Zhejiang Kaiyin
Cen Zhengping Director April 9, 2018 No
Holding Co., Ltd.
Zhejiang
Chengjian Design
Cen Zhengping Director March 15, 2022 No
& Research
Institute Co., Ltd.
Hangzhou Robam Vice President,
Wang Gang Appliances Co., Secretary of the June 1, 2008 Yes
Ltd. Board, Director
Hangzhou
Wang Gang Nuobang Non- Director January 1, 2013 No
textile Co., Ltd.
Dize Household
Appliances
Wang Gang Director July 1, 2012 No
(Shanghai)
Trading Co., Ltd.
Hangzhou Fortune
Gas Cryogenic
Wang Gang Director January 1, 2018 No
Equipment Co.,
Ltd.
Jiangsu Mige New
Wang Gang Director December 7, 2022 No
Material Co., Ltd.
De Dietrich
Appliances
Wang Gang Trading Director June 1, 2016 No
(Shanghai) Co.,
Ltd.
Hangzhou
Wang Gang Guoguang Tourism Director October 1, 2017 No
Supplies Co., Ltd.
Shanghai Qingke
Information
Wang Gang Supervisor November 1, 2017 No
Technology Co.,
Ltd.
Ningbo Qingfeng
Wang Gang Investment Co., Director December 1, 2017 No
Ltd.
Hangzhou Laoban
Fuchuang
Wang Gang Supervisor May 1, 2018 No
Investment
Management Co.,
60
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Ltd.
Shengzhou Jindi
Wang Gang Intelligent Kitchen Director July 1, 2018 No
Electric Co., Ltd.
Hangzhou
Xiaodian Independent
Wang Gang September 1, 2020 Yes
Technology Co., director
Ltd.
Hangzhou
Hengsheng December 28,
Wang Gang Director No
Technology Co., 2022
Ltd.
Zhejiang Caitong
Chen Zhimin Capital Investment Director No
Co., Ltd.
Hangzhou
Tigermed
Chen Zhimin Supervisor April 22, 2020 Yes
Consulting Co.,
Ltd.
Zhejiang Canaan
September 20,
Chen Zhimin Technology Co., Supervisor Yes
2022
Ltd.
Hangzhou
Honghua Digital Independent
Chen Zhimin December 6, 2019 Yes
Technology Co., director
Ltd.
Tongkun Group Independent
Chen Zhimin June 23, 2020 Yes
Co., Ltd. director
Zhejiang Guozi September 14,
Zhou Siyuan Director No
Robotics Co., Ltd. 2017
Hangzhou
Weiming
Zhou Siyuan Investment Director September 1, 2017 No
Management Co.,
Ltd.
Hangzhou Xihu
Tiandi
Zhou Siyuan Director May 13, 2011 No
Development Co.,
Ltd.
Hangzhou Xihu
Tiandi
Zhou Siyuan Director July 23, 2014 No
Management Co.,
Ltd.
Zhejiang Hangcha
Zhou Siyuan Director January 28, 2011 No
Holding Co., Ltd.
Ningbo Donghai
Zhou Siyuan Director No
Bank Co., Ltd.
Shanghai Lainuo
Photoelectric
Zhang Ou Director April 4, 2007 No
Technology Co.,
Ltd.
Changzhou Haojia
Executive
Intelligent September 20,
Zhang Ou Director, General No
Technology 2018
Manager
Service Co., Ltd.
Punishment of current and outgoing directors, supervisors and senior managers of the Company by the securities regulatory
authorities in the past three years
61
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
□ Applicable N/A
3. Remuneration of directors, supervisors and senior managers
Decision-making procedure, determination basis and actual payment of remuneration for directors, supervisors and senior
managers
4.3.1 Decision-making procedures for remuneration of directors, supervisors and senior managers
The remuneration plan for directors of the Company shall be put forward by the remuneration committee and examined and
approved by the board of directors and the general meeting of shareholders. The compensation plan of the Company's supervisors
shall be put forward by the Human Resources Department and reviewed and approved by the Board of Supervisors and the
shareholders' meeting. The compensation committee of the Company's senior management personnel shall put forward the pre-
plan for the part of duty salary, which shall be reviewed and approved by the board of directors; Based on the Company's
operating performance, the annual reward principle will be determined for performance-based pay, which will be paid after the
executive's personal performance appraisal and authorized by the chairman of the board.
4.3.2 Determination basis for remuneration of directors, supervisors and senior managers
The directors, supervisors and senior managers of the Company shall receive their duties salary according to their positions, and
the annual reward principle shall be determined according to the Company's operating performance. The performance salary shall
be paid after examination and verification by the chairman of the Company.
Remuneration of directors, supervisors and senior managers during the reporting period
Unit: CNY 10,000
Whether to
Total pre-tax receive
Employment remuneration remuneration
Name Position Gender Age
status received from from related
the Company parties of the
Company
Chairman of
Qiu Jianping Male 61 Incumbent 62.57 No
the board
Vice Chairman
Chi Xiaoheng Female 48 Incumbent 180 No
& President
Director & Vice
Li Zheng Male 63 Incumbent 120 No
President
Director & Vice
Wang Lingling Female 61 Incumbent 40.67 No
President
Cen Zhengping Director Male 61 Incumbent 0 Yes
Xu Zheng Director Female 39 Incumbent 0 Yes
Independent
Shi Hong Female 59 Incumbent 9.29 No
director
Independent
Chen Zhimin Female 62 Incumbent 9.29 No
director
Independent
Wang Gang Male 47 Incumbent 9.29 No
director
Jiang Saiping Vice president Female 51 Incumbent 68.4 No
Chairman of
Fu Yajuan the Board of Female 50 Incumbent 34.52 No
Supervisors
Chen Jun Supervisor Male 42 Incumbent 44.08 No
Huang
Supervisor Female 39 Incumbent 21.06 No
Qiaozhen
Secretary of the
Zhou Siyuan Male 36 Incumbent 100 No
Board and Vice
62
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
President
Chief financial
Ni Shuyi Female 46 Incumbent 100 No
officer
Wang Weiyi Vice president Male 53 Incumbent 120 No
Wang Min Vice president Male 51 Incumbent 100 No
Li Feng Vice president Male 48 Incumbent 120 No
Zhang Ou Vice president Male 56 Incumbent 121.21 No
Zhang Mao Vice president Female 43 Incumbent 62.4 No
Total -- -- -- -- 1,322.78 --
VI. Performance of directors' duties during the reporting period
1. Situation of the Board of Directors during this reporting period
Session Date of convening Date of disclosure Resolution
16th Meeting of the 5th Announcement No.: 2022-
January 27, 2022 January 28, 2022
Session of Board of Directors 004
17th Meeting of the 5th Announcement No.: 2022-
April 11, 2022 April 12, 2022
Session of Board of Directors 013
18th Meeting of the 5th Announcement No.: 2022-
April 25, 2022 April 26, 2022
Session of Board of Directors 027
19th Meeting of the 5th Announcement No.: 2022-
May 10, 2022 May 11, 2022
Session of Board of Directors 032
20th Meeting of the 5th Announcement No.: 2022-
June 30, 2022 July 1, 2022
Session of Board of Directors 038
21st Meeting of the 5th Announcement No.: 2022-
July 18, 2022 July 19, 2022
Session of Board of Directors 043
22nd Meeting of the 5th Announcement No.: 2022-
August 12, 2022 August 13, 2022
Session of Board of Directors 047
23rd Meeting of the 5th Announcement No.: 2022-
August 25, 2022 August 26, 2022
Session of Board of Directors 057
24th Meeting of the 5th Announcement No.: 2022-
September 23, 2022 September 24, 2022
Session of Board of Directors 063
25th Meeting of the 5th Announcement No.: 2022-
October 19, 2022 October 20, 2022
Session of Board of Directors 072
26th Meeting of the 5th Announcement No.: 2022-
November 8, 2022 November 9, 2022
Session of Board of Directors 077
27th Meeting of the 5th Announcement No.: 2022-
December 11, 2022 December 14, 2022
Session of Board of Directors 090
28th Meeting of the 5th Announcement No.: 2022-
December 16, 2022 December 17, 2022
Session of Board of Directors 092
29th Meeting of the 5th Announcement No.: 2022-
December 30, 2022 December 31, 2022
Session of Board of Directors 096
2. Directors' attendance at the board of directors and shareholders' meetings
Directors' attendance at the board of directors and shareholders' meetings
Number of Whether
Number of
board failed to
Number of board Number of
meetings to Number of Number of attend two
Name of board meetings shareholders'
be attended board board consecutive
director meetings attended via meetings
during the appointments absences board
attended corresponden attended
reporting meetings in
ce
period person
63
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Qiu Jianping 14 14 0 0 0 No 4
Chi
14 14 0 0 0 No 4
Xiaoheng
Wang
14 14 0 0 0 No 4
Lingling
Li Zheng 14 14 0 0 0 No 4
Xu Zheng 14 14 0 0 0 No 4
Cen
14 11 3 0 0 No 4
Zhengping
Wang Gang 14 11 3 0 0 No 4
Chen Zhimin 14 11 3 0 0 No 4
Shi Hong 14 11 3 0 0 No 4
Description of failure to attend two consecutive board meetings in person
3. Cases in which directors raise objections to relevant matters of the Company
Whether the director has raised an objection to the relevant matters of the Company
□Yes No
During the reporting period, the directors raised no objections to relevant matters of the Company.
4. Other instructions for directors to perform their duties
Whether the director's suggestions to the Company have been accepted
Yes □ No
Whether the director's suggestions to the Company have been adopted or not
During the reporting period, in strict accordance with relevant laws and regulations, the Articles of Association and Rules of
Procedure of the Board of Directors of the Company, the directors of the Company earnestly performed the relevant duties, strictly
implemented the resolutions of the general meeting of shareholders, participated in the meetings of the board of directors and the
general meeting of shareholders, carefully deliberated various proposals, and actively promoted the implementation of the
resolutions of the board of directors. Meanwhile, each director timely understood the Company's operating conditions, internal
control system construction and the implementation of the board's resolutions, studied, planned and promoted the next stage of
work priorities, fully understood and agreed on the Company's renewal of financial audit institutions, profit distribution, related
transactions, financial assistance and other matters in the report period, so as to promote the sustainable and high-quality
development of the Company's various businesses.
VII. Situation of special committees under the board of directors during the reporting
period
Important
opinions Performa
Number of Details of
Committee Date of and nce of
Membership meetings Meeting content objection (if
name convening suggestion other
held any)
s put duties
forward
Compensatio Chen We deliberated and
n and Zhimin, Shi April 11, adopted the
1
Evaluation Hong, 2022 Proposal on the
Committee Wang Gang, Compensation Plan
64
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Chi of the Company's
Xiaoheng, Directors in 2022
Xu Zheng and Proposal on the
Compensation Plan
of the Company's
Senior Executives
in 2022.
The meeting
deliberated and
approved the full
text and abstract of
2021 Annual
Report, 2021
Annual Audit
Report of the
Company, 2021
Financial Final
Accounts Report of
the Company, 2021
Annual Internal
Control Self-
evaluation Report of
the Company,
Wang Gang,
Proposal on
Shi Hong,
Renewing Tianjian
Chen
Audit April 11, Certified Public
Zhimin, 4
committee 2022 Accountants
Wang
(Special General
Lingling,
Partnership) as
Xu Zheng
Audit Institution of
the Company in
2022, Proposal on
the Forecast of
Daily Connected
Transactions in
2022, Summary of
2021 Audit Work
and 2022 Audit
Work Plan of the
Audit Department,
and Special Report
on the Deposit and
Use of the
Company's Raised
Funds in 2021.
Wang Gang,
Shi Hong,
The meeting has
Chen
Audit April 25, deliberated and
Zhimin, 4
committee 2022 approved Q1 2021
Wang
Report.
Lingling,
Xu Zheng
Wang Gang, The meeting has
Shi Hong, deliberated and
Audit Chen August 25, approved the full
4
committee Zhimin, 2022 text and abstract of
Wang the 2022 Semi-
Lingling, Annual Report and
65
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Xu Zheng Special Report on
2022 Semi-Annual
Storage and Use of
the Company's
Raised Funds.
Wang Gang,
Shi Hong,
The meeting has
Chen
Audit October 19, deliberated and
Zhimin, 4
committee 2022 approved the Q3
Wang
Report 2022
Lingling,
Xu Zheng
VIII. Work of the Board of Supervisors
The Board of Supervisors find out whether the Company is at risk in its supervisory activities during the reporting period
□Yes No
The Board of Supervisors has no objection to the supervisory matters in the reporting period.
IX. Employees condition
1. Number of employees, position types and education level
Number of active employees in the parent company at the end
1,403
of reporting period (person)
Number of active employees in the main subsidiary at the end
9,156
of reporting period (person)
Total number of active employees at the end of reporting period
10,559
(person)
Total number of employees receiving salary during the period
10,559
(person)
Number of retired employees of the parent company and its
0
main subsidiary that shall bear the expenses(person)
Positions
Position category Number of each position (person)
Production personnel 7,199
Sales personnel 1,035
Technical personnel 1,099
Financial personnel 170
Administrative personnel 1,056
Total 10,559
Educational background
Educational background type Quantity (person)
Graduate degree or above 120
University degree (including junior college) 2,716
Senior high school (including technical secondary school and
2,924
technical school)
Below high school 4,799
Total 10,559
66
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
2. Salary policy
In strict accordance with the relevant provisions of the national labor contract law, the Company carries out staff salary
management and ensures that the employees are paid on time and in full before the 20th day of each month. The average salary of
employees in 2022 is higher than the provincial average salary standard of Zhejiang Province in 2022. The overtime salary of
employees in weekdays and weekends is calculated in full according to the regulations. Some positions are subject to the
comprehensive working hour system. Complete one general salary adjustment annually, three salary adjustment quarterly, and one
external salary level survey. The salary calculation scheme is divided into two categories: the front-line employees are paid
according to overtime work, and the hourly wage and overtime pay are calculated according to the national labor law policy. The
salary of management positions are based on a combination of fixed salary and performance-based pay.
3. Training plan
Staff training and development is an important part of the Company's work. Training management in 2022 will continue to focus
on the three directions of new staff growth education, professional and technical training, and staff professional quality education.
The Company organized 314 training sessions throughout the year, with a total of 5,999 people attending the training, and the total
class hours reached 11,783 hours. Meanwhile, the Company continued to carry out the construction of talent echelon and focuses
on the director and manager level talent selection and training. In 2022, in order to support the long-term sustainable development
of the Company, the Company will focus on improving the management skills of in-service middle and senior management
personnel, doing a good job in the training of reserve talents, strengthening the construction of internal trainer team and building a
strong teaching team to meet the growing training demand.
4. Labor service outsourcing condition
□ Applicable N/A
X. Profit distribution of the Company and conversion of capital reserve fund to share
capital
Profit distribution policy, especially the formulation, implementation or adjustment of cash dividend policies during the reporting
period
Applicable □ N/A
The Company held the 2020 annual general meeting of shareholders on May 10, 2021, deliberated and approved the Company's
Shareholder Return Plan for the Next Three Years (2021-2023), which comprehensively considered the Company's profitability,
development strategy planning, shareholder return, social cost of capital, external financing environment and other factors. The
Company's Board of Directors has formulated the Three-year Shareholder Return Plan (2021-2023).
During the reporting period, the formulation and implementation of the Company's profit distribution policy were in line with
China Securities Regulatory Commission's Notice on Further Implementation of Related Matters Concerning Cash Dividend of
Listed Companies, Guidance on Supervision of Listed Companies No. 3 -- Cash Dividend of Listed Companies, the Articles of
Association, and other relevant provisions. The relevant decision-making procedures and mechanisms were complete, and the
independent directors were diligent and responsible, fully safeguarding the legitimate rights and interests of minority shareholders.
Special description of the cash dividend policy
Whether it complies with the provisions of the Company's
articles of association or the resolution of the general meeting Yes
of shareholders:
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Whether the dividend standard and proportion are clear and
Yes
definite:
Whether the relevant decision-making procedures and
Yes
mechanisms are complete:
Whether the independent directors performed their duties and
Yes
played their due roles:
Whether minority shareholders have sufficient opportunities to
express their opinions and appeals, and whether their legitimate Yes
rights and interests are fully protected:
If the cash dividend policy is adjusted or changed, whether the
Yes
conditions and procedures are compliant and transparent:
The Company's profit in the reporting period and the parent company's profit available to shareholders are positive, but no cash
dividend distribution plan has been proposed
□ Applicable N/A
Profit distribution and conversion of capital reserve into share capital during the reporting period
Applicable □ N/A
Bonus shares per 10 shares (shares) 0
Dividend payout per 10 shares (CNY) (tax included) 1.66
Share capital base (shares) of the distribution plan 1,194,478,182
Cash dividend amount (CNY) (tax included) 198,283,378.21
Amount of cash dividend by other means (e.g. share
50,184,048.00
repurchase) (CNY)
Total cash dividend (including other means) (CNY) 248,467,426.21
Distributable profit (CNY) 4,882,191,240.72
The proportion of total cash dividends (including other means)
100
in total profit distribution
This cash dividend situation
Others
Detailed description of profit distribution or capital reserve conversion plan
Audited by Pan-China Certified Public Accountants (special general partnership), the Company (parent company) achieved a net
profit of CNY 653,002,000.00 in 2022. According to the Company Law, the Accounting Standards for Business Enterprises and
the Articles of Association, the Company intends to withdraw the legal surplus reserve of CNY 65,300,200.00 in accordance with
10% of the net profit achieved in 2022, and the remaining profit available for distribution in prior years is CNY 429,8560,700.00,
deducting CNY 4,071,200.00 generated by absorption of combined subsidiaries. The actual profit available for distribution by
shareholders was CNY 4,882,191,200.00. (Note: The difference in mantissa between the total count and the number calculated
according to the details is due to rounding)
XI. Implementation of company equity incentive plans, employee stock ownership plans, or
other employee incentive measures
□ Applicable N/A
The Company has no implementation of equity incentive plan, employee stock ownership plan or other employee incentive
measures during the reporting period.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
XII. Construction and implementation of the internal control system during the reporting
period
1. Construction and implementation of internal control
During the reporting period, the Company continuously improves the internal control system in strict accordance with the
Company Law, Securities Law, Governance Guidelines for Listed Companies, Basic Norms for Enterprise Internal Control and
relevant laws, regulations and normative documents. The Board of Directors carries out self-evaluation on the internal control of
the company every year and discloses the Internal Control Self-Evaluation Report. Meanwhile, according to the requirements of
Shenzhen Stock Exchange, the Company hires an accounting firm to conduct internal control audit of the company. In 2022, the
Company revised the Articles of Association in accordance with the new Securities Law, the Shenzhen Stock Exchange Listing
Rules and other laws, regulations and normative documents, and the actual situation of the company. The Company constantly
improves and enhances the level of corporate governance in accordance with the provisions and requirements of laws, regulations,
normative documents and the Articles of Association.
During the reporting period, the Company has no major or material defects in the internal control of financial reporting and non-
financial reporting. The Company has maintained effective internal control over financial reporting in all major aspects in
accordance with the requirements of the internal control standard system and relevant regulations of the enterprise.
2. Specific situation of major internal control defects found during the reporting period
□Yes No
XIII. The Company's management and control over its subsidiaries during the reporting
period
Problems
Integration Measures taken Settlement Follow-up
Designation Integration plan encountered in
progress to resolve it progress resolution plan
integration
N/A N/A N/A N/A N/A N/A N/A
XIV. Internal control self-evaluation report or internal control audit report
1. Internal control self-evaluation report
Date of full text disclosure of internal
April 22, 2023
control evaluation reports
Index to full text disclosure of internal The 2022 Annual Internal Control Self-Evaluation Report disclosed by
control evaluation reports http://www.cninfo.com.cn
Proportion of the total assets of the units
included in the evaluation to the total
100.00%
assets of the consolidated financial
statements of the Company
Proportion of the operating income of the
units included in the evaluation to the
100.00%
operating income of the Company's
consolidated financial statements
Defect identification criteria
69
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Category Financial report Non-financial report
(1) Signs of major defects in financial
reports include: ① Fraud by directors,
supervisors and senior managers; ②
Correct the material defects in the
financial reports that have been
announced; ③ The CPA found that there If any of the following circumstances
was a material misstatement in the occurs, it can be identified as a major
current financial report and the defect. In other circumstances, it can be
Company's internal control failed to find identified as a material defect or a
the misstatement in the operation general defect according to the degree of
process; ④ Ineffective supervision of influence. (1) Unscientific decision-
internal control by the audit committee making procedure; (2) Violating national
and the internal audit institution. (2) laws and regulations, such as
Qualitative criteria Indications of material deficiencies in environmental pollution; (3) The loss of
financial reports include: ① Failure to managerial or technical personnel; (3)
select and apply accounting policies in The loss of managerial or technical
accordance with GAAP; ② No anti- personnel; (5) The results of internal
fraud procedures and control measures control evaluation, especially the major
have been established; ③ No or material defects, have not been
corresponding control mechanism has rectified; (6) Lack of system control or
been established or no corresponding systematic failure of system for
compensatory control has been important business.
implemented for the accounting
treatment of unconventional or special
transactions; (3) Refers to other defects
except major defects and material defects
as general defects.
Internal control defects that may cause or
have caused loss related to profit, as
measured by operating income measures.
If this defect alone or in conjunction with
other defects may result in a
misstatement of less than 1% of the
operating income in the financial report,
it is considered a general defect; If it is
more than 1% of operating proceeds but
less than 3%, it is deemed to be a (1) Major defects: causing direct
material defect. If it exceeds 3% of property losses of more than CNY 10
revenue, it is considered a major defect. million; (2) Material defects: causing
Quantitative criteria Losses that may result from or have direct property losses of CNY 1 million -
resulted from internal control defects 10 million (inclusive); (3) General
related to asset management, measured defects: causing direct property losses of
by the total assets index. If this defect less than CNY 1 million (inclusive).
alone or in conjunction with other
defects may result in a misstatement of
less than 1% of the total assets in the
financial report, it is considered to be a
general defect; If it is more than 1% of
the total assets but less than 3%, it is
deemed as a material defect; If it exceeds
3% of the total assets, it is considered a
major defect.
Number of major defects in financial
0
reports (PCS)
Number of major defects in non-financial
0
reports (PCS)
70
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Number of material defects in financial
0
reports (PCS)
Number of material defects in non-
0
financial reports (PCS)
2. Internal control audit report
Applicable □ N/A
The deliberative comment section of the internal control audit report
In our opinion, GreatStar maintained effective internal control over financial reporting in all material respects as of December 31,
2022, in accordance with the Basic Norms for Internal Control of Enterprises and relevant regulations.
Disclosure of internal control audit report Disclosure
Date of the full text disclosure of internal control audit reports April 22, 2023
Verification Report on the Internal Control of Hangzhou
Index to the full text disclosure of internal control audit reports GreatStar Industrial Co., Ltd. (Tian Jian Shen (2023) No.3370,
published by http://www.cninfo.com.cn)
Internal control audit report opinion type Standard unqualified opinion
Whether there are major defects in non-financial reports No
Whether the accounting firm issues non-standard opinions of the internal control audit report
□Yes No
Whether the internal control audit report issued by the accounting firm is consistent with the self-evaluation report of the Board of
Directors
Yes □ No
XV. Description of listed company governance special action self-examination problem
rectification
According to the document requirements of Zhejiang Securities Regulatory Bureau Notice on Carrying out Special Action on the
Governance of Listed Companies under the Jurisdiction (Zhejiang Securities Regulatory Company (2022) No. 141), our company
carefully carries out inspection according to the relevant requirements in the self-inspection list. Through self-inspection, it is
found that the Company complies with relevant regulations in terms of the operation of the three committees, investor
management and management, internal control system construction, information disclosure quality and other aspects. The
directors, supervisors and senior managers are diligent and responsible, and the Company does not have the situation that the
controlling shareholders and their related parties occupy funds or violate external guarantees. The Company will further improve
the internal control system, do a good job in information disclosure, investor relationship management and other related work, and
constantly improve the level of corporate governance.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Section V Environmental and Social Responsibility
I. Major environmental protection issues
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmental
protection department
□Yes No
Administrative punishment for environmental problems during the reporting period
The impact on the
Name of company Cause of production and Corrective action
Violation situation Punishment result
or subsidiary punishment operation of listed of the Company
companies
None None None None None None
Refer to other environmental information disclosed by key pollutant discharge units
The Company and its subsidiaries do not belong to the key pollutant discharge units announced by the national environmental
protection department. During the reporting period, the Company was not subject to administrative penalties due to environmental
problems.
Measures taken to reduce its carbon emissions during the reporting period and their effects
Applicable □ N/A
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 Instruction, Regulations on
Greenhouse Gas Management and other systems, integrating the concept of environmental protection into the daily production and
operation of the company. Meanwhile, the Company actively design green products, build green factories and promote green
office to implement the concept of energy saving and low carbon. The Company takes environmental factors into full
consideration in the product design and R&D stage, actively launches green products, continuously improves the product
environmental protection attributes, and continuously develops new environmental protection technology, so as to reduce material
waste, environmental pollution and energy consumption; In order to help fight the battle of pollution prevention and control, the
Company has developed scientific waste management and control procedures, chemical management procedures and other
relevant standards, so as to strictly control pollution, maximize the impact of its business operations on the environment, and
realize green production; In accordance with the principles of low-carbon energy and clean production, the Company promotes the
green transformation and upgrading of the factory through the construction of rooftop solar energy, the use of electric forkl ift and
other measures to achieve green development, centering on the concept of green office. The Company advocates system upgrading
and supports with all departments to actively promote the popularity of green office awareness in the whole company.
Reasons for not disclosing other environmental information
None
II. Social Responsibility
(1) Protecting the rights and interests of shareholders and creditors
During the reporting period, the Company further strengthened the standardized operation, established and improved the corporate
governance structure, standardized management in the convening and procedure of the general meeting of shareholders, and
72
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
ensured the shareholders' right to know, right to participate and right to vote on major issues of the company; The Company
constantly improved the Company's internal control system, revised the Articles of Association according to relevant regulations;
The Company conscientiously performed the obligation of information disclosure, ensured the true, accurate, complete, timely and
fair information disclosure, did not selectively disclose information, strictly implemented the insider information registration and
insider information confidentiality system, and treated all shareholders and investors fairly; The Company strengthened investor
relationship management, communicated with investors through investor relationship interactive platforms, hotlines and other
means, and protected the legitimate rights and interests of all shareholders, especially minority shareholders.
(2) Protection of employee rights and interests
The Company adheres to the people-oriented, takes the 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 employees'
pension, medical, unemployment, industrial injury, maternity and other social insurance on time, respects and protects employees'
individual rights and interests, and pays attention to employees' health, safety and satisfaction. The Company attaches great
importance to personnel training, and regularly organizes training on production safety knowledge, basic skills of various positions,
and comprehensive quality training of management personnel, so that employees can effectively improve their overall professional
quality and comprehensive quality in addition to their own work, so as to realize the common growth of employees and enterprises,
and build harmonious and stable labor-capital relations.
(3) Protecting the rights and interests of suppliers, clients and consumers
The Company has been following the trading principles of "honesty and trustworthiness, mutual benefit, legal compliance", pays
attention to the communication and coordination with all relevant parties, fully respects and protects the legitimate rights and
interests of suppliers and customers, and establishes a strategic partnership with suppliers and customers. The Company constantly
improves the procurement system and process. In terms of the selection of suppliers, the Company has established a fair and
impartial evaluation system to select qualified suppliers. The Company adheres to customer interests first, strictly controls product
quality, constantly improves service quality, and always pays attention to product safety, so that the rights and interests of all
parties have been duly protected.
(4) Environmental protection
The Company attaches great importance to environmental protection and takes environmental protection, energy saving and
emission reduction as an important work. During the reporting period, the Company conducted effective and comprehensive
treatment of waste water and waste gas in strict accordance with relevant environmental laws and regulations and corresponding
standards, and the waste water and waste gas treatment facilities operated normally. In order to strengthen the management of
emission reduction and pollution control, the Company conducts regular testing. The overall operation of environmental protection
facilities is in good condition, and the work of energy conservation and emission reduction is carried out orderly.
III. Consolidate and expand the achievements in poverty alleviation and rural revitalization
During the reporting period, the Company did not participate in the precise consolidation and expansion of poverty alleviation and
rural revitalization work.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Section VI Important Matters
I. Performance of commitments
1. Commitments completed by the actual controller, shareholders, related parties, acquirers, the
Company and other relevant parties within the reporting period and commitments not completed by the
end of the reporting period
Applicable □ N/A
Cause of Type of Content of Commitment Term of
Promising party Performance
commitment commitment commitment time commitment
1. I and the
enterprises
controlled by
me shall
minimize
related
transactions
with the listed
company as
much as
possible, and
shall not use
my position as
the actual
controller of the
listed company
to seek to grant
rights superior
to other third
Commitments Reduce and parties in
made at the Qiu Jianping; standardize business Long-term In strict
June 4, 2019
time of asset Wang Lingling related cooperation validity performance
restructuring transactions with the listed
company. 2.
The Company
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 first.
3. In case of
necessary and
unavoidable
related
transactions,
the Company
74
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
and the
enterprises
controlled by
the Company
will enter into
agreements
with the listed
company
according to the
principles of
fairness and
compensation
of equivalent
value and
perform legal
procedures, and
comply with
the
requirements of
relevant laws,
regulations and
normative
documents and
provisions of
the Articles of
Association.
The Company
will perform
the obligations
of information
disclosure and
relevant
internal
decision-
making and
approval
procedures in
accordance
with the law,
and ensure that
it will not
conduct
transactions
with the listed
company on
terms that are
obviously
unfair
compared with
the market
price, nor will it
use such
transactions to
engage in any
behavior that
damages the
legitimate
rights and
75
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
interests of the
listed company
and other
shareholders.
1. The
Company and
the enterprises
controlled by
the Company
will minimize
affiliated
transactions
with the listed
company and
will not use its
position as the
controlling
shareholder of
the listed
Company to
seek to grant
rights superior
to other third
parties in
business
cooperation
with the listed
Company. 2.
The Company
Commitments Reduce and will not use its
made at the GreatStar standardize position as the Long-term In strict
June 4, 2019
time of asset Group related controlling validity performance
restructuring transactions shareholder of
the listed
company to
seek the right to
enter into
transactions
with the listed
company first.
3. In case of
necessary and
unavoidable
related
transactions,
the Company
and the
enterprises
controlled by
the Company
will enter into
agreements
with the listed
company
according to the
principles of
fairness and
compensation
76
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
of equivalent
value and
perform legal
procedures, and
comply with
the
requirements of
relevant laws,
regulations and
normative
documents and
provisions of
the Articles of
Association.
The Company
will perform
the obligations
of information
disclosure and
relevant
internal
decision-
making and
approval
procedures in
accordance
with the law,
and ensure that
it will not
conduct
transactions
with the listed
company on
terms that are
obviously
unfair
compared with
the market
price, nor will it
use such
transactions to
engage in any
behavior that
damages the
legitimate
rights and
interests of the
listed company
and other
shareholders.
1. I shall not
directly or
Commitments indirectly
made at the Qiu Jianping; Avoid engage in or Long-term In strict
June 4, 2019
time of asset Wang Lingling competition participate in validity performance
restructuring any business
that may be in
direct or
77
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
indirect
competition
with the
business of the
listed company
and its
subsidiaries; I
warrant that
legal and
effective
measures will
be taken to
prevent other
enterprises
under my
control from
engaging in or
participating 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
controlled by
me will not
compete with
the expanded
business of the
listed company;
Where there
may be
competition
with the
expanded
business of the
listed company,
I and other
enterprises
controlled by
me shall
withdraw from
the competition
with the listed
company in the
following
ways: A.
Discontinue
any business
that is or may
78
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
be competitive
with the listed
company; B.
Incorporate the
competing
businesses into
the listed
company for
management;
C. Transfer the
competing
business to an
unrelated third
party. 3. If I or
any other
enterprise
under my
control has any
business
opportunity to
engage in or
participate in
any activity
which may be
competitive
with the
operation of the
listed company,
I shall
immediately
notify the listed
company of
such business
opportunity,
and within a
reasonable
period specified
in the notice, if
the listed
company gives
a positive reply
that it is willing
to take
advantage of
such business
opportunity, I
shall try my
best to give the
listed company
such business
opportunity. 4.
If I violate the
above
commitments, I
am willing to
bear all the
liabilities
arising
79
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
therefrom and
fully
compensate or
compensate for
all the direct or
indirect losses
caused to the
listed company.
1. The
Company does
not directly or
indirectly
engage in or
participate in
any business
that is in
potential direct
or indirect
competition
with the
business of the
listed company
and its
subsidiaries;
The Company
warrants that it
will take legal
and effective
measures to
prevent other
enterprises
Commitments controlled by
made at the GreatStar Avoid the Company Long-term In strict
June 4, 2019
time of asset Group competition from engaging validity performance
restructuring in or
participating 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;
80
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Where there
may be
competition
with the
expanded
business of the
listed company,
the Company
and other
enterprises
controlled by
the Company
shall withdraw
from the
competition
with the listed
company in the
following
ways: A.
Discontinue
any business
that is or may
be competitive
with the listed
company; B.
Incorporate the
competing
businesses into
the listed
company for
management;
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
which may be
competitive
with the
operation of the
listed company,
the Company
shall
immediately
notify the listed
company of
such business
81
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
opportunity,
and within a
reasonable
period specified
in the notice. If
the listed
company gives
a positive reply
that it is willing
to take
advantage of
such business
opportunity, the
Company will
try to give the
business
opportunity to
the listed
company. 4. In
case of
violation of the
above
commitments,
the Company is
willing to bear
all the liabilities
arising
therefrom and
fully
compensate or
compensate for
all the direct or
indirect losses
caused to the
listed company.
I promise that
after the
completion of
this transaction,
I will ensure
that the listed
company will
continue to
improve its
corporate
Commitments Ensure the
governance
made at the Qiu Jianping; independence Long-term In strict
structure and June 4, 2019
time of asset Wang Lingling of listed validity performance
independently
restructuring companies
operated
corporate
management
system in
accordance
with relevant
laws and
regulations and
the Articles of
Association,
82
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
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.
The Company
undertakes that
after the
completion of
this transaction,
it will ensure
that the listed
company will
continue to
improve its
corporate
governance
structure and
independently
operated
corporate
management
system in
Commitments Ensure the accordance
made at the GreatStar independence with relevant Long-term In strict
June 4, 2019
time of asset Group of listed laws and validity performance
restructuring companies 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.
All directors 1. I promise not
Commitments
and senior Other to transfer Long-term In strict
made at the June 4, 2019
management commitments benefits to validity performance
time of asset
personnel of the other units or
83
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
restructuring Company individuals free
of charge or
under unfair
conditions, nor
to damage the
interests of the
company in
other ways. 2. I
promise to
restrict my duty
consumption
behavior. 3. I
promise that I
will not use the
Company's
assets to engage
in investment
and
consumption
activities
unrelated to the
performance of
my duties. 4. I
promise that the
compensation
system set by
the Board of
Directors or the
compensation
and Evaluation
Committee will
be linked to the
implementation
of the
Company's
compensation
measures. In
case of any loss
caused to the
Company or the
stockholders by
violation of the
above
commitments, I
shall be liable
for
compensation
according to
law.
1. I shall not
interfere with
the Company's
Commitments
operation and
made at the GreatStar Other Long-term In strict
management June 4, 2019
time of asset Group commitments validity performance
activities
restructuring
beyond its
authority, and
shall not
84
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
encroach on the
company's
interests. 2. If
the China
Securities
Regulatory
Commission
(CSRC) makes
explicit
provisions on
supplementary
return measures
and
commitments
between the
issuance date of
this
Commitment
and the
completion of
the transaction,
and the
aforesaid
commitments
fail to meet
such provisions
of the CSRC, I
promise to
issue
supplementary
commitments
in accordance
with the
provisions of
the CSRC. 3.
The Company
will strictly
fulfill the
measures to fill
the diluted
immediate
return. If it fails
to fill the
diluted
immediate
return
measures, it
will publicly
explain the
specific reasons
for its failure to
fill the diluted
immediate
return measures
at the
shareholders'
meeting of the
Company and
85
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
apologize to the
Company's
shareholders
and public
investors; If
investors suffer
losses in
securities
trading due to
failure to fulfill
relevant
commitments,
they will be
compensated
according to
law. In case of
any loss caused
to the Company
or its
shareholders
due to its
breach of the
aforesaid
commitment,
the Company
shall be liable
for
compensation
according to
law.
1. I shall not
interfere with
the Company's
operation and
management
activities
beyond its
authority, and
shall not
encroach on the
company's
interests. 2. If
Commitments the China
made at the Qiu Jianping; Other Securities Long-term In strict
June 4, 2019
time of asset Wang Lingling commitments Regulatory validity performance
restructuring Commission
(CSRC) makes
explicit
provisions on
supplementary
return measures
and
commitments
between the
issuance date of
this
Commitment
and the
86
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
completion of
the transaction,
and the
aforesaid
commitments
fail to meet
such provisions
of the CSRC, I
promise to
issue
supplementary
commitments
in accordance
with the
provisions of
the CSRC. 3. I
will strictly
fulfill the
measures to fill
the diluted
immediate
return. If I fail
to fill the
diluted
immediate
return
measures, I will
publicly
explain the
specific reasons
for my failure
to fill the
diluted
immediate
return measures
at the
Company's
general meeting
of shareholders
and apologize
to the
Company's
shareholders
and public
investors; If
investors suffer
losses in
securities
trading due to
failure to fulfill
relevant
commitments,
they will be
compensated
according to
law. In case of
any loss caused
to the Company
87
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
or its
shareholders by
violation of the
above
commitments, I
shall be liable
for
compensation
according to
law.
1. Promise not
to transfer
benefits to
other units or
individuals free
of charge or
under unfair
conditions, nor
to damage the
interests of the
Company by
other means. 2.
Promise to
restrict the
consumption
behavior of
directors and
senior
managers. 3.
Promise not to
use company
Commitments assets to engage
All directors
made at the in investment
and senior
time of an Other and November 23, Long-term In strict
management
initial public commitments consumption 2018 validity performance
personnel of the
offering or activities
Company
refinancing unrelated to the
performance of
duties. 4.
Promise that
the
compensation
system set by
the Board of
Directors or the
compensation
committee will
be linked to the
implementation
of the
Company's
compensation
measures. 5. If
the Company
implements the
equity incentive
plan in the
future, promise
88
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
that the
exercise
conditions of
the future
equity incentive
plan will be
linked to the
implementation
of the
Company's
filling return
measures. As
one of the
subjects
responsible for
filling the
return
measures, if I
violate the
above
commitments
or refuse to
perform the
above
commitments, I
agree to be
punished or
take relevant
management
measures in
accordance
with the
relevant
regulations and
rules
formulated or
issued by China
Securities
Regulatory
Commission,
Shenzhen Stock
Exchange and
other securities
regulatory
authorities, and
I am willing to
bear the
corresponding
legal liabilities.
Promise not to
interfere with
Commitments
the Company's
made at the
operation and
time of an GreatStar Other November 23, Long-term In strict
management
initial public Group commitments 2018 validity performance
activities
offering or
beyond its
refinancing
power and not
to encroach on
89
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
the Company's
interests. As
one of the
subjects
responsible for
the
compensation
measures, if the
Company
violates the
above
commitments
or refuses to
perform the
above
commitments,
the Company
agrees to
impose relevant
penalties or
take relevant
management
measures on the
Company in
accordance
with the
relevant
regulations and
rules
formulated or
issued by the
China
Securities
Regulatory
Commission,
Shenzhen Stock
Exchange and
other securities
regulatory
authorities, and
is willing to
bear the
corresponding
legal liabilities.
Promise not to
interfere with
the Company's
operation and
Commitments management
made at the activities
time of an Qiu Jianping; Other beyond its November 13, Long-term In strict
initial public Wang Lingling commitments power and not 2019 validity performance
offering or to encroach on
refinancing the Company's
interests. As
one of the
subjects
responsible for
90
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
filling the
return
measures, if I
violate the
above
commitments
or refuse to
perform the
above
commitments, I
agree to take
relevant
penalties or
take relevant
management
measures in
accordance
with the
relevant
regulations and
rules
formulated or
issued by China
Securities
Regulatory
Commission,
Shenzhen Stock
Exchange and
other securities
regulatory
authorities, and
I am willing to
bear the
corresponding
legal liabilities.
During its
tenure as the
controlling
shareholder of
the issuer,
GreatStar
Holdings
Group Co.,
Commitments Ltdand the
Commitments
on trade companies it
made at the As the
competition, will directly or
time of an GreatStar controlling In strict
connected indirectly April 5, 2009
initial public Group shareholder of performance
transactions, control in the
offering or the Company
and utilization future will not
refinancing
of funds engage in or
participate in
any business or
activity within
or outside
China in any
form (including
but not limited
to investment,
91
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
combination
and acquisition,
association,
joint venture,
cooperation,
partnership,
contract or
lease operation,
or purchase of
shares of listed
companies) that
constitutes or
may constitute
material
competition
with the
Issuer's main
business. Nor
will it support,
in any form,
any third party
other than the
issuer and its
wholly-owned
or majority-
controlled
subsidiaries in
or outside
China to
engage in or
participate in
any business or
activity that
constitutes or
may constitute
material
competition
with the
Issuer's main
business. In
case any loss is
caused to the
issuer due to
the failure to
fulfill the
promises and
warranties
made in the
commitment
letter, the
GreatStar
Holding Group
Co., Ltd. will
compensate the
issuer for all
actual losses.
Qiu Jianping; Commitments While it has As the actual In strict
Commitments April 5, 2010
Wang Lingling on trade effective controller of the performance
92
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
made at the competition, control of the Company
time of an connected issuer, Qiu
initial public transactions, Jianping and
offering or and utilization his wife and the
refinancing of funds other
enterprises
directly or
indirectly
controlled by
Qju Jianping
and his wife
and other
enterprises
other than the
issuer and its
wholly-owned
or controlling
subsidiaries
will not engage
in or participate
in any form
(including but
not limited to
investment,
combination
and acquisition,
association,
joint venture,
cooperation,
partnership,
contract or
lease operation,
purchase of
shares of listed
companies)
within or
outside China,
which
constitutes or
may constitute
the main
business of the
issuer any
business or
activity in
which the
issuer has a
material
competitive
relationship
will not support
in any way,
whether in or
outside China,
any third party
other than the
issuer and its
wholly-owned
93
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
or majority-
owned
subsidiaries to
engage in or
participate in
any business or
activity that
constitutes or
may constitute
a material
competitive
relationship
with the issuer's
main business.
If any loss is
caused to the
issuer due to
the failure to
fulfill the
promise and
guarantee made
in the
commitment
letter, Qiu
Jianping and
his wife will
compensate the
issuer for all
actual losses.
Whether
promises are Yes
kept on time
2. If there is a profit forecast for the assets or projects of the Company and the reporting period is still in
the profit forecast period, the Company shall explain the reasons for the assets or projects reaching the
original profit forecast
□ Applicable N/A
II. Non-operational funds occupied by the controlling shareholders and other related parties
of the listed company
□ Applicable N/A
During the reporting period, the controlling shareholder and other related parties do not occupy non-operational funds of the listed
company.
III. Violation of foreign guarantee
□ Applicable N/A
The Company has no violation of external guarantee during the reporting period.
94
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
IV. The Board of Directors' explanation of the latest issue of "Non-standard Audit Report"
□ Applicable N/A
V. Explanation of the Board of Directors, the Board of Supervisors and the independent
directors (if any) to the "Non-standard Audit Report" of the accounting firm in the current
reporting period
□ Applicable N/A
VI. Description of changes in accounting policies, accounting estimates or corrections of
major accounting errors compared with the financial report of the prior year
□ Applicable N/A
There is no change in accounting policies, accounting estimates or correction of material accounting errors during the reporting
period.
VII. Description of changes in the scope of consolidated statements compared with the
financial report of the prior year
Applicable □ N/A
For details, see Section 10, VIII, “Changes in the scope of consolidation”
VIII. Employment and dismissal of accounting firms
The accounting firm currently employed
Pan-China Certified Public Accountants LLP (Special General
Name of domestic accounting firm
Partnership)
Remuneration of domestic accounting firms (ten thousand
89.5
CNY)
Consecutive years of audit services provided by domestic
14
accounting firms
Name of CPA of domestic accounting firm Fei Fanghua and Li Xi
Number of consecutive years of CPA audit services provided
2
by domestic accounting firms
Whether to hire an accounting firm during the current period
□Yes No
Employment of internal control audit firms, financial advisers or sponsors
□ Applicable N/A
IX. Delisting after disclosure of annual report
□ Applicable N/A
95
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
X. Matters related to bankruptcy reorganization
□ Applicable N/A
No bankruptcy reorganization related matters occurred during the reporting period.
XI. Major litigation and arbitration matters
Applicable □ N/A
Litigation
Basic Amount Enforcement
Whether Progress of (arbitration)
information involved (ten of litigation Date of Disclosure
provisions litigation hearing
of litigation thousand (arbitration) disclosure index
are formed (arbitration) results and
(arbitration) CNY) judgments
impact
For litigation
matters, the
Company
will: 1.
Successful
litigation or
mediation to
recover the
funds
As of involved; 2.
December Require the
31, 2022, the involved unit
settlement and its
amount has associated
reached CNY legal person
0.00; The or nature to
Summary of
amount provide
other matters
involved in guarantee for
that do not
the mediation the execution
meet the
to be of the debt, A total of
material
recovered is so as to CNY 0.00
litigation 83.82 No
CNY 0.00 guarantee the has been
disclosure
The amount recovery of collected
standards
of money the involved
(the
involved in funds; 3. Set
Company as
the case that aside bad
plaintiff)
has won the debt
arbitration allowance in
but has not accordance
been with
completed is accounting
CNY standards and
808,200.00. company
management
system. In
summary,
this summary
of litigation
matters has
no material
impact on the
Company.
96
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
For litigation
matters, the
Company
will: 1.
Successful
litigation or
mediation to
recover the
funds
involved; 2.
Require the
involved unit
By
and its
December
associated
31, 2022, the
legal person
amount of
or nature to
money
Summary of provide
involved in
other matters guarantee for
the case has
that do not the execution Among
been settled
meet the of the debt, them, the
and
material so as to compensatio
54.32 No withdrawn is
litigation guarantee the n judgment
CNY
disclosure recovery of has been
43,900.00;
criteria (the the involved executed
The amount
company as funds; 3. Set
of
defendant) aside bad
compensatio
debt
n involved in
allowance in
the case is
accordance
CNY
with
2,480.00.
accounting
standards and
company
management
system. In
summary,
this summary
of litigation
matters has
no material
impact on the
Company.
XII. Punishment and rectification
□ Applicable N/A
The Company has no punishment and rectification during the reporting period.
XIII. Good faith status of the Company and its controlling shareholders and actual
controllers
Applicable □ N/A
97
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
During the reporting period, the Company and Qiu Jianping, the controlling shareholder of GreatStar Group and the actual
controller, have good integrity. There is no failure to fulfill the effective judgment of the court, and the debts with a large amount
of debt are not repaid when they mature.
XIV. Material affiliated Transactions
1. Related transactions related to daily operations
□ Applicable N/A
During the reporting period, no affiliated transactions related to daily operations occurred.
2. Related transactions arising from asset or equity acquisition or sale
□ Applicable N/A
During the reporting period, there is no related transaction of asset or equity acquisition or sale.
3. Related transactions for joint foreign investment
□ Applicable N/A
There is no affiliated transaction of the Company's joint foreign investment during the reporting period.
4. Related creditor's rights and debts
□ Applicable N/A
The Company does not have related debt transactions during the reporting period.
5. Dealings with related financial companies
□ Applicable N/A
There is no deposit, loan, credit granting or other financial business between the Company and the finance company and the
related parties.
6. Transactions between financial companies controlled by the Company and related parties
□ Applicable N/A
There is no deposit, loan, credit granting or other financial business between the finance company controlled by the Company and
its related parties.
7. Other major related transactions
□ Applicable N/A
The Company has no other significant related transactions during the reporting period.
98
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
XV. Major Contracts and performance
1. Trusteeship, contracting and leasing matters
(1) Trusteeship situation
□ Applicable N/A
There is no trusteeship during the reporting period.
(2) Contracting conditions
□ Applicable N/A
There is no contract in the reporting period.
(3) The leasing situation
□ Applicable N/A
There is no lease during the reporting period.
2. Major guarantee
Applicable □ N/A
Unit: CNY 10,000
External guarantees of the Company and its subsidiaries (excluding guarantees for subsidiaries)
Guarante
e Whether Whether
Counter
Name of amount Amount Actual Actual the to
Type of guarante
the related of date of amount Security Guarante performa guarante
guarante e
guaranto announc guarante occurren guarante (if any) e period nce is e for
e situation
r ement e ce ed complete related
(if any)
disclosur d or not parties
e date
N/A
The guarantee status of the Company to its subsidiaries
Guarante
e Whether Whether
Counter
Name of amount Amount Actual Actual the to
Type of guarante
the related of date of amount Security Guarante performa guarante
guarante e
guaranto announc guarante occurren guarante (if any) e period nce is e for
e situation
r ement e ce ed complete related
(if any)
disclosur d or not parties
e date
GreatSta
r Europe
2018/8/3
Limited
July 3, 48,991.1 August 13,360.5 General 1-
by No Yes
2018 4 31, 2018 2 warranty 2023/7/2
shares
7
Compan
y
Arrow April 12, May 23, General
6,964.6 6,964.60 1 No Yes
Fastener 2022 2022 warranty
99
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Co.,
LLC
Prime-
Line April 12, May 23, General
5,223.45 5,223.45 1 No Yes
Products 2022 2022 warranty
, LLC
Shop-
Vac April 12, April 12, General
6,964.6 6,964.6 1 No Yes
USA, 2022 2022 warranty
LLC
Suzhou
Xindadi
Hardwar June 22, January General
10,000 7,600 3 No Yes
e 2020 7, 2021 warranty
Product
Co., Ltd.
2022/10/
Geelong Septemb
October General 13-
Sales er 24, 8,400 0.00 No Yes
13, 2022 warranty 2025/12/
Co., Ltd. 2022
31
GreatSta
r Europe
2021/12/
Limited Decemb Decemb
25,980.1 25,980.1 General 27-
by er 4, er 27, No Yes
5 5 warranty 2029/06/
shares 2021 2021
30
Compan
y
Total amount of
Total amount of
guarantee actually
guarantee approved
incurred to the
for subsidiaries 27,552.65 26,752.65
subsidiary during the
during the reporting
reporting period
period (B1)
(B2)
Total approved Total balance of
guarantee amount actual guarantee to
for subsidiaries at 112,523.94 subsidiary at the end 66,093.32
the end of the report of reporting period
period (B3) (B4)
The guarantee of the subsidiary to the subsidiary
Guarante
e Whether Whether
Counter
Name of amount Amount Actual Actual the to
Type of guarante
the related of date of amount Security Guarante performa guarante
guarante e
guaranto announc guarante occurren guarante (if any) e period nce is e for
e situation
r ement e ce ed complete related
(if any)
disclosur d or not parties
e date
N/A
Total amount of company guarantee (the sum of the first three items)
Total amount of
Total amount of
actual guarantee
approved guarantee
27,552.65 incurred during the 26,752.65
in reporting period
reporting period
(A1+B1+C1)
(A2+B2+C2)
Total amount of 112,523.94 Total amount of 66,093.32
100
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
approved guarantee actual guaranteed
at the end of the balance at the end of
reporting period the reporting period
(A3+B3+C3) (A4+B4+C4)
Proportion of the actual total guaranteed (i.e.
4.93%
A4+B4+C4) to the company's net assets
Including:
Balance of security provided to shareholders,
0
actual controllers and their affiliates (D)
Balance of debt guarantees provided directly
or indirectly to the insured with an asset- 59,128.72
liability ratio of more than 70% (E)
Amount guaranteed in excess of 50% of net
0
assets (F)
Total amount of the above three guarantees
59,128.72
(D+E+F)
The specific situation of the composite guarantee
N/A
3. Entrusted cash asset management
(1) Entrusted financial management situation
Applicable □ N/A
Summary of entrusted financial management during the reporting period
Unit: CNY 10,000
Overdue recovery
of the financial
Sources of funds Amount of Amount not
Outstanding management has
Concrete type entrusted to entrusted financial recovered after the
balance been deducted
finance management deadline
impairment
amount
Bank financial
Self-owned funds 18,800 6,000 0 0
products
Total 18,800 6,000 0 0
Specific situation of high-risk entrusted financial management with significant single amount or low security and poor liquidity
□ Applicable N/A
Entrusted financing is expected to fail to recover the principal or exist other circumstances that may lead to impairment
□ Applicable N/A
(2) Entrusted loans
□ Applicable N/A
There are no entrusted loans during the reporting period.
101
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
4. Other major contracts
□ Applicable N/A
There are no other major contracts during the reporting period.
XVI. Explanation of other important matters
Applicable □ N/A
1. During the reporting period, the Company obtained the purchase confirmation from a large retail company in the United States,
the purchase target is 12 volt power tools, the purchase scope is all the sales and services of this type of products in about 2,000
stores in North America in the next three years, and the estimated order amount is no less than USD 15 million per year, more than
50% of the Company's 2020 power tool product revenue. For details, see Notice (2022) No. 010 disclosed on April 7, 2022.
2. During the reporting period, the Company signed a supplier purchase agreement with a large retail company in the United States.
The purchase object is non-tool household goods, and the expected purchase amount is no less than USD 40 million per year. For
details, see Announcement (2022) No. 034 disclosed on May 13, 2022.
3. During the reporting period, the Company obtained the final confirmation of product procurement from a large retail company,
the procurement target is mobile energy storage (POWER BANK) and household energy storage (POWER STATION) products,
and the expected purchase amount is no less than USD 20 million per year. The validity period of this purchase is two years. For
details, see Announcement (2022) No. 061 disclosed on September 10, 2022.
4. On September 23, 2022, the 24th meeting of the 5th session of Board of Directors of the Company deliberated and approved the
Proposal on the Establishment of a Wholly-owned Subsidiary Company through Foreign Investment. Hong Kong GreatStar
International Co., Ltd., a wholly-owned subsidiary of the company, intends to establish a wholly-owned sub-subsidiary company,
Hangzhou GreatStar New Energy Co., Ltd. (tentatively named, subject to the approval of the competent authorities), with a
registered capital of USD 15 million, which will be raised by Hong Kong GreatStar. For details, see Announcement (2022) No.
067 disclosed on September 24, 2022.
5. Global Depository Receipts issued by the Company approved by China Securities Regulatory Commission and SIX Exchange
RegulationAG, Switzerland Hereinafter referred to as "GDR") will be listed on the Swiss Stock Exchange on November 15, 2022
(Swiss time) (hereinafter referred to as "Issuance"). GDR securities are Hangzhou GreatStar Industrial Co., Ltd. GDR listing code:
GSI. 70% or more of the net proceeds from the offering will be used to expand the Company's main business, including but not
limited to the development of power tools and home energy storage products and overseas distribution: not more than 30% or the
remainder of the net proceeds will be used for working capital and general corporate purposes. The price of each GDR in the
Issuance is USD13.08. The number of GDRS in the Issuance is 11,812,700, among which each GDR represents 5 shares of the
Company's A shares, and the corresponding number of new underlying A shares is 59,063,500. After the completion of the
Issuance of GDRS, the total share capital of the Company is changed to 1,202,501,992 shares, and the total amount of funds raised
by the Issuance of GDRS is USD154,510,116.00. The funds raised in the Issuance have been received.
6. On December 16, 2022, the 28th meeting of the 5th session of Board of Directors of the Company deliberated and approved the
Proposal on the Establishment of a Wholly-owned Sub-subsidiary through Foreign Investment. Hong Kong GreatStar International
Co., Ltd., a wholly-owned subsidiary of the Company, intends to establish a wholly-owned sub-subsidiary, Hangzhou GreatStar
Garden Tools Co., Ltd. (tentatively named, subject to the approval of the competent authorities), in Shangcheng District,
Hangzhou City, Zhejiang Province, with a registered capital of USD 100 million, which is self-raised by Hong Kong GreatStar.
For details, see Announcement (2022) No. 093 disclosed on December 17, 2022.
XVII. Major matters of subsidiaries of the Company
□ Applicable N/A
102
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Section VII Changes in Shares and Information about Shareholders
I. Changes in shares
1. Changes in shares
Unit: share
Before change Increase/decrease (+, -) After change
Conversio
n of
Proportio Issue new Share Proportio
Quantity provident Others Subtotal Quantity
n shares delivery n
fund
shares
I. Limited
- -
sale 61,339,78 49,531,30
5.36% 11,808,48 11,808,48 4.12%
condition 6 4
2 2
shares
1. State
sharehold
ing
2.
Sharehold
ing by
state-
owned
legal
persons
3. Other - -
61,339,78 49,531,30
domestic 5.36% 11,808,48 11,808,48 4.12%
6 4
holdings 2 2
Including:
domestic
legal
person
sharehold
ing
Domestic
natural - -
61,339,78 49,531,30
person 5.36% 11,808,48 11,808,48 4.12%
6 4
sharehold 2 2
ing
4. Foreign
ownershi
p
Including:
foreign
legal
person
sharehold
ing
103
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Sharehold
ing by
foreign
natural
persons
II. Shares
subject to 1,082,098 59,063,50 11,808,48 70,871,98 1,152,970
94.64% 95.88%
unlimited ,706 0 2 2 ,688
sale
1. CNY
1,082,098 59,063,50 11,808,48 70,871,98 1,152,970
ordinary 94.64% 95.88%
,706 0 2 2 ,688
shares
2. Foreign
capital
stocks
listed in
China
3. Foreign
capital
stocks
listed
overseas
4. Others
III. Total
1,143,438 59,063,50 59,063,50 1,202,501
number of 100.00% 0 100.00%
,492 0 0 ,992
shares
Reasons for changes in shares
Applicable □ N/A
During the reporting period, the number of global depositary receipts issued by the Company was 11,812,700, in which each GDR
represented five A-shares of the Company, and the corresponding number of new underlying A-shares was 59,063,500. As a result,
the total capital of the Company increased by 59,063,500 shares; Changes in limited sale conditions are caused by changes in the
holdings of directors and executives of the Company.
Approval of changes in shares
Applicable □ N/A
The Company has obtained the approval of the China Securities Regulatory Commission (hereinafter referred to as "CSRC") for
the issuance of GDRS. For details, please refer to the Announcement on the Issuance and Listing of GDRS on the Swiss Stock
Exchange Approved by the CSRC published by the Company on November 10, 2022 (Announcement (2022) No. 081) and has
obtained the approval of the Prospectus Office of the Swiss Stock Exchange Regulator for the GDR offering, as detailed in the
Company's Notice concerning the Determination of the Price Range for the GDR Offering and the Approval of the Prospectus
Office of the Swiss Stock Exchange Regulator, dated 10 November 2022 (Announcement (2022) No. 082).
Transfer of stock changes
□ Applicable N/A
The impact of stock changes on basic and diluted earnings per share, net asset value per share attributable to the Company's
common shareholders and other financial indicators in the most recent year and the most recent period
□ Applicable N/A
104
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Other contents deemed necessary by the Company or required by the securities regulatory authorities to be disclosed
□ Applicable N/A
2. Changes in restricted shares
Applicable □ N/A
Unit: share
Increase the Number of Number of
Initial limited number of restricted restricted
Name of Reasons for Date of lifting
number of restricted shares released shares at the
shareholder restricted sales the restriction
shares sold shares in the in the current end of the
current period period period
25% of the total
number of
restricted
Appointed an
shares to be
executive and
Zhang Mao 0 2,175 2,175 released at the
locked up 75%
beginning of
of his shares.
each year
during the term
of office.
25% of the total
number of
restricted
shares to be
Executive lock
Li Feng 609,733 30,225 639,958 released at the
stock
beginning of
each year
during the term
of office.
25% of the total
number of
restricted
shares to be
Director lock-in
Qiu Jianping 45,663,225 2,159,218 11,300,100 36,522,343 released at the
stock
beginning of
each year
during the term
of office.
25% of the total
number of
restricted
shares to be
Executive lock
Wang Lingling 12,863,220 3,150,000 9,713,220 released at the
stock
beginning of
each year
during the term
of office.
25% of the total
number of
restricted
Executive lock
Zhou Siyuan 0 450,000 450,000 shares to be
stock
released at the
beginning of
each year
105
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
during the term
of office.
Total 59,136,178 2,641,618 14,450,100 47,327,696 -- --
II. Securities issuance and listing
1. Securities issuance (excluding preferred shares) during the reporting period
Applicable □ N/A
Names of
Issue price Number of
stocks and Date of Quantity Date of Closing Disclosure Date of
(or interest approved
derivative issue issued listing date index disclosure
rate) listings
securities
Stock class
Announce
November USD 2.616 November March 15,
A-share 59,063,500 59,063,500 ment No.:
10, 2022 per share 15, 2022 2023
2022-086
Convertible bonds, separately traded convertible bonds and corporate bonds
Other derivative securities
Global It's USD Announce
November November November
depositary 13.08 per 11,812,700 11,812,700 ment No.:
10, 2022 15, 2022 10, 2022
receipts copy 2022-084
Description of securities issuance (excluding preferred stock) during the reporting period
The Company completed the issue of Global Depository Receipts (hereinafter referred to as "GDR") in November 2022 and was
listed on the Swiss Stock Exchange on November 15, 2022 (Swiss time) (hereinafter referred to as "Issuance"). The price of each
GDR in the Issuance is USD 13.08. The number of GDRS in the Issuance is 11,812,700, among which each GDR represents 5
shares of the Company's A shares, and the corresponding number of new underlying A shares is 59,063,500. After the completion
of this GDR, the total share capital of the Company is changed to 1,202,501,992 shares.
2. Description of changes in the total number of shares and shareholder structure of the company, as well
as changes in the structure of assets and liabilities of the company
Applicable □ N/A
The Company completed the issue of Global Depository Receipts (hereinafter referred to as "GDR") in November 2022 and was
listed on the Swiss Stock Exchange on November 15, 2022 (Swiss time) (hereinafter referred to as "Issuance"). The price of each
GDR in the Issuance is USD 13.08. The number of GDRS in the Issuance is 11,812,700, among which each GDR represents 5
shares of the Company's A shares, and the corresponding number of new underlying A shares is 59,063,500. After the completion
of this GDR, the total share capital of the Company is changed to 1,202,501,992 shares.
3. Situation of the existing internal job stock
□ Applicable N/A
106
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
III. Shareholders and actual controllers
1. Number and shareholding of the Company's shareholders
Unit: share
Total
Total
number of
number of
common
Reporting preferred
shareholder Total number of preferred
the total shareholder
s at the end shareholders whose voting
number of s reporting
of the rights were restored at the
common restoration
46,393 preceding 53,807 0 end of the month prior to 0
shareholder of voting
month prior disclosure of the Annual
s at the end rights (if
to Report (if any) (see Note
of the any) at the
disclosure 8)
period end of the
of the
period (see
Annual
Note 8)
Report
Shareholders holding more than 5% or the top 10 shareholders
Report the Number of Number of Condition of pledge, mark
Changes in
number of shares held shares held or freeze
Name of Nature of Shareholdi the
holdings at on limited under an
shareholder shareholder ng ratio reporting Share
the end of terms of unlimited Quantity
period status
the period sale condition
Domestic
GreatStar
non-state-
Holding 452,305,86 452,305,86
owned 37.61% -11434000 0
Group Co., 4 4
legal
Ltd.
person
Citibank, Overseas
59063500.0 59,063,500.
National legal 4.91% 59,063,500 0
0 00
Association person
Domestic
Qiu
natural 4.05% 48,696,458 2878958 36,522,343 12,174,115
Jianping
person
Hong Kong
Securities Overseas
Clearing legal 2.08% 25,044,623 -53725619 0 25,044,623
Company person
Limited
China
Constructio
n Bank
Co., Ltd. -
BoCOM
Schroders
Others 1.61% 19,359,284 5056185 0 19,359,284
Economic
new power
hybrid
securities
investment
fund
China
Merchants Others 1.09% 13,103,456 3139581 0 13,103,456
Bank Co.,
107
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Ltd. -
BoCOM
Schroders
Innovation
Pilot
hybrid
securities
investment
fund
Domestic
Wang
natural 1.08% 12,950,960 0 9,713,220 3,237,740
Lingling
person
National
Social
Security Others 1.02% 12,300,000 -500000 0 12,300,000
Fund 115
portfolio
National
Social
Security Others 0.97% 11,635,720 6922494 0 11,635,720
Fund 418
portfolio
Industrial
and
Commercia
l Bank of
China
Limited -
Fuguo
Tianhui Others 0.83% 10,003,400 2794148 0 10,003,400
Select
Growth
Hybrid
Securities
Investment
Fund
(LOF)
Placement of new shares
by strategic investors or During the reporting period, the Company added 59,063,500 basic A-shares due to the issuance of
general corporations as GDRS. At the end of the reporting period, the above added shares were held by Citibank and
top 10 shareholders (if National Association.
any) (see Note 3)
Description of such GreatStar Holding Group Co., Ltd., Qiu Jianping and Wang Lingling are related and belong to the
stockholder affiliation or concerted actors stipulated in the Measures for the Administration of Acquisition of Listed
concerted action Companies.
Description of the above
shareholders involved in
entrustment/fiduciary None
voting rights, waiver of
voting rights
Special description of the
repurchase account (if
None
any) among the top 10
shareholders (see Note 10)
Holdings of the top 10 unlimited sale condition shareholders
108
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Class of shares
Number of unlimited sale condition shares held at the end of reporting
Name of shareholder Class of
period Quantity
shares
CNY
GreatStar Holding Group 452,305,86
452,305,864 common
Co., Ltd. 4
stock
CNY
Citibank, National
59,063,500 common 59,063,500
Association
stock
Hong Kong Securities CNY
Clearing Company 25,044,623 common 25,044,623
Limited stock
China Construction Bank
Co., Ltd. - BoCOM CNY
Schroders Economic new 19,359,284 common 19,359,284
power hybrid securities stock
investment fund
China Merchants Bank
Co., Ltd. - BoCOM CNY
Schroders Innovation 13,103,456 common 13,103,456
Pilot hybrid securities stock
investment fund
CNY
National Social Security
12,300,000 common 12,300,000
Fund 115 portfolio
stock
CNY
Qiu Jianping 12,174,115 common 12,174,115
stock
CNY
National Social Security
11,635,720 common 11,635,720
Fund 418 portfolio
stock
Industrial and
Commercial Bank of
CNY
China Limited - Fuguo
10,003,400 common 10,003,400
Tianhui Select Growth
stock
Hybrid Securities
Investment Fund (LOF)
CITIC Securities Co., Ltd. CNY
- Social Security Fund 9,760,298 common 9,760,298
17052 portfolio stock
Description of the
relationships or concerted
actions of the top 10
unlimited-float GreatStar Holding Group Co., Ltd. and Qiu Jianping are related to each other and belong to the joint
stockholders and the top actors stipulated in the Measures for the Administration of Acquisition of Listed Companies.
10 unlimited-float
stockholders and the top
10 stockholders
Description of top 10
common shareholders'
GreatStar Holding Group Co., Ltd. participated in the lending business of the securities of the
participation in margin
transfer, by the end of the reporting period, a total of 11,434,000 shares had been lent.
trading (if any) (see Note
4)
Whether the top 10 common shareholders and the top 10 unlimited condition common shareholders of the company have engaged
in agreed repurchase transactions during the reporting period
109
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
□Yes No
The top 10 common shareholders and the top 10 unlimited condition common shareholders of the Company did not conduct
agreed repurchase transactions during the reporting period.
2. Controlling shareholders of the Company
Nature of controlling shareholder: natural person holding
Type of controlling shareholder: natural person
Whether they have obtained the right of
Name of controlling shareholder Nationality
abode in another country or region
Qiu Jianping China No
Main occupation and position Chairman of the Board, Chairman of GreatStar Group
Hangcha Group Co., Ltd., stock code: 603298, stock abbreviation: Hangcha Group,
the company was listed in Shanghai Stock Exchange on December 27, 2016, mainly
Equity status of other domestic and
engaged in forklift trucks, intelligent vehicles and other industrial vehicle products
foreign listed companies holding or
and main parts of the kit. Zhejiang Xinchai Co., Ltd., stock code: 301032, stock
participating shares during the reporting
abbreviation: Xinchai Co., Ltd., listed in Shenzhen Stock Exchange on July 22, 2021,
period
is mainly engaged in the R&D, production and sales of non-road diesel engines and
related parts.
Change in reporting period of controlling shareholders
□ Applicable N/A
The controlling shareholders of the company have not changed during the reporting period.
3. The actual controller of the Company and the person acting in concert
Nature of actual controller: Domestic natural person
Type of actual controller: natural person
Whether they have obtained
Relationship with actual
Name of actual controller Nationality the right of abode in another
controller
country or region
Qiu Jianping Myself China No
Main occupation and position Chairman of the Board, Chairman of GreatStar Group
The domestic and foreign
Qiu Jianping is the actual controller of Hangcha Group Co., Ltd. (Stock code: 603298) and
listed companies in the past
Zhejiang Xinchai Co., Ltd. (stock code: 301032).
10 years
Whether actual controller has changed in the reporting period
□ Applicable N/A
The actual controller of the Company has not changed during the reporting period.
Block diagram of the property rights and control relationship between the company and the actual controller
110
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Qiu Jianping
Qiu Jianping and his wife
GreatStar Holding Group Co., Ltd.
Hangzhou GreatStar Industrial Co., Ltd.
The actual controller controls the Company through trust or other asset management
□ Applicable N/A
4. The accumulative number of shares pledged by the controlling shareholder or the largest shareholder
of the Company and the persons acting in concert shall account for 80% of the number of shares held by
them
□ Applicable N/A
5. Other corporate shareholders holding more than 10%
□ Applicable N/A
6. The controlling shareholder, the actual controller, the reorganization party and other commitment
subject stock restriction reduction
□ Applicable N/A
IV. Specific implementation of share repurchase in the reporting period
The implementation progress of share repurchase
Applicable □ N/A
Proportion of
shares
repurchased
Amount to
Number of Number of to the
Scheme As a be Proposed
shares to be Repurchase shares underlying
disclosure percentage of repurchased buyback
repurchased use repurchased shares
time total equity (ten thousand period
(shares) (shares) covered by
CNY)
the equity
incentive
plan (if any)
Among
them, 40% of
the
18,000- 2021-7-6 to
July 6, 2021 repurchased 8,023,810
36,000 2022-7-4
shares are
intended to
be used for
111
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
stock source
of employee
stock
ownership
plan or
equity
incentive
plan, and
60% of the
repurchased
shares are
intended to
be used for
conversion of
corporate
bonds issued
by the
Company
that can be
converted
into stock
The implementation progress of reducing shares and repurchasing shares by centralized bidding trading
□ Applicable N/A
112
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Section VIII Preferred Shares
□ Applicable N/A
No preferred stock existed in the Company during the reporting period.
113
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Section IX Information about Bond
□ Applicable N/A
114
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Section X Financial Statements
I. Audit report
Type of audit opinion Standard unreserved opinion
Date of signing the audit report April 21, 2023
Pan-China Certified Public Accountants (special general
Name of audit institution
partnership)
Audit report number Pan-China Audit (2023) No. 3368
CPA name Fei Fanghua and Li Xi
Text of audit report
All shareholders of Hangzhou GreatStar Industrial Co., Ltd.:
I. Audit opinions
We have audited the financial statements of Hangzhou GreatStar Technology Co., Ltd. (hereinafter referred to as “GreatStar”),
including the consolidated and parent company balance sheet for December 31, 2022, the consolidated and parent company
income statement for 2022, the consolidated and parent company cash flow statement, the consolidated and parent company
statement of changes in shareholders’ equity, and the relevant notes to the financial statements.
In our opinion, the accompanying financial statements, prepared in all material respects in accordance with the provisions of the
accounting standards for business enterprises, fairly present the financial position of the combination and parent company as of
December 31, 2022, and the results of the combination and parent company's operations and cash flows for the year 2022.
II. Basis of audit opinions
We carried out the audit in accordance with the auditing standards of Chinese certified public accountants. Our responsibilities
under these standards are further elaborated in the "Certified Public Accountant Responsibilities for the Audit of Financial
Statements" section of the audit report. In accordance with the Chinese Certified Public Accountant Code of Ethics, we are
independent of GreatStar and fulfill other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
III. Key audit matters
Key audit items refer to the items that we consider to be the most important in the audit of current financial statements based on
our professional judgment. The response to these matters is in the context of an audit of the financial statements as a whole and the
formation of an audit opinion. We do not express an opinion on these matters separately.
(I) Revenue recognition
1. Event description
For details of disclosure of relevant information, see Note V, (II), 1 and Note III, (XXV) to the financial statements.
The revenue of GreatStar comes from hand tools, power tools, laser measurement and storage, etc. In 2022, the operating income
of GreatStar was CNY 1,261,0189,600.00. As revenue is one of the key performance indicators of GreatStar, there may be an
inherent risk that the management of GreatStar (hereinafter referred to as “Management”) may achieve specific goals or
expectations through inappropriate revenue recognition. Therefore, we have identified revenue recognition as a key audit item.
2. Audit response
For revenue recognition, our audit procedures mainly include:
115
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
(1) Understand the key internal controls related to revenue recognition, evaluate the design of these controls, determine whether
they are implemented, and test the operational effectiveness of the relevant internal controls;
(2) Examine the sales contract, understand the main contract terms or conditions, and evaluate whether the revenue recognition
method is appropriate;
(3) Carry out analysis procedures for operating proceeds and gross profit margin on a monthly, product and customer basis,
identify whether there are significant or abnormal fluctuations, and find out the causes of fluctuations;
(4) For domestic sales revenue, check supporting documents related to revenue recognition by sampling method, including sales
contract, order, sales invoice, warehouse delivery and customer signature; For export income, check sales contract, export
declaration, freight bill of lading, customer receipt, sales invoice and other supporting documents by sampling method;
(5) Confirm current sales to major customers by sampling method in combination with receivables confirmation;
(6) Implement cut-off test for the operating income recognized around the balance sheet date to evaluate whether the operating
income is recognized in the appropriate period;
(7) Check whether the information related to the operating income has been properly presented in the financial statements.
(II) Impairment of goodwill
1. Event description
For details of disclosure of relevant information, see Note III, (XX) and Note V, (I), 19 to the financial statements.
As at December 31, 2022, the original book value of goodwill of GreatStar was CNY 2,585,130,465.59, the reserve for
impairment was CNY 148,989,670.93, and the book value was CNY 2,436,140,794.66.
When there are signs of impairment in the asset group or asset group combination related to goodwill, and at the end of each year,
management shall conduct impairment tests on goodwill. Management will combine the goodwill with its related asset group or
asset group combination for impairment test, and the recoverable amount of the related asset group or asset group combination
shall be calculated according to the present value of the estimated future cash flow. Key assumptions used in the impairment test
include: revenue growth rate in the detailed forecast period, growth rate in the perpetual forecast period, gross profit rate and
discount rate, etc.
Because the amount of goodwill is material and the test of goodwill impairment involves significant management judgment, we
have identified goodwill impairment as a critical audit matter.
2. Audit response
For goodwill impairment, our audit procedures mainly include:
(1) Understand the key internal controls related to goodwill impairment, evaluate the design of these controls, determine whether
they are implemented, and test the operational effectiveness of the relevant internal controls;
(2) Review the management's forecast of the present value of future cash flows and actual operating results in prior years, and
evaluate the accuracy of the management's past forecasts;
(3) Understand and evaluate the competence, professional quality and objectivity of external valuation experts employed by
management;
(4) Evaluate the rationality and consistency of the methods used by the management in the impairment test;
(5) Evaluate the rationality of key assumptions adopted by the management in the impairment test, and review whether relevant
assumptions are consistent with the overall economic environment, industrial conditions, business conditions, historical experience
and other assumptions used by the management in relation to financial statements;
(6) Test the accuracy, completeness and relevance of the data used by the management in the impairment test, and review the
internal consistency of relevant information in the impairment test;
(7) Test whether the calculation of the present value of the expected future cash flow by the management is accurate;
(8) Check whether the information related to goodwill impairment has been properly presented in the financial statements.
116
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
IV. Other information
Management is responsible for other information. Other information includes information covered in the annual report, but
excludes the financial statements and our audit reports.
Our audit opinion on the financial statements does not cover other information, nor do we express any form of forensic
conclusions on other information.
In conjunction with our audit of the financial statements, it is our responsibility to read the additional information and, in doing so,
consider whether the additional information is materially inconsistent with the financial statements or what we have learned during
the audit or appears to be materially misstated.
Based on the work we have performed, if we determine that additional information is materially misstated, we shall report that fact.
We have nothing to report in this regard.
V. Responsibility of the management for financial statements
Management is responsible for preparing the financial statements in accordance with the accounting standards for business
enterprises to achieve fair representation, and for designing, implementing and maintaining the necessary internal controls t o
ensure that the financial statements are free from material misstatement due to fraud or error.
In preparing the financial statements, management is responsible for evaluating GreatStar's ability to go as a going concern,
disclosing matters relating to going concern, if applicable, and applying the going concern assumption, unless a liquidation is
planned, the operations are discontinued or there is no other realistic alternative.
The GreatStar Management Layer (hereinafter referred to as “Management”) is responsible for overseeing the financial reporting
process of GreatStar.
VI. Responsibilities of Certified Public Accountants for auditing financial statements
Our objective is to obtain reasonable assurance that the financial statements as a whole are free from material misstatement due to
fraud or error, and to produce an audit report containing an audit opinion. Reasonable assurance is a high level of assurance, but it
does not guarantee that an audit performed in accordance with auditing standards will always find a material misstatement. The
misstatement may result from fraud or error and is generally considered material if it is reasonably expected that the missta tement,
in isolation or in combination, could affect the economic decisions made by users of the financial statements based on the financial
statements.
In performing our audit work in accordance with audit standards, we exercise professional judgment and maintain professional
skepticism. Meanwhile, we also perform the following work:
(I) Identify and assess the risk of material misstatement of financial statements caused by fraud or error, design and implement
audit procedures to deal with these risks, and obtain sufficient and appropriate audit evidence as the basis for expressing audit
opinions. Because fraud may involve collusion, forgery, willful omission, misrepresentation, or override internal controls, the risk
of failing to detect a material misstatement as a result of fraud is higher than the risk of failing to detect a material mis statement as
a result of error.
(II) Understand the internal controls related to audit to design appropriate audit procedures.
(III) Evaluate the appropriateness of accounting policies chosen by the management and the reasonableness of accounting
estimates and relevant disclosures made by the management.
(IV) Conclude the appropriateness of management's use of the going concern assumption. Meanwhile, based on the audit evidence
obtained, it concludes whether there is a material uncertainty about matters or circumstances that may raise material doubt about
GreatStar's ability to go as a going concern. If we conclude that there is a material uncertainty, auditing standards require us to
bring relevant disclosures in the financial statements to the attention of statement users in our audit reports; If disclosure is
117
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
inadequate, we shall express a non-unqualified opinion. Our conclusions are based on information available as of the audit
reporting date. However, future events or circumstances may result in GreatStar not being a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial
statements fairly reflect the relevant transactions and events.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entity or business activities of the
GreatStar, so as to express audit opinions on the financial statements. We are responsible for the guidance, supervision and
execution of Group audits and take full responsibility for audit opinions.
We communicate with the management about the planned audit scope, timing, and significant audit findings, including internal
control deficiencies of concern that we have identified during the audit.
We also provide the management with a statement that we have complied with ethical requirements related to our independence
and communicate with governance about all relationships and other matters that may reasonably be considered to affect our
independence, as well as relevant precautions, if applicable.
From the matters communicated with the management layer, we determine which matters are the most important for the audit of
the current financial statements and therefore constitute the key audit matters. We describe these matters in our audit reports unless
the public disclosure of such matters is prohibited by law or regulation or, in rare circumstances, we determine that we shall not
communicate a matter in our audit report if the negative consequences of communicating the matter in our audit report can
reasonably be expected to outweigh the benefit in the public interest.
II. Financial statements
The unit of the statement in the financial notes: CNY
1. Consolidated balance sheets
Prepared by: Hangzhou GreatStar Industrial Co., Ltd.
December 31, 2022
Unit: CNY
Item December 31, 2022 January 1, 2022
Current assets:
Cash and Cash equivalents 4,863,206,182.40 4,033,707,240.16
Settlements Provision
Loans to banks and other financial
institutions
Financial assets held for trading 70,230,104.24 13,557,757.75
Derivative financial assets
Notes receivable 18,765,981.83 6,629,914.18
Accounts receivable 1,896,685,590.11 1,798,265,505.53
Financing receivables 324,557,679.71 559,020,827.52
Prepayments 128,254,093.87 77,743,441.90
Insurance premium receivable
Due from reinsurers
Reinsurance contract reserves
receivable
Other receivables 58,325,042.10 96,151,003.68
Including: Interest receivable
118
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Dividends receivable
Financial assets purchased under
agreements to resell
Inventories 2,812,572,525.68 2,835,777,996.84
Contract assets
Assets classified as held for sale
Current portion of non-current assets 98,061.60 90,708.80
Other current assets 134,130,648.58 193,991,198.10
Total current assets 10,306,825,910.12 9,614,935,594.46
Non-current assets:
Loans and advances
Debt investment
Other debt investments
Long-term receivables 2,872,179.47 2,721,241.71
Long-term equity investment 2,544,523,517.55 2,353,942,699.80
Other equity instruments investment 16,550,000.00 16,550,000.00
Other non-current financial assets
Investment properties 122,158,556.01 127,058,966.69
Fixed assets 1,518,902,232.96 1,494,547,487.29
Construction in progress 304,599,362.46 113,750,851.49
Productive biological assets
Oil and gas assets
Right-to-use assets 417,129,361.41 411,722,761.66
Intangible assets 712,798,866.46 671,293,451.61
Development expenditure
Goodwill 2,436,140,794.66 2,305,780,623.86
Long-term deferred expenses 29,683,274.34 26,745,962.25
Deferred tax assets 92,863,613.38 64,333,652.79
Other non-current assets 74,507,127.95 103,771,593.06
Total non-current assets 8,272,728,886.65 7,692,219,292.21
Total assets 18,579,554,796.77 17,307,154,886.67
Current liabilities:
Short-term borrowings 1,379,062,713.11 1,806,901,201.39
Borrowings from the central bank
Deposits and balances from banks and
other financial institutions
Financial liabilities held for trading 48,413,710.29 978,031.91
Derivative financial liabilities
Notes payable 21,096,540.03 51,728,000.00
Accounts payable 1,366,875,268.71 1,640,430,929.84
Receipts in advance
Contract liabilities 131,898,420.14 91,235,951.19
Financial assets sold under agreements
119
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
to buy
Customer deposits and balances from
banks and other financial institutions
Customer brokerage deposits
Securities underwriting brokerage
deposits
Payroll and employee benefits payable 270,678,187.82 264,073,705.38
Tax payable 176,943,955.53 170,836,108.02
Other payables 21,198,376.32 676,502,987.21
Including: Interest payable
Dividend payable
Fees and commissions payable
Reinsurance payable
Liabilities classified as held for sale
Current portion of non-current
323,296,833.40 358,525,963.69
liabilities
Other current liabilities 2,136,266.97 2,501,196.81
Total current liabilities 3,741,600,272.32 5,063,714,075.44
Non-current liabilities:
Insurance reserves
Long-term borrowings 798,604,951.84 1,015,445,732.07
Bonds payable
Including: Preference shares
Perpetual debt
Lease liabilities 318,221,349.99 289,196,511.02
Long-term payables
Long-term payroll and employee
19,223,856.97 20,854,276.60
benefits payable
Provisions 4,548,413.90 4,924,868.93
Deferred income 2,364,687.74 2,802,244.63
Deferred tax liabilities 70,462,027.25 96,927,387.14
Other non-current liabilities
Total non-current liabilities 1,213,425,287.69 1,430,151,020.39
Total liabilities 4,955,025,560.01 6,493,865,095.83
Shareholders’ equity:
Paid-in capital 1,202,501,992.00 1,143,438,492.00
Other equity instruments
Including: Preference shares
Perpetual bond
Capital reserve 3,950,778,936.53 2,924,951,844.93
Less: Treasury shares 236,625,962.00 186,441,914.48
Other comprehensive income 115,010,556.85 -229,774,189.10
Special reserve
Surplus reserve 663,843,379.04 598,543,176.63
General risk reserve
Retained earnings 7,702,438,641.41 6,348,179,336.72
Equity attributable to parent company 13,397,947,543.83 10,598,896,746.70
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Non-controlling interests 226,581,692.93 214,393,044.14
Total shareholders’ equity 13,624,529,236.76 10,813,289,790.84
Total liabilities and shareholders’ equity 18,579,554,796.77 17,307,154,886.67
Legal representative: Qiu Jianping Chief accountant: Ni Shuyi Head of accounting department: Ni Shuyi
2. Balance sheet of parent company
Unit: CNY
Item December 31, 2022 January 1, 2022
Current assets:
Cash and Cash equivalents 1,959,109,461.78 2,206,647,760.44
Financial assets held for trading 2,805,400.00
Derivative financial assets
Notes receivable 6,303,252.22 3,817,503.68
Accounts receivable 1,094,304,301.40 972,916,000.96
Financing receivables 321,247,171.36 370,836,450.93
Prepayment 11,356,975.59 15,407,186.40
Other receivables 2,755,900,353.60 1,458,883,819.83
Including: Interest receivable
Dividends receivable
Inventories 67,443,090.27 68,823,270.52
Contract assets
Assets classified as held for sale
Current portion of non-current
assets
Other current assets 56,338,463.11 51,228,927.28
Total current assets 6,272,003,069.33 5,151,366,320.04
Non-current assets:
Debt investment
Other debt investments
Long-term receivables
Long-term equity investment 6,646,597,702.06 6,509,236,517.72
Other equity instruments Investment 16,550,000.00 16,550,000.00
Other non-current financial assets
Investment properties 122,158,556.01
Fixed assets 164,458,168.94 148,222,773.14
Construction in progress 32,000,978.77 6,172,215.82
Productive biological assets
Oil and gas assets
Right-to-use assets
Intangible assets 21,448,416.46 16,166,495.20
Development expenditure
Goodwill
Long-term deferred expenses
121
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Deferred tax assets 16,436,967.81 12,054,042.27
Other non-current assets 2,422,590.14 5,741,206.20
Total non-current assets 7,022,073,380.19 6,714,143,250.35
Total assets 13,294,076,449.52 11,865,509,570.39
Current liabilities:
Short-term borrowings 656,030,197.16 1,547,295,724.96
Financial liabilities held for trading 13,075,775.62
Derivative financial liabilities
Notes payable 100,000,000.00
Accounts payable 1,107,917,284.47 389,834,880.42
Receipts in advance
Contract liabilities 43,237,007.23 46,268,755.74
Payroll and employee benefits payable 52,247,521.65 46,155,738.14
Taxes payable 35,226,805.80 76,469,338.83
Other payables 3,392,054.12 585,010,369.48
Including: Interest payable
Dividend payable
Liabilities classified as held for sale
Current portion of non-current
73,583,468.23 82,994,001.43
liabilities
Other current liabilities 604,815.09 427,742.00
Total current liabilities 2,085,314,929.37 2,774,456,551.00
Non-current liabilities:
Long-term borrowings 792,728,586.65 391,626,437.89
Bonds payable
Including: Preference shares
Perpetual bond
Lease liabilities
Long-term payables
Long-term payroll and employee
benefits payable
Provisions
Deferred income 795,332.50 1,556,851.32
Deferred tax liabilities 2,413,918.11 1,799,743.40
Other non-current liabilities
Total non-current liabilities 795,937,837.26 394,983,032.61
Total liabilities 2,881,252,766.63 3,169,439,583.61
Shareholders’ equity:
Paid-in capital 1,202,501,992.00 1,143,438,492.00
Other equity instruments
Including: Preference shares
Perpetual debt
Capital reserve 3,958,727,598.88 2,930,657,501.76
Less: Treasury shares 236,625,962.00 186,441,914.48
Other comprehensive income -54,066,268.84 -84,939,637.21
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Special reserve
Surplus reserve 660,095,082.13 594,794,879.72
Retained earnings 4,882,191,240.72 4,298,560,664.99
Total shareholders’ equity 10,412,823,682.89 8,696,069,986.78
Total liabilities and shareholders’ equity 13,294,076,449.52 11,865,509,570.39
3. Consolidated income statement
Unit: CNY
Item 2022 2021
I. Total revenue 12,610,189,590.33 10,919,683,344.37
Including: Operating proceeds 12,610,189,590.33 10,919,683,344.37
Interest income
Net earned premiums
Net fee and commission
revenue
II. Total operating costs 11,041,030,293.49 9,865,931,262.26
Including: Operating cost 9,266,922,304.75 8,176,123,668.50
Interest expense
Fees and commission expenses
Surrenders
Net payments for insurance
claims
Net provision of insurance
reserve
Policyholder dividends
Reinsurance expense
Taxes and surcharges 47,328,748.68 36,118,676.84
Selling expenses 757,228,439.80 593,003,103.68
General and administrative
760,961,439.86 686,120,731.06
expenses
R&D expenses 319,444,535.16 309,763,366.15
Financial expenses -110,855,174.76 64,801,716.03
Including: Interest expense 102,114,891.52 59,754,089.36
Interest income 83,482,441.75 59,709,415.20
Add: Other income 50,671,622.68 47,550,853.31
Investment income (loss
176,927,540.37 370,298,858.39
presented by “-”)
Including: Share of profits
186,224,854.43 253,722,685.68
or loss of associates and joint ventures
Gain from
derecognition of financial assets
measured at amortized cost
Exchange gain (loss presented by
“-”)
Net exposure hedging gain (loss
123
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
presented by “-”)
Gain on changes in fair value
-50,580,428.04 -23,610,602.75
(loss presented by “-”)
Credit impairment loss (loss
19,113,580.83 -44,330,212.07
presented by “-”)
Assets impairment loss (loss
-61,324,795.37 -23,131,165.61
presented by “-”)
Gain from disposal of assets (loss
-16,894,964.73 -3,020,089.44
presented by “-”)
III. Operating profit (loss presented by “-
1,687,071,852.58 1,377,509,723.94
”)
Add: Non-operating income 1,183,010.44 87,347,950.40
Less: Non-operating costs 20,981,657.35 6,324,391.50
IV. Total Profit (total loss presented by “-
1,667,273,205.67 1,458,533,282.84
”)
Less: Income tax expense 222,629,780.80 161,218,083.23
V. Net profit (net loss presented by “-”) 1,444,643,424.87 1,297,315,199.61
(1) Classified by operation continuity
1. Net profit from continuing
1,444,643,424.87 1,297,315,199.61
operations (net loss presented by “-”)
2. Net profit from discontinuing
operations (net loss presented by “-”)
(2) Classified by ownership
1. Net profit attributable to owners
1,419,559,507.10 1,270,003,396.40
of parent company
2. Net profit attributable to non-
25,083,917.77 27,311,803.21
controlling interests
VI. Other comprehensive income, net of
345,139,758.35 -124,287,257.00
tax
Other comprehensive income, net of
tax, attributable to owners of the parent 344,784,745.95 -123,936,842.23
company
(1) Other comprehensive income
that will not be reclassified to profit or -57,181,824.00 71,842,154.00
loss
1. Remeasurement gains or losses
-57,181,824.00 71,842,154.00
of a defined benefit plan
2. Other comprehensive income
using the equity method that will not be
reclassified to profit or loss
3. Changes in fair value of other
equity instrument investments
4. Changes in the fair value of the
enterprise's own credit risk
5. Others
(2) Other comprehensive income to
401,966,569.95 -195,778,996.23
be reclassified into profit or loss
1. Other comprehensive income
that can be classified into profit or loss in 30,873,368.37 -57,553,901.17
equity method
2. Changes in the fair value of
other debt investments
3. Amount of financial assets
reclassified into other comprehensive
124
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
income
4. Provision for credit impairment
of other debt investments
5. Cash flow hedging reserves
6. Exchange differences on
translation of foreign currency financial 371,093,201.58 -138,225,095.06
statements
7. Others
Other comprehensive income, net of
tax, attributable to non-controlling 355,012.40 -350,414.77
interests
VII. Total comprehensive income 1,789,783,183.22 1,173,027,942.61
Total comprehensive income
attributable to the owner of the parent 1,764,344,253.05 1,146,066,554.17
company
Total comprehensive income
25,438,930.17 26,961,388.44
attributable to non-controlling interests
VIII. Earnings per share
(1) Basic earnings per share 1.24 1.13
(2) Diluted earnings per share 1.24 1.13
If a combination of enterprises under common control occurs in the current period, the net profit realized by the combined party
before the combination: CNY 0.00, and the net profit realized by the combined party in the prior period: CNY 0.00.
Legal representative: Qiu Jianping Chief accountant: Ni Shuyi Head of accounting department: Ni Shuyi
4. Profit statement of parent company
Unit: CNY
Item 2022 2021
I. Operating proceeds 4,823,927,494.05 5,221,628,054.56
Less: Operating costs 3,916,985,810.07 4,191,586,370.63
Taxes and surcharges 7,125,272.26 3,914,655.88
Selling expenses 157,616,107.21 148,931,778.67
Administrative expenses 158,154,677.59 149,112,457.48
R&D expenses 172,795,285.87 179,141,639.18
Financial expenses -118,107,418.16 14,697,466.10
Including: Interest expenses 61,350,280.13 34,320,239.29
Interest income 81,159,347.99 60,903,121.60
Add: Other income 26,535,450.88 30,673,586.63
Investment income (loss
212,798,675.79 328,237,087.74
presented by “-”)
Including: Investment income
185,125,266.05 254,321,468.97
from associates and joint ventures
Gain from
derecognition of financial assets
measured at amortized cost (loss
presented by “-”)
Net exposure hedging gain (loss
presented by “-”)
Gain on changes in fair value
-15,881,175.62 -10,581,000.00
(loss presented by “-”)
125
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Credit impairment loss (loss
-19,083,749.36 -14,920,249.84
presented by “-”)
Assets impairment loss (loss
-766,503.26 -458,846.42
presented by “-”)
Gain from disposal of assets (loss
70,451.00 74,881.50
presented by “-”)
II. Operating profit (loss presented by “-
733,030,908.64 867,269,146.23
”)
Add: Non-operating income 624.86 381,632.32
Less: Non-operating costs 118,114.79 714,318.83
III. Total Profit (total loss presented by "-
732,913,418.71 866,936,459.72
")
Less: Income tax expense 79,911,394.57 97,532,338.07
IV. Net Profit (net loss presented by “-”) 653,002,024.14 769,404,121.65
(1) Net profit from continuing
653,002,024.14 769,404,121.65
operations (net loss presented by “-”)
(2) Net profit from discontinuing
operations (net loss presented by “-”)
V. Other comprehensive income, net of
30,873,368.37 -57,553,901.17
tax
(1) Other comprehensive income
that will not be reclassified to profit or
loss
1. Changes arising from the re-
measurement of defined benefit plans
2. Other comprehensive income
using the equity method that will not be
reclassified to profit or loss
3. Changes in fair value of other
equity instrument investments
4. Changes in fair value of
enterprise’s own credit risk
5. Others
(2) Other comprehensive income to
30,873,368.37 -57,553,901.17
be reclassified to profit or loss
1. Other comprehensive income
that can be reclassified to profit or loss in 30,873,368.37 -57,553,901.17
equity method
2. Changes in fair value of other
debt investments
3. Change in the fair value of
available-for-sale financial assets
4. Provision for credit impairment
of other debt investments
5. Cash flow hedge reserve
6. Exchange differences on
translation of foreign currency financial
statements
7. Others
VI. Total comprehensive income 683,875,392.51 711,850,220.48
VII. Earnings per share
(1) Basic earnings per share
(2) Diluted earnings per share
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
5. Consolidated cash flow statement
Unit: CNY
Item 2022 2021
I. Cash flows from operating activities:
Cash receipts from the sale of goods
12,910,612,353.48 10,523,385,725.14
and the rendering of services
Net increase in customer bank deposits
and due to banks and other financial
institutions
Net increase in loans from the central
bank
Net increase in funds borrowed from
other financial institutions
Cash premiums received on original
insurance contracts
Net cash received from re-insurance
business
Net increase in deposits and
investments from insurers
Cash received from interest, fees and
commission
Net increase in funds deposit
Net increase in repurchase business
funds
Net income from securities trading
brokerage business
Tax refunds received 767,676,772.01 670,357,690.68
Cash received relating to other
172,081,769.11 160,238,749.92
operating activities
Sub-total of cash inflows from operating
13,850,370,894.60 11,353,982,165.74
activities
Cash paid for purchase of goods and
8,589,229,524.03 8,138,089,857.73
services
Net increase in loans and payments on
behalf of customers
Net increase in deposits with central
bank and other financial institutions
Payments for claims for original
insurance contracts
Net increase in funds lent
Cash paid for interest, fees and
commission
Commissions on insurance policies pai
Cash paid to and on behalf of
2,037,598,678.58 1,806,978,106.79
employee
Cash paid for taxes 419,820,083.63 365,159,229.48
Cash paid relating to other operating
1,171,885,965.97 1,025,122,802.07
activities
Sub-total of cash outflows from
12,218,534,252.21 11,335,349,996.07
operating activities
Net cash flows from operating activities 1,631,836,642.39 18,632,169.67
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
II. Cash flows from investment activities:
Cash received from disposal of
167,680,415.22 399,043,604.99
investments
Cash received from investment
67,654,596.08 121,150,687.38
income
Net proceeds from disposal of
property, intangible assets and other 40,203,072.92 50,825,512.05
long-term assets
Cash received from disposal of
subsidiaries and other business units
Cash received relating to other
70,195,704.98 5,945,450.31
investing activities
Sub-total of cash inflows from investing
345,733,789.20 576,965,254.73
activities
Purchase of property, intangible assets
432,498,640.04 541,990,133.84
and other non-current assets
Cash paid for investments 221,000,000.00 321,320,000.00
Net increase in secured loans
Net cash paid for acquisition of a
76,724,758.42 923,935,753.71
subsidiary and other operating units
Cash paid relating to other investing
129,876,712.70 2,788,158.98
activities
Sub-total of cash outflows from
860,100,111.16 1,790,034,046.53
investment activities
Net cash flows from investment activities -514,366,321.96 -1,213,068,791.80
III. Cash flows from financing Activities:
Cash received from investments 1,087,601,650.11
Including: Cash receipts from capital
contributions from non-controlling
interests of subsidiaries
Proceeds from borrowings 3,498,929,736.98 3,832,766,206.58
Cash receipts relating to other
104,266,666.67 583,000,000.00
financing activities
Sub-total of cash inflows from financing
4,690,798,053.76 4,415,766,206.58
activities
Cash paid for repayment of debt 4,431,592,234.99 2,540,690,729.79
Cash payments for distribution of
84,667,826.94 53,626,407.90
dividends or profit and interest expenses
Including: Dividends or profit paid to
non-controlling shareholders of 13,170,580.97 755,470.43
subsidiaries
Cash payments relating to other
784,289,697.86 290,674,869.30
financing activities
Sub-total of cash outflows from
5,300,549,759.79 2,884,992,006.99
financing activities
Net cash flows from financing activities -609,751,706.03 1,530,774,199.59
IV. Effect of exchange rate change on
284,522,324.89 -65,414,554.36
cash and cash equivalents
V. Net increase in cash and cash
792,240,939.29 270,923,023.10
equivalents
Add: Cash and cash equivalent at the
4,001,186,241.18 3,730,263,218.08
beginning of the period
VI. Cash and cash equivalents at the end
4,793,427,180.47 4,001,186,241.18
of the period
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
6. Cash flow statement of parent company
Unit: CNY
Item 2022 2021
I. Cash flows from operating activities:
Cash receipts from the sale of goods
4,918,593,279.27 5,540,994,419.37
and the rendering of services
Tax refunds received 478,049,259.74 539,325,024.06
Cash received relating to other
91,105,691.64 105,584,100.91
operating activities
Sub-total of cash inflows from operating
5,487,748,230.65 6,185,903,544.34
activities
Cash paid for purchase of goods and
3,482,411,796.27 4,918,942,931.09
services
Cash paid to and on behalf of
316,096,416.76 287,460,870.76
employee
Cash paid for taxes 135,425,402.10 130,907,197.94
Cash paid for other operating activities 274,272,238.19 329,723,900.32
Sub-total of cash outflows from
4,208,205,853.32 5,667,034,900.11
operating activities
Net cash flows from operating activities 1,279,542,377.33 518,868,644.23
II. Cash flows from investment activities:
Cash received from disposal of
119,399.32 52,950,000.00
investments
Cash received from investment
78,605,425.60 78,486,454.00
income
Net proceeds from disposal of
property, intangible assets and other 731,000.00 256,690.72
long-term assets
Cash received from disposal of
subsidiaries and other business units
Cash received relating to other
103,688,450.77 12,022,084.95
investing activities
Sub-total of cash inflows from investing
183,144,275.69 143,715,229.67
activities
Purchase of property, intangible assets
39,019,508.60 25,307,503.53
and other non-current assets
Cash paid for investments 154,755,189.04 1,207,408,860.00
Cash paid for disposal of subsidiaries
and other business units
Cash paid relating to other investing
1,360,257,082.16 616,537,578.64
activities
Sub-total of cash outflows from
1,554,031,779.80 1,849,253,942.17
investment activities
Net cash flows from investment activities -1,370,887,504.11 -1,705,538,712.50
III. Cash flows from financing Activities:
Cash received from investments 1,087,601,650.11
Proceeds from borrowings 2,986,019,388.00 2,985,778,938.56
Cash receipts relating to other
18,857,097.90 583,000,000.00
financing activities
Sub-total of cash inflows from financing
4,092,478,136.01 3,568,778,938.56
activities
Repayments for debts 3,637,460,412.39 2,197,497,826.00
Cash payments for distribution of
42,758,384.71 29,988,023.43
dividends or profit and interest expenses
Cash payments relating to other
676,660,516.57 216,024,031.31
financing activities
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Sub-total of cash outflows from
4,356,879,313.67 2,443,509,880.74
financing activities
Net cash flows from financing activities -264,401,177.66 1,125,269,057.82
IV. Effect of exchange rate changes on
108,079,052.78 -20,904,019.78
cash and cash equivalents
V. Net increase in cash and cash
-247,667,251.66 -82,305,030.23
equivalents
Add: Cash and cash equivalents at the
2,205,340,620.44 2,287,645,650.67
beginning of the period
VI. Cash and cash equivalents at the end
1,957,673,368.78 2,205,340,620.44
of the period
7. Consolidated statement of changes in shareholders’ equity
Current amount
Unit: CNY
2022
Shareholders’ equity attributable to parent company
Other equity Othe Total
instruments r O share
Gen Min
Item Shar Capi Less: com Spec Surp Reta t ority hold
Pref eral
e Perp tal Treasu preh ial lus ined h Subt equit ers’
eren risk
capit etual Othe reser ry ensi reser reser profi e otal y equit
ce reser
al bon rs ve shares ve ve ve ts r y
shar ve
d inco s
es me
- 10,5 10,8
1,14 2,92 598, 6,34 214,
I. Balance at 186,4 229, 98,8 13,2
3,43 4,95 543, 8,17 393,
the end of 41,91 774, 96,7 89,7
8,49 1,84 176. 9,33 044.
prior year 4.48 189. 46.7 90.8
2.00 4.93 63 6.72 14
10 0 4
Add:
Accounting
0.00
policy
changes
Pr
evious error 0.00
correction
er
ger of
enterprises
0.00
under
common
control
Ot
0.00
hers
- 10,5 10,8
II. Balance 1,14 2,92 598, 6,34 214,
186,4 229, 98,8 13,2
at the 3,43 4,95 543, 8,17 393,
0.00 0.00 0.00 41,91 774, 0.00 0.00 96,7 89,7
beginning of 8,49 1,84 176. 9,33 044.
4.48 189. 46.7 90.8
the year 2.00 4.93 63 6.72 14
10 0 4
III. Changed 59,0 1,02 50,18 344, 65,3 1,35 2,79 12,1 2,81
0.00 0.00 0.00 0.00 0.00
during the 63,5 5,82 4,047. 784, 00,2 4,25 9,05 88,6 1,23
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
period 00.0 7,09 52 745. 02.4 9,30 0,79 48.7 9,44
(decrease 0 1.60 95 1 4.69 7.13 9 5.92
presented by
“-")
344, 1,41 1,76 25,4 1,78
(1) Total
784, 9,55 4,34 38,9 9,78
comprehens 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
745. 9,50 4,25 30.1 3,18
ive income
95 7.10 3.05 7 3.22
(2) Owner
59,0 1,01 1,07 1,07
investment
63,5 2,26 1,32 1,32
and 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
00.0 4,79 8,29 8,29
reduction of
0 6.24 6.24 6.24
capital
1. Common 59,0 1,01 1,07 1,07
shares 63,5 2,26 1,32 1,32
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
invested by 00.0 4,79 8,29 8,29
the owner 0 6.24 6.24 6.24
2. Other
equity 0.00
instrument
3. Shares
paid taken
into 0.00
shareholder’
s equity
4. Others 0.00
- - -
65,3
65,3 13,1 13,1
(3) Profit 00,2
0.00 0.00 00,2 0.00 70,5 70,5
distribution 02.4
02.4 80.9 80.9
1
1 7 7
-
65,3
1. Transfer 65,3
00,2
to surplus 0.00 0.00 00,2 0.00 0.00 0.00
02.4
reserve 02.4
1
1
2. Transfer
to general 0.00 0.00
reserve
3.
- -
Distribution
13,1 13,1
to owners
70,5 70,5
(or
80.9 80.9
shareholders
7 7
)
4. Others 0.00
(4) Transfer
within 0.00
equity
1. Transfer-
in from
0.00
capital
reserves
2. Transfer- 0.00
131
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
in from
surplus
reserves
3. Loss
covered by
0.00
surplus
reserves
4. Retained
earnings
transferred
from
0.00
changes in
defined
benefit
plans
5. Retained
earnings
transferred
0.00
from other
comprehens
ive income
6. Others 0.00
5. Special
0.00
reserves
1. Current
0.00
extraction
2. Current
0.00
use
- -
13,5 -
50,18 36,6 36,7
62,2 79,7
(6) Others 0.00 0.00 0.00 0.00 4,047. 0.00 0.00 0.00 0.00 0.00 21,7 01,4
95.3 00.4
52 52.1 52.5
6 1
6 7
13,3 13,6
IV. Balance 1,20 3,95 115, 663, 7,70 226,
236,6 97,9 24,5
at the end of 2,50 0,77 010, 843, 2,43 581,
0.00 0.00 0.00 25,96 0.00 0.00 47,5 29,2
the current 1,99 8,93 556. 379. 8,64 692.
2.00 43.8 36.7
period 2.00 6.53 85 04 1.41 93
3 6
Prior amount
Unit: CNY
2021
Shareholders’ equity attributable to parent company
Other equity G
instruments e
Sp n Total
Pr Other O Min share
Pe ec e
Item ef Capita Less: compr Surplu t ority hold
rp ial r Retain
Share er l Treasu ehensi s h Subt equit ers’
et re a ed
capital en Othe reserv ry ve reserv e otal y equit
ua se l profits
ce rs e shares incom e r y
l rv r
sh e s
bo e i
ar
nd s
es
k
132
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
r
e
s
e
r
v
e
190, - 8,82 211, 9,03
I. Balance at 1,075, 2,095, 105,4 521,6 5,155,
509, 105,8 6,19 219, 7,41
the end of 247,7 044,5 92,69 02,76 116,35
257. 37,34 0,57 605. 0,18
prior year 00.00 41.15 0.23 4.46 2.49
28 6.87 8.28 02 3.30
Add:
Accounting
policy
changes
Pr
evious error
correction
C
ombination
of
enterprises
under
common
control
Ot
hers
II. Balance 190, - 8,82 211, 9,03
1,075, 2,095, 105,4 521,6 5,155,
at the 509, 105,8 6,19 219, 7,41
247,7 044,5 92,69 02,76 116,35
beginning of 257. 37,34 0,57 605. 0,18
00.00 41.15 0.23 4.46 2.49
the year 28 6.87 8.28 02 3.30
III. Changed
-
during the - 1,77 1,77
68,19 190, 829,9 80,94 76,94 1,193, 3,17
period 123,9 2,70 5,87
0,792. 509, 07,30 9,224. 0,412. 062,9 3,43
(decrease 36,84 6,16 9,60
00 257. 3.78 25 17 84.23 9.12
presented by 2.23 8.42 7.54
28
“-")
- 1,14 26,9 1,17
(1) Total 1,270,
123,9 6,06 61,3 3,02
comprehens 003,3
36,84 6,55 88.4 7,94
ive income 96.40
2.23 4.17 4 2.61
(2) Owner -
- 801, 801,
investment 68,19 190, 818,1
105,4 333, 333,
and 0,792. 509, 59,47
92,69 703. 703.
reduction of 00 257. 8.29
0.23 24 24
capital 28
1. Common
shares
invested by
the owner
2. Other
equity
instrument
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
3. Shares
paid taken
into
shareholder’
s equity
-
- 801, 801,
68,19 190, 818,1
105,4 333, 333,
4. Others 0,792. 509, 59,47
92,69 703. 703.
00 257. 8.29
0.23 24 24
28
- - -
76,94
(3) Profit 76,94 755, 755,
0,412.
distribution 0,412. 470. 470.
17
17 43 43
-
1. Transfer 76,94
76,94
to surplus 0,412.
0,412.
reserve 17
17
2. Transfer
to general
reserve
3.
Distribution - -
to owners 755, 755,
(or 470. 470.
shareholders 43 43
)
4. Others
(4) Transfer
within
equity
1. Transfer-
in from
capital
reserves
2. Transfer-
in from
surplus
reserves
3. Loss
covered by
surplus
reserves
4. Retained
earnings
transferred
from
changes in
defined
benefit
plans
5. Retained
earnings
transferred
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
from other
comprehens
ive income
6. Others
5. Special
reserves
1. Current
extraction
2. Current
use
- - -
11,747 186,4 174, 23,0 197,
(6) Others ,825.4 41,91 694, 32,4 726,
9 4.48 088. 78.8 567.
99 9 88
10,5 10,8
IV. Balance - 214,
1,143, 2,924, 186,4 598,5 6,348, 98,8 13,2
at the end of 229,7 393,
438,4 0.00 951,8 41,91 43,17 179,3 96,7 89,7
the current 74,18 044.
92.00 44.93 4.48 6.63 36.72 46.7 90.8
period 9.10 14
0 4
8. Statement of changes in shareholders’ equity of parent company
Current amount
Unit: CNY
2022
Other equity
instruments Less Other
: compr Spec Total
Item Pref Surplu Retain
Share Perp Capital Trea ehensi ial shareh
eren s ed Others
capital etual reserve sury ve reser olders’
ce Others reserve profits
bon shar incom ve equity
shar es e
d
es
186, -
I. Balance at 594,79 4,298, 8,696,
1,143,43 2,930,657, 441, 84,93
the end of 0.00 0.00 0.00 0.00 4,879. 560,66 069,98
8,492.00 501.76 914. 9,637.
prior year 72 4.99 6.78
48 21
Add:
Accounting
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
policy
changes
Pr
evious error 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
correction
Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
II. Balance 186, -
594,79 4,298, 8,696,
at the 1,143,43 2,930,657, 441, 84,93
0.00 0.00 0.00 0.00 4,879. 560,66 069,98
beginning of 8,492.00 501.76 914. 9,637.
72 4.99 6.78
the year 48 21
III. Changed 50,1 30,87 65,300 583,63 1,716,
59,063,5 1,028,070,
during the 0.00 0.00 0.00 84,0 3,368. 0.00 ,202.4 0,575. 753,69
00.00 097.12
period 47.5 37 1 73 6.11
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
(decrease 2
presented by
“-")
(1) Total 30,87 653,00 683,87
comprehens 0.00 0.00 0.00 0.00 0.00 0.00 3,368. 0.00 0.00 2,024. 5,392.
ive income 37 14 51
(2) Owner
investment 1,071,
59,063,5 1,012,264,
and 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 328,29
00.00 796.24
reduction of 6.24
capital
1. Common
1,071,
shares 59,063,5 1,012,264,
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 328,29
invested by 00.00 796.24
6.24
the owner
2. Other
equity 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
instrument
3. Shares
paid taken
into 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
shareholder’
s equity
4. Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
-
65,300
(3) Profit 65,300
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ,202.4 0.00
distribution ,202.4
1
1
-
1. Transfer 65,300
65,300
to surplus 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ,202.4 0.00
,202.4
reserve 1
1
2.
Distribution
to owners
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(or
shareholders
)
3. Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(4) Transfer
within 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
equity
1. Transfer-
in from
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
capital
reserves
2. Transfer-
in from
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
surplus
reserves
3. Loss
covered by 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
surplus
136
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
reserves
4. Retained
earnings
transferred
from
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
changes in
defined
benefit
plans
5. Retained
earnings
transferred
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
from other
comprehens
ive income
6. Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
5. Special
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
reserves
1. Current
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
extraction
2. Current
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
use
50,1 -
-
15,805,30 84,0 38,449
(6) Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4,071,
0.88 47.5 ,992.6
246.00
2 4
IV. Balance 236, -
660,09 4,882, 10,412
at the end of 1,202,50 3,958,727, 625, 54,06
0.00 0.00 0.00 0.00 5,082. 191,24 ,823,6
the current 1,992.00 598.88 962. 6,268.
13 0.72 82.89
period 00 84
Prior amount
Unit: CNY
2021
Other equity
instruments
Pe Less: Other Spec Surplu Total
Item Pref rp Ot
Share Capital Treasu compreh ial s Retaine shareh
eren et he
capital reserve ry ensive reser reserv d profits olders’
ce ua Others rs
shares income ve e equity
shar l
es bo
nd
I. Balance at 105,4 - 517,8 7,360,
1,075,247, 190,509, 2,103,49 3,606,09
the end of 92,69 27,385,7 54,46 322,3
700.00 257.28 2,365.12 6,955.51
prior year 0.23 36.04 7.55 19.19
Add:
Accounting
policy
changes
Pr
evious error
correction
137
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Ot
hers
II. Balance
105,4 - 517,8 7,360,
at the 1,075,247, 190,509, 2,103,49 3,606,09
92,69 27,385,7 54,46 322,3
beginning of 700.00 257.28 2,365.12 6,955.51
0.23 36.04 7.55 19.19
the year
III. Changed
during the
- 80,94 - 76,94 1,335,
period 68,190,79 827,165, 692,463,
190,509, 9,224. 57,553,9 0,412. 747,6
(decrease 2.00 136.64 709.48
257.28 25 01.17 17 67.59
presented by
“-")
(1) Total - 711,85
769,404,
comprehens 57,553,9 0,220.
121.65
ive income 01.17 48
(2) Owner
-
investment - 801,3
68,190,79 818,159, 105,4
and 190,509, 33,70
2.00 478.29 92,69
reduction of 257.28 3.24
0.23
capital
1. Common
shares
invested by
the owner
2. Other
equity
instrument
3. Shares
paid taken
into
shareholder’
s equity
-
- 801,3
68,190,79 818,159, 105,4
4. Others 190,509, 33,70
2.00 478.29 92,69
257.28 3.24
0.23
76,94 -
(3) Profit
0,412. 76,940,4
distribution
17 12.17
1. Transfer 76,94 -
to surplus 0,412. 76,940,4
reserve 17 12.17
2.
Distribution
to owners
(or
shareholders
)
3. Others
(4) Transfer
within
equity
1. Transfer-
138
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
in from
capital
reserves
2. Transfer-
in from
surplus
reserves
3. Loss
covered by
surplus
reserves
4. Retained
earnings
transferred
from
changes in
defined
benefit
plans
5. Retained
earnings
transferred
from other
comprehens
ive income
6. Others
5. Special
reserves
1. Current
extraction
2. Current
use
-
186,4
9,005,65 177,4
(6) Others 41,91
8.35 36,25
4.48
6.13
IV. Balance
186,4 - 594,7 8,696,
at the end of 1,143,438, 2,930,65 4,298,56
41,91 84,939,6 94,87 069,9
the current 492.00 7,501.76 0,664.99
4.48 37.21 9.72 86.78
period
III. Basic Information about the Company
Hangzhou GreatStar Industrial Co., Ltd. (hereinafter referred to as “Company”), formerly known as Hangzhou GreatStar Industrial
Limited., was formed and jointly invested by natural persons Qiu Jianping, Wang Lingling, Li Zheng, Wang Weiyi and Wang Min,
and was registered in Hangzhou Administrative Bureau for Industry and Commerce on August 9, 2001. Hangzhou GreatStar
Industrial Co., Ltd. was established by way of an overall change with March 31, 2008 as the base date, and was registered with the
Hangzhou Administration for Industry and Commerce on July 2, 2008. Its headquarters is located in Hangzhou, Zhejiang Province.
139
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
The Company now holds the business license of unified social credit code 91330000731506099D. As of December 31, 2022, the
registered capital was CNY 1,202,501,992.00 and the total number of shares was 1,202,501,992, with the nominal value of CNY 1
per share. Among them, there are 49,531,304 outstanding shares subject to selling restrictions and 1,152,970,688 outstanding
shares not subject to selling restrictions. The Company's shares have been listed and traded in Shenzhen Stock Exchange since July
13, 2010.
The Company engages in the tool hardware industry. The main business activities are the R&D, production and sales of hand tools,
power tools, laser measurement, storage cabinets and Power Stations. The main products of the Company are hand tools, power
tools, laser measurement, storage cabinets and Power Stations.
This financial statement was approved for disclosure by the 30th meeting of the 5th session of Board of Directors of the Company
on April 21, 2023.
The Company has incorporated 91 subsidiaries, including Changzhou Huada Kejie Opto-Electro Instrument Co., Ltd., Zhejiang
GreatStar Tools Limited, Hangzhou GreatStar Tools Limited, Hong Kong GreatStar International Limited, GreatStar Tools USA
Inc, Arrow Fastener Co., LLC, GreatStar Industrial USA LLC, GreatStar Europe AG, Lista Holding AG, BeA GmbH and
Zhongshan Kilong Industrial Co., Ltd. in the scope of the consolidated financial statements for the period. For details, see the
notes VI & VII to the financial statements.
4. Basis for preparing financial statements
1. Preparation basis
The Company's financial statements are prepared on a going concern basis.
2. Continuing operation
The Company has no events or circumstances that would cause material doubt about its ability to go as a going concern for the 12
months from the end of the reporting period.
5. Important accounting policies and accounting estimates
Specific accounting policies and accounting estimates notes:
The Company has formulated specific accounting policies and estimates for transactions or events such as impairment of financial
instruments, depreciation of fixed assets, amortization of intangible assets, and revenue recognition based on actual production and
operation characteristics.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
1. Statement of compliance with accounting standards for business enterprises
The financial statements prepared by the Company meet the requirements of the accounting standards for business enterprises and
truly and completely reflect the company's financial position, operating results and cash flow and other relevant information.
2. Accounting period
The fiscal year begins on January 1 and ends on December 31 of a calendar year.
3. Business cycle
The operating cycle of the Company's business is relatively short, with 12 months as the liquidity division standard of assets and
liabilities.
4. Functional currency
The Company and its domestic subsidiaries adopt CNY as the functional standard currency. Overseas subsidiaries such as Hong
Kong GreatStar International Limited, GreatStar Tools USA, Inc and GreatStar Europe AG have chosen the currency of the
accounting standard for their overseas operations in the main economic environment in which they operate.
5. Accounting treatment methods for combination of enterprises under common control and not under
common control
1. Accounting treatment methods for business combinations under common control
The assets and liabilities acquired by the Company in the business combination shall be measured according to the book value of
the combined party in the consolidated financial statements of the ultimate controlling party on the combination date. The
Company shall adjust the capital reserve according to the difference between the book value share of the shareholders’ equity of
the combined party in the consolidated financial statements of the ultimate controlling party and the book value of the combined
consideration paid or the total face value of the issued shares. If the capital reserve is insufficient for write-down, the retained
earnings shall be adjusted.
2. Accounting treatment methods for business combinations not under common control
On the purchase date, the Company recognizes the difference between the cost of the combination and the share of the fair value
of the identifiable net assets of the purchaser obtained in the combination as goodwill. If the combination cost is less than the fair
value share of the identifiable net assets of the purchaser obtained in the combination, the fair value of the acquired identifiable
assets, liabilities and contingent liabilities and the measurement of the combination cost shall be reviewed first. If the combination
141
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
cost is still less than the fair value share of the identifiable net assets of the purchaser obtained in the combination, the difference
shall be recorded into profit and loss.
6. Preparation method of consolidated financial statements
The parent company includes all subsidiaries under its control in the consolidated scope of the consolidated financial statements.
The consolidated financial statements are based on the financial statements of the parent company and its subsidiaries and are
prepared by the parent company in accordance with Accounting Standard for Business Enterprises No. 33 - Consolidated Financial
Statements based on other relevant information.
7. Classification of joint venture arrangement and accounting treatment of joint operation
1. The joint venture arrangement is divided into joint operations and joint venture.
2. When the Company is a joint venture party, the following items related to the share of profits in the joint operation shall be
recognized:
(1) Recognize the assets held separately, and confirm the assets held jointly according to the holding share;
(2) Recognize the liabilities undertaken separately and the liabilities jointly undertaken according to the share held;
(3) Recognize the income generated from the sale of the Company's share of joint operation;
(4) Recognize the income generated from the disposal of assets in joint operation according to the shares held by the Company;
(5) Recognize the expenses incurred separately and the expenses incurred by joint operation according to the shares held by the
Company.
8. Criteria for determining cash and cash equivalents
Cash shown in the statement of cash flows refers to cash on hand and deposits available for payment at any time. Cash equivalents
refer to investments held by enterprises with a short term, strong liquidity, easy to convert into known amounts of cash, and little
risk of changes in value.
9. Translation of foreign currency business and foreign currency statements
1. Translation of foreign currency business
When a foreign currency transaction is initially recognized, the approximate spot rate of the transaction date shall be converted
into the CNY amount. On the balance sheet date, foreign currency monetary items shall be converted at the spot exchange rate on
the balance sheet date. The exchange difference arising from the different exchange rates shall be recorded into profit and loss,
except for the exchange difference of the principal and interest of special foreign currency loans related to the acquisition and
construction of assets eligible for capitalization. The foreign currency non-monetary items measured at historical cost shall still be
142
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
converted at the approximate spot rate on the date of transaction without changing the CNY amount; The foreign currency non-
monetary items measured at fair value shall be converted by the spot exchange rate on the fair value determination date, and the
difference shall be booked into profit and loss or other comprehensive income.
2. Translation of financial statements in foreign currency
The assets and liabilities in the balance sheet shall be converted at the spot exchange rate on the balance sheet date; The
shareholders’ equity items, except the "undistributed profit" items, shall be converted at the spot exchange rate on the transaction
date; The income and expense items in the income statement shall be converted at the approximate spot rate of the transaction date.
The difference in translation of foreign currency financial statements resulting from the above-mentioned translation shall be
included in other comprehensive income.
10. Financial instruments
1. Classification of financial assets and financial liabilities
At the initial recognition, financial assets are divided into the following three categories: (1) Financial assets measured at
amortized cost; (2) Financial assets measured at fair value through other comprehensive income; (3) Financial assets measured at
fair value through profit and loss.
At the initial recognition, financial liabilities are divided into the following four categories: (1) Financial liabilities measured at
fair value through profit and loss; (2) Financial liabilities arising from transfers of financial assets that do not qualify for
derecognition or from continuing involvement in the transferred financial assets; (3) Financial guarantee contracts that do not fall
under (1) or (2) above, and loan commitments that do not fall under (1) above and lend at below-market rates; (4) Financial
liabilities measured at amortized cost.
2. Recognition basis, measurement method and derecognition conditions for financial assets and financial liabilities
(1) Recognition basis and initial measurement method of financial assets and financial liabilities
When the Company becomes a party to a financial instrument contract, it recognizes a financial asset or liability. When financial
assets or financial liabilities are initially recognized, they are measured at fair value. For financial assets and financial liabilities
measured at fair value through profit and loss, relevant transaction costs are directly recognized in profit and loss. For ot her types
of financial assets or financial liabilities, related transaction costs are included in the initial recognized amount. However, if the
accounts receivable initially recognized by the Company does not contain significant financing component or the Company does
not consider the financing component in the contract less than one year, the initial measurement shall be made in accordance with
the transaction price defined in the Accounting Standards for Business Enterprises No. 14 -- Revenue.
(2) Follow-up measurement methods of financial assets
1) Financial assets measured at amortized cost
Using the effective interest rate method, the follow-up measurement is carried out according to the amortized cost. The gains or
losses arising from financial assets measured at amortized cost and not part of any hedging relationship shall be recognized in
profit or loss upon derecognition, reclassification, amortization according to the effective interest rate method or recognit ion of
impairment.
2) Investment in debt instruments measured at fair value and whose changes are included in other comprehensive income
Fair value is used for subsequent measurement. Interest, impairment losses or gains and exchange gains and losses calculated
using the effective interest rate method are included in profit and loss, while other gains or losses are included in other
comprehensive income. Upon derecognition, the accumulated gains or losses previously recognized in other comprehensive
income shall be transferred out of other comprehensive income and recognized in profit and loss.
3) Investment in equity instruments measured at fair value through other comprehensive income
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Fair value is used for subsequent measurement. The dividends obtained (except the part of investment cost recovery) are included
in the profit and loss, and other gains or losses are included in other comprehensive income. Upon derecognition, the accumulated
gains or losses previously recorded in other comprehensive income are transferred out of other comprehensive income and
recognized in retained earnings.
4) Financial assets measured at fair value through profit and loss
The fair value is adopted for subsequent measurement, and the resulting gain or loss (including interest and dividend income) is
recognized in profit and loss, unless the financial asset is a part of the hedge relationship.
(3) Follow-up measurement methods of financial liabilities
1) Financial liabilities measured at fair value through profit and loss
Such financial liabilities include trading financial liabilities (including derivative instruments belonging to financial liabilities) and
financial liabilities designated as measured at fair value through profit and loss. Follow-up measurement of such financial
liabilities is recognized at fair value. Changes in the fair value of financial liabilities designated as measured at fair value through
profit and loss due to changes in the Company's own credit risks are recognized in other comprehensive income unless accounting
misallocation in profit and loss is caused or extended by such adjustment. Other gains or losses arising from such financial
liabilities (including interest expense, except changes in fair value caused by changes in the Company's own credit risk) are
recognized in profit or loss, unless the financial liabilities are part of the hedging relationship. Upon derecognition, the
accumulated gains or losses previously recorded in other comprehensive income are transferred out of other comprehensive
income and recognized in retained earnings.
2) Financial liabilities arising from transfers of financial assets that do not qualify for derecognition or from continuing
involvement in the transferred financial assets
Measurement is carried out in accordance with relevant provisions in the Accounting Standards for Business Enterprises No. 23 -
Financial assets transfer.
3) Financial guarantee contracts that do not fall under 1) or 2) above, and loan commitments that do not fall under 1) and lend at
below-market rates
After the initial recognition, subsequent measurement shall be made in accordance with the higher of the following two amounts:
(1) the loss reserve amount determined in accordance with the impairment provisions of financial instruments; (2) The balance of
the initial recognized amount after deducting the accumulated amortization amount determined in accordance with the relevant
provisions of the Accounting Standards for Business Enterprises No. 14 -- Income.
4) Financial liabilities measured at amortized cost
The effective interest rate method is adopted to measure the amortized cost. The gains or losses arising from financial liabilities
measured at amortized cost and not part of any hedging relationship shall be recognized in profit and loss upon derecognition and
amortization according to the effective interest rate method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets shall be derecognized when one of the following conditions is met:
① The contractual right to collect cash flows of financial assets has been terminated;
② The financial assets have been transferred, and the transfer meets the provisions related to derecognition of financial assets in
the Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets.
2) When the current obligation of the financial liabilities (or part thereof) has been discharged, financial liabilities (or part thereof)
shall be derecognized accordingly.
3. Confirmation basis and measurement method of financial asset transfer
If the Company transfers almost all risks and rewards in the ownership of financial assets, it shall derecognize such financial assets
and separately recognize the rights and obligations generated or retained in the transfer as assets or liabilities. Those who retain
almost all risks and rewards in the ownership of financial assets continue to recognize the transferred financial assets. If the
company neither transfers nor retains almost all the risks and rewards in the ownership of the financial asset, it shall deal with the
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following cases respectively: (1) If it does not retain the control over the financial asset, it shall derecognize the financial asset and
separately recognize the rights and obligations generated or retained in the transfer as assets or liabilities; (2) If the control of the
financial assets is retained, the relevant financial assets shall be recognized according to the degree of continued involvement in
the transferred financial assets, and the relevant liabilities shall be recognized accordingly.
If the overall transfer of financial assets meets the conditions for termination of recognition, the difference between the following
two amounts shall be recorded into current profit and loss: (1) Book value of the transferred financial assets on the date of
derecognition; (2) The sum of the consideration received for the transfer of financial assets and the amount corresponding to the
part of termination of recognition in the accumulative amount of the change in fair value directly included in other comprehensive
income (the financial assets involved in the transfer are debt instrument investment measured at fair value through other
comprehensive income). If a part of the financial asset is transferred and the transferred part satisfies the conditions for
derecognition, the book value of the whole financial asset before transfer shall be apportioned between the part of termination of
recognition and the part of continued recognition according to their relative fair value on the transfer date, and the difference of the
following two amounts shall be recognized in profit and loss: (1) Book value of the part of termination of recognition; (2) The sum
of the consideration for the part of termination of recognition and the amount corresponding to the part of derecognition in the
accumulated amount of the change in fair value directly included in other comprehensive income (the financial assets involved in
the transfer are the debt instrument investment measured at fair value through other comprehensive income).
4. Methods for determining the fair value of financial assets and financial liabilities
The Company determines the fair value of the relevant financial assets and financial liabilities using valuation techniques
applicable in the current circumstances and supported by sufficient available data and other information. The Company divides the
input values used by the valuation technology into the following levels and uses them successively:
(1) The input value of the first level is the unadjusted quotation of the same asset or liability available on the measurement date in
the active market;
(2) The input value of the second level is the directly or indirectly observable input value of related assets or liabilities except the
input value of the first level, including the quotation of similar assets or liabilities in the active market; quotation of the same or
similar assets or liabilities in inactive markets; observable input values other than quotes, such as interest rates and yiel d curves
that are observable during normal quotation intervals; and market validation input values;
(3) The input values of the third level are the unobtainable input values of related assets or liabilities, including interest rates that
cannot be directly observed or verified by observable market data, stock volatility, future cash flows of the disposal obligations
undertaken in the enterprise combination, and financial forecasts made using their own data.
5. Impairment of financial instruments
(1) Measurement and accounting treatment of impairment of financial instruments
Based on expected credit losses, the Company shall make provisions for impairment and recognize loss reserve with respect to
financial assets measured at amortized cost, investment in debt instruments measured at fair value through other comprehensive
income, contract assets, lease receivables, loan commitments other than financial liabilities classified as measured at fair value
through profit and loss, financial liabilities not measured at fair value through profit and loss, or financial guarantee contracts for
financial liabilities arising from transfers of financial assets that do not qualify for derecognition or from continuing involvement
in the transferred financial assets.
Expected credit loss refers to the weighted average of credit loss of financial instruments weighted by the risk of default. Credit
loss refers to the difference between all contract cash flows receivable by the company at the original actual interest rate and all
cash flows expected to be collected, i.e., the present value of all cash shortages. The financial assets purchased or originated by the
Company that have suffered credit impairment shall be discounted according to the actual credit-adjusted interest rate of the
financial assets.
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For the financial assets purchased or originated by the Company that have suffered credit impairment , the Company will only
recognize the cumulative changes in expected credit losses in the entire duration since the initial recognition as a loss reserve at the
balance sheet date.
For receivables and contract assets formed from transactions regulated by Accounting Standard for Business Enterprises No. 14 --
Revenue and without significant financing component or the Company does not consider the financing component in contracts less
than one year, the Company uses simplified measurement method to measure the loss reserve in accordance with the expected
credit loss amount equivalent to the entire duration.
For financial assets other than those measured in the above manners, the Company evaluates at each balance sheet date whether
their credit risk has increased significantly since the initial recognition. If the credit risk has increased significantly since the initial
recognition, the Company measures the loss reserve in accordance with the amount of expected credit losses during the entire
duration. If the credit risk does not increase significantly since the initial recognition, the Company measures the loss reserve in
accordance with the amount of expected credit losses on the financial instrument within the next 12 months.
The Company uses reasonably available and evidence-based information, including forward-looking information to determine
whether the credit risk of the financial instruments has increased significantly since the initial recognition by comparing t he risk of
default on the financial instruments as of the balance sheet date with the risk of default on the initial recognition date.
At the balance sheet date, if the Company determines that a financial instrument has only low credit risk, it is assumed that the
credit risk of the financial instrument has not increased significantly since the initial recognition.
The Company evaluates expected credit risk and measures expected credit losses on the basis of individual financial instruments or
combinations of financial instruments. When the combination of financial instruments is based, the Company divides the financial
instruments into different combinations based on common risk characteristics.
The company will remeasure the expected credit losses on each balance sheet date, and the resulting increase or reversal of loss
reserves will be recorded into current profit and loss as impairment losses or gains. For a financial asset measured at amort ized
cost, the loss reserve shall be used to offset the carrying value of the financial asset listed in the balance sheet. For creditor's rights
investment measured at fair value and whose changes are included in other comprehensive income, the Company recognizes its
loss reserve in other comprehensive income and does not offset the carrying value of the financial asset.
(2) A financial instrument that evaluates expected credit risk by portfolio and adopts a three-stage model to measure expected
credit losses
Basis for determining
Item Method of measuring expected credit losses
the combination
With reference to historical credit loss experience, combined with
the current situation and the forecast of future economic conditions,
Other receivables -- aging
Aging the expected credit loss is calculated by default risk exposure and the
combination
expected credit loss rate within the next 12 months or the whole
duration
With reference to historical credit loss experience, combined with
Other receivables -- collections
Associated the current situation and the forecast of future economic conditions,
of related party funds within
transactions within the the expected credit loss is calculated by default risk exposure and the
the scope of consolidated
scope of consolidation expected credit loss rate within the next 12 months or the whole
receivables
duration
(3) Adopt simplified measurement method to measure receivables and contract assets of expected credit losses by combination
1) Specific combinations and methods for measuring expected credit losses
Basis for determining
Item Method of measuring expected credit losses
the combination
By referring to the historical credit loss experience, combining the
Banker's acceptance receivable
current situation and the forecast of the future economic situation,
Type of bill
the expected credit loss is calculated through the default risk
Trade acceptance receivables exposure and the expected credit loss rate of the whole duration
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By referring to the historical credit loss experience, combining the
current situation and the forecast of the future economic situation,
Accounts receivable -- aging
Aging the comparison table between the aging receivable and the expected
combination
credit loss rate in the whole duration is prepared to calculate the
expected credit loss
2) Accounts receivable -- comparison table of aging combination and expected credit loss rate over the whole duration
Accounts receivable
Aging
Expected credit loss ratio (%)
Within 1 year (inclusive, the same below) 5
1-2 years 10
2-3 years 20
3-4 years 30
4-5 years 50
More than 5 years 100
6. Offset of financial assets and financial liabilities
Financial assets and financial liabilities are shown separately in the balance sheet and do not offset each other. Provided that the
following conditions are met meanwhile, the Company shall show the net amount after offsetting each other in the balance sheet:
(1) The Company has the legal right to offset the confirmed amount, and such legal right is currently enforceable; (2) The
Company plans to settle on a net basis, or meanwhile realize the financial assets and settle the financial liabilities.
If the transfer of financial assets does not meet the conditions for termination of recognition, the Company shall not offset the
transferred financial assets and related liabilities.
11. Notes receivable
The notes receivable has a short maturity, low default risk and strong ability to fulfill the contract cash flow obligation in the short
term, and therefore the Company regards notes receivable as a financial instrument with low credit risk and directly makes t he
assumption that the credit risk has not increased significantly since the initial recognition. Considering that the historical default
rate is zero, the Company's fixed non-performing debt ratio for notes receivable is 0.
12. Accounts receivable
For details, see V “Major Accounting Policies and Accounting Estimates”, 10 “Financial Instruments”.
13. Financing of receivables
For details, see V “Major Accounting Policies and Accounting Estimates”, 10 “Financial Instruments”.
14. Other receivables
Methods of determining and accounting for expected credit losses of other receivables
For details, see V “Major Accounting Policies and Accounting Estimates”, 10 “Financial Instruments”.
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15. Inventory
1. Classification of inventory
Inventory includes finished products or commodities held for sale in daily activities, products in the production process, materials
and supplies consumed in the production process or in the provision of services.
2. Valuation method for issuing inventory
The monthly weighted average method is adopted for issuing inventory.
3. The basis for determining the net realizable value of inventory
On the balance sheet date, the inventory shall be measured by the lower of cost and net realizable value, and the inventory
depreciation reserve shall be drawn according to the difference between the cost and net realizable value of a single inventory. The
net realizable value of the inventory directly used for sale shall be determined by the estimated selling price of the invent ory less
estimated selling expenses and related taxes in the normal course of production and operation. For inventories that need to be
processed, the net realizable value shall be determined by the estimated selling price of finished products produced in the normal
course of production and operation after deducting the estimated cost, estimated selling expenses and related taxes to be incurred
upon completion. On the balance sheet date, if a part of the same inventory has a contract price, but the other part does not have a
contract price, its net realizable value shall be determined respectively, and the corresponding cost shall be compared with it to
determine the amount to be withdrawn or transferred back from the reserve for inventory declines respectively.
4. Inventory system
The inventory system is the perpetual inventory system.
5. Amortization method of low-value consumable products and packaging
(1) Low-value consumable products
Amortization is carried out in accordance with the one-time resale method.
(2) Packaging
Amortization is carried out in accordance with the one-time resale method.
(XII) Contract cost
The assets related to contract cost include contract acquisition cost and contract performance cost.
The incremental cost incurred by the company to acquire the contract is expected to be recovered and recognized as an asset as the
contract acquisition cost. If the amortization period of contract acquisition costs does not exceed one year, it is recognized directly
in profit and loss when incurred.
The cost incurred by the Company for the performance of the contract, which does not apply to the scope of relevant standards
such as inventory, fixed assets or intangible assets and meets the following conditions, shall be recognized as an asset as t he
performance cost of the contract:
1. The costs are directly related to a current or prospective contract, including direct labor, direct materials, manufacturing
expenses (or similar expenses), costs expressly borne by the customer and other costs incurred solely as a result of the contract;
2. The cost increases the Company's resources for future performance obligations;
3. The cost is expected to be recovered.
The Company amortizes the assets related to the contract cost on the same basis as the commodity or service revenue recognition
related to the asset and recognizes them in profit and loss.
If the carrying value of the asset related to the contract cost is higher than the remaining consideration expected to be obt ained
from the transfer of the commodity or service related to the asset minus the estimated cost to be incurred, the Company shall set
aside an impairment reserve for the excess part and recognize it as an asset impairment loss. The factors of impairment in the prior
period change after the transfer, so that if the remaining consideration expected to be obtained minus the estimated cost to be
incurred is higher than the book value of the asset, the original asset impairment reserve has been withdrawn and recorded into the
current profit and loss. However, the carrying value of the asset after conversion shall not exceed the carrying value of the asset on
the date of conversion under the assumption that no impairment provision is made.
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16. Contract assets
The Company shall list the contractual assets or contractual liabilities in the balance sheet according to the relationship between
the performance of the obligations and the payment of the customer. The Company presents contract assets and contract liabilities
under the same contract on a net basis after offsetting them against each other.
The Company shows as receivables its right to collect consideration from the customer unconditionally (that is, depending only on
the passage of time), and its right to collect consideration for goods transferred to the customer (which depends on factors other
than the passage of time) as contractual assets.
17. Contract cost
The assets related to contract cost include contract acquisition cost and contract performance cost.
The incremental cost incurred by the company to acquire the contract is expected to be recovered and recognized as an asset as the
contract acquisition cost. If the amortization period of contract acquisition costs does not exceed one year, it is recognized directly
in profit and loss when incurred.
The cost incurred by the Company for the performance of the contract, which does not apply to the scope of relevant standards
such as inventory, fixed assets or intangible assets and meets the following conditions, shall be recognized as an asset as t he
performance cost of the contract:
1. The costs are directly related to a current or prospective contract, including direct labor, direct materials, manufacturing
expenses (or similar expenses), costs expressly borne by the customer and other costs incurred solely as a result of the contract;
2. The cost increases the Company's resources for future performance obligations;
3. The cost is expected to be recovered.
The Company amortizes the assets related to the contract cost on the same basis as the commodity or service revenue recognition
related to the asset and recognizes them in profit and loss.
If the carrying value of the asset related to the contract cost is higher than the remaining consideration expected to be obt ained
from the transfer of the commodity or service related to the asset minus the estimated cost to be incurred, the Company shall set
aside an impairment reserve for the excess part and recognize it as an asset impairment loss. The factors of impairment in the prior
period change after the transfer, so that if the remaining consideration expected to be obtained minus the estimated cost to be
incurred is higher than the book value of the asset, the original asset impairment reserve has been withdrawn and recorded into the
current profit and loss. However, the carrying value of the asset after conversion shall not exceed the carrying value of the asset on
the date of conversion under the assumption that no impairment provision is made.
18. Assets held for sale
1. Classification of non-current assets held for sale or disposal groups
Non-current assets or disposal groups are classified as assets held for sale by the Company if they both meet the following
conditions: (1) They can be immediately sold under current conditions, as is customary for the sale of such assets or disposal
groups in similar transactions; (2) A sale is highly likely to occur, that is, the Company has decided on the sale plan and obtained
firm purchase commitments, and the sale is expected to be completed within one year.
Non-current assets or disposal groups acquired by the Company specifically for resale shall be classified as assets held for sale on
the acquisition date if they meet the condition that the sale is expected to be completed within one year and are likely to meet other
classification conditions for the held-for-sale category within a short period (usually three months).
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If the transaction between non-related parties is not completed within one year due to one of the following reasons beyond the
control of the Company and the Company remains committed to selling the non-current assets or disposal group, the non-current
assets or disposal group shall continue to be classified as assets held for sale: (1) The Purchaser or any other party sets conditions
that lead to the postponement of the Sale, and the Company has acted in a timely manner in respect of such conditions and expects
to be able to successfully resolve the postponement factors within one year from the date of setting conditions that lead to the
postponement of the Sale; (2) Due to the occurrence of rare circumstances that cause the non-current assets held for sale or the
disposal group to fail to complete the sale within one year, the Company has taken necessary measures in response to these new
circumstances and re-satisfied the classification conditions of the categories held for sale within the first one year.
2. Measurement of non-current assets held for sale or disposal groups
(1) Initial measurement and subsequent measurement
When the non-current assets or disposal groups held for sale are initially measured or remeasured on the balance sheet date, if the
carrying value is higher than the net amount after the fair value minus the selling expense, the carrying value shall be written down
to the net amount after the fair value minus the selling expense, and the amount written down shall be recognized as the asset
impairment loss and included in profit and loss. Meanwhile, the impairment provisions of the assets held for sale shall be
recognized.
Initial measurement amount of the non-current assets or disposal groups classified as assets held for sale on the acquisition date is
the lower of initial measurement amount assuming that they are not classified as assets held for sale and the net fair value after
deducting selling expenses are compared. Except for the non-current assets or disposal group acquired in the enterprise
combination, the difference generated by the net amount of the fair value minus the sale expense of the non-current assets or
disposal group as the initial measurement amount shall be recorded in profit and loss.
As for the amount of asset impairment loss recognized by the disposal group held for sale, the carrying value of goodwill in the
disposal group shall be offset first, and then the carrying value shall be offset proportionally according to the proportion of the
carrying value of various non-current assets in the disposal group.
Non-current assets held for sale or in the disposal group are not depreciated or amortized, and interest and other expenses of
liabilities in the disposal group held for sale continue to be recognized.
(2) Accounting treatment for reversal of asset impairment loss
If the net amount of the fair value of the non-current assets held for sale after subtracting the selling expense increases on the
subsequent balance sheet date, the amount previously written down shall be restored and reversed within the amount of asset
impairment loss recognized after being classified as assets held for sale, and the reversed amount shall be recorded in profit and
loss. Asset impairment losses recognized before being classified as assets held for sale are not reversed.
If the net amount of the fair value of the disposal group held for sale after subtracting the selling expense increases on the
subsequent balance sheet date, the amount previously written down shall be restored and reversed within the amount of asset
impairment loss recognized after the non-current assets are classified as held for sale, and the reversed amount shall be included in
profit and loss. The carrying value of goodwill that has been written off and the asset impairment losses recognized before the non-
current assets are classified as assets held for sale are not reversed.
The subsequent reversed amount of asset impairment loss recognized by the disposal group held for sale shall be increased in
proportion to the carrying value of various non-current assets except goodwill in the disposal group.
(3) Accounting treatment for assets no longer classified as held-for-sale category and derecognition
When non-current assets or disposal groups are no longer classified as assets held for sale because they no longer meet the
conditions for classification of the held-for-sale class or non-current assets are removed from the held-for-sale disposal group, the
measurement shall be at the lower of the following: 1) Book value before it is classified as assets held for sale, adjusted for
depreciation, amortization or impairment that would have been recognized if it were not classified as assets held for sale; and 2)
reversible amount.
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When the non-current assets held for sale or disposal group is derecognized, the unrecognized gains or losses shall be booked in
profit and loss.
19. Long-term equity investment
1. Judgment of joint control and significant influence
There is common control over an arrangement in accordance with relevant provisions, and the relevant activities of the
arrangement can only be decided after the consensus of the participants who share the control right, which is deemed as joint
control. Having the power to participate in the decision-making of the financial and operational policies of the investee, but not
being able to control or jointly control the formulation of these policies with other parties, shall be regarded as having significant
influence.
2. Determination of investment cost
(1) For the combination of enterprises under common control, if the merging party pays cash, transfers non-cash assets, assumes
debt or issues equity securities as the combination consideration, the initial investment cost shall be based on the book value of the
shareholders’ equity of the combined party acquired in the consolidated financial statements of the ultimate controlling party on
the combination date. The capital reserve shall be adjusted by the difference between the initial investment cost of long-term
equity investment and the book value of the combined consideration paid or the total face value of the issued shares. If the capital
reserve is insufficient for write-down, the retained earnings shall be adjusted.
The Company realizes long-term equity investment formed by enterprise combination under common control step by step through
multiple transactions to judge whether it is a package transaction. In the case of a package transaction, each transaction is
accounted for as one transaction in which control is acquired. If it is not a package transaction, the initial investment cost shall be
determined on the combination date according to the share of the book value of the consolidated party's net assets in the
consolidated financial statements of the ultimate controlling party after the combination. The capital reserve shall be adjusted by
the difference between the initial investment cost of long-term equity investment on the combination date and the sum of the book
value of long-term equity investment before the combination and the book value of the new payment consideration of shares
further acquired on the combination date. If the capital reserve is insufficient for write-down, the retained earnings shall be
adjusted.
(2) If it is formed by the combination of enterprises not under common control, the fair value of the combination consideration
paid on the purchase date shall be taken as the initial investment cost.
The Company realizes long-term equity investment formed by enterprise consolidation under different control step by step through
multiple transactions, and conducts relevant accounting treatment by differentiating individual financial statements and
consolidated financial statements:
1) In individual financial statements, the sum of the book value of the original equity investment plus the cost of the new
investment shall be used as the initial investment cost calculated according to the cost method.
2) Determine whether it is a package transaction in the consolidated financial statements. In the case of a package transacti on, each
transaction is accounted for as one transaction in which control is acquired. If it does not belong to the package transaction, the
equity held by the purchaser before the purchase date shall be remeasured according to the fair value of the equity on the purchase
date, and the difference between the fair value and the carrying value shall be included in the current investment income. If the
equity held by the purchaser before the purchase date involves other comprehensive income under the equity method, other
comprehensive income related thereto shall be converted into the current income of the purchase date, except other comprehensive
income arising from changes in net liabilities or net assets of the invested party due to remeasurement of the defined benefit plan.
(3) Other than the enterprise combination: In case of cash payment, the purchase price actually paid shall be regarded as the initial
investment cost. Where equity securities are issued, the fair value of the equity securities issued shall be taken as the initial
investment cost. If it is obtained through debt restructuring, its initial investment cost shall be determined according to Accounting
Standards for Business Enterprises No. 12 - Debt Restructuring. If it is obtained by exchange of non-monetary assets, its initial
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investment cost shall be determined according to Accounting Standards for Business Enterprises No. 7 - Exchange of non-
monetary Assets.
3. Follow-up measurement and profit and loss recognition methods
The long-term equity investment controlled by the invested entity shall be accounted by cost method. Long-term equity
investments in associates and joint ventures shall be accounted for by the equity method.
4. The method of disposing the investment in the subsidiary company step by step through multiple transactions until the loss of
control
(1) Individual financial statements
The difference between the book value and the actual purchase price of the disposed equity shall be booked into profit and loss.
For the remaining equity, which still has a significant influence on the invested entity or is under joint control with other parties, it
shall be converted to the equity method of accounting. If it is no longer able to control, jointly control or have significant influence
on the invested entity, the accounting shall be carried out in accordance with the relevant provisions of the Accounting Standards
for Business Enterprises No. 22 -- Recognition and Measurement of Financial Instruments.
(2) Consolidated financial statements
1) Disposal of the investment in the subsidiary step by step through multiple transactions until the control right is lost and it is not
a package transaction
Before the loss of control, the disposal price and the disposal of long-term equity investment shall be entitled to the difference
between the net asset share continuously calculated by the subsidiary since the purchase date or the combination date, and the
capital reserve (capital premium) shall be adjusted. If the capital premium is insufficient, the retained earnings shall be deducted.
When the control of original subsidiary is lost, the remaining equity shall be remeasured according to its fair value on the date of
the loss of control. The sum of the consideration obtained from the disposal of the equity and the fair value of the remaining equity,
minus the difference between the shares of the original shareholding proportion which shall enjoy the net assets continuously
calculated from the purchase date or combination date of the original subsidiary, shall be included in the investment income of the
period of loss of control, and the goodwill shall be written down meanwhile. Other comprehensive income related to the equity
investment of the original subsidiary shall be converted to current investment income when the right of control is lost.
2) Disposal of the investment in the subsidiary step by step through multiple transactions until the control right is lost and it is a
package transaction
Each transaction shall be treated as a transaction for the disposal of a subsidiary and loss of control. However, the difference
between the disposal price and the disposal investment corresponding to the share of the net assets of the subsidiary before the loss
of the right of control shall be recognized as other comprehensive income in the consolidated financial statements and transferred
to the profit and loss of the period when the right of control is lost.
20. Investment real estate
Investment real estate measurement model
Cost method measurement
Depreciation or amortization method
1. Investment real estate includes leased land use right, land use right held and ready to be transferred after appreciation and leased
buildings.
2. The initial measurement of investment real estate shall be based on the cost, the subsequent measurement shall be carried out in
the cost mode, and the depreciation or amortization shall be carried out in the same way as that of fixed assets and intangible assets.
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21. Fixed assets
(1) Recognition conditions
Fixed assets refer to tangible assets that are held for the production of commodities, the provision of labor services, the lease or the
operation and management, and whose service life exceeds one fiscal year. Fixed assets are recognized when economic benefits
are likely to flow in and costs can be measured reliably.
(2) Depreciation method
Annual depreciation
Category Depreciation method Depreciation life Residual value rate
rate
Houses and buildings Average years method 20-25 years 0%, 5% 5.00% - 3.80%
General purpose
Average years method 3-10 years 0%, 10% 33.33%-9.00%
equipment
Special equipment Average years method 5-15 years 0%, 10% 20.00%-6.00%
Means of transport Average years method 4-10 years 5%, 10% 23.75%-9.00%
(3) Identification basis, valuation and depreciation method of fixed assets leased by financing
If one or more of the following criteria is met, it shall be regarded as a finance lease: (1) When the lease term expires, the
ownership of the leased asset is transferred to the lessee; (2) The lessee has the option to purchase the leased asset, and the
purchase price concluded is expected to be far lower than the fair value of the leased asset when the option is exercised, so it is
reasonably certain that the lessee will exercise this option on the commencement date of the lease; (3) Even if the ownership of the
asset is not transferred, the lease period accounts for the majority of the useful life of the leased asset [usually more than 75%
(inclusive) of the useful life of the leased asset]; (4) The present value of the minimum lease payment of the lessee on the
beginning date of the lease, which is almost equivalent to the fair value of the leased asset on the beginning date of the lease [more
than 90% (inclusive)]; The present value of the minimum lease payment of the lessor on the lease commencement date, which is
almost equivalent to the fair value of the leased asset on the lease commencement date [more than 90% (inclusive)]; and (5) The
nature of the leased assets is special, if there is no major transformation, only the lessee can use it. For the fixed assets under
financing lease, the lower of the fair value of the leased assets on the date of lease commencement and the current value of the
minimum lease payment shall be recognized and depreciation shall be calculated and deducted according to the depreciation
policy of the self-owned fixed assets.
22. Construction in progress
1. The construction in progress will be recognized when the financial benefit is likely to flow in, and the cost can be reliably
measured. The construction in progress is measured at the actual cost incurred before the construction of the asset reaches a
predetermined usable state.
2. When the project under construction reaches the predetermined usable state, it shall be transferred to fixed assets according to
the actual cost of the project. If it has reached the predetermined serviceable state but has not yet handled the final accou nting for
completion, it shall first transfer the estimated value to the fixed assets, and after the final accounting for completion, it shall adjust
the original provisional estimated value according to the actual cost, but no longer adjust the depreciation that has already been
drawn.
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23. Borrowing costs
1. Recognition principle of capitalization of borrowing costs
If the borrowing expenses incurred by the Company can be directly attributed to the purchase, construction or production of assets
that meet the capitalization conditions, they shall be capitalized and included into the cost of the relevant assets. Other borrowing
expenses shall be recognized as expenses when incurred and recorded into profit and loss.
2. Period of capitalization of borrowing costs
(1) Capitalization begins when the borrowing cost meets the following conditions: 1) Asset expenditure has been incurred; 2) The
borrowing cost has been incurred; 3) The purchase, construction or production activities necessary to bring the assets to a
predetermined usable or marketable state have begun.
(2) If the assets eligible for capitalization are abnormally interrupted in the process of purchase, construction or production, and
the interruption time is more than 3 months, the capitalization of borrowing costs will be suspended. The borrowing costs incurred
during the interruption period are recognized as current expenses until the purchase and construction of assets or production
activities are restarted.
(3) When the assets purchased, built or produced in line with the capitalization conditions reach a predetermined useable or
saleable state, the capitalization of borrowing costs ceases.
3. Capitalization rate and capitalization amount of borrowing costs
When a special loan is borrowed for the purchase, construction or production of assets that meet the capitalization conditions, the
interest expense actually incurred in the current period of the special loan (including the amortization of discount or premium
determined according to the effective rate method), less the amount of interest income obtained from depositing the loan funds not
yet used in the bank or investment income obtained from making temporary investment, Determining the amount of interest to be
capitalized. Where the general loan is occupied for the purchase, construction or production of assets conforming to the
capitalization conditions, the amount of interest to be capitalized for the general loan shall be calculated and determined according
to the weighted average of the accumulated asset expenditure exceeding the special loan's asset expenditure multiplied by the
capitalization rate of the occupied general loan.
24. Right-to-use assets
1. Recognition conditions for the right-to-use assets
The right to use assets refers to the right of the company as the lessee to use the leased assets during the lease term. The Company
shall confirm the right-to-use assets of the lease on the commencement date of the lease term. Right-to-use assets are recognized
when economic benefits are likely to flow in and costs can be measured reliably.
2. Initial measurement of right-to-use assets
The right-to-use assets are initially measured according to the cost, which includes: (1) The initial measurement amount of the
lease liability; (2) The amount of the lease payment paid on or before the commencement date of the lease term, if there is l ease
incentive, the amount related to the lease incentive already enjoyed shall be deducted; (3) Initial direct expenses incurred by lessee;
(4) The estimated costs incurred by the Lessee for dismantling and removing the leased assets, restoring the premises where the
leased assets are located, or restoring the leased assets to the state agreed in the lease terms.
3. Follow-up measurement of right-to-use assets
(1) The Company adopts the cost model to carry out follow-up measurement of the right-to-use assets.
(2) The Company shall calculate and depreciate the right-to-use assets. If the ownership of the leased asset can be reasonably
determined at the end of the lease term, the company shall calculate and withdraw depreciation within the remaining service life of
the leased asset. If it is not reasonably certain that the ownership of the leased asset can be acquired at the end of the lease term,
the Company shall calculate and withdraw depreciation during the short period between the lease term and the remaining service
life of the leased asset.
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(3) When the company re-measures the lease liability according to the current value of the changed lease payment amount and
adjusts the book value of the right-to-use asset accordingly, if the book value of the right-to-use asset has been reduced to zero, but
the lease liability still needs to be further reduced, the remaining amount shall be recorded into the current profit and loss.
25. Intangible assets
(1) Valuation method, service life and impairment test
1. Intangible assets, including land ownership, land use right, patent right, trademark right, proprietary technology, management
software and pollutant discharge right, shall be initially measured according to cost.
2. Intangible assets with limited service life shall be systematically and reasonably amortized within the service life according to
the expected realization mode of the economic benefits related to the intangible assets. If the expected realization mode can not be
reliably determined, the straight-line method shall be adopted for amortization. The specific years are as follows:
Item Amortization years (year)
Land use right 50, 30
Patent right 10
Trademark right 10
Proprietary technology 5
Management software 3-10
Pollutant discharge right 10
The Company does not amortize intangible assets such as land ownership and trademark right whose service life is uncertain. The
Company will review the service life of such intangible assets in each accounting period. For intangible assets with uncertai n
service life, the basis for judging the uncertain service life is that it is impossible to estimate the period of intangible assets
bringing future economic benefits to the enterprise. Intangible assets whose service life is uncertain shall be the ownership of land.
(2) Internal R&D expenditure accounting policies
The expenditure in the research phase of internal R&D projects shall be booked into profit and loss when incurred. The
expenditures in the development stage of an internal R&D project shall be recognized as intangible assets if the following
conditions are met: (1) It is technically feasible to complete the intangible assets so that they can be used or sold; (2) It has the
intention to complete the intangible assets and use or sell them; (3) The way in which intangible assets generate economic benefits,
including proving the existence of a market for products produced by the use of intangible assets or the existence of a market for
intangible assets themselves, and proving the usefulness of intangible assets to be used internally; (4) It has sufficient technical,
financial and other resources to complete the development of the intangible assets and has the ability to use or sell the int angible
assets; (5) The expenditures attributable to the development stage of the intangible assets can be measured reliably.
26. Impairment of long-term assets
For long-term equity investment, investment real estate measured by cost mode, fixed assets, construction in progress, assets with
use right, intangible assets with limited service life and other long-term assets, if there are signs of impairment on the balance
sheet date, the recoverable amount shall be estimated. For the intangible assets whose goodwill and service life are uncertain due
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to the business combination, the impairment test will be conducted every year regardless of whether there is any indication of
impairment. Goodwill is tested for impairment in conjunction with its associated asset group or combination of asset groups.
If the recoverable amount of the above long-term assets is lower than the carrying value, the asset impairment reserve shall be
recognized according to the difference and booked into profit and loss.
27. Long-term deferred expenses
Long-term amortized expenses have been accounted for, amortization period of more than 1 year (exclusive) of various expenses.
Long-term deferred expenses are recorded in the account according to the actual amount incurred and amortized evenly in
installments during the benefit period or specified period. If long-term deferred expense items do not benefit future accounting
periods, the amortized value of the item that has not been amortized is fully transferred to current profit and loss.
28. Contractual liabilities
The Company shall list the contractual assets or contractual liabilities in the balance sheet according to the relationship between
the performance of the obligations and the payment of the customer. The Company shall set off the contractual assets and
contractual liabilities under the same contract and show them in net.
The Company lists as a contractual liability the obligation to transfer goods to the customer for consideration received or
receivable from the customer.
29. Employee compensation
(1) Accounting treatment of short-term compensation
During the accounting period when employees provide services to the company, the short-term compensation actually incurred is
recognized as a liability and recorded into the current profit and loss or the cost of related assets.
(2) Accounting treatment of post-employment benefits
Post-employment benefits are divided into defined deposit plan and defined benefit plan.
(1) During the accounting period when an employee provides services to the Company, the amount to be paid according to the
established withdrawal plan shall be recognized as a liability and recorded into the current profit and loss or the cost of related
assets.
(2) Accounting for defined benefit plans usually includes the following steps:
1) According to the expected cumulative benefit unit method, using unbiased and mutually consistent actuarial assumptions to
estimate the relevant demographic variables and financial variables, measure the obligations arising from the benefit plan, and
determine the duration of the related obligations. Meanwhile, the obligation arising from the defined benefit plan is discounted to
determine the current value of the defined benefit plan obligation and the current service cost;
2) If there are assets in the defined benefit plan, the deficit or surplus formed by the present value of the obligations of the defined
benefit plan minus the fair value of the assets in the defined benefit plan will be recognized as the net liability or net asset of a
defined benefit plan. If there is surplus in the defined benefit plan, the net assets of the defined benefit plan shall be measured
according to the lower of the surplus of the defined benefit plan or the upper limit of assets;
3) At the end of the period, the employee compensation cost generated by the defined benefit plan shall be recognized as service
cost, net interest of net liabilities or net assets of the defined benefit plan, and changes generated by remeasuring net liabilities or
net assets of the defined benefit plan, among which the service cost and net interest of net liabilities or net assets of the defined
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benefit plan shall be included into current profit or loss or cost of related assets. Changes resulting from the re-measurement of net
liabilities or net assets of the benefit plan are recorded in other comprehensive income and are not allowed to be carried back to
profit or loss in subsequent accounting periods, but such amounts recognized in other comprehensive income can be transferred
within the scope of equity.
(3) Accounting treatment of dismiss welfare
For dismiss benefits provided to employees, the employee compensation liability generated by dismiss benefits shall be recognized
as soon as possible and recorded into profit and loss: (1) The Company cannot unilaterally withdraw the dismiss benefits provided
by the termination of labor relations plan or reduction proposal; (2) When the Company recognizes the costs or expenses related to
the restructuring involving the payment of dismiss benefits.
(4) Accounting treatment of other long-term employee benefits
Other long-term benefits provided to the staff and workers, which meet the requirements of the defined deposit plan, shall be
accounted for in accordance with the relevant provisions of the defined deposit plan. In addition, other long-term benefits shall be
accounted for in accordance with the relevant provisions of the defined benefit plan. To simplify the relevant accounting treatment,
the employee compensation cost generated as service cost, net interest of net liabilities or net assets of other long-term employee
benefits, and the total net income generated by the re-measurement of net liabilities or net assets of other long-term employee
benefits shall be recognized in profit and loss or cost of related assets.
30. Lease liabilities
On the commencement date of the lease, the Company recognizes the present value of the outstanding lease payments as a lease
liability. When calculating the present value of lease payments, the internal interest rate of lease is used as the discount rate. If the
internal interest rate of lease cannot be determined, the company's incremental borrowing rate is used as the discount rate. The
difference between the lease payment amount and the present value shall be regarded as the unrecognized financing expense, and
the interest expense shall be recognized in accordance with the discount rate of the present value of the lease payment amount
during each period of the lease term and recorded into the current profit and loss. Variable lease payments not included in the
measurement of lease liabilities are booked into current profit and loss when actually incurred.
After the commencement of the lease term, when the actual fixed payment amount changes, the estimated amount payable of the
guarantee balance changes, the index or ratio used to determine the lease payment amount changes, the evaluation result of the
purchase option, the renewal option or the termination option changes, or the actual exercise of the option changes, the Company
shall remeasure the lease liability according to the present value of the changed lease payment amount. And adjust the book value
of the right to use assets accordingly. If the book value of the right to use assets has been reduced to zero, but the lease liability
still needs to be further reduced, the remaining amount shall be booked in profit and loss.
31. Provisions
1. Obligations arising from contingent matters such as external guarantee, litigation, product quality assurance and loss contract
become the current obligations undertaken by the Company, and the performance of such obligations is likely to lead to the
outflow of economic benefits from the Company. When the amount of such obligations can be measured reliably, the Company
will recognize such obligations as provisions.
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2. The Company makes the initial measurement of the provisions in accordance with the best estimate of the expenditures required
to fulfill the relevant current obligations, and reviews the carrying value of the provisions on the balance sheet date.
32. Share payment
1. Types of share payments
Including share payments settled in equity and share payments settled in cash.
2. Implement, modify and terminate relevant accounting treatment of share payment plans
(1) To be paid in equity settled shares
Immediately after the grant of feasible rights in exchange for employee services with equity settlement of the stock payment, on
the grant date according to the fair value of the equity instrument into the relevant costs or expenses, adjust the capital r eserve
accordingly. If the service within the waiting period is completed or the performance conditions are met, the right is paid by the
equity settled shares. On each balance sheet day during the waiting period, based on the best estimate of the number of the
available right equity instruments, the service acquired during the current period is included into the relevant cost or expense
according to the fair value of the grant date of the equity instruments, and the capital reserve is adjusted accordingly.
If the fair value of the other party's services can be measured reliably, it shall be measured according to the fair value of the other
party's services on the date of acquisition; If the fair value of the services of other parties cannot be measured reliably, but the fair
value of the equity instrument can be measured reliably, it shall be measured according to the fair value of the equity instrument
on the date the service is acquired, and recorded into the relevant cost or expense, and the shareholders’ equity shall be increased
accordingly.
(2) To be paid in cash shares
Cash settled share-based payments that are immediately exercisable after the grant in exchange for employee services are
recognized as relevant costs or expenses at the fair value of the Company's liabilities on the grant date, with corresponding
increases in liabilities. After completing the service within the waiting period or meeting the specified performance conditions, the
right is paid in cash settled shares in exchange for the employee's service. On each balance sheet date within the waiting period,
based on the best estimate of the situation of the right, the service acquired during the current period is included in the relevant
costs or expenses and corresponding liabilities according to the fair value of the liabilities assumed by the company.
(3) Modify and terminate the share payment plan
If the amendment increases the fair value of the equity instrument granted, the Company recognizes the increase in the acquired
services accordingly according to the increase in the fair value of the equity instrument; If the amendment increases the number of
equity instruments granted, the Company accordingly recognizes the fair value of the increased equity instruments as an increase
in the services acquired; If the Company modifies the option conditions in a way that benefits the employee, the Company will
consider the revised option conditions when dealing with the option conditions.
If the amendment reduces the fair value of the equity instrument granted, the Company continues to recognize the amount of
services obtained based on the fair value of the equity instrument on the grant date, without regard to the decrease in the fair value
of the equity instrument; If the modification reduces the number of equity instruments granted, the Company will treat the
reduction as a cancellation of the equity instruments granted; If an option condition is modified to the detriment of the employee,
the modified option condition shall not be taken into account when dealing with the option condition.
If the Company cancellations or settles the vested instrument during the waiting period (other than if it is cancelled because the
conditions of the vesting right have not been met), the cancellation or settlement will be treated as an accelerated vesting right,
immediately recognizing the amount originally recognized during the remaining waiting period.
33. Revenue
The accounting policies used to recognize and measure revenue
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1. Principle of revenue recognition
On the commencement date of the contract, the Company evaluates the contract, identifies the individual performance obligations
contained in the contract, and determines whether the individual performance obligations shall be performed within a certain
period or at a certain point.
If one of the following conditions is met, the performance obligation shall be performed within a certain period; otherwise, the
performance obligation shall be performed at a certain point: (1) The customer shall obtain and consume the economic benefits
brought by the performance of the Company meanwhile; (2) The customer can control the goods under construction during the
company's contract performance; (3) The commodities produced by the Company during the performance of the Contract have
irreplaceable uses, and the Company has the right to collect payment for the performance part accumulated so far during the whole
contract period.
For the performance obligations performed within a certain period of time, the Company recognizes revenue in accordance with
the progress of the performance within that period of time. If the performance progress cannot be reasonably determined, and the
cost already incurred is expected to be compensated, the income shall be recognized according to the amount of cost already
incurred until the performance progress can be reasonably determined. For performance obligations performed at a certain point,
revenue is recognized when the customer obtains control of the relevant goods or services. In determining whether the customer
has acquired control of the commodity, the company considers the following indications: (1) The Company has a current right to
collect on the commodity, that is, the customer has a current obligation to pay for the commodity; (2) The Company has
transferred the legal ownership of the commodity to the customer, that is, the customer has the legal ownership of the commodity;
(3) The Company has physically transferred the commodity to the customer, that is, the customer has physically possessed the
commodity; (4) The Company has transferred the main risks and rewards of the ownership of the commodities to the customer,
that is, the customer has acquired the main risks and rewards of the ownership of the commodities; (5) The customer has accepted
the commodity; (6) Other indications indicating that the customer has taken control of the goods.
2. Principles of income measurement
(1) The Company measures its income according to the transaction price apportioned to each individual performance obligation.
The transaction price is the amount of consideration that the Company expects to be entitled to receive in connection with the
transfer of goods or services to the customer, excluding amounts collected on behalf of third parties and amounts expected to be
refunded to the Customer.
(2) Where there is variable consideration in the contract, the Company determines the best estimate of the variable consideration in
accordance with the expected value or the amount most likely to occur, provided that the transaction price containing the var iable
consideration does not exceed the amount of accumulated recognized revenue that is highly unlikely to be materially reversed
when the relevant uncertainty is eliminated.
(3) If there is a significant financing component in the contract, the Company shall determine the transaction price according to the
amount payable in cash, which is assumed to be paid by the customer upon acquisition of control of the commodity or service. The
difference between the transaction price and the contract consideration shall be amortized by the effective interest rate method
during the contract period. On the commencement date of the contract, if the Company expects that the interval between the
customer acquiring the control of the commodity or service and the customer paying the price is not more than one year, it will not
consider the significant financing element in the contract.
(4) If the contract contains two or more performance obligations, the Company shall, on the commencement date of the contract,
apportion the transaction price to the performance obligations of each individual item in accordance with the relative proportion of
the individual selling price of the commodity promised by the performance obligations of each individual item.
3. Specific methods of revenue recognition
The sales business of Hand Tools, Power Tools, Laser Measurement, Storage and other products of the company belong to the
performance obligations performed at a certain point. Domestic sales income will be recognized when the company delivers the
products to the place of delivery agreed in the contract and the customer confirms acceptance, the company has received the price
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or has obtained the right to collect payment, and the related economic benefits are likely to flow in. Export sales income is
recognized when the company has declared the products to customs according to the contract, obtained the bill of lading or arrived
at the destination designated by the customer and confirmed by the customer, received the payment for goods or obtained the right
to collect payment and the related economic benefits are likely to flow in.
Different business models of the same type of business lead to differences in revenue recognition accounting policies
34. Government subsidies
1. The government subsidy shall be recognized when the following conditions are met: (1) The Company can meet the conditions
attached to the government subsidy; (2) The Company can receive government subsidies. If the government subsidy is a monetary
asset, it shall be measured according to the amount received or receivable. If government subsidies are non-monetary assets, they
shall be measured at fair value; if the fair value cannot be obtained reliably, it shall be measured according to the nominal amount.
2. Judgment basis and accounting treatment method of government subsidies related to assets
Government documents specify that government subsidies used to purchase and build or otherwise form long-term assets are
classified as asset-related government subsidies. If the government documents are not clear, it shall be judged on the basis of the
basic conditions that must be met to obtain the subsidy, and if the basic conditions are the purchase and construction of long-term
assets or the formation of long-term assets by other means, it shall be regarded as government subsidies related to assets.
Government subsidies related to assets, write-down of the book value of related assets or recognized as deferred income. If the
government subsidy related to assets is recognized as deferred income, it shall be recorded into profit and loss by stages in a
reasonable and systematic way during the service life of the relevant assets. The government subsidy measured according to the
nominal amount is directly booked into the current profit and loss. If relevant assets are sold, transferred, scrapped or damaged
before the end of their useful life, the balance of relevant deferred income that has not been distributed shall be transferred to the
profit or loss of the asset disposal period.
3. Judgment basis and accounting treatment method of government subsidies related to income
Government subsidies other than those related to assets are divided into revenue-related government subsidies. For government
subsidies that contain both asset-related parts and revenue-related parts, it is difficult to distinguish between asset-related or
revenue-related government subsidies, and the overall government subsidies are classified as revenue-related government
subsidies. The government subsidies related to revenue, which are used to compensate the relevant costs or losses in the
subsequent period, are recognized as deferred revenue, and in the period of recognizing the relevant costs or losses, are recorded
into the current profit and loss or write-off the relevant costs; If it is used to compensate the incurred costs or losses, it shall be
directly recorded into the current profit and loss or write-off the relevant costs.
4. Government subsidies related to daily business activities of the company shall be recorded into other income or written down
related costs according to the essence of economic business. Government subsidies unrelated to daily activities of the company
shall be included in non-operating income and expenditure.
35. Deferred income tax assets/deferred income tax liabilities
1. The deferred income tax asset or deferred income tax liability shall be calculated and recognized according to the applicable tax
rate during the expected recovery of the asset or repayment of the liability based on the difference between the book value of the
asset or liability and its tax basis (if the tax basis of the item not recognized as an asset or liability can be determined in accordance
with the tax law).
2. Identify deferred income tax assets to the extent that taxable income is likely to be obtained to offset deductible temporary
differences. On the balance sheet date, if there is conclusive evidence that it is likely that sufficient taxable income will be
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obtained in the future period to offset the deductible temporary differences, the deferred income tax assets not recognized in the
previous accounting period will be recognized.
3. On the balance sheet date, review the carrying value of the deferred income tax assets, and write down the carrying value of the
deferred income tax assets if it is likely that it cannot obtain enough taxable income to offset the benefits of the deferred income
tax assets in the future period. When sufficient taxable income is likely to be obtained, the amount of the write-down is reversed.
4. The current income tax and deferred income tax of the company are recorded into the current profit and loss as income tax
expense or income, but the income tax generated under the following circumstances is excluded: (1) enterprise combination; (2)
Transactions or events directly recognized in shareholders’ equity.
36. Leasing
(1) Accounting treatment of operating leases
1. The Company as lessee
On the commencement date of the Lease term, the Company considers any lease for a period not exceeding 12 months and without
a purchase option to be a short-term lease; when a single leased asset is a brand-new asset, the lease with a lower value is
identified as a low-value asset lease. Where the company subleases or intends to sublease the leased assets, the original lease shall
not be deemed as a low-value asset lease.
For all short-term leases and low-value asset leases, the Company shall, in accordance with the straight-line method, record the
lease payment into the cost of the relevant asset or current profit or loss during each period of the lease term.
With the exception of short-term leases and low-value asset leases which adopt simplified treatment above, the Company
recognizes the use right assets and lease liabilities for the lease on the commencement date of the lease term.
(1) Right to use assets
The right to use assets shall be initially measured according to the cost, which includes: 1) the initial measurement amount of the
lease liability; 2) The amount of lease payment paid on or before the beginning of the lease term, if there is lease incentive, the
amount related to lease incentive already enjoyed will be deducted; 3) Initial direct expenses incurred by Lessee; 4) The estimated
costs incurred by the Lessee for dismantling and removing the leased assets, restoring the site where the leased assets are l ocated,
or restoring the leased assets to the state agreed in the lease terms.
The company shall depreciate the assets to be used according to the straight-line method. If the ownership of the leased asset can
be reasonably determined at the end of the lease term, the company shall calculate and withdraw depreciation within the remaining
service life of the leased asset. If it is not reasonably certain that the ownership of the leased asset can be acquired at t he end of the
lease term, the Company shall calculate and withdraw depreciation during the short period between the lease term and the
remaining service life of the leased asset.
(2) Lease liabilities
On the commencement date of the lease, the Company recognizes the present value of the outstanding lease payments as a lease
liability. When calculating the present value of lease payments, the internal interest rate of lease is used as the discount rate. If the
internal interest rate of lease cannot be determined, the company's incremental borrowing rate is used as the discount rate. The
difference between the lease payment amount and the present value shall be regarded as the unrecognized financing expense, and
the interest expense shall be recognized in accordance with the discount rate of the present value of the lease payment amount
during each period of the lease term and recorded into the current profit and loss. Variable lease payments not included in the
measurement of lease liabilities are booked into current profit and loss when actually incurred.
After the commencement of the lease term, when the actual fixed payment amount changes, the estimated amount payable of the
guarantee balance changes, the index or ratio used to determine the lease payment amount changes, the evaluation result of the
purchase option, the renewal option or the termination option changes, or the actual exercise of the option changes, the Company
shall remeasure the lease liability according to the present value of the changed lease payment amount. And adjust the book value
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of the right to use assets accordingly. If the book value of the right to use assets has been reduced to zero, but the lease liability
still needs to be further reduced, the remaining amount shall be booked in profit and loss.
2. The Company acts as lessor
On the beginning day of the lease, the company classifies the leases that essentially transfer almost all the risks and rewards related
to the ownership of the leased assets as financial leases, and all the others as operating leases.
(1) Operating lease
During each period of the lease term, the company recognizes the lease revenue as rental income according to the straight-line
method, and the initial direct expenses incurred are capitalized and apportioned according to the same basis as the rental in come
recognition, and recorded into the current profit and loss by stages. The amount of variable lease payments obtained by the
Company in connection with the operating lease and not included in the lease collection amount shall be recorded in the current
profit and loss when actually incurred.
(2) Accounting treatment of finance lease
On the beginning date of the lease term, the Company shall recognize the finance lease payment receivable according to the net
lease investment (the sum of the unguaranteed balance and the lease payment not received on the beginning date of the lease term
according to the present value discounted by the inherent interest rate of the lease) and terminate the recognition of the fi nance
lease asset. During each period of the lease term, the Company calculates and recognizes interest income based on the inherent
interest rate of the lease.
The amount of variable lease payments obtained by the Company that are not included in the measurement of net lease investment
is recorded in current profit and loss when actually incurred.
37. Changes in major accounting policies and estimates
(1) Changes in major accounting policies
Applicable □ N/A
Contents and reasons of changes in
Approval procedure Remarks
accounting policy
1. Since January 1, 2022, the Company has implemented the provisions of Accounting Standards for Enterprises Interpretation No.
15 issued by the Ministry of Finance on “Accounting treatment of the products or by-products produced before the fixed assets
reach the predetermined usable state or in the process of R&D”. This change in accounting policy has no impact on the financial
statements of the company.
2. Since January 1, 2022, the Company has implemented the provisions of “Judgment on loss-making Contracts” in Interpretation
of Accounting Standards for Business Enterprises No. 15 issued by the Ministry of Finance, and this change in accounting policy
has no impact on the Company's financial statements.
3. Since November 30, 2022, the Company has implemented the provisions of Interpretation of Accounting Standards for Business
Enterprises No. 16 issued by the Ministry of Finance on “Accounting treatment of income tax Impact on dividends related to
financial instruments classified by the Issuer as equity instruments”. Such change of accounting policy has no impact on the
financial statements of the Company.
4. Since November 30, 2022, the Company has implemented the provisions of Interpretation of Accounting Standards for Business
Enterprises No. 16 issued by the Ministry of Finance on “Accounting treatment of the Company's modification of cash settlement
share payment to equity settlement share payment”. This change of accounting policy has no impact on the Company's financial
statements.
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(2) Changes in material accounting estimates
□ Applicable N/A
VI. Taxes
1. Main types of taxes and tax rates
Type of tax Tax basis Tax rate
Output tax shall be calculated on the
basis of the income from sales of goods
and taxable services calculated in
accordance with the provisions of the
Value-added tax 13%, 6%
Tax Law. After deducting the input tax
allowed to be deducted for the current
period, the difference shall be VAT
payable
City maintenance and construction tax The turnover tax actually paid 7%, 5%
For details, see instructions on corporate
Corporate income tax Taxable income income tax rates of tax subjects with
different tax rates
In case of AD valorem tax, 1.2% of the
remaining value of the original value of
the property after a one-time reduction of
Property tax 1.2%, 12%
30% shall be paid; If the tax is levied
from rent, 12% of the rental income shall
be paid
Education surcharge The turnover tax actually paid 3%
Local education fees surcharge The turnover tax actually paid 2%
If there are tax payers with different corporate income tax rates, the information shall be disclosed
Name of taxpayer Income tax rate
The Company 15%
Hong Kong GreatStar International Limited 16.50%
Prim' Tools Limited 16.50%
Hong Kong Goldblatt Industrial Co.,Ltd. 16.50%
Hong Kong International Huada Kejie Opto-Electro Instrument
16.50%
Co., Ltd.
Hong Kong Shop-Vac International Co., Limited 16.50%
Geelong Sales Company International (HK)
16.50%
Limited
Changzhou Huada Kejie Opto-Electro Instrument Co., Ltd 15%
Hangzhou Lianhe Electric Manufacturing Co., Ltd. 15%
Dongguan Ouda Electronics Co., Ltd. 15%
Hangzhou Lianhe Tool Manufacturing Co., Ltd. 15%
Hangzhou Liansheng Measuring Tool Manufacturing Co., Ltd. 15%
Zhejiang Yiyang Tool Manufacturing Co., Ltd. 15%
Suzhou Xindadi Hardware Product Co., Ltd. 15%
Geelong Sales Co., Ltd. 15%
Geelong Investment Holding Limited 15%
13.24%, 19.00%, 19.41%, 21.00%, 22.00%, 24.00%, 25.00%,
GreatStar Europe AG and its subsidiaries
27.50%, 27.90%, 29.13%
Zhejiang Guoxin Tool Co., Ltd. 20%
Changzhou Huada Kejie Construction Machinery Co., Ltd. 20%
Zhongshan Geelong Import and Export Trade Co., Ltd. 20%
163
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Ningbo Fenghua Giant Star Tool Co., Ltd. 15%
GreatStar Vietnam Co., Ltd 20%
Vietnam United Co., Ltd 20%
TGH (Cambodia) Industrial Co., LTD 20%
Geelong (Thailand) Co., Ltd 20%
GreatStar Industrial Vietnam Co., Ltd 20%
XDD Products (USA) LLC 21%
SHOP-VAC VIETNAM CO.,LTD 20%
HUADA VIETNAM CO.,LTD 20%
Newland.LLC 21%
25.1745%, GreatStar according to the Internal Revenue Code
of the United States
Industrial USA, LLC, Arrow Fastener Co., LLC, Prime-Line
GreatStar Tools USA,Inc and its subsidiaries Products, LLC, 4900 Highlands Parkway, LLC, Shop-Vac
USA, LLC and SK Hand Tool, LLC are not required to declare
and pay corporate income tax as LLC. The subject of tax
liability is GreatStar Tools USA,Inc
GreatStar Japan Co., Ltd Corporate tax is payable at a progressive rate
A company incorporated in the British Virgin Islands. No
GreatStar International Holdings Limited corporate income tax is payable under the British Virgin Islands
tax system
A company registered in the British Cayman Islands. No
Geelong Orchid Holding Limited corporate income tax is required under the British Cayman
Islands tax system
A company registered in the British Cayman Islands. No
Geelong Holdings Limited corporate income tax is required under the British Cayman
Islands tax system
The taxable income tax not exceeding 600,000 patacas shall be
subject to 0% corporate income tax rate, and the portion
Geelong Sales (Macau Commercial) Limited
exceeding 600,000 Patacas shall be subject to 12% corporate
income tax rate
Other taxable entities other than those mentioned above 25%
2. Tax incentives
1. According to the relevant provisions of Measures for the Identification and Administration of High-tech Enterprises (Guo Ke Fa
Huo (2016) No. 32) and "Guidelines for the Identification and Administration of High-tech Enterprises" (Guo Ke Fa Huo (2016)
No. 195), the Company is recognized as a high-tech enterprise and has obtained the High-tech Enterprise Certificate (No.
GR202233005456). The validity period of the recognition is 3 years (2022-2024), and the corporate income tax shall be paid at the
tax rate of 15% in 2022.
2. According to the List of the First Batch of High-tech Enterprises to be Recognized in Jiangsu Province in 2020 issued by the
Office of the National Leading Group for the Recognition and Management of High-tech Enterprises, Changzhou Huadkejie
Photoelectric Instrument Co., Ltd. is recognized as a high-tech enterprise and has obtained the High-tech Enterprise Certificate
numbered GR202032002996. The validity period of the recognition is 3 years (2020-2022), and the corporate income tax shall be
paid at the tax rate of 15% in 2022.
3. According to the relevant provisions of Measures for the Identification and Administration of High-tech Enterprises (Guo Ke Fa
Huo (2016) No. 32) and Guidelines on the Identification and Administration of High-tech Enterprises (Guo Ke Fa Huo (2016) No.
195), its subsidiary Hangzhou Lianhe Electric Manufacturing Co., Ltd. is identified as a high-tech enterprise. The company shall
obtain the High-tech Enterprise Certificate numbered GR202233010022, which shall be valid for 3 years (2022-2024), and pay the
enterprise income tax at the tax rate of 15% in 2022.
4. According to the relevant provisions of Measures for the Identification and Management of High-tech Enterprises (Guo Ke Fa
Huo (2016) No. 32) and Guidelines for the Identification and Management of High-tech Enterprises (Guo Ke Fa Huo (2016) No.
164
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
195), Dongguan Ouda Electronic Co., Ltd. of Sub-subsidiary is recognized as a high-tech enterprise. The company shall obtain the
High-tech Enterprise Certificate numbered GR202144002851, which shall be valid for 3 years (2021-2023), and pay the enterprise
income tax at 15% tax rate in 2022.
5. According to the Letter on the Record of High-tech Enterprises in Zhejiang Province in 2020 (Guo Ke Huo Zi (2020) No. 251)
issued by the Office of the Leading Group for the Identification and Management of National High-tech Enterprises, the subsidiary
Hangzhou Lianhe Tool Manufacturing Co., Ltd. is recognized as a high-tech enterprise. The company shall obtain the High-tech
Enterprise Certificate numbered GR202133002795, which shall be valid for 3 years (2021-2023), and pay the enterprise income
tax at 15% tax rate in 2022.
6. According to the Letter on the Record of High-tech Enterprises in Zhejiang Province in 2020 (Guo Ke Huo Zi (2020) No. 251)
issued by the Office of the Leading Group for the Identification and Management of National High-tech Enterprises, the subsidiary
Hangzhou Liansheng Measuring Tool Manufacturing Co., Ltd. is recognized as a high-tech enterprise. The company shall obtain
the High-tech Enterprise Certificate numbered GR202133004728, which shall be valid for 3 years (2021-2023), and pay the
enterprise income tax at 15% tax rate in 2022.
7. According to the relevant provisions of Measures for the Identification and Management of High-tech Enterprises (Guo Ke Fa
Huo (2016) No. 32) and Guidelines for the Identification and Management of High-tech Enterprises (Guo Ke Fa Huo (2016) No.
195), Sub-subsidiary Zhejiang Yiyang Tool Manufacturing Co., Ltd. is recognized as a high-tech enterprise. The company shall
obtain the High-tech Enterprise Certificate numbered GR202233007785, which shall be valid for 3 years (2022-2024), and pay the
enterprise income tax at the tax rate of 15% in 2022.
8. According to the relevant provisions of the Measures for the Identification and Administration of New and High-tech
Enterprises (Guo Ke Fa Huo (2016) No. 32) and the Guidelines for the Identification and Administration of New and High-tech
Enterprises (Guo Ke Fa Huo (2016) No. 195), Suzhou New Earth Hardware Products Co., Ltd. is identified as a new and high-tech
enterprise. The company shall obtain the High-tech Enterprise Certificate numbered GR202132006099, which shall be valid for 3
years (2021-2023), and pay the enterprise income tax at 15% tax rate in 2022.
9. According to the relevant provisions of Measures for the Identification and Management of High-tech Enterprises (Guo Ke Fa
Huo (2016) No. 32) and Guidelines for the Identification and Management of High-tech Enterprises (Guo Ke Fa Huo (2016) No.
195), Sub-subsidiary Zhongshan Jiilong Industrial Co., Ltd. is recognized as a high-tech enterprise. The company shall obtain the
High-tech Enterprise Certificate numbered GR202244011605, which shall be valid for 3 years (2022-2024), and pay the enterprise
income tax at 15% tax rate in 2022.
10. In accordance with relevant provisions in Administrative Measures for Identification of High-tech Enterprises (Guo Ke Fa Huo
(2016) No. 32) and Guidelines for Administration of Identification High-tech Enterprises (Guo Ke Fa Huo (2016) No. 195), the
subsidiary Ningbo Fenghua GreatStar Tools Co., Ltd. has been identified as a high-tech enterprise and granted the High-tech
Enterprise Certificate numbered GR202233100274 with a validity period of 3 years (from 2022 to 2024). Therefore, the enterprise
income tax was paid at the tax rate of 15% in 2022.
11. According to the Announcement of the Ministry of Finance and the State Administration of Taxation on the Administrative
Measures for the Preferential VAT Policies to Promote the Employment of Disabled Persons (Cai Shui (2016) No. 52), the
subsidiary Longyou Hugong Forging Three Tools Co., Ltd., after filing with the competent tax authority for the employment of
disabled persons, enjoys the preferential policy of the VAT limit collection and refund at this period.
12. According to the document of Announcement on Further Implementation of Preferential Income Tax Policies for Small and
Micro Enterprises (Announcement No. 13 2022 of the Ministry of Finance and the State Administration of Taxation) issued by the
Ministry of Finance and the State Administration of Taxation, during the period from January 1, 2022 to December 31, 2024, the
annual taxable income of small and micro profit enterprises shall not exceed CNY 1 million. Deduct 12.50% from the amount of
taxable income and pay the enterprise income tax at the rate of 20%. The part of the annual taxable income exceeding CNY 1
million but not exceeding CNY 3 million shall be included in the taxable income at a reduced rate of 25%, and the enterprise
income tax shall be paid at a tax rate of 20%. From January 1, 2022 to December 31, 2022, Zhejiang Guoxin Tools Co., Ltd.,
165
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Zhongshan Kilong Import and Export Trading Co., Ltd., and Changzhou Huada Kejie Construction Machinery Co., Ltd., shall be
subject to this preferential income tax policy and pay corporate income tax at a tax rate of 20%.
VII. Notes to consolidated financial statements
1. Cash and cash equivalents
Unit: CNY
Item Closing balance Opening balance
Cash on hand 4,328,053.84 2,574,760.83
Bank deposit 4,788,725,570.94 3,983,507,419.70
Other monetary funds 70,152,557.62 47,625,059.63
Total 4,863,206,182.40 4,033,707,240.16
Including: the total amount of funds
1,073,586,253.48 802,607,925.10
deposited abroad
Total amount of money
subject to restrictions on use by reason of 69,779,001.93 32,520,998.98
mortgage, pledge or freeze
Other notes:
Other monetary funds at the end of the period include forward settlement of foreign exchange of CNY 33,448,671.74, short-term
loan of CNY 20,893,800.00, letter of credit of CNY 6,616,370.00, banker's acceptance of CNY 7,384,067.19 and customs duty
guarantee of CNY 1,393,093.00, Alipay of CNY 373,555.69 and ETC deposit of CNY 43,000.00. Other monetary funds at the
beginning of the period include bank acceptance deposit of CNY 27,725,700.00, securities account deposit of CNY 13,598,051.60,
forward settlement and sale of foreign exchange deposit of CNY 2,295,252.00, ETC deposit of CNY 32,000.00, customs duty
bond deposit of CNY 1,975,140.00, project performance deposit of CNY 492,906.98, and deposit in Alipay of CNY 1,506,009.05.
2. Trading financial assets
Unit: CNY
Item Closing balance Opening balance
Financial assets measured at fair value
70,230,104.24 13,557,757.75
through profit or loss
Including:
Derivative financial assets 10,230,104.24 4,330,070.00
Bank financial products 60,000,000.00
Equity instrument investment 9,227,687.75
Including:
Total 70,230,104.24 13,557,757.75
Other notes:
None
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
3. Notes receivable
(1) Classification and listing of notes receivable
Unit: CNY
Item Closing balance Opening balance
Banker's acceptance 18,765,981.83 5,663,502.93
Commercial acceptance 966,411.25
Total 18,765,981.83 6,629,914.18
Unit: CNY
Closing balance Opening balance
Categor Book balance Bad debt provision Book balance Bad debt provision
y Book Book
Proporti Provisio value Proporti Provisio value
Amount Amount Amount Amount
on n ratio on n ratio
Includ
ing:
Notes
receivab
le set
aside for
18,765,9 18,765,9 6,629,91 6,629,91
bad 100.00% 100.00%
81.83 81.83 4.18 4.18
debts
assessed
by
groups
Includ
ing:
Banker's
18,765,9 18,765,9 5,663,50 5,663,50
acceptan 100.00% 85.42%
81.83 81.83 2.93 2.93
ce
Commer
cial 966,411. 966,411.
14.58%
acceptan 25 25
ce
18,765,9 18,765,9 6,629,91 6,629,91
Total 100.00% 100.00%
81.83 81.83 4.18 4.18
Bad debt provision assessed by groups:
Unit: CNY
Closing balance
Name
Book balance Bad debt provision Provision ratio
Bank acceptance portfolio 18,765,981.83
Total 18,765,981.83
Instructions for determining the basis of the combination:
Bad debt provision assessed by groups:
Unit: CNY
Closing balance
Name
Book balance Bad debt provision Provision ratio
Instructions for determining the basis of the combination:
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
If the provision for doubtful accounts of notes receivable is made according to the general model of expected credit losses, please
refer to other methods of disclosure of receivables to disclose the relevant information of doubtful accounts:
□ Applicable N/A
(2) Notes receivable that have been endorsed or discounted by the Company at the end of the period and
are not due on the balance sheet date
Unit: CNY
Amount derecognized at the end of the Amount not derecognized at the end of
Item
period the period
Banker's acceptance 4,504,513.91
Total 4,504,513.91
4. Accounts receivable
(1) Classification of accounts receivable
Unit: CNY
Closing balance Opening balance
Categor Book balance Bad debt provision Book balance Bad debt provision
y Book Book
Proporti Provisio value Proporti Provisio value
Amount Amount Amount Amount
on n ratio on n ratio
Account
receivab
le of bad
debt
3,780,75 3,780,75
provisio 0.19% 100.00%
3.57 3.57
n
assessed
individu
ally
Includ
ing:
Account
s
receivab
le of bad
debt 1,999,94 103,257, 1,896,68 1,899,00 100,742, 1,798,26
99.81% 5.16% 100.00% 5.31%
provisio 2,811.41 221.30 5,590.11 8,012.88 507.35 5,505.53
n
assessed
by
groups
Includ
ing:
2,003,72 107,037, 1,896,68 1,899,00 100,742, 1,798,26
Total 100.00% 5.34% 100.00% 5.31%
3,564.98 974.87 5,590.11 8,012.88 507.35 5,505.53
Provision for bad debts assessed individually: 3,780,753.57
Unit: CNY
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Closing balance
Name
Book balance Bad debt provision Provision ratio Reason for provision
Shanghai Lainuo
Expected
Photoelectric 3,780,753.57 3,780,753.57 100.00%
unrecoverable
Technology Co., Ltd.
Total 3,780,753.57 3,780,753.57
Bad debt provision assessed by groups: 103,257,221.30
Unit: CNY
Closing balance
Name
Book balance Bad debt provision Provision ratio
Aging groups 1,999,942,811.41 103,257,221.30 5.16%
Total 1,999,942,811.41 103,257,221.30
Instructions for determining the basis of the combination:
Aging
If the provision for doubtful accounts receivable is made according to the general model of expected credit losses, please refer to
other methods of disclosure of receivables to disclose the relevant information of doubtful accounts:
□ Applicable N/A
Aging disclosure
Unit: CNY
Aging Book balance
Within 1 year (inclusive) 1,970,425,386.97
1-2 years 25,344,201.58
2-3 years 5,830,575.46
More than 3 years 2,123,400.97
3-4 years 696,290.54
4-5 years 454,657.11
More than 5 years 972,453.32
Total 2,003,723,564.98
(2) Bad debt provision withdrawn, recovered or reversed in the current period
Details of bad debt provision:
Unit: CNY
Changes in the current period
Opening
Category Recovery or Closing balance
balance Provision Write-off Others
reversal
Bad debt
provision
3,591,754.39 188,999.18 3,780,753.57
assessed
individually
Bad debt
provision
100,742,507.35 -1,858,727.49 1,055,458.37 5,428,899.81 103,257,221.30
assessed by
groups
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Total 100,742,507.35 1,733,026.90 188,999.18 1,055,458.37 5,617,898.99 107,037,974.87
Among them, the amount of the current bad debt provision recovery or reversal is important:
Unit: CNY
Name of unit Recovery or reversal Recovery mode
(3) Receivables among the top five closing balances collected by the debtor
Unit: CNY
Percentage of total closing
Closing balance of accounts Closing balance of bad debt
Customer balance of accounts
receivable provision
receivable
Customer 1 417,503,364.89 20.84% 20,875,168.24
Customer 2 369,853,367.35 18.46% 18,492,668.37
Customer 3 60,719,295.17 3.03% 3,035,964.76
Customer 4 56,385,734.96 2.81% 2,819,286.75
Customer 5 51,415,571.21 2.57% 2,570,778.56
Total 955,877,333.58 47.71%
5. Financing of receivables
Unit: CNY
Item Closing balance Opening balance
Banker's acceptance 3,310,508.35 5,278,343.13
Accounts receivable 321,247,171.36 553,742,484.39
Total 324,557,679.71 559,020,827.52
Changes in the current period and fair value of receivables financing
Applicable □ N/A
(1) Breakdown
Closing balance Opening balance
Item Accumulative confirmed Accumulative confirmed
Book value reserve for credit Book value reserve for credit
impairment impairment
Banker's acceptance 3,310,508.35 5,278,343.13
Accounts receivable 321,247,171.36 16,907,745.86 553,742,484.39 29,144,341.28
Total 324,557,679.71 16,907,745.86 559,020,827.52 29,144,341.28
(2) Reserve for credit impairment of receivables financing
Decrease in the current
Increase in the current period
period
Item Opening balance Impact of Closing balance
Write-
Provision exchange rate Reversal Others
off
fluctuations
Reserve for credit
impairment is set
29,144,341.28 16,907,745.86
aside on a -12,767,474.27 530,878.85
combination basis
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Decrease in the current
Increase in the current period
period
Item Opening balance Impact of Closing balance
Write-
Provision exchange rate Reversal Others
off
fluctuations
Total 29,144,341.28 -12,767,474.27 530,878.85 16,907,745.86
(3) At the end of the period, the Company has endorsed or discounted the notes receivable and has not matured on the balance
sheet date
Derecognition amount at
Item
the end of the period
Banker's acceptance 6,559,637.55
Subtotal 6,559,637.55
The acceptor of the banker's acceptance bill is the commercial bank. Because the commercial bank has high credit, the possibility
that the banker's acceptance bill will not be paid when it expires is low, so our company will terminate the confirmation of the
banker's acceptance bill that has been endorsed or discounted. However, if such notes are not paid at maturity, the Company shall
remain jointly and severally liable to the holders under the Instruments Act.
(4) Accounts receivable derecognized due to the transfer of financial assets
Gain or loss associated
Item Derecognition Transfer mode of financial assets
with the derecognition
1,878,525,994.18 Receivables financing assignment
Payment for goods -7,931,415.18
(Note) without additional recourse
Subtotal 1,878,525,994.18 -7,931,415.18
(Note) The amount of the receivables financing transfer without recourse was USD 269,724,893.63. The transfer of receivables
financing in USD without recourse was translated into CNY 1,878,525,994.18 by the exchange rate at the end of the period
If the financing impairment reserve of receivables is prepared according to the general model of expected credit losses, please refer
to other methods of disclosure of receivables to disclose the relevant information of impairment reserve:
□ Applicable N/A
Other notes:
6. Advance payment
(1) Prepayments shall be listed and shown according to aging
Unit: CNY
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year 123,153,057.84 95.25% 74,702,657.14 96.09%
1-2 years 3,784,255.82 0.00% 1,748,154.88 2.25%
2-3 years 808,907.98 0.00% 1,075,509.98 1.38%
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
More than 3 years 507,872.23 0.47% 217,119.90 0.28%
Total 128,254,093.87 77,743,441.90
Explanation of the reasons why the prepayment with an important amount and an aging age of more than 1 year is not settled in
time:
(2) Advance payment among the top five in the closing balance of the prepaid objects
The total prepayments of the top five closing balance amounts to CNY 47,934,016.73, accounting for 35.13% of the total closing
balance of prepayments
Other notes:
(1) Provision for bad debts in the current period amounted to CNY 2,411,861.08, which increased by CNY 463,566.46 due to
exchange rate fluctuations.
(2) The actual written off prepayment is CNY 54,269.29 in the current period.
7. Other receivables
Unit: CNY
Item Closing balance Opening balance
Other receivables 58,325,042.10 96,151,003.68
Total 58,325,042.10 96,151,003.68
(1) Other receivables
1) Classification of other receivables by nature
Unit: CNY
Book balance at the end of the reporting Book balance at the beginning of the
Nature
period reporting period
Deposit 30,880,521.21 24,611,560.03
Export tax rebate receivable 24,697,312.44 61,953,922.99
Provisional payment receivable 5,617,725.38 6,025,540.52
Employee reserve fund 1,529,914.18 2,666,593.46
Equity settlement receivable 6,160,202.73
Others 2,327,676.34 2,653,025.72
Total 65,053,149.55 104,070,845.45
2) Provision for bad debts
Unit: CNY
Stage I Stage II Stage III
Bad debt provision Lifetime ECL (not Lifetime ECL Total
12-month ECL
impaired) (impaired)
As at January 1, 2022 4,606,101.41 854,761.14 2,458,979.22 7,919,841.77
Changes due to
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
financial instruments
recognized as at
January 1, 2022
-- Transfer to stage II -99,539.17 99,539.17
-- Transfer to stage III -775,552.12 775,552.12
Provision -11,184,311.29 20,330.15 672,986.60 -10,490,994.54
Write-off 5,000.00 5,000.00
Other changes 9,304,260.22 9,304,260.22
As at December 31,
2,621,511.17 199,078.34 3,907,517.94 6,728,107.45
2022
Loss reserve for a significant change in book balance during the current period
□ Applicable N/A
Aging disclosure
Unit: CNY
Aging Book balance
Within 1 year (inclusive) 52,430,223.89
1-2 years 1,990,783.43
2-3 years 7,755,521.23
More than 3 years 2,876,621.00
3-4 years 588,931.41
4-5 years 215,910.64
More than 5 years 2,071,778.95
Total 65,053,149.55
3) Other receivables actually written off during the current period
Unit: CNY
Item Write-off amount
Shifeng outdoor shopping mall 5,000.00
Other significant write-offs of receivables:
Unit: CNY
Whether the
Write-off payment is
Nature of other Reason for write-
Name of unit Write-off amount procedures generated by
receivables off
performed related party
transactions
Instructions for writing off other receivables:
Other receivables actually written off during the period are CNY 5,000.00.
4) Other receivables among the top five closing balances collected by the debtor
Unit: CNY
Percentage of the Closing balance of
Name of unit Nature of payment Closing balance Aging
total closing bad debt provision
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
balance of other
receivables
Export tax rebate Export tax rebate
24,697,312.44 Within 1 year 37.96% 1,234,865.62
receivable receivable
Cng ty c phn
Tng Viên Grand Deposit 5,058,071.44 2-3 years 7.78% 1,011,614.29
Park
Payment of social
insurance premium
Provisional
and housing
payment 2,923,397.25 Within 1 year 4.49% 146,169.86
provident fund on
receivable
behalf of
employees
Hangzhou
Qiantang Smart
deposit 1,908,000.00 More than 5 years 2.93% 1,908,000.00
City Management
Committee
Hangzhou
Qiantang Smart
deposit 1,007,000.00 2-3 years 1.55% 201,400.00
City Management
Committee
China
Construction
Electronic deposit 2,510,000.00 Within 1 year 3.86% 125,500.00
Commerce Co.,
Ltd.
Total 38,103,781.13 58.57% 4,627,549.77
8. Inventory
Whether the Company is required to follow real estate industry disclosure requirements
None
(1) Categories of inventories
Unit: CNY
Closing balance Opening balance
Reserve for Reserve for
inventory inventory
Item decline or decline or
Book balance impairment of Book value Book balance impairment of Book value
contract contract
performance performance
costs costs
Raw material 763,015,426.57 11,758,583.43 763,015,426.57 828,353,943.87 828,353,943.87
Goods in
346,179,403.66 346,179,403.66 411,642,818.41 411,642,818.41
progress
1,769,035,629. 1,685,025,580. 1,619,622,574. 1,572,401,600.
Finished goods 72,251,465.32 47,220,974.64
25 50 68 04
Commissioned
16,699,727.54 16,699,727.54 22,559,098.84 22,559,098.84
materials
Low-value
consumable 1,652,387.41 1,652,387.41 820,535.68 820,535.68
goods
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
2,896,582,574. 2,812,572,525. 2,882,998,971. 2,835,777,996.
Total 84,010,048.75 47,220,974.64
43 68 48 84
(2) Reserve for inventory decline and impairment of contract performance costs
Unit: CNY
Current increase Current reduction
Opening
Item Reversal or Closing balance
balance Provision Others Others
elimination
Raw material 12,089,485.73 39,929.66 370,831.96 11,758,583.43
Finished goods 47,220,974.64 31,100,452.54 3,977,161.75 10,047,123.61 72,251,465.32
Total 47,220,974.64 43,189,938.27 4,017,091.41 10,417,955.57 84,010,048.75
Reverse inventory
Determine net realizable value decline The value of inventory sold fell
Item
Concrete basis Reasons for Reasons for preparation
preparation
The amount of the estimated selling price of the
During the current period, the
relevant finished products less the estimated
Raw material inventory that has been set aside for
cost to be incurred up to completion, estimated
inventory decline is consumed/sold
selling expenses and related taxes and fees
Selling or scrapping part of the
The amount of the estimated selling price of the
inventory that has been drawn down
Finished relevant finished products less the estimated
goods the reserve for inventory decline, and
selling expenses and related taxes is determined
selling off the corresponding inventory
as net realizable value
decline reserve that has been drawn up
9. Current portion of non-current assets
Unit: CNY
Item Closing balance Opening balance
Finance lease receivable 98,061.60 90,708.80
Total 98,061.60 90,708.80
Significant debt investments/other debt investments
Unit: CNY
Closing balance Opening balance
Credit item Coupon Effective Maturity Coupon Effective Maturity
Face value Face value
rate interest rate date rate interest rate date
Other notes:
10. Other current assets
Unit: CNY
Item Closing balance Opening balance
VAT allowance 114,913,836.33 160,295,028.26
Advance payment of corporate income
4,945,994.21 24,135,847.39
tax
Deferred expense 3,832,917.83 5,876,647.96
175
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Time deposit interest 10,437,900.21 3,683,674.49
Total 134,130,648.58 193,991,198.10
Other notes:
11. Long-term receivables
(1) Long-term receivables
Unit: CNY
Closing balance Opening balance
Discount rate
Item Bad debt Bad debt
Book balance Book value Book balance Book value interval
provision provision
Finance lease 299,568.31 299,568.31 446,386.40 446,386.40 0.75%
Includin
g: Unrealized
-4,002.95 -4,002.95 -14,135.20 -14,135.20
financing
income
Land lease
2,572,611.16 2,572,611.16 2,274,855.31 2,274,855.31
deposit
Total 2,872,179.47 2,872,179.47 2,721,241.71 2,721,241.71
Impairment of bad debt provision
Unit: CNY
Stage I Stage II Stage III
Bad debt provision Lifetime ECL (not Lifetime ECL Total
12-month ECL
impaired) (impaired)
Changes due to
financial instruments
recognized as at
January 1, 2022
Loss reserve for a significant change in book balance during the current period
□ Applicable N/A
12. Long-term equity investment
Unit: CNY
Changes in the current period
Investm
ent
Openin gains Impair
Other Declara Closing
g and ment
Investe Additio Reducti compre Other tion of Provisi balance
balance losses reserve
e nal on of hensive changes cash on for (book
(book recogni Others closing
investm investm income in dividen impair value)
value) zed balance
ent ent adjustm equity d or ment
under
ents profit
the
equity
method
176
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
I. Joint ventures
II. Associates
Hangzh
ou
Zhongc
e
Haicha
1,268,8 1,387,6
o 85,019, 28,287, 5,465,5
65,846. 37,932.
Enterpr 436.77 071.60 77.19
61 17
ise
Manage
ment
Co.,
Ltd.
Zhejian
g
Hangch
732,591 95,134, 3,648,4 6,495,7 40,000, 797,869
a
,395.62 172.50 30.69 30.54 000.00 ,729.35
Holdin
g Co.,
Ltd.
Zhejian
g Guozi -
75,805, 1,521,2 62,379,
Robotic 14,947,
856.54 87.22 261.25
s Co., 882.51
Ltd.
Ningbo
Dongha -
190,561 12,234, 201,743
i Bank 1,053,1
,324.86 926.64 ,081.34
Co., 70.16
Ltd.
Changz
hou
Huada
Xideba 1,873,6 1,099,5 2,973,2
o Laser 75.00 88.38 63.38
Instrum
ent Co.,
Ltd.
Hangzh
ou
Micro
-
Nano 84,244, 7,684,6 91,920,
8,963.7
Technol 601.17 12.65 250.06
6
ogy
Co.,
Ltd.
2,353,9 2,544,5
Subtota 186,224 30,873, 13,482, 40,000,
42,699. 23,517.
l ,854.43 368.37 594.95 000.00
80 55
2,353,9 2,544,5
186,224 30,873, 13,482, 40,000,
Total 42,699. 23,517.
,854.43 368.37 594.95 000.00
80 55
Other notes:
None
177
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
13. Investments in other equity instruments
Unit: CNY
Item Closing balance Opening balance
Hangzhou Haibang Xinhu Talent Venture
Investment Partnership (limited 16,550,000.00 16,550,000.00
partnership)
Total 16,550,000.00 16,550,000.00
Itemized disclosure of non-trading equity instrument investments in the current period
Unit: CNY
Reasons for
Amounts Reasons for
measurement at
transferred transferring
fair value with
Recognized from other other
Cumulative Cumulative their changes
Item dividend comprehensive comprehensive
gain loss included into
income income to incomes into
other
retained retained
comprehensive
earnings earnings
income
Hangzhou
Haibang Xinhu
Talent Venture
Investment 12,400,000.00
Partnership
(limited
partnership)
Other notes:
None
14. Investment real estate
(1) Investment real estate with cost measurement model
Applicable □ N/A
Unit: CNY
Construction in
Item Houses and buildings Land use right Total
progress
I. Original book value
1. Opening
118,165,047.78 16,928,850.24 135,093,898.02
balance
2. Amount
increased in the current
period
(1)
Outsourcing
(2) Inventory,
fixed assets, transfer-in
of construction in
progress
178
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
(3) Increase
of enterprise
combination
3. Amount
decreased in the
current period
(1) Disposal
(2) Other
transfer-out
4. Closing balance 118,165,047.78 16,928,850.24 135,093,898.02
II. Cumulative
depreciation and
Cumulative
amortization
1. Opening
6,059,898.87 1,975,032.46 8,034,931.33
balance
2. Amount
increased in the current 4,561,833.68 338,577.00 4,900,410.68
period
(1) Provision
4,561,833.68 338,577.00 4,900,410.68
or amortization
3. Amount
decreased in the
current period
(1) Disposal
(2) Other
transfer-out
4. Closing balance 10,621,732.55 2,313,609.46 12,935,342.01
III. Reserve for
impairment
1. Opening
balance
2. Amount
increased in the current
period
(1) Provision
3. Amount
decreased in the
current period
(1) Disposal
(2) Other
transfer-out
4. Closing balance
IV. Book value
179
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
1. Closing book
107,543,315.23 14,615,240.78 122,158,556.01
value
2. Opening book
112,105,148.91 14,953,817.78 127,058,966.69
value
(2) Investment real estate with fair value measurement model
□ Applicable N/A
15. Fixed assets
Unit: CNY
Item Closing balance Opening balance
Fixed assets 1,518,902,232.96 1,494,547,487.29
Total 1,518,902,232.96 1,494,547,487.29
(1) Fixed assets
Unit: CNY
Houses and General purpose
Item Special equipment Means of transport Total
buildings equipment
I. Original book
value:
1. Opening
1,221,859,989.74 208,831,294.89 1,325,263,396.67 44,231,023.20 2,800,185,704.50
balance
2. Amount
increased in the 94,159,063.15 49,115,083.32 138,256,756.93 8,552,151.34 290,083,054.74
current period
(1)
36,556,513.47 38,547,696.43 93,759,147.55 4,242,093.19 173,105,450.64
Purchase
(2)
Transfer-in of
27,885,715.08 1,855,954.14 9,671,073.12 3,041,043.36 42,453,785.70
construction in
progress
(3)
Increase of
enterprise
combinations
(4)
Impact of
29,716,834.60 8,711,432.75 34,826,536.26 1,269,014.79 74,523,818.40
exchange rate
fluctuations
3. Amount
decreased in the 7,359,741.55 6,002,459.65 93,452,684.73 8,025,841.63 114,840,727.56
current period
(1)
Disposal or 7,359,741.55 6,002,459.65 93,452,684.73 8,025,841.63 114,840,727.56
scrapping
4. Closing 1,308,659,311.34 251,943,918.56 1,370,067,468.87 44,757,332.91 2,975,428,031.68
180
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
balance
II. Cumulative
depreciation
1. Opening
376,911,458.22 146,391,564.76 743,906,907.98 37,645,885.82 1,304,855,816.78
balance
2. Amount
increased in the 59,158,712.49 18,643,595.92 119,449,690.75 3,857,957.27 201,109,956.43
current period
(1)
52,744,462.75 12,401,804.36 109,060,827.37 2,956,682.34 177,163,776.82
Provision
(2) Impact of
exchange rate 6,414,249.74 6,241,791.56 10,388,863.38 901,274.93 23,946,179.61
fluctuations
3. Amount
decreased in the 784,252.64 4,668,140.95 41,411,177.43 6,677,728.03 53,541,299.05
current period
(1)
Disposal or 784,252.64 4,668,140.95 41,411,177.43 6,677,728.03 53,541,299.05
scrapping
4. Closing
435,285,918.07 160,367,019.73 821,945,421.30 34,826,115.06 1,452,424,474.16
balance
III. Reserve for
impairment
1. Opening
782,400.43 782,400.43
balance
2. Amount
increased in the 3,428,590.31 3,428,590.31
current period
(1)
3,305,922.73 3,305,922.73
Provision
(2)
Impact of
122,667.58 122,667.58
exchange rate
fluctuations
3. Amount
decreased in the 109,666.18 109,666.18
current period
(1)
Disposal or 109,666.18 109,666.18
scrapping
4. Closing
4,101,324.56 4,101,324.56
balance
IV. Book value
1. Closing
873,373,393.27 91,576,898.83 544,020,723.01 9,931,217.85 1,518,902,232.96
book value
2. Opening
844,948,531.52 62,439,730.13 580,574,088.26 6,585,137.38 1,494,547,487.29
book value
181
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
(2) Fixed assets leased through operating leases
Unit: CNY
Item Book value as at the end of the reporting period
Houses and buildings 10,845,503.63
Subtotal 10,845,503.63
16. Construction in progress
Unit: CNY
Item Closing balance Opening balance
Construction in progress 304,599,362.46 113,750,851.49
Total 304,599,362.46 113,750,851.49
(1) Details of construction in progress
Unit: CNY
Closing balance Opening balance
Item Reserve for Reserve for
Book balance Book value Book balance Book value
impairment impairment
Annual output
of 550,000 sets
1,865,865.07 1,865,865.07 27,730,496.71 27,730,496.71
of laser sensor
modules
Phase-I factory
construction of
GreatStar
95,185,314.94 95,185,314.94 23,839,910.93 23,839,910.93
Intelligent
Equipment Co.,
Ltd. in Vietnam
Cambodia
Phase II plant
21,017,425.13 21,017,425.13 17,095,602.29 17,095,602.29
construction
project
Cambodia
phase III plant
19,576,510.61 19,576,510.61
construction
project
Annual output
of 1.5 million
mesh
9,141,619.68 9,141,619.68 10,154,222.15 10,154,222.15
technology
transformation
phase II project
Intelligent
factory with an
annual output
19,200,447.56 19,200,447.56
of 1 million
sets of new
power tools
GreatStar
headquarters 28,297,770.43 28,297,770.43 5,824,743.14 5,824,743.14
renovation
182
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
project
Construction of
toolbox
production 11,842,636.03 11,842,636.03 62,254.53 62,254.53
bases in
Thailand
Vietnam Union
Company
1,348,331.57 1,348,331.57 200,574.51 200,574.51
equipment
installation
Drawer cabinet
production line
28,596,859.65 28,596,859.65
construction
project
Sporadic
68,526,581.79 68,526,581.79 28,843,047.23 28,843,047.23
projects
Total 304,599,362.46 304,599,362.46 113,750,851.49 113,750,851.49
(2) Changes of major construction in progress in the current period
Unit: CNY
Includi
Amou Propor
Other Cumul ng:
nt tion of Curren
reduce ative Amou
transfe cumul t
Openi Curren d Closin amoun nt of
rred to ative interes Source
ng t amoun g Progre t of capital
Item Budget fixed project t of
balanc increas ts in balanc ss capital ized
assets invest capital funds
e e the e ized interes
in the ment ization
current interes t in the
current to rate
period t current
period budget
period
Annua
l
output
Stock
of
offerin
550,00 100,00 27,730 12,024 37,888
1,865, 39.75 g
0 sets 0,000. ,496.7 ,283.0 ,914.6 40%
865.07 % funds
of 00 1 2 6
&
laser
others
sensor
modul
es
Phase-
I
factory
constr
uction Stock
of offerin
102,38 23,839 68,380 95,185
GreatS 2,964, 92.97 g
3,700. ,910.9 ,874.8 ,314.9 92%
tar 529.20 % funds
00 3 1 4
Intellig &
ent others
Equip
ment
Co.,
Ltd. in
183
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Vietna
m
Cambo
dia
Phase 20,756 17,095 21,017
2,262, 1,658, 101.26
II plant ,100.0 ,602.2 ,425.1 99% Others
941.42 881.42 %
constr 0 9 3
uction
project
Cambo
dia
Phase
24,658 18,909 19,576
III 667,01 79.39
,000.0 ,493.7 ,510.6 75% Others
plant 6.91 %
0 0 1
constr
uction
project
Annua
l
output
of 1.5
million
mesh
15,000 10,154
techno 3,119, 4,131, 9,141, 88.49
,000.0 ,222.1 90% Others
logy 272.51 874.98 619.68 %
0 5
transfo
rmatio
n
phase
II
project
Intellig
ent
factory
with
Stock
an
offerin
annual 103,00 19,200 19,200
18.64 g
output 0,000. ,447.5 ,447.5 20%
% funds
of 1 00 6 6
&
million
Others
sets of
new
power
tools
GreatS
tar
headqu 35,220 22,473 28,297
5,824, 80.35
arters ,000.0 ,027.2 ,770.4 80% Others
743.14 %
renova 0 9 3
tion
project
Constr
uction
Stock
of 116,78 11,233 11,842
62,254 547,14 93.33 offerin
toolbo 5,800. ,233.8 ,636.0 95%
.53 7.63 % g
x 00 7 3
funds
produc
tion
184
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
bases
in
Thaila
nd
Vietna
m
Union
Compa 17,234
200,57 1,542, 432,99 38,220 1,348, 106.95
ny ,300.0 99% Others
4.51 532.40 6.06 .72 331.57 %
equip 0
ment
installa
tion
Drawe
r
cabinet
produc 45,704 28,596 28,596
62.57
tion ,200.0 ,859.6 ,859.6 62% Others
%
line 0 5 5
constr
uction
project
580,74 84,907 187,74 42,453 236,07
5,875,
Total 2,100. ,804.2 2,966. ,785.7 2,780.
795.88
00 6 23 0 67
17. Productive biological assets
(1) Productive biological assets using cost measurement model
□ Applicable N/A
(2) Productive biological assets using fair value measurement model
□ Applicable N/A
18. Oil and gas assets
□ Applicable N/A
19. Right-to-use assets
Unit: CNY
General purpose
Item Houses and buildings Means of transport Total
equipment
I. Original book value
1. Opening
504,829,254.24 3,540,581.40 9,299,747.81 517,669,583.45
balance
2. Amount
increased in the current 109,390,010.92 671,700.57 9,036,662.95 119,098,374.44
period
(1) New lease 75,608,439.45 437,472.00 6,618,528.00 82,664,439.45
(2) Increase
185
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
resulted from the
combination of
enterprises not under
common control
(3) Impact of
exchange rate 33,781,571.47 234,228.57 2,418,134.95 36,433,934.99
fluctuations
3. Amount
decreased in the 17,138,965.73 229,213.09 17,368,178.82
current period
(1) Lease
17,138,965.73 229,213.09 17,368,178.82
expiration
4. Closing balance 597,080,299.43 4,212,281.97 18,107,197.67 619,399,779.07
II. Cumulative
depreciation
1. Opening
101,721,014.98 1,142,277.36 3,083,529.45 105,946,821.79
balance
2. Amount
increased in the current 103,121,531.98 680,961.90 6,442,374.58 110,244,868.46
period
(1) Provision 93,465,964.39 550,368.00 4,332,384.00 98,348,716.39
(2) Increase
resulted from the
combination of
enterprises not under
common control
(3) Impact of
exchange rate 9,655,567.59 130,593.90 2,109,990.58 11,896,152.07
fluctuations
3. Amount
decreased in the 13,861,403.50 59,869.09 13,921,272.59
current period
(1) Disposal
(2) Lease
13,861,403.50 59,869.09 13,921,272.59
expiration
4. Closing balance 190,981,143.46 1,823,239.26 9,466,034.94 202,270,417.66
III. Reserve for
impairment
1. Opening
balance
2. Amount
increased in the current
period
(1) Provision
3. Amount
decreased in the
current period
(1) Disposal
4. Closing balance
186
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
IV. Book value
1. Closing book
406,099,155.97 2,389,042.71 8,641,162.73 417,129,361.41
value
2. Opening book
403,108,239.26 2,398,304.04 6,216,218.36 411,722,761.66
value
Other notes:
None
20. Intangible assets
(1) Intangible assets
Unit: CNY
Unpatente Proprietar
Land Managem Pollutant
Land use Patent d Trademar y
Item ownershi ent discharge Total
right right technolog k right technolog
p software right
y y
I.
Original
book
value
1.
232,058,1 5,117,908 129,852,2 310,883,4 18,478,82 132,102,1 2,648,543 831,141,3
Opening
68.21 .04 68.23 76.53 0.35 69.22 .69 54.27
balance
2.
Amount
increased 23,051,25 289,742.5 6,978,678 15,539,10 31,384,53 77,243,31
in the 4.70 3 .95 6.30 7.22 9.70
current
period
(
18,643,00 289,742.5 1,906,467 23,742,51 44,585,49
1) 3,773.58
0.00 3 .25 6.14 9.50
Purchase
(
2)
Internal
R&D
(
3)
Increase
of
enterprise
combinati
ons
(4)
Impact of
exchange 4,408,254 5,072,211 15,535,33 7,642,021 32,657,82
rate .70 .70 2.72 .08 0.20
fluctuatio
ns
3. 1,816,371 584,614.0 2,400,985
187
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Amount .00 3 .03
decreased
in the
current
period
(
1,816,371 584,614.0 2,400,985
1)
.00 3 .03
Disposal
4.
255,109,4 5,407,650 135,014,5 326,422,5 18,478,82 162,902,0 2,648,543 905,983,6
Closing
22.91 .57 76.18 82.83 0.35 92.41 .69 88.94
balance
II.
Cumulati
ve
amortizati
on
1.
39,264,22 2,634,970 5,310,521 11,264,38 100,689,6 684,207.2 159,847,9
Opening
1.69 .57 .33 0.89 00.98 0 02.66
balance
2.
Amount
increased 6,008,367 514,583.3 4,771,932 1,755,487 20,606,30 264,854.4 33,921,53
in the .61 0 .85 .93 7.76 0 3.85
current
period
(
5,935,759 514,583.3 4,146,261 1,755,487 19,327,67 264,854.4 31,944,62
1)
.66 0 .20 .93 6.58 0 3.07
Provision
(2)
Impact of
exchange 625,671.6 1,278,631 1,976,910
72,607.95 0.00
rate 5 .18 .78
fluctuatio
ns
3.
Amount
decreased 584,614.0 584,614.0
in the 3 3
current
period
(
584,614.0 584,614.0
1)
3 3
Disposal
4.
45,272,58 3,149,553 10,082,45 13,019,86 120,711,2 949,061.6 193,184,8
Closing
9.30 .87 4.18 8.82 94.71 0 22.48
balance
III.
Reserve
for
impairme
nt
1.
188
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Opening
balance
2.
Amount
increased
in the
current
period
(
1)
Provision
3.
Amount
decreased
in the
current
period
(
1)
Disposal
4.
Closing
balance
IV. Book
value
1.
Closing 209,836,8 2,258,096 135,014,5 316,340,1 5,458,951 42,190,79 1,699,482 712,798,8
book 33.61 .70 76.18 28.65 .53 7.70 .09 66.46
value
2.
Opening 192,793,9 2,482,937 129,852,2 305,572,9 7,214,439 31,412,56 1,964,336 671,293,4
book 46.52 .47 68.23 55.20 .46 8.24 .49 51.61
value
The intangible assets formed through internal R&D of the Company at the end of the current period account for 0.00% of the
balance of intangible assets.
21. Goodwill
(1) Original book value of goodwill
Unit: CNY
Investee or Increase in the current period Decrease in the current period
matter of Opening Formed by the Impact of Closing balance
forming balance combination of exchange rate Disposal
goodwill enterprises fluctuations
Lista Holding 1,065,726,426.
985,816,724.04 79,909,702.35
AG 39
Geelong Orchid
568,037,859.11 568,037,859.11
Holdings Ltd
Arrow Fastener
588,655,629.60 54,371,959.20 643,027,588.80
Co., LLC
189
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Changzhou
Huada Kejie
Opto-Electro 118,076,677.01 118,076,677.01
Instrument Co.,
Ltd
Prim' Tools
62,974,701.61 5,816,741.97 68,791,443.58
Limited
Suzhou
Xindadi
Hardware 42,288,608.30 42,288,608.30
Product Co.,
Ltd.
Prexiso AG 31,562,433.97 2,558,431.65 34,120,865.62
Prime-Line
27,415,510.00 2,532,270.00 29,947,780.00
Products, LLC
Longyou
Hugong
8,072,738.29 8,072,738.29
Forging No. 3
Tools Co., Ltd.
Shanghai
Endura Tool 5,677,361.84 5,677,361.84
Co., Ltd.
Haining
Sheffield
884,415.32 884,415.32
Cutting Tools
Co., Ltd.
Zhejiang
Guoxin Tool 308,667.41 308,667.41
Co., Ltd.
Longyou
Yiyang Forging 170,033.92 170,033.92
Co., Ltd.
2,439,941,360. 2,585,130,465.
Total 145,189,105.17
42 59
(2) Reserve for goodwill impairment
Unit: CNY
Investee or Increase in the current period Decrease in the current period
matter of Opening
Closing balance
forming balance Provision Disposal
goodwill
Lista Holding
70,398,887.67 70,398,887.67
AG
Geelong Orchid
Holdings Ltd 524,650.53 1,049,301.06 1,573,951.59
(Note)
Changzhou
Huada Kejie
Opto-Electro 58,591,956.96 58,591,956.96
Instrument Co.,
Ltd
Prime-Line
3,311,657.93 3,311,657.93
Products, LLC
Longyou
1,333,583.47 6,739,154.82 8,072,738.29
Hugong
190
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Forging No. 3
Tools Co., Ltd.
(Note)
Shanghai
Endura Tool 5,677,361.84 5,677,361.84
Co., Ltd.
Haining
Sheffield
884,415.32 884,415.32
Cutting Tools
Co., Ltd.
Zhejiang
Guoxin Tool 308,667.41 308,667.41
Co., Ltd.
Longyou
Yiyang Forging 170,033.92 170,033.92
Co., Ltd.
Total 134,160,736.56 14,828,934.37 148,989,670.93
Information about the asset group or combination of asset groups where goodwill is located
In recognition of the goodwill generated by the deferred income tax liabilities of Longyou Hugong Forging No. 3 Tools Co., Lt d.
and the related asset group of Geelong Orchid Holdings Ltd, an equivalent amount of goodwill impairment provision of CNY
444,527.83 and CNY 1,049,301.06 was made due to the reversal of the current deferred income tax liabilities.
Explanations for the goodwill impairment test process, key parameters (such as forecast period growth rate, stable period growth
rate, profit rate, discount rate, forecast period, etc. when the present value of future cash flows is expected) and the recognition
method of goodwill impairment loss:
Goodwill impairment test process
1) Lista Holding AG
① Information about the asset group or combination of asset groups where goodwill is located
Composition of the asset group or the combination of asset groups Related asset group of Lista Holding AG
Book value of the asset group or the combination of asset groups 679,523,110.89
Book value of goodwill apportioned to the asset group or combination of
995,327,538.72
asset groups and method of apportionment
Book value of the asset group or combination of asset groups containing
1,674,850,649.61
goodwill
Whether the asset group or combination of asset groups is consistent with
the asset group or combination of asset groups as determined at the date of Yes
purchase and at the time of the goodwill impairment test in prior years
② Process, method and conclusion of goodwill impairment test
The recoverable amount of goodwill is calculated according to the present value of the expected future cash flow, which is based
on the 5-year cash flow forecast approved by the Company. The discount rate used for the cash flow forecast is 11.10% (2021:
9.96%), and the cash flow after the forecast period remains stable.
Other key data used in the impairment test include: estimated selling price, sales volume, production cost and other related
expenses. The Company has determined the above key data based on its historical experience and forecast of market development.
The discount rate adopted by the Company is the pre-tax interest rate that reflects the current market time value of money and the
specific risks of the underlying asset group.
According to the Appraisal Report issued by Wanbang Asset Appraisal Co., Ltd. (Wan Bang Ping Bao (2023) No. 91), the
recoverable amount of the asset group or combination of asset groups containing goodwill is CNY 1,782,760,000.00, and the book
value is CNY 1,674,850,649.61, and there is no impairment loss of goodwill.
2) Geelong Orchid Holdings Ltd
191
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
① Information about the asset group or combination of asset groups where goodwill is located
Composition of the asset group or the combination of asset groups Related asset group of Geelong Orchid Holdings Ltd
Book value of the asset group or the combination of asset groups 533,728,771.00
Book value of goodwill apportioned to the asset group or combination of
566,463,907.52
asset groups and method of apportionment
Book value of the asset group or combination of asset groups containing
1,100,192,678.52
goodwill
Whether the asset group or combination of asset groups is consistent with
the asset group or combination of asset groups as determined at the date of No
purchase and at the time of the goodwill impairment test in prior years
Composition of asset group or combination of asset groups during the
Geelong Orchid Holdings Ltd asset group
goodwill impairment test in 2021
Due to the adjustment of internal business and equity
Reason for change in the composition of an asset group or combination of structure, Geelong (Thailand) Co., Ltd. has been
asset groups included in the asset group of Geelong Orchid
Holdings Ltd since 2022
② Process, method and conclusion of goodwill impairment test
The recoverable amount of goodwill is calculated according to the present value of the expected future cash flow, which is based
on the 5-year cash flow forecast approved by the Company. The discount rate used in the cash flow forecast is 12.14% (2021:
12.68%), and the cash flow after the forecast period remains stable.
Other key data used in the impairment test include: estimated selling price, sales volume, production cost and other related
expenses. The Company has determined the above key data based on its historical experience and forecast of market development.
The discount rate adopted by the Company is the pre-tax interest rate that reflects the current market time value of money and the
specific risks of the underlying asset group.
According to the Appraisal Report issued by Wanbang Asset Appraisal Co., Ltd. (Wan Bang Ping Bao (2023) No. 90), the
recoverable amount of the asset group or combination of asset groups containing goodwill is CNY 1,243,000,000.00, and the book
value is CNY 1,100,192,678.52, and there is no impairment loss of goodwill.
3) Arrow Fastener Co., LLC
① Information about the asset group or combination of asset groups where goodwill is located
Composition of the asset group or the combination of asset groups Related asset group of Arrow Fastener Co., LLC
Book value of the asset group or the combination of asset groups 474,187,618.63
Book value of goodwill apportioned to the asset group or combination of
643,027,588.80
asset groups and method of apportionment
Book value of the asset group or combination of asset groups containing
1,117,215,207.43
goodwill
Whether the asset group or combination of asset groups is consistent with
the asset group or combination of asset groups as determined at the date of Yes
purchase and at the time of the goodwill impairment test in prior years
② Process, method and conclusion of goodwill impairment test
The recoverable amount of goodwill is calculated according to the present value of the expected future cash flow, which is based
on the 5-year cash flow forecast approved by the Company. The discount rate used for the cash flow forecast is 11.61% (2021:
10.61%), and the cash flow after the forecast period remains stable.
Other key data used in the impairment test include: estimated selling price, sales volume, production cost and other related
expenses. The Company has determined the above key data based on its historical experience and forecast of market development.
The discount rate adopted by the Company is the pre-tax interest rate that reflects the current market time value of money and the
specific risks of the underlying asset group.
192
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
According to the Appraisal Report issued by Wanbang Asset Appraisal Co., Ltd. (Wan Bang Ping Bao (2023) No. 93), the
recoverable amount of the asset group or combination of asset groups containing goodwill is CNY 1,126,384,758.00, and the book
value is CNY 1,117,215,207.80, and there is no impairment loss of goodwill.
4) Changzhou Huada Kejie Opto-Electro Instrument Co., Ltd.
① Information about the asset group or combination of asset groups where goodwill is located
Composition of the asset group or the combination of asset groups Related asset group of Changzhou Huada Kejie Opto-
Electro Instrument Co., Ltd.
Book value of the asset group or the combination of asset groups 272,284,100.63
Book value of goodwill apportioned to the asset group or combination of
91,514,953.92
asset groups and method of apportionment
Book value of the asset group or combination of asset groups containing
363,799,054.55
goodwill
Whether the asset group or combination of asset groups is consistent with
the asset group or combination of asset groups as determined at the date of Yes
purchase and at the time of the goodwill impairment test in prior years
② Process, method and conclusion of goodwill impairment test
The recoverable amount of goodwill is calculated according to the present value of the expected future cash flow, which is based
on the 5-year cash flow forecast approved by the Company. The discount rate used for the cash flow forecast is 11.34% (2021:
12.85%), and the cash flow after the forecast period remains stable.
Other key data used in the impairment test include: estimated selling price, sales volume, production cost and other related
expenses. The Company has determined the above key data based on its historical experience and forecast of market development.
The discount rate adopted by the Company is the pre-tax interest rate that reflects the current market time value of money and the
specific risks of the underlying asset group.
According to the Appraisal Report issued by Wanbang Asset Appraisal Co., Ltd. (Wan Bang Ping Bao (2023) No. 88), the
recoverable amount of the asset group or combination of asset groups containing goodwill is CNY 420,050,000.00, and the book
value is CNY 363,799,054.55, and there is no impairment loss of goodwill.
5) Prim' Tools Limited
① Information about the asset group or combination of asset groups where goodwill is located
Composition of the asset group or the combination of asset groups Related asset group of Prim' Tools Limited
Book value of the asset group or the combination of asset groups 127,292,247.61
Book value of goodwill apportioned to the asset group or combination of
68,791,443.58
asset groups and method of apportionment
Book value of the asset group or combination of asset groups containing
196,083,691.19
goodwill
Whether the asset group or combination of asset groups is consistent with
the asset group or combination of asset groups as determined at the date of Yes
purchase and at the time of the goodwill impairment test in prior years
② Process, method and conclusion of goodwill impairment test
The recoverable amount of goodwill is calculated according to the present value of the expected future cash flow, which is based
on the 5-year cash flow forecast approved by the Company. The discount rate used for the cash flow forecast is 11.41% (2021:
13.00%), and the cash flow after the forecast period remains stable.
Other key data used in the impairment test include: estimated selling price, sales volume, production cost and other related
expenses. The Company has determined the above key data based on its historical experience and forecast of market development.
The discount rate adopted by the Company is the pre-tax interest rate that reflects the current market time value of money and the
specific risks of the underlying asset group.
193
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
According to the Appraisal Report issued by Wanbang Asset Appraisal Co., Ltd. (Wan Bang Ping Bao (2023) No. 89), the
recoverable amount of the asset group or combination of asset groups containing goodwill is CNY 232,330,000.00, and the book
value is CNY 196,083,691.19, and there is no impairment loss of goodwill.
6) Prime-Line Products, LLC
① Information about the asset group or combination of asset groups where goodwill is located
Composition of the asset group or the combination of asset groups Related asset group of Prime-Line Products, LLC
Book value of the asset group or the combination of asset groups 274,962,185.83
Book value of goodwill apportioned to the asset group or combination of
26,636,122.07
asset groups and method of apportionment
Book value of the asset group or combination of asset groups containing
301,598,307.90
goodwill
Whether the asset group or combination of asset groups is consistent with
the asset group or combination of asset groups as determined at the date of Yes
purchase and at the time of the goodwill impairment test in prior years
② Process, method and conclusion of goodwill impairment test
The recoverable amount of goodwill is calculated according to the present value of the expected future cash flow, which is based
on the 5-year cash flow forecast approved by the Company. The discount rate used for the cash flow forecast is 12.07% (2021:
10.61%), and the cash flow after the forecast period remains stable.
Other key data used in the impairment test include: estimated selling price, sales volume, production cost and other related
expenses. The Company has determined the above key data based on its historical experience and forecast of market development.
The discount rate adopted by the Company is the pre-tax interest rate that reflects the current market time value of money and the
specific risks of the underlying asset group.
According to the Appraisal Report issued by Wanbang Asset Appraisal Co., Ltd. (Wan Bang Ping Bao (2023) No. 92), the
recoverable amount of the asset group or combination of asset groups containing goodwill is CNY 318,909,000.00, and the book
value is CNY 301,598,307.90, and there is no impairment loss of goodwill.
7) Other companies
① The Company has conducted a closing goodwill impairment test on the related asset groups of Suzhou Xindadi Hardware
Products Co., Ltd. and Prexiso AG. The recoverable amount of the asset group or combination of asset groups containing goodwill
is calculated at the present value of projected future cash flows based on a five-year cash flow forecast approved by the Company,
which remains stable after the forecast period. The discount rate adopted by the Company is the pre-tax interest rate that reflects
the current market time value of money and the specific risks of the underlying asset group. Other key data used in the impairment
test include: estimated selling price, sales volume, production cost and other related expenses. The Company has determined the
above key data based on its historical experience and forecast of market development. The above estimates of recoverable amounts
indicate that there is no impairment loss of goodwill.
② The Company has conducted impairment tests on the related asset groups of Longyou Hugong Forging No. 3 Tool Co., Ltd.,
Shanghai Liyi Tool Co., Ltd., Haining Sheffield Tool Co., Ltd., Zhejiang Guoxin Tool Co., Ltd., and Longyou Yiyang Forging Co.,
Ltd., and their goodwill impairment losses are identified as CNY 6,739,154.82 CNY 5,677,361.84, CNY 884,415.32, CNY
308,667.41 and CNY 170,033.92 respectively.
Impact of goodwill impairment test
N/A
Other notes:
194
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
22. Long-term deferred expenses
Unit: CNY
Current period
Increase in the Other reduced
Item Opening balance amortization Closing balance
current period amounts
amount
Expenditures for
improvement of 6,739,950.58 2,043,196.51 2,072,420.44 -25,249.99 6,735,976.64
leased fixed assets
Decoration cost 6,561,351.43 9,812,208.16 5,662,902.96 -163,739.04 10,874,395.67
Mold cost 11,183,138.80 7,096,182.44 8,045,165.23 10,234,156.01
Others 2,261,521.44 243,355.20 786,030.72 -119,900.10 1,838,746.02
Total 26,745,962.25 19,194,942.31 16,566,519.35 -308,889.13 29,683,274.34
Other notes:
None
23. Deferred income tax assets/deferred income tax liabilities
(1) Unoffset deferred tax assets
Unit: CNY
Closing balance Opening balance
Item Deductible for Deductible for
Deferred tax assets Deferred tax assets
temporary differences temporary differences
Bad debt provision 75,037,482.03 19,562,336.87 126,923,687.93 24,804,313.63
Reserve for inventory
94,747,478.74 20,983,892.60 63,458,652.61 14,741,539.47
decline
Mold cost 165,257.83 24,788.68
Changes in the fair
value of trading 13,075,775.60 1,961,366.34
financial instruments
Withholding expense 188,560,571.00 48,671,047.11 169,819,676.11 24,529,483.31
Deferred income 795,332.50 119,299.88 1,556,851.32 233,527.70
Profits distributed from
10,437,803.87 1,565,670.58
partnership business
Total 382,654,443.74 92,863,613.38 361,924,125.80 64,333,652.79
(2) Unoffset deferred income tax liabilities
Unit: CNY
Closing balance Opening balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
Appraisal of assets
appreciation of
130,493,175.41 22,637,189.13 136,221,613.07 24,608,080.53
enterprises with
different control
Changes in the fair
value of trading 216,822.79 32,523.42 2,822,612.24 423,391.84
financial assets
195
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Interest receivable 10,354,688.66 1,553,203.30 3,683,674.49 552,551.17
Depreciation of fixed
157,866,605.45 33,965,448.24 215,457,755.28 48,392,628.88
assets
Reserve for inventory
6,370,128.97 1,301,362.33 17,481,348.51 2,452,010.77
decline
Withholding expense 51,761,401.14 10,591,929.69 143,184,822.64 19,782,033.37
Others 1,861,905.13 380,371.14 5,266,299.15 716,690.58
Total 358,924,727.55 70,462,027.25 524,118,125.38 96,927,387.14
(3) Details of unrecognized deferred income tax assets
Unit: CNY
Item Closing balance Opening balance
Deductible loss 291,942,202.73 268,267,176.46
Total 291,942,202.73 268,267,176.46
(4) Deductible losses on unrecognized deferred tax assets will become due in the following years
Unit: CNY
Year Closing amount Opening amount Remarks
2022 8,794,514.34
2023 12,521,147.05 13,108,405.23
2024 32,951,460.64 34,197,239.43
2025 34,819,578.42 34,847,410.00
2026 69,022,589.38 92,940,492.11
2027 50,649,136.49 7,204,355.21
2028 26,243,099.31 26,243,099.31
2029 7,438,617.58 7,438,617.58
2030 13,508,002.18 15,081,463.76
2031 32,348,426.72 28,411,579.49
2032 12,440,144.96
Total 291,942,202.73 268,267,176.46
Other notes:
None
24. Other non-current assets
Unit: CNY
Closing balance Opening balance
Item Reserve for Reserve for
Book balance Book value Book balance Book value
impairment impairment
Prepayment for
57,883,798.81 57,883,798.81 54,968,493.62 54,968,493.62
land purchase
Prepayment for
14,558,437.00 14,558,437.00 40,432,170.46 40,432,170.46
equipment
Prepayment for
intangible 2,064,892.14 2,064,892.14 8,370,928.98 8,370,928.98
assets purchase
Total 74,507,127.95 74,507,127.95 103,771,593.06 103,771,593.06
196
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Other notes:
None
25. Short-term borrowings
(1) Classification of short-term borrowings
Unit: CNY
Item Closing balance Opening balance
Pledged borrowings 20,924,304.95
Mortgaged borrowings 10,000,000.00 14,000,000.00
Secured borrowings 145,646,000.00 73,000,000.00
Credit borrowings 1,199,414,617.82 1,718,165,732.74
Interest payables that have been
3,077,790.34 1,735,468.65
withdrawn not yet due
Total 1,379,062,713.11 1,806,901,201.39
Description about classification of short-term borrowings:
None
(2) Overdue and unpaid short-term borrowings
The total amount of overdue and unpaid short-term borrowings at the end of the current period is CNY xxx, among which the
important overdue short-term borrowings are as follows:
Unit: CNY
Borrower Closing balance Borrowing rate Overdue time Overdue interest rate
Other notes:
26. Trading financial liabilities
Unit: CNY
Item Closing balance Opening balance
Trading financial liabilities 48,413,710.29 978,031.91
Including:
Derivative financial liabilities 48,413,710.29 978,031.91
Including:
Total 48,413,710.29 978,031.91
Other notes:
27. Notes payable
Unit: CNY
197
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Types Closing balance Opening balance
Banker's acceptance 21,096,540.03 51,728,000.00
Total 21,096,540.03 51,728,000.00
The total amount of notes payable due and unpaid at the end of the current period is CNY 0.00.
28. Accounts payable
(1) List of accounts payable
Unit: CNY
Item Closing balance Opening balance
Payment payable for materials purchase 1,150,990,191.95 1,425,489,422.83
Expenses payable 165,627,875.06 164,006,095.43
Payment payable for engineering
50,257,201.70 50,935,411.58
equipment
Total 1,366,875,268.71 1,640,430,929.84
29. Contractual liabilities
Unit: CNY
Item Closing balance Opening balance
Payment for goods 131,898,420.14 91,235,951.19
Total 131,898,420.14 91,235,951.19
Amount and reason of significant changes in book value during the reporting period
Unit: CNY
Variable
Item Reasons for change
amount
30. Employee benefits payable
(1) List of employee benefits payable
Unit: CNY
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
I. Short-term benefits 258,963,855.94 1,903,414,672.41 1,904,071,498.98 258,307,029.37
II. Post-employment
benefits - defined 5,109,849.44 122,826,836.18 115,565,527.17 12,371,158.45
contribution plan
Total 264,073,705.38 2,026,241,508.59 2,019,637,026.15 270,678,187.82
(2) List of short-term benefits
Unit: CNY
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
1. Salaries, bonuses,
249,932,098.41 1,705,346,783.15 1,702,241,783.54 253,037,098.02
allowances and
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
subsidies
2. Employee welfare
0.00 62,735,235.93 62,735,235.93 0.00
expenses
3. Social insurance
3,774,792.73 99,123,280.97 98,914,773.97 3,983,299.73
premium
Including: health
3,588,364.25 84,300,727.84 84,210,968.85 3,678,123.24
insurance premiums
Industrial
injury insurance 179,773.07 14,241,854.09 14,120,316.75 301,310.41
premium
Maternity
6,655.41 580,699.04 583,488.37 3,866.08
insurance premium
4. Housing provident
127,564.00 28,622,105.77 28,404,520.21 345,149.56
fund
5. Trade union funds
and employee 5,129,400.80 7,587,266.59 11,775,185.33 941,482.06
education funds
Total 258,963,855.94 1,903,414,672.41 1,904,071,498.98 258,307,029.37
(3) List of defined contribution plan
Unit: CNY
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
1. Basic endowment
4,965,811.04 120,432,567.24 113,209,605.37 12,188,772.91
insurance premium
2. Unemployment
144,038.40 2,394,268.94 2,355,921.80 182,385.54
insurance premium
Total 5,109,849.44 122,826,836.18 115,565,527.17 12,371,158.45
Other notes:
None
31. Taxes payable
Unit: CNY
Item Closing balance Opening balance
Value-added tax 25,628,212.44 10,372,853.71
Consumption tax 4,646,613.97 3,774,804.62
Corporate income tax 128,337,935.70 141,051,404.72
Individual income tax 3,844,249.01 3,916,018.80
City maintenance and construction tax 1,356,721.18 1,207,760.74
Property tax 6,855,195.19 6,481,130.82
Stamp duty 2,116,945.92 751,473.65
Land use tax 2,072,352.53 2,193,256.20
Education surcharge 682,263.36 543,959.59
Local education additional tax 462,433.69 464,719.08
Environmental protection tax 1,442.26 1,464.83
199
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Security fund for the disabled 61,129.65 65,433.09
Vehicle and vessel tax 11,828.17
Withholding and payment of VAT 494,411.75
Withholding and payment of enterprise
384,048.88
income tax
Total 176,943,955.53 170,836,108.02
Other notes:
None
32. Other payables
Unit: CNY
Item Closing balance Opening balance
Other amounts payable 21,198,376.32 676,502,987.21
Total 21,198,376.32 676,502,987.21
(1) Other payables
1) List other payables according to the nature of the payments
Unit: CNY
Item Closing balance Opening balance
Provisional receipts payable 8,050,261.29 5,712,537.69
Fund lending 5,055,791.67 583,570,527.78
deposit 2,453,772.95 2,476,768.95
Withholding expense 1,447,150.53 4,166,538.26
Equity payments payable 76,724,758.42
Others 4,191,399.88 3,851,856.11
Total 21,198,376.32 676,502,987.21
2) Other important payables whose account age exceeds 1 year
Unit: CNY
Reasons for not being repaid or carried
Item Closing balance
forward
Other notes:
None
33. Current portion of non-current liabilities
Unit: CNY
Item Closing balance Opening balance
Current portion of long-term borrowing 233,875,782.07 231,828,892.32
Current portion of lease liability 88,367,583.10 125,724,601.18
Interest payable on long-term borrowings
1,053,468.23 972,470.19
that have been withdrawn not yet due
200
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Total 323,296,833.40 358,525,963.69
Other notes:
None
34. Other current liabilities
Unit: CNY
Item Closing balance Opening balance
Tax on items to be resold 2,136,266.97 2,501,196.81
Total 2,136,266.97 2,501,196.81
Change in short-term bonds payable:
Unit: CNY
Amorti
zation Repay
Openin Interest of ment in
Bond Face Date of Bond Amoun Current Closing
g charged premiu the
name value issue period t issued issue balance
balance at par ms or current
discoun period
ts
Total
Other notes:
35. Long-term borrowings
(1) Classification of long-term borrowings
Unit: CNY
Item Closing balance Opening balance
Pledged borrowings 73,600,000.00 147,120,000.00
Secured borrowings 129,954,602.72
Credit borrowings 724,448,825.19 273,594,153.36
Pledge and guarantee borrowings 464,565,380.50
Interest payable on long-term borrowings
556,126.65 211,595.49
that have been withdrawn not yet due
Total 798,604,951.84 1,015,445,732.07
Description about classification of long-term borrowings:
Other notes, including interest rate ranges:
36. Lease liabilities
Unit: CNY
201
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Item Closing balance Opening balance
Unpaid lease payments 324,601,077.37 296,462,213.75
Less: Financing charges not recognized -6,379,727.38 -7,265,702.73
Total 318,221,349.99 289,196,511.02
Other notes:
None
37. Long-term employee benefits payable
(1) Long-term employee benefits payable statement
Unit: CNY
Item Closing balance Opening balance
II. Dismiss welfare 19,223,856.97 20,854,276.60
Total 19,223,856.97 20,854,276.60
38. Provisions
Unit: CNY
Item Closing balance Opening balance Reason for formation
Product quality assurance 2,511,885.60 2,309,585.60
Soil remediation cost 2,036,528.30 2,615,283.33
Total 4,548,413.90 4,924,868.93
Other statements, including the statements of material assumptions and estimates relating to significant provisions:
None
39. Deferred income
Unit: CNY
Increase in the Decrease in the Reason for
Item Opening balance Closing balance
current period current period formation
Government
2,802,244.63 873,200.00 1,310,756.89 2,364,687.74 Special subsidy
subsidy
Total 2,802,244.63 873,200.00 1,310,756.89 2,364,687.74 --
Items involving government grants:
Unit: CNY
Amount Amount of
Amount
Amount of included in write-down
included in
additional non- of costs Asset-
Liability Opening other Other Closing
subsidy in operating and related/inco
items balance income in changes balance
the current income in expenses in me-related
the current
period the current the current
period
period period
Special
1,085,393.0 Asset-
subsidy for 191,918.07 893,475.00
7 related
"machine
202
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
replaces
human"
technical
transformat
ion project
Special
subsidies
for
equipment
Asset-
manufactur 689,999.72 230,000.04 459,999.68
related
ing projects
in strategic
emerging
industries
Special
subsidies
for building
a public Asset-
636,555.46 393,222.48 243,332.98
service related
platform
for foreign
trade
Special
funds for
developme
nt pilot and
Asset-
base 183,999.88 92,000.04 91,999.84
related
projects in
strategic
emerging
industries
Financial
subsidy for
new hand
Asset-
tool series 160,000.24 99,999.96 60,000.28
related
product
expansion
project
Special
subsidy for
innovation
capacity
constructio
Asset-
n projects 46,296.26 46,296.26
related
of
provincial
enterprise
technology
center
Subsidies
for
Asset-
industrial 573,200.00 57,320.04 515,879.96
related
production
equipment
Subsidies
Income-
for project 300,000.00 200,000.00 100,000.00
related
R&D
203
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
2,802,244.6 1,310,756.8 2,364,687.7
Subtotal 873,200.00
3 9 4
Other notes:
For details of the amount of government grants included in current profit and loss, see Section X, (VII), 66 “Description of
government grants”
40. Capital stock
Unit: CNY
Increase or decrease in this change (+, -)
Opening Conversion Closing
balance Issue new Share balance
of provident Others Subtotal
shares delivery
fund shares
Number of 1,143,438,49 59,063,500.0 59,063,500.0 1,202,501,99
shares 2.00 0 0 2.00
Other notes:
In accordance with the resolutions of the 22nd Meeting of the 5th Session of Board of Directors of the Company and the 2nd
extraordinary General Meeting of Shareholders in 2022, and after the approval of the Prospectus Office of SIX Swiss Exchange
(hereinafter referred to as "SIX") and the License No. (2022) 2680 of China Securities Regulatory Commission, the Company is
authorized to issue no more than 114,343,849 new A-share underlying shares corresponding to Global Depositary Receipt (GDR),
and the number of GDR to be issued does not exceed 22,868,769 shares based on the conversion ratio determined (each GDR
represents 5 A-share underlying shares). In accordance with the offering plan and subscription, the Company has issued
GDR11,812,700 shares, corresponding to 59,063,500 A-share underlying shares of the Company, to the qualified international
investors and other investors in compliance with relevant regulations at an offering price of USD 13.08 per GDR, for a total
amount of funds to be raised USD 154,510,116.00. As of November 18, 2022, the Company has actually issued GDR11,812,700
shares to the above qualified investors, corresponding to 59,063,500 A-share underlying shares of the Company, and the total
amount of funds to be raised is USD 154,510,116.00 (equivalent to CNY 1,087,601,650.11). After deducting the issuance fee of
CNY 16,273,353.87, the net fund raised is CNY 1,071,328,296.24. Among them, the paid-in capital stock is CNY fifty-nine
million, sixty-three thousand and five hundred (CNY 59,063,500.00) and the capital reserve (capital stock premium) is CNY
1,012,264,796.24. The receipt of the above raised funds has been verified by Tianjian Certified Public Accountants (Special
General Partnership), and the capital verification report No. Tian Jian Yan (2022) No. 681 is issued.
41. Capital reserve
Unit: CNY
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Capital premium
2,720,102,577.01 1,012,344,496.65 3,732,447,073.66
(equity premium)
Other capital reserves 204,849,267.92 13,482,594.95 218,331,862.87
Total 2,924,951,844.93 1,025,827,091.60 3,950,778,936.53
Other explanations, including description of changes in the current period and reasons for changes:
1) Capital reserve - Description about changes in equity premium
204
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
① In the current period, due to the Company's issuance of Global Depositary Receipt (GDR) on SIX, the capital reserve -
premium on capital stock is increased by CNY 1,012,264,796.24. For details, see Section 10, (VII), 40, “Description of Capital
Stock”.
② The Company accepts the 1.94% equity of Hangzhou GreatStar Hardware Tools Co., Ltd., which is held by minority
shareholders of Hangzhou GreatStar Hardware Tools Co., Ltd., at the price of CNY 0.00. When the Company is preparing the
consolidated financial statements, the difference of CNY 79,700.41 between the newly acquired long-term equity investment due
to the purchase of minority shares and the net asset share of Hangzhou GreatStar Hardware Tools Co., Ltd., which shall be
continuously calculated since the combination date based on the newly added shareholding ratio, is included in the capital reserve.
2) Capital Reserve – Description about changes in other capital reserve
The shares of changes in shareholders’ equity of Zhejiang Guozi Robotics Co., Ltd., Zhejiang Hangcha Holding Co., Ltd., and
Hangzhou Zhongce Haichao Enterprise Management Co., Ltd., excluding the net profit and loss, other comprehensive income and
profit distribution, which shall be calculated according to the Company's shareholding ratio, have increased in long-term equity
investment and capital reserves respectively - other capital reserves of CNY 1,521,287.22, CNY 6,495,730.54 and CNY
5,465,577.19.
42. Treasury stock
Unit: CNY
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Treasury stock 186,441,914.48 50,184,047.52 236,625,962.00
Total 186,441,914.48 50,184,047.52 236,625,962.00
Other explanations, including description of changes in the current period and reasons for changes:
According to the resolution of the 11th Meeting of the 5th Session of Board of Directors of the Company, it is agreed that the
Company shall use its own funds of no less than (inclusive) CNY 180 million and no more than (inclusive) CNY 360 million to
buy back part of the Company's shares through centralized bidding. The price of the repurchased shares shall not exceed CNY 36
per share, and the term of the repurchased shares shall not exceed 12 months from the date of deliberation and approval by the
board of directors. By the end of the period, the Company's special account for share repurchase has repurchased 8,023,810 shares
in total and paid CNY 236,625,962.00 in total.
43. Other comprehensive income
Unit: CNY
Current period amount
Less: Less:
transferred transferred
to profit or to retained
loss in the earnings in Amount Amount
Current
Opening current the current attributable attributable Closing
Item period Less:
balance period from period from to the to the balance
amount Income tax
other other parent minority
before expense
comprehen comprehen company shareholder
income tax
sive sive after tax s after tax
income income
booked booked
earlier earlier
I. Other - - - - -
comprehen 31,557,637. 60,977,952. 3,796,128.0 57,181,824. 88,739,461.
205
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
sive 08 00 0 00 08
income that
cannot be
reclassified
into profit
or loss
Including:
remeasured
- - - - -
change
31,557,637. 60,977,952. 3,796,128.0 57,181,824. 88,739,461.
amount of
08 00 0 00 08
defined
benefit plan
II. Other
comprehen
sive
-
incomes 401,966,56 401,966,56 203,750,01
198,216,55 355,012.40
that can be 9.95 9.95 7.93
2.02
reclassified
into profit
and loss
Including:
other
comprehen
sive
income that - -
30,873,368. 30,873,368.
can be 84,939,637. 54,066,268.
37 37
transferred 21 84
to profit or
loss under
the equity
method
Differ
ence in
translation -
371,093,20 371,093,20 257,816,28
of financial 113,276,91 355,012.40
1.58 1.58 6.77
statements 4.81
in foreign
currency
Total other
- -
comprehen 340,988,61 344,784,74 115,010,55
229,774,18 3,796,128.0 355,012.40
sive 7.95 5.95 6.85
9.10 0
incomes
Other explanations, including the adjustment of the effective part of cash flow hedge profit and loss to the initial recognized
amount of the hedged items:
None
44. Surplus reserve
Unit: CNY
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Statutory surplus 598,543,176.63 65,300,202.41 663,843,379.04
206
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
reserve
Total 598,543,176.63 65,300,202.41 663,843,379.04
Description of surplus reserve, including changes in current period and reasons for changes:
According to the provisions of the articles of association, the statutory surplus reserve is withdrawn at 10% of the net profit
realized by the parent company in the current period.
45. Undistributed profits
Unit: CNY
Item Current period amount Prior period amount
Undistributed profit at the end of the
6,348,179,336.72 5,155,116,352.49
prior period before adjustment
Undistributed profit at the beginning of
6,348,179,336.72 5,155,116,352.49
the period after adjustment
Add: Net profit attributable to owners of
1,419,559,507.10 1,270,003,396.40
parent company for the period
Less: Withdrawal of statutory surplus
65,300,202.41 76,940,412.17
reserve
Undistributed profit at the end of the
7,702,438,641.41 6,348,179,336.72
period
Details of adjustment of undistributed profit at the beginning of the period:
1) Due to the retroactive adjustment of Accounting Standards for Business Enterprises and relevant new regulations, the
undistributed profit at the beginning of the period is affected by CNY 0.00.
2) Due to the change of accounting policies, the undistributed profit at the beginning of the period is affected by CNY 0.00.
3) Due to the correction of major accounting errors, the undistributed profit at the beginning of the period is affected by CNY 0.00.
4) Due to changes in the scope of combination caused by the same control, the undistributed profit at the beginning of the period is
affected by CNY 0.00.
5) After other adjustments in total, the undistributed profit at the beginning of the period is affected by CNY 0.00.
46. Operating proceeds and operating costs
Unit: CNY
Current period amount Prior period amount
Item
Revenues Costs Revenues Costs
Main business 12,545,286,576.78 9,244,404,166.19 10,849,925,564.41 8,147,389,910.45
Other business 64,903,013.55 22,518,138.56 69,757,779.96 28,733,758.05
Total 12,610,189,590.33 9,266,922,304.75 10,919,683,344.37 8,176,123,668.50
Whether the net profit is negative after deducting the non-recurrent profit and loss
□Yes No
Revenue-related information:
Unit: CNY
Classification of
Branch 1 Branch 2 Total
contract
Type of commodity 12,545,286,576.78 12,545,286,576.78
207
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Including:
Hand
10,004,744,537.61 10,004,744,537.61
Tools & Storage
Power Tools ＆
laser Measurement 2,540,542,039.17 2,540,542,039.17
＆ Power Stations
Classification by
12,545,286,576.78 12,545,286,576.78
operating area
Including:
America 7,892,263,869.75 7,892,263,869.75
Europe 3,296,852,123.29 3,296,852,123.29
Others 634,667,980.89 634,667,980.89
China 721,502,602.85 721,502,602.85
Type of market or
customer
Including:
Type of contract
Including:
Classification by time
of transfer of goods
Including:
Classification by
contract term
Including:
Classification by sales
channel
Including:
Total
Information related to performance obligations:
The sales performance obligations of the Company's hand tools and power tools, laser measurings, industrial storages, personal
protective equipment and other products are usually within 1 year. The Company will take advance payment or provide an account
period according to different customers. As the main responsible person, the Company directly sells the products. For the domestic
sales, the Company will obtain the unconditional right of collection when the Company delivers the products to the customers and
the customers have accepted the products as agreed in the contract; and for the overseas sales, the Company will obtain the
unconditional right of collection when the Company declares the products at customs, obtains the bill of lading or delivers the
products to the customers at the designated destination as agreed in the contract, and the control of the products is transferred to
the customers.
Information relating to the transaction price apportioned to the remaining performance obligations:
The amount of revenues corresponding to the performance obligations of the contract signed but not yet performed or completed at
the end of the current reporting period is CNY 131,898,420.14, among which CNY 131,898,420.14 is expected to be recognized in
2023, and CNY 0.00 is expected to be recognized in 2024, and CNY 0.00 is expected to be recognized in 2025.
Other notes:
The income that is recognized in the current period and included in the opening book value of contract liabilities is CNY
91,235,951.19.
208
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
47. Taxes and surcharges
Unit: CNY
Item Current period amount Prior period amount
City maintenance and construction tax 11,571,038.85 7,256,954.85
Education surcharge 5,189,547.92 3,771,830.67
Property tax 16,912,104.43 12,351,881.98
Land use tax 2,084,005.49 2,227,537.31
Vehicle and vessel use tax 58,382.49 86,214.28
Stamp duty 8,040,968.45 7,829,087.46
Local education additional tax 3,459,698.53 2,585,929.23
Environmental protection tax 13,002.52 9,241.06
Total 47,328,748.68 36,118,676.84
Other notes:
None
48. Sales expenses
Unit: CNY
Item Current period amount Prior period amount
Compensation expenditures 398,662,746.55 329,786,407.95
Advertising and promotion expenses 234,815,034.42 173,588,091.95
Office expenses 53,295,831.67 22,868,008.43
Depreciation and amortization 16,451,396.81 21,114,863.37
Consulting fee 14,737,583.22 10,976,839.16
Rent fee 8,096,364.87 6,737,089.27
Travel expense 6,520,356.14 5,472,391.88
Commodity inspection fee 5,278,754.56 7,773,433.50
Insurance premium 4,133,914.99 5,538,490.21
Others 15,236,456.57 9,147,487.96
Total 757,228,439.80 593,003,103.68
Other notes:
None
49. General and administrative expenses
Unit: CNY
Item Current period amount Prior period amount
Compensation expenditures 474,556,828.40 414,247,951.75
Office expenses 97,032,204.35 73,875,810.36
Depreciation and amortization 77,866,531.84 67,871,799.44
Consulting fee 64,751,668.35 88,634,883.05
Travel expense 17,871,137.28 14,051,596.45
Business entertainment expenses 3,874,433.78 3,968,221.22
Greening cost 2,976,006.64 3,459,791.23
Tax expenditure 2,793,774.11 2,206,645.73
Others 19,238,855.11 17,804,031.83
209
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Total 760,961,439.86 686,120,731.06
Other notes:
None
50. R&D expenses
Unit: CNY
Item Current period amount Prior period amount
Compensation expenditures 198,631,442.97 175,844,458.23
Direct input 83,802,929.10 97,611,535.85
Depreciation and amortization 15,283,842.90 12,408,282.37
Others 21,726,320.19 23,899,089.70
Total 319,444,535.16 309,763,366.15
Other notes:
None
51. Financial expenses
Unit: CNY
Item Current period amount Prior period amount
Interest expense 102,114,891.52 59,754,089.36
Interest income -83,482,441.75 -59,709,415.20
Exchange gain or loss -146,152,161.07 53,973,441.25
Bank charges 16,664,536.54 10,783,600.62
Total -110,855,174.76 64,801,716.03
Other notes:
None
52. Other revenues
Unit: CNY
Other sources of revenue Current period amount Prior period amount
Government grants related to assets 1,110,756.89 1,190,493.96
Government grants related to revenues 49,227,280.96 45,857,466.79
Refund of withholding personal income
333,584.83 502,892.56
tax commission
Total 50,671,622.68 47,550,853.31
53. Investment income
Unit: CNY
Item Current period amount Prior period amount
Income from long-term equity
investments accounted for by the equity 186,224,854.43 253,722,685.68
method
210
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Investment income from disposal of
70,248.49 40,415.45
long-term equity investments
Investment income of the trading
2,368,356.03 1,808,120.10
financial asset during the holding period
Investment income from the disposal of
-16,204,503.40 119,298,472.39
trading financial assets
Loss on discounted receivables financing -7,931,415.18 -4,570,835.23
Dividend income from other equity
12,400,000.00
instruments during the holding period
Total 176,927,540.37 370,298,858.39
Other notes:
None
54. Income from changes in fair value
Unit: CNY
Source of income from changes in fair
Current period amount Prior period amount
value
Trading financial assets -50,580,428.04 -22,632,570.84
Including: income from changes in
fair value incurred from derivative -41,392,762.63 -31,697,410.86
financial instruments
Trading financial liabilities -978,031.91
Total -50,580,428.04 -23,610,602.75
Other notes:
None
55. Credit impairment loss
Unit: CNY
Item Current period amount Prior period amount
Loss on other bad debts due from
10,552,317.00 -4,967,019.95
receivables
Bad debt loss on accounts receivable
12,767,474.27 -9,918,842.81
financing
Bad debt loss on accounts receivable -1,794,349.36 -30,906,344.55
Loss on bad debts on prepayments -2,411,861.08 1,461,995.24
Total 19,113,580.83 -44,330,212.07
Other notes:
None
56. Asset impairment loss
Unit: CNY
Item Current period amount Prior period amount
211
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
II. Loss of inventory decline and
impairment loss of contract performance -43,189,938.27 -18,850,329.32
cost
V. Impairment loss of fixed assets -3,305,922.73
XI. Impairment loss of goodwill -14,828,934.37 -4,280,836.29
Total -61,324,795.37 -23,131,165.61
Other notes:
None
57. Proceeds from asset disposal
Unit: CNY
Source of asset disposal proceeds Current period amount Prior period amount
Proceeds from disposal of fixed assets -15,154,452.66 -3,020,089.44
Proceeds from disposal of intangible
-1,816,371.00
assets
Proceeds from disposal of right-of-use
75,858.93
assets
Total -16,894,964.73 -3,020,089.44
58. Non-operating income
Unit: CNY
Amount booked into non-
Item Current period amount Prior period amount recurring profit or loss in the
current period
Unpayable accounts 927,736.08 3,836,871.67 927,736.08
Indemnity income 142,321.59 324,870.81 142,321.59
Gain on decommissioning of
245.38 13,785.22 245.38
non-current assets
Negative goodwill incurred
82,984,773.90
from business consolidation
Others 112,707.39 187,648.80 112,707.39
Total 1,183,010.44 87,347,950.40 1,183,010.44
Government grants recorded in the current profit and loss:
Unit: CNY
Whether
subsidies
affect Whether it Current Prior Asset-
Subsidy Issuing Reason for Property/ty
profits and is a special period period related/inco
item body issuance pe
losses in subsidy amount amount me-related
the current
year
Other notes:
None
212
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
59. Non-operating expenses
Unit: CNY
Amount booked into non-
Item Current period amount Prior period amount recurring profit or loss in the
current period
External donation 2,381,483.86 4,019,141.43 2,381,483.86
Indemnity expenditure 9,616,939.96 9,616,939.96
Loss on scrap of non-current
7,507,908.93 1,847,789.51 7,507,908.93
assets
Penalty expenditure 846,535.48 321,317.87 846,535.48
Others 628,789.12 136,142.69 628,789.12
Total 20,981,657.35 6,324,391.50 20,981,657.35
Other notes:
None
60. Income tax expenses
(1) Income tax expense statement
Unit: CNY
Item Current period amount Prior period amount
Income tax expense in the current period 273,828,973.28 181,379,736.40
Deferred income tax expense -51,199,192.48 -20,161,653.17
Total 222,629,780.80 161,218,083.23
(2) Adjustment process of accounting profit and income tax expense
Unit: CNY
Item Current period amount
Total profit 1,667,273,205.67
Income tax expense at statutory/applicable tax rates 250,090,980.85
Impact of different tax rates applied to subsidiaries 16,972,963.30
Impact of adjusting income tax for prior periods 23,824,878.53
Impact of non-taxable income -7,509,723.61
Impact of non-deductible costs, expenses and losses 7,811,040.89
Impact of deductible losses on deferred income tax assets not
-20,962,995.36
recognized in the prior period
Impact of deductible temporary differences or deductible losses
17,778,857.42
on deferred tax assets not recognized in the current period
Impact of investment income recognized for long-term equity
-28,150,792.19
investment calculated under the equity method
Impact of additional deductions for technology development
-37,225,429.03
expenses and wages of the disabled
Income tax expense 222,629,780.80
Other notes:
213
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
None
61. Other comprehensive income
For details, see Note 43, “Other Comprehensive Incomes”
62. Cash flow statement items
(1) Other cash received in connection with operating activities
Unit: CNY
Item Current period amount Prior period amount
Withdrawal of bank acceptance deposit 27,725,700.00 14,267,400.00
Interest income 76,728,216.03 76,718,283.04
Government subsidy income 46,029,953.90 42,393,347.30
Operating lease income 20,667,575.93 19,564,397.37
Withdrawal of customs bond money 700,000.00
Others 230,323.25 7,295,322.21
Total 172,081,769.11 160,238,749.92
Description of other cash received in connection with operating activities:
None
(2) Other cash paid in connection with operating activities
Unit: CNY
Item Current period amount Prior period amount
Operating period expenses 1,146,808,817.06 985,886,790.62
Payment of bank acceptance deposit 7,384,067.19 27,725,700.00
Payment of L/C guarantee deposit 6,616,370.00
Payment of customs bond 1,975,140.00
Others 11,076,711.72 9,535,171.45
Total 1,171,885,965.97 1,025,122,802.07
Description of other cash paid in connection with operating activities:
None
(3) Other cash received in connection with investment activities
Unit: CNY
Item Current period amount Prior period amount
Withdrawal of margin purchased for
forward settlement and sale of foreign 69,702,798.00 3,295,074.50
exchange
Withdrawal of project performance bond 492,906.98 495,608.89
Withdrawal of refundable deposit 2,154,766.92
Total 70,195,704.98 5,945,450.31
Description of other cash received in connection with investing activities:
214
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
None
(4) Other cash paid in connection with investment activities
Unit: CNY
Item Current period amount Prior period amount
Purchase of margin for forward
100,856,217.74 2,295,252.00
settlement and sale of foreign exchange
Payment of project performance bond 492,906.98
Loss on forward settlement and sale of
29,020,494.96
foreign exchange investment
Total 129,876,712.70 2,788,158.98
Description of other cash paid in connection with investment activities:
None
(5) Other cash received in connection with financing activities
Unit: CNY
Item Current period amount Prior period amount
Receipt of financial support from the
583,000,000.00
actual controller
Receipt of bill discount 99,266,666.67
Receipt of social fund loan 5,000,000.00
Total 104,266,666.67 583,000,000.00
Description of other cash received in connection with fund-raising activities:
None
(6) Other cash paid in connection with financing activities
Unit: CNY
Item Current period amount Prior period amount
Funds paid for share repurchases 50,184,047.52 186,441,914.48
Funds paid for minority stakes 20,201,500.00
Repayment of borrowings and interests 602,271,700.00 16,850,810.54
Repayment of lease liabilities and
86,735,381.29 59,939,559.59
interests
Fees for handling of financing guarantee
7,931,415.18 4,570,835.23
and receivables financing transfer
Payment of deposit for bank borrowings 20,893,800.00
Payment for stock issue 16,273,353.87
Redemption amount of convertible bonds 2,581,437.71
Payment for settlement of minority
shareholders of FRONTIER Kitchen & 88,811.75
Bath (Suzhou) Co., Ltd.
Total 784,289,697.86 290,674,869.30
Description of other cash paid in connection with other financing activities:
None
215
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
63. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Unit: CNY
Supplementary information Current period amount Prior period amount
1. Adjustment net profit into cash flow
from operating activities
Net profit 1,444,643,424.87 1,297,315,199.61
Add: Reserve for asset impairment 42,211,214.54 67,461,377.68
Depreciation of fixed assets,
depletion of oil and gas assets,
181,387,033.50 170,864,798.78
depreciation of productive biological
assets
Depreciation of right-of-use
98,348,716.39 78,057,113.74
assets
Amortization of intangible assets 32,283,200.07 24,648,378.98
Amortization of long-term
16,566,519.35 28,589,540.58
deferred expenses
Loss on disposal of fixed assets,
intangible assets and other long-term 16,894,964.73 3,020,089.44
assets (presented by “-” for gain)
Loss on retirement of fixed assets
7,507,663.55 1,834,004.29
(income presented by “-”)
Loss from changes in fair value
50,580,428.04 23,610,602.75
(income presented by “-”)
Financial expenses (income
-44,037,269.55 111,747,068.72
presented by “-”)
Investment losses (income
-176,927,540.37 -370,298,858.39
presented by “-”)
Decrease in deferred tax assets
-28,529,960.59 -21,863,965.98
(increase presented by “-”)
Increase in deferred income tax
-26,465,359.89 1,702,312.81
liabilities (decrease presented by “-”)
Decrease in inventory (increase
-24,001,558.52 -1,209,507,080.11
presented by “-”)
Decrease in operating receivables
313,928,739.58 -537,038,480.67
(increase presented by “-”)
Increase in operating payables
-272,553,573.31 348,490,067.44
(decrease presented by “-”)
Others
Net cash flows from operating
1,631,836,642.39 18,632,169.67
activities
2. Major investments and financing
activities that do not involve cash
receipts and payments
Conversion of debt into capital
Current portion of convertible bonds
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Fixed assets under financing lease
3. Net changes in cash and cash
equivalents:
Closing balance of cash 4,793,427,180.47 4,001,186,241.18
Less: Opening balance of cash 4,001,186,241.18 3,730,263,218.08
Add: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net increase in cash and cash
792,240,939.29 270,923,023.10
equivalents
(2) Net cash received from subsidiaries paid in the current period
Unit: CNY
Amount
Including:
Including:
Add: Cash or cash equivalents paid in the current period for
76,724,758.42
business combinations that occurred in the prior period
Including:
Geelong Orchid Holding Limited 47,973,954.65
BeA 28,750,803.77
Net cash paid by subsidiaries 76,724,758.42
Other notes:
None
(3) Composition of cash and cash equivalents
Unit: CNY
Item Closing balance Opening balance
I. Cash 4,793,427,180.47 4,001,186,241.18
Including: cash on hand 4,328,053.84 2,574,760.83
Bank deposit that is readily
4,788,725,570.94 3,983,507,419.70
available for payment
Funds in other currencies that are
373,555.69 15,104,060.65
readily available for payment
III. Balance of cash and cash equivalents
4,793,427,180.47 4,001,186,241.18
at the end of the period
Other notes:
Due to limited liquidity, the Company will use the cash funds other than cash and cash equivalents for bank acceptance deposit,
project performance deposit, forward settlement and sale of foreign exchange deposit, customs duty guarantee deposit, ETC
deposit and investment deposit. The opening balance of such margin deposits is CNY 32,520,998.98 and the closing balance is
CNY 69,779,001.93.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
64. Assets with limited ownership or access
Unit: CNY
Book value as at the end of the reporting
Item Reason for restriction
period
Guarantee deposits for future foreign
Monetary assets 33,448,671.74
exchange settlement
Used as collateral for drawing bank
Fixed assets 27,776,638.39
acceptance bills
Used as collateral for drawing bank
Intangible assets 2,046,633.50
acceptance bills
Monetary assets 20,893,800.00 Guarantee deposits for short-term loans
Monetary assets 6,616,370.00 Guarantee deposits for letters of credit
Guarantee deposits for bank acceptance
Monetary assets 7,384,067.19
bills
Monetary assets 1,393,093.00 Customs guarantee deposits
Monetary assets 43,000.00 Guarantee deposits for ETC
Fixed assets 10,003,152.72 Used as collateral for bank loans
Intangible assets 1,385,386.53 Used as collateral for bank loans
100% shares of Arrow Fastener Co.,
481,723,419.57 Used as collateral for bank loans
LLC (Note)
Total 592,714,232.64
Other notes:
(Note) Arrow Fastener Co., LLC100.00% equity is the closing net book asset
65. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: CNY
Closing balance of foreign Balance that is converted into
Item Converted exchange rate
currency CNY at the end of the period
Monetary assets 1,495,179,172.94
Including: USD 158,889,555.73 6.9646 1,106,602,199.84
EUR 17,414,286.72 7.4229 129,264,508.89
HKD 30,417,977.09 0.8933 27,172,378.93
VND 121,580,449,561.00 0.00029486 35,849,211.36
JPY 99,935,216.00 0.0524 5,236,605.32
CHF 25,241,152.73 7.5432 190,399,063.27
THP 2,061,537.85 0.2014 415,193.72
KHR 4,016,935.00 0.0017 6,828.79
MOP 274,655.85 0.849 233,182.82
Accounts receivable 1,823,138,813.21
Including: USD 214,797,632.77 6.9646 1,495,979,593.19
EUR 33,201,649.79 7.4229 246,452,526.23
HKD 2,046,598.02 0.8933 1,828,226.01
VND 1,392,428,508.44 0.00029486 410,571.47
JPY 81,660,969.85 0.0524 4,279,034.82
CHF 9,503,127.55 7.5432 71,683,991.74
GBP 296,684.47 8.3941 2,490,399.11
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
THP 71,850.25 0.2014 14,470.64
Financing of receivables 321,247,171.36
Including: USD 46,125,717.39 6.9646 321,247,171.36
Long-term receivables 2,872,179.47
Including: VND 8,724,856,400.00 0.00029486 2,572,611.16
CHF 39,713.69 7.5432 299,568.31
Short-term loans 744,724,368.21
Including: EUR 58,612,784.65 7.4229 435,076,839.18
USD 43,110,552.00 6.9646 300,247,750.46
GBP 1,119,807.79 8.3941 9,399,778.57
Accounts payable 498,822,023.08
Including: USD 38,114,561.49 6.9646 265,452,674.95
EUR 4,678.15 7.4229 34,725.44
HKD 21,960,029.99 0.8933 19,616,894.79
JPY 32,917,910.76 0.0524 1,724,898.52
CHF 23,141,772.99 7.5432 174,563,022.02
VND 119,627,680,372.34 0.00029486 35,273,417.83
THP 10,706,998.66 0.2014 2,156,389.53
Current portion of non-
161,345,782.08
current liabilities
Including: EUR 21,689,289.48 7.4229 160,997,426.88
JPY 6,648,000.00 0.0524 348,355.20
Long-term loans 424,448,825.21
Including: USD 60,100,000.00 6.9646 418,572,460.00
EUR 791,653.56 7.4229 5,876,365.21
HKD
Lease liabilities 276,291,656.14
Including: VND 42,234,063,296.18 0.00029486 12,453,135.90
CHF 27,717,039.17 7.5432 209,075,169.87
EUR 4,619,145.25 7.4229 34,287,453.28
USD 2,913,418.93 6.9646 20,290,797.48
HKD 207,208.79 0.8933 185,099.61
Other notes:
None
(2) Description of overseas operating entities, including important overseas operating entities that shall
disclose their main overseas operating places, bookkeeping base currency and the basis for selection, and
shall also disclose the reasons for changes in the bookkeeping base currency.
Applicable □ N/A
Name Principal place of business Bookkeeping base currency
Germany, Austria, Australia, France, Czech
Republic, United States, Norway, Sweden,
BeA GmbH and its subsidiaries EUR, AUD, USD, CHF, GBP
Switzerland, Slovakia, Spain, Italy, United
Kingdom
GreatStar Tools USA,INC., and its
USA USD
subsidiaries
Switzerland, Austria, Germany, France,
Lista Holding AG and its subsidiaries CHF, EUR, GBP
Spain, Italy, England
Geelong Orchid Holding Limited and its British Cayman Islands, Thailand, Hong
HKD, THB, USD
subsidiaries Kong, Mauritius, Macau
219
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
XDD Products (USA) LLC USA USD
TGH (Cambodia) Industrial Co., LTD Cambodia USD
Newland.LLC USA USD
GreatStar Japan Co., LTD Japan JPY
GreatStar Europe AG Switzerland CHF
Prexiso AG Switzerland CHF
Hong Kong International Huada Kejie
Hong Kong USD
Opto-Electro Instrument Co., Ltd.
Hong Kong GreatStar International Limited Hong Kong USD
Hong Kong Goldblatt Industrial Co., Ltd. Hong Kong USD
Prim' Tools Limited Hong Kong HKD
Hong Kong Shop-Vac International Co.,
Hong Kong USD
Limited
GreatStar International Holdings Limited British Virgin Islands USD
GreatStar Vietnam Co.,Ltd Vietnam VND
Vietnam United Co., Ltd Vietnam VND
GreatStar Industrial Vietnam Co., Ltd Vietnam VND
SHOP-VAC VIETNAM CO.,LTD Vietnam VND
HUADA VIETNAM CO.,LTD Vietnam VND
66. Government subsidies
(1) Basic information of government grants
Unit: CNY
Amount booked into current
Types Amount Presentation item
profit and loss
Special subsidies for building
a public service platform for 243,332.98 Other income 393,222.48
foreign trade
Special subsidy for "machine
replaces human" technical 893,475.00 Other income 191,918.07
transformation project
Special subsidies for
equipment manufacturing
459,999.68 Other income 230,000.04
projects in strategic emerging
industries
Financial subsidy for new
hand tool series product 60,000.28 Other income 99,999.96
expansion project
220
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Special subsidy for
innovation capacity
construction projects of Other income 46,296.26
provincial enterprise
technology center
Special funds for
development pilot and base
91,999.84 Other income 92,000.04
projects in strategic emerging
industries
Subsidies for industrial
515,879.96 Other income 57,320.04
production equipment
Subtotal 2,264,687.74 1,110,756.89
(2) Return of government grants
□ Applicable N/A
Other notes:
Government grants that are related to revenues and are used to compensate for related costs or losses of the Company in the future
period
Opening Current period Closing Current carry-
Current carry-
Items Deferred Additional Deferred over Remarks
over
income subsidy income Presentation item
Subsidy for Chang Ke Fa (2022)
300,000.00 200,000.00 100,000.00 R&D expenses
R&D project No.110
Subtotal 300,000.00 200,000.00 100,000.00
Government subsidy related to revenue that is used to compensate a company for related costs or losses that have been incurred
Items Amount Presentation item Remarks
Zhe Cai Ke Jiao (2022) No. 3, Hang Qian Tang Shi
Special financial fund 12,629,864.00 Other income Jian (2022) No. 21, Zhe Jing Xin Zhuang Bei (2021)
No. 226, etc.
Special fund for foreign trade Hang Cai Qi (2022) No. 57, Zhe Cai Jian (2021) No.
9,575,100.00 Other income
development 83, Hang Shang Wu (2022) No.69, etc.
Subsidies for maintaining Yue Ren She Gui (2022) No. 9, Zhe Ren She No. 37
5,671,645.53 Other income
stable employment (2022), Hai Jing Xin No. 27 (2022), etc.
Shang Shang Wu (2022) No. 16, Shang Shang Wu
Business development fund 5,506,637.62 Other income
(2022) No. 12, Hang Cai Qi (2021) No. 47, etc.
Tax refund 4,070,527.06 Other income Cai Shui (2016) No. 52
Special fund for subsidizing e- Shang Shang Wu (2022) No. 11, Hang Zi Mao Ban
3,602,900.00 Other income
commerce (2022) No. 2
Patent and intellectual property Hang Shi Guan Gan (2021) No. 180, Zhejiang Cai
2,327,180.00 Other income
grants Hang (2020) No. 55, Su Cai Hang (2022) No. 40, etc.
Financial assistance fund for
1,129,310.00 Other income Hang Qian Tang Shi Jian (2022) No. 21
R&D
Hang Ren She Ban Fa (2022) No. 16, Hang Ren She
Training subsidy 691,100.00 Other income Ban Fa (2022) No. 17, Zhe Ren She Fa (2022) No. 4,
etc.
Special award for brand
400,000.00 Other income Hai Zhi Fa Ban (2022) No. 1
building
Cai Shui (2019) No. 22, Shang Zheng Han (2022) No.
Others 3,623,016.75 Other income
19, Hang Ke Wai Zhuan (2022) No. 80, etc.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Subtotal 49,227,280.96
The amount of government subsidy included in the current period profit and loss is CNY 50,538,037.85.
VIII. Changes in the scope of combination
1. Changes in the scope of combination for other reasons
Description of changes in the scope of combination caused by other reasons (such as the establishment of a new subsidiary,
liquidation of a subsidiary, etc.) and relevant information:
1. Increase of combination scope
Method of
Date of acquisition Ratio of
Companies equity Amount of contribution
of the equity contribution
acquisition
Zhongshan Geelong Import and Export
Setup June 23, 2022 100.00%
Trade Co., Ltd. CNY 21,065,000.00
Zhejiang Shiwanke Electric Appliance Co.,
Setup April 21, 2022 100.00%
Ltd. CNY 10,000,000.00
50,000,000.00
Hangzhou GreatStar Energy Co., Ltd. Setup December 16, 2022 100.00%
USD
Hangzhou GreatStar Garden Tools Co.,
Setup December 16, 2022 USD 100,000,000.00 100.00%
Ltd.
2. Decrease of combination scope
Equity From beginning to
Date of disposal of Net assets at the
Companies disposal disposal date
the shares disposal date
method Net profit
Hangzhou Lianhe Machinery Co., Ltd. Write-off September 19, 2022 -4,071,246.00 -206,011.38
Zhejiang GreatStar Intelligent Tool Co.,
Write-off May 13, 2022 -9,168.96 -987.91
Ltd.
Hangzhou GreatStar Power Tools Co., Ltd. Write-off June 20, 2022 -3,070,849.17 -3,069,955.62
International Storage Solutions Limited Write-off December 9, 2022 0.00 0.00
IX. Rights and interests in other subjects
1. Interests in subsidiaries
(1) Composition of enterprise group
Principal place Place of Nature of Shareholding ratio Acquisition
Subsidiaries
of business registration business Direct Indirect mode
Changzhou
Combination of
Huada Kejie Changzhou Changzhou
Manufacturing enterprises not
Opto-Electro City, Jiangsu City, Jiangsu 65.00%
industry under common
Instrument Co., Province Province
control
Ltd
Zhejiang Hangzhou City, Hangzhou City,
Manufacturing
GreatStar Tool Zhejiang Zhejiang 100.00% Setup
industry
Co., Ltd. Province Province
Hangzhou Hangzhou City, Hangzhou City, Manufacturing 100.00% Combination of
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
GreatStar Tool Zhejiang Zhejiang industry enterprises
Co., Ltd. Province Province under common
control
Combination of
Prim' Tools enterprises not
Hong Kong Hong Kong Commerce 86.96%
Limited under common
control
Hong Kong
GreatStar
Hong Kong Hong Kong Commerce 100.00% Setup
International
Limited
GreatStar Tools
USA USA Commerce 100.00% Setup
USA, Inc
Combination of
Arrow Fastener Manufacturing enterprises not
USA USA 100.00%
Co., LLC industry under common
control
GreatStar
Industrial USA, USA USA Commerce 100.00% Setup
LLC
GreatStar
Switzerland Switzerland Commerce 100.00% Setup
Europe AG
Combination of
Lista Holding Manufacturing enterprises not
Switzerland Switzerland 100.00%
AG industry under common
control
Manufacturing
BeA GmbH Germany Germany 100.00% Setup
industry
Zhongshan Zhongshan Combination of
Geelong Sales City, City, Manufacturing enterprises not
100.00%
Co., Ltd. Guangdong Guangdong industry under common
Province Province control
Explanation that the shareholding ratio in the subsidiary is different from the voting rights ratio:
N/A
Basis for holding half or less voting rights but still controlling the investee, and holding more than half of the voting rights but not
controlling the investee:
N/A
Basis of control for significant structured entities that are included in the scope of combination:
N/A
Basis for determining whether the Company is an agent or a principal:
N/A
Other notes:
None
223
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
(2) Important non-wholly-owned subsidiaries
Unit: CNY
Profit and loss Dividends declared and
Closing balance of
Shareholding of attributable to minority distributed to minority
Subsidiaries minority shareholders'
minority shareholders shareholders in the shareholders in the
equity for the period
current period current period
Changzhou Huada
Kejie Opto-Electro 35.00% 15,926,120.48 12,250,000.00 112,851,595.03
Instrument Co., Ltd
Prim' Tools Limited 13.04% 3,094,007.61 920,580.97 20,307,068.89
Explanation of the difference between the shareholding proportion of minority shareholders and the voting right proportion of
subsidiaries:
N/A
Other notes:
None
(3) Major financial information of important non-wholly-owned subsidiaries
Unit: CNY
Closing balance Opening balance
Subsid Curren Non- Curren Non-
Non- Total Non- Total
iaries Curren Total t current Curren Total t current
current liabiliti current liabiliti
t assets assets liabiliti liabiliti t assets assets liabiliti liabiliti
assets es assets es
es es es es
Chang
zhou
Huada
Kejie
349,55 73,416 422,96 112,51 112,64 405,97 77,136 483,11 185,08 185,71
Opto- 132,52 631,03
2,501. ,525.2 9,026. 5,156. 7,679. 5,953. ,343.7 2,297. 1,625. 2,660.
Electro 3.42 4.97
39 3 62 24 66 52 9 31 15 12
Instru
ment
Co.,
Ltd
Prim'
170,85 23,624 194,47 36,527 44,020 143,75 11,369 155,11 26,734 27,820
Tools 7,492, 1,086,
2,422. ,711.5 7,134. ,312.2 ,312.0 0,402. ,163.4 9,565. ,231.8 ,953.9
Limite 999.77 722.10
73 2 25 3 0 46 0 86 7 7
d
Unit: CNY
Current period amount Prior period amount
Subsidiarie Total Cash flow Total Cash flow
s Operating comprehen from Operating comprehen from
Net profit Net profit
proceeds sive operating proceeds sive operating
incomes activities incomes activities
Changzhou
Huada 461,625,60 47,884,566. 47,921,709. 81,146,145. 571,558,62 59,396,937. 59,381,572. 32,031,010.
Kejie Opto- 5.94 79 77 88 3.42 13 04 76
Electro
224
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Instrument
Co., Ltd
-
Prim' Tools 225,102,04 23,760,712. 30,217,880. 33,810,293. 204,292,34 24,562,639. 22,420,559.
5,995,149.1
Limited 4.54 24 39 05 5.86 10 07
2
Other notes:
None
2. Transactions in which the owner's share of equity in the subsidiary changes and remains in control of
the subsidiary
(1) Description of changes in shareholders’ equity shares of subsidiaries
Shareholding ratio before Shareholding ratio after
Subsidiaries Date of change
change change
Hangzhou GreatStar Hardware Tools Co.,
August 2022 68.13% 70.07%
Ltd.
(2) Impact of the transaction on the non-controlling interests and the shareholders’ equity attributable to the parent
company
Unit: CNY
Hangzhou GreatStar Hardware Tools Co., Ltd.
Purchase cost/disposal consideration 0.00
- Cash
- Fair value of non-cash assets
Total purchase cost/disposal consideration 0.00
Less: share of net assets of the subsidiary based on the
79,700.41
proportion of equity acquired/disposed of
Balance -79,700.41
Including: adjustment of capital reserve 79,700.41
Adjustment of surplus reserve
Adjustment of undistributed profit
Other notes:
None
3. Interests in joint venture arrangements or joint ventures
(1) Important joint venture or associated enterprise
Name of joint Shareholding ratio Accounting
Principal place Place of Nature of
venture or method for
of business registration business Direct Indirect
associated investment in
225
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
enterprise joint venture or
associated
enterprise
Hangzhou
Zhongce
Hangzhou City, Hangzhou City, Accounting
Haichao Service
Zhejiang Zhejiang 27.86% under the
Enterprise industry
Province Province equity method
Management
Co., Ltd.
Zhejiang
Hangzhou City, Hangzhou City, Accounting
Hangcha Manufacturing
Zhejiang Zhejiang 20.00% under the
Holding Co., industry
Province Province equity method
Ltd.
Zhejiang Guozi Hangzhou City, Hangzhou City, Accounting
Manufacturing
Robotics Co., Zhejiang Zhejiang 21.95% under the
industry
Ltd. Province Province equity method
Ningbo Ningbo City, Ningbo City, Accounting
Finance
Donghai Bank Zhejiang Zhejiang 19.00% under the
industry
Co., Ltd. Province Province equity method
Shanghai
Lainuo Accounting
Photoelectric Shanghai City Shanghai City Commerce 26.00% under the
Technology equity method
Co., Ltd.
Changzhou
Huada Xidebao Changzhou Changzhou Accounting
Manufacturing
Laser City, Jiangsu City, Jiangsu 31.85% under the
industry
Instrument Co., Province Province equity method
Ltd.
Hangzhou
Hangzhou City, Hangzhou City, Accounting
Micro Nano Manufacturing
Zhejiang Zhejiang 32.53% under the
Technology industry
Province Province equity method
Co., Ltd.
Explanations that the proportion of shares in a joint venture or associated enterprise is different from the proportion of voting
rights:
None
Basis for holding less than 20% of the voting rights but having significant influence, or holding 20% or more of the voting rights
but not having significant influence:
The Company holds 19.00% of the equity of Ningbo Donghai Bank Co., Ltd. and is the third largest shareholder. The
Company is represented on the Board of Directors of Ningbo Donghai Bank Co., Ltd. and has decision-making power over its
financial and operational policies.
(2) Main financial information of important associates
Unit: CNY
Closing balance/current period amount Opening balance/prior 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 8,277,441,059.61 18,308,908,248.12 7,418,780,740.77 14,948,356,801.94
Non-current assets 4,131,292,679.55 22,072,977,513.86 3,731,133,085.89 19,969,457,376.52
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Total assets 12,408,733,739.16 40,381,885,761.98 11,149,913,826.66 34,917,814,178.46
Current liabilities 3,740,265,952.40 21,272,363,669.80 3,477,650,918.98 15,446,567,589.35
Non-current liabilities 1,153,351,595.36 6,146,529,870.38 961,010,530.12 7,448,879,770.24
Total liabilities 4,893,617,547.76 27,418,893,540.18 4,438,661,449.10 22,895,447,359.59
Minority interests 4,070,665,933.39 7,981,720,186.41 3,593,193,876.73 7,467,456,772.20
Equity attributable to
shareholders of the 3,444,450,258.01 4,981,272,035.39 3,118,058,500.83 4,554,910,046.67
parent company
Share of net assets
based on the 688,890,029.35 1,387,637,932.17 623,611,700.17 1,268,865,846.61
shareholding ratio
Adjustment items 108,979,700.00 108,979,700.00
- Goodwill 108,979,700.00 108,979,700.00
- Unrealized profits
from internal trading
- Others
Book value of equity
investment in 797,869,729.35 1,387,637,932.17 732,591,400.17 1,268,865,846.61
associates
Fair value of equity
investment of
associates with public
offer
Operating proceeds 14,416,244,509.63 31,888,853,180.61 14,493,418,510.34 30,285,690,427.77
Net profit 1,110,752,833.42 1,023,039,308.35 1,074,154,744.24 1,415,381,801.88
Net profit from
discontinued
operations
Other comprehensive
18,242,153.44 247,182,937.32 -25,326,711.49 -475,468,089.70
income
Total comprehensive
1,128,994,986.86 1,270,222,245.67 1,048,828,032.75 939,913,712.18
incomes
Dividends received
from associates in the 40,000,000.00
current year
Other notes:
None
(3) Summary financial information of non-material joint ventures and associates
Unit: CNY
Closing balance/current period amount Opening balance/prior period amount
Joint ventures:
Sum of the following items in proportion
to their shareholding
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Associates:
Total book value of investment 359,015,856.03 352,485,457.57
Sum of the following items in proportion
to their shareholding
- Net profit 6,071,245.16 1,101,187.62
- Other comprehensive income -1,062,133.92 1,477,170.16
- Total comprehensive income 5,009,111.24 2,578,357.78
Other notes:
None
(4) Excess losses incurred by a joint venture or a associate
Unit: CNY
Unrecognized loss in the
Name of joint venture or Cumulative unrecognized loss Cumulative unrecognized loss
current period (or net profit
associated enterprise in the prior period at the end of the period
shared for the current period)
Shanghai Lainuo
Photoelectric Technology Co., -693,831.45 -85,658.09 -779,489.54
Ltd.
Other notes:
None
X. Risks relevant financial instruments
The Company engages in risk management with the objective of striking a balance between risk and return, minimizing the
negative impact of risk on the Company's operating performance and maximizing the benefits of shareholders and other equity
investors. Based on this risk management objective, the Company's basic risk management strategy is to confirm and analyze
various risks faced by the Company, establish an appropriate risk tolerance bottom line, implement risk management, monitor
various risks timely and reliably, and keep the risk control within the limited scope.
The Company faces various risks related to financial instruments in its daily activities, including credit risk, liquidity risk and
market risk. The management has reviewed and approved policies to manage the risks, as outlined below.
(I) Credit risk
Credit risk refers to the risk that one party to a financial instrument fails to fulfill its obligations and causes financial losses to the
other party.
1. Credit risk management practice
(1) Evaluation method of credit risk
The Company evaluates at each balance sheet date whether the credit risk of the relevant financial instruments has increased
significantly since the initial recognition. To determine whether credit risk has increased significantly since the initial r ecognition,
the Company considers that reasonable and evidence-based information, including qualitative and quantitative analysis based on
historical data, external credit risk ratings and forward-looking information, can be obtained without unnecessary additional cost or
effort. Based on a single financial instrument or a combination of financial instruments with similar credit risk characteristics, the
Company determines the change of default risk within the expected duration of financial instruments by comparing the risk of
default on the balance sheet date with the risk of default on the initial recognition date.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
The Company considers that the credit risk of financial instruments has significantly increased when one or more of the following
quantitative and qualitative criteria are triggered:
1) The quantitative criteria is that the default probability of the remaining duration of the balance sheet date increases by more than
a certain percentage compared with the initial recognition;
2) The qualitative criteria is that the debtor's business or financial situation is involved with material adverse changes, existing or
expected changes in technology, market, economy or legal environment, which poses a material adverse impact on the debtor's
repayment ability to the Company.
(2) Definition of default and credit impairment assets
The Company will define the financial asset as having defaulted when the financial instrument meets one or more of the following
conditions, using the same criteria as the definition of having incurred credit impairment:
1) The debtor has major financial difficulties;
2) The debtor violates the binding terms on the debtor in the contract;
3) The debtor is likely to go bankrupt or undergo other financial restructuring;
4) The creditor, for economic or contractual reasons related to the debtor's financial difficulties, grants concessions that the debtor
would not have made in any other circumstances.
2. Measurement of expected credit losses
The key parameters of expected credit loss measurement include default probability, default loss rate and default risk exposure.
The Company establishes default probability, default loss rate and default risk exposure model taking into accounting quantitative
analysis and forward-looking information of historical statistical data (such as counterparty ratings, guarantee methods and types
of collateral, repayment methods, etc.).
3. For the opening balance and closing reconciliation of the reserve for losses on financial instrument, see Section X, VII, 4,
Section X, VII, 5 and Section X, VII, 7 of this report.
4. Credit risk exposure and credit risk concentration
The Company's credit risk is primarily derived from monetary funds and receivables. In order to control the above related risks,
the Company has taken the following measures.
(1) Monetary funds
The Company deposits its bank deposits and other monetary funds in financial institutions with high credit ratings and therefore
has low credit risk.
(2) Receivables
The Company continuously evaluates the credit of customers who transact on credit. Based on the results of the credit evaluation,
the Company chooses to transact with approved and creditworthy customers and monitors their receivables balances to ensure that
the Company is not exposed to material bad debt risk.
No guaranty is required as the Company only trades with the recognized and reputable third parties. The credit risk is managed by
customers in a centralized manner. As of December 31, 2022, the Company has certain credit concentration risk, 47.71% of the
Company's accounts receivable (December 31, 2021: 37.03%) originated from the top five balance customers. The Company does
not hold any collateral or other credit enhancement on the balance of accounts receivable.
The Company's maximum credit exposure is the book values of all financial assets on the balance sheet.
(II) Liquidity risk
Liquidity risk refers to the risk of shortage of funds when the Company performs its obligation of settlement through delivery of
cash or other financial assets. Liquidity risks may arise from the inability to sell financial assets at fair value as soon as possible; or
from the failure of the other party to repay its contractual obligations; or from debts that mature early; or the inability to generate
the desired cash flow.
In order to control this risk, the Company integrates various financing means such as bill settlement and bank loan, and adopts
appropriate combination of long-term and short-term financing methods to optimize the financing structure and maintain the
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
balance between sustainability and flexibility of financing. The Company has obtained bank lines of credit from a number of
commercial banks to meet its working capital needs and capital expenditures.
Financial liabilities are classified by remaining maturity date
Closing balance
Item
Undiscounted More than 3
Book value Within 1 year 1-3 years
contract amount years
Bank loan 2,412,596,915.25 2,479,666,840.77 1,653,566,564.54 825,295,053.98 805,222.25
Trading financial
48,413,710.29 48,413,710.29 48,413,710.29
liabilities
Notes payable 21,096,540.03 21,096,540.03 21,096,540.03
Accounts payable 1,366,875,268.71 1,366,875,268.71 1,366,875,268.71
Other amounts
21,198,376.32 21,198,376.32 21,198,376.32
payable
Lease liabilities 406,588,933.09 413,037,311.70 88,436,234.33 134,252,177.05 190,348,900.32
Subtotal 4,276,769,743.69 4,350,288,047.82 3,199,586,694.22 959,547,231.03 191,154,122.57
(Continued)
Number at the end of prior year
Item
Undiscounted contract More than 3
Book value Within 1 year 1-3 years
amount years
Bank loan 3,055,148,295.97 3,139,533,799.57 2,057,990,775.73 494,435,452.74 587,107,571.10
Trading financial
978,031.91 978,031.91 978,031.91
liabilities
Notes payable 51,728,000.00 51,728,000.00 51,728,000.00
Accounts payable 1,640,430,929.84 1,640,430,929.84 1,640,430,929.84
Other amounts
676,502,987.21 676,502,987.21 676,502,987.21
payable
Lease liabilities 414,921,112.20 422,186,814.93 125,724,601.18 140,362,949.63 156,099,264.12
Subtotal 5,839,709,357.13 5,931,360,563.46 4,553,355,325.87 634,798,402.37 743,206,835.22
(III) Market risks
Market risk refers to the risk that the fair value or future cash flow of financial instruments will fluctuate due to changes in market
prices. Market risks mainly include interest rate risk and foreign exchange risk.
1. Interest rate risk
Interest rate risk refers to the risk of fluctuation in the fair value of the financial instruments or the future cash flow due to the
change in the market interest rate. The interest-bearing financial instruments at a fixed rate expose the Company to fair value
interest rate risk, while interest-bearing financial instruments at a floating rate expose the Company to cash flow interest rate risk.
The Company determines the ratio of financial instrument at a fixed rate to financial instrument at a floating rate based on market
conditions, and maintains an appropriate combination of financial instruments through regular review and monitoring. The cash
flow interest rate risk faced by the Company is mainly related to its bank borrowings accrued at a floating interest rate.
As at December 31, 2022, the Company had bank borrowings of CNY 713,120,304.41 bearing interest at a floating rate (as at
December 31, 2021: CNY 929,187,140.36), assuming that a change in interest rates of 50 basis points will not have a material
impact on the Company's total profit and shareholders' equity under the assumption that other variables remain constant.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
2. Foreign exchange risk
Foreign exchange risk refers to the risk that the fair value or future cash flow of financial instruments will fluctuate due to changes
in foreign exchange rates. The exchange rate change faced by the Company is mainly related to its foreign currency monetary
assets and liabilities. For foreign currency assets and liabilities, if short-term imbalances occur, the Company will buy and sell
foreign currency at market rates as necessary to ensure that net exposure is maintained at an acceptable level.
For the Company's foreign currency monetary assets and liabilities at the end of the period, see the notes in Section X, VII, 65 of
this report.
XI. Disclosure of fair value
1. Fair value of assets and liabilities measured at fair value at the end of the period
Unit: CNY
Fair value at the end of the period
Item Level 1 fair value Level 2 fair value Level 3 fair value
Total
measurement measurement measurement
I. Continuous fair value
-- -- -- --
measurement
(I) Trading financial
70,230,104.24 70,230,104.24
assets
1. Financial assets that
are measured at fair
value and whose
70,230,104.24 70,230,104.24
changes are booked
into current profit or
loss
(3) Derivative financial
10,230,104.24 10,230,104.24
assets
(4) Bank financial
60,000,000.00 60,000,000.00
products
(II) Other investments
324,557,679.71 324,557,679.71
in creditor's rights
(III) Investment in
other equity 16,550,000.00 16,550,000.00
instruments
Total assets
continuously measured 70,230,104.24 341,107,679.71 411,337,783.95
at fair value
(VI) Trading financial
48,413,710.29 48,413,710.29
liabilities
Derivative
48,413,710.29 48,413,710.29
financial liabilities
Total liabilities
continuously measured 48,413,710.29 48,413,710.29
at fair value
II. Non-continuous fair
-- -- -- --
value measurement
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
2. Basis for determining the market price of continuous and non-continuous level 1 fair value
measurement items
Financial products are measured with market quotation as a reasonable estimate of fair value.
3. Qualitative and quantitative information on the valuation techniques used and important parameters
for continuous and non-continuous level 2 fair value measurement items
Derivative financial assets and derivative financial liabilities are measured with the valuation notice provided by banks and
securities companies as a reasonable estimate of fair value.
4. Qualitative and quantitative information on the valuation techniques used and important parameters
for continuous and non-continuous level 3 fair value measurement items
1. As the term of receivables financing is not more than one year, the influence of the time value of funds on its fair value is not
significant, so it is recognized that the fair value of the above receivables financing is approximately equal to its carrying value.
2. Investment in other equity instruments (Hangzhou Haibang Xinhu Talent Venture Capital Partnership (limited partnership))
shall be measured according to the investment cost as a reasonable estimate of fair value, considering the operating environment
and conditions comprehensively.
5. Continuous level 3 fair value measurement items, adjustment information between the opening and
closing carrying amount and sensitivity analysis of unobservable parameters
6. Continuous fair value measurement items, if there is a conversion between various levels during the
current period, the reasons for the conversion and the policy for determining the timing of the conversion
7. Changes in valuation technology during the current period and reasons for the changes
8. Fair value of financial assets and financial liabilities not measured at fair value
9. Others
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
XII. Related parties and related party transactions
1. Parent company of the Company
Proportion of
Shareholding ratio
Place of voting rights of
Parent company Nature of business Registered capital of parent company
registration parent company to
to the Company
the Company
GreatStar Holding Industrial
Hangzhou CNY 10,000.00 37.61% 37.61%
Group Co., Ltd. investment
Description of the Company’s parent company
The predecessor of GreatStar Holding Group Co., Ltd. is the former Hangzhou GreatStar Investment Holding Co., Ltd.
(hereinafter referred to as GreatStar Investment Company). GreatStar Investment Company was jointly funded by natural persons
Qiu Jianping, Li Zheng, Chi Xiaoheng, Wang Min, Li Feng, Yu Wentan, Wang Weiyi, He Tianle, Fu Yajuan, Fang Zhenjun, Xu
Weisu and Wang Wei, and registered in Hangzhou Administration for Industry and Commerce Jianggan Branch on November 2,
2007. The Company holds the business license with the unified social credit code of 913301046680178300, registered capital of
CNY 100 million.
The Company engages in general equipment manufacturing and tool hardware industry. The main business activities include
forklift, hand tools, handheld electric tools, engineering test instruments, tires, R&D production and sales of tires and rubber
products. Main products or services provided: forklifts, accessories and other, hand tools, hand-held electric tools, engineering test
instruments, tires, tires and rubber products.
Qiu Jianping is the ultimate control party of the Company.
Other notes:
None
2. Subsidiaries of the Company
For details of the Company's subsidiaries, see Notes IX, 1, (1) “Composition of the Group”.
3. Joint ventures and associates of the Company
For important joint ventures or associates of the Company, see Notes IX, 3, (1) “Important joint ventures or associates”.
The details of other joint ventures or associates with the balance of related party transactions with the Company in the current
period or related party transactions with the Company in the prior period are as follows:
Name of joint venture or associate Relationship with the Company
Other notes:
None
4. Other related parties
The relationship between other related parties and the
Name of other related parties
Company
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
The spouse of the actual controller and the person acting in
Wang Lingling
concert with him
Hangzhou GreatStar Precision Machinery Co., Ltd. Controlled by the actual controller
The companies controlled by Zhejiang Hangcha Holding Co.,
Hangcha Group Co., Ltd. and its affiliated enterprises Ltd., an associate enterprise of the Company, are also
controlled by the actual controller
The companies controlled by Hangzhou Zhongce Haichao
Zhongce Rubber Group Co., Ltd. and its affiliated enterprises Enterprise Management Co., Ltd., an associate enterprise of the
Company, are also controlled by the actual controller
Hangzhou Weiming Investment Management Co., Ltd. Original associates of the Company
Other notes:
None
5. Related party transactions
(1) Related party transactions of purchase and sales of goods, render and accept services
Purchase of goods / accept of services
Unit: CNY
Related party Current period Approved trading Whether to exceed Prior period
Related party
transaction amount quotas the trading limit amount
Shanghai Lainuo
Photoelectric
Materials 0.00 No 7,192.04
Technology Co.,
Ltd.
Zhejiang Guozi
Robotics Co., Ltd. Products and
9,276,973.76 No 785,830.34
and its affiliated services
enterprises
Hangcha Group
Forklift, spare
Co., Ltd. and its
parts and 16,577,579.13 No 9,749,969.30
affiliated
maintenance fee
enterprises
Hangcha Group
Co., Ltd. and its
Automatic library 0.00 No 781,280.21
affiliated
enterprises
Changzhou Huada
Xidebao Laser
Materials 95,066.86 No 0.00
Instrument Co.,
Ltd.
Zhongce Rubber
Group Co., Ltd. Cost of parts and
57,766,301.68 No 1,050,065.29
and its affiliated maintenance
enterprises
Hangzhou Micro
Software and
Nano Technology 0.00 No 37,168.14
hardware
Co., Ltd.
Sales of goods / render of services
Unit: CNY
Related party Related party transaction Current period amount Prior period amount
234
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Changzhou Huada Xidebao
Laser measuring instrument 8,430,267.36 8,802,699.15
Laser Instrument Co., Ltd.
Changzhou Huada Xidebao
Hydropower 134,416.80 117,404.10
Laser Instrument Co., Ltd.
Changzhou Huada Xidebao
Consulting service 3,476,428.09 2,520,746.47
Laser Instrument Co., Ltd.
Hangcha Group Co., Ltd. and
Hand tools and accessories 13,943,429.18 16,188,555.01
its affiliated enterprises
Hangcha Group Co., Ltd. and
Operating service fee 2,903,893.36 2,535,515.08
its affiliated enterprises
Zhejiang Guozi Robotics Co.,
Ltd. and its affiliated Hand tools 11,977,029.04 9,957,102.80
enterprises
Shanghai Lainuo
Photoelectric Technology Co., Sale of goods 3,043.54 1,937,505.66
Ltd.
Hangzhou GreatStar Precision
Hand tools 2,807.12 0.00
Machinery Co., Ltd.
Zhongce Rubber Group Co.,
Ltd. and its affiliated Hand tools 0.00 14,409.98
enterprises
Zhejiang Hangcha Holding
Hand tools 594.69
Co., Ltd.
Description of related party transactions of purchase and sales of goods, render and accept services
None
(2) Related lease
The Company as the lessor:
Unit: CNY
Lease income in the current Lease income in the prior
Lessee Types of leased assets
period period
Changzhou Huada Xidebao
Houses 201,625.20 176,106.15
Laser Instrument Co., Ltd.
The Company as lessee:
Unit: CNY
Rental charges for
simplified Variable lease
treatment of short- payments not Interest expenses
Increased right-to-
Types term leases and included in the Rent paid incurred on lease
use assets
of low-value asset lease liabilities (if liabilities
Lessor leases (if applicable)
leased
assets applicable)
Current Prior Current Prior Current Prior Current Prior Current Prior
period period period period period period period period period period
amount amount amount amount amount amount amount amount amount amount
Hangzh
ou
GreatSt 1,342,5 1,264,4
Houses
ar 42.86 76.19
Precisio
n
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Machin
ery Co.,
Ltd.
Hangch
a Group
Co.,
Transpo
Ltd.
rt 154,024 243,840
and its
equipm .82 .42
affiliate
ent
d
enterpri
ses
Description of related lease
None
(3) Related-party guarantee
The Company provides guarantee for the bank loan to its wholly owned subsidiary GreatStar Europe AG and the GreatStar
Holdings Group Limited provides guarantee for the loan to the Company. As of December 31, 2022, the amount guaranteed is
EUR 18 million and the repayment period is from February 28, 2023 to June 26, 2023.
(4) Funds borrowing from related parties
Unit: CNY
Related party Amount Starting date Maturity date Remarks
Borrowing
By the end of this
Mr. Qiu Jianping and
reporting period, all
Ms. Wang Lingling
583,000,000.00 December 20, 2021 December 9, 2022 principal and interest
(the person acting in
have been repaid, and
concert)
the balance is 0
(5) Remuneration for key management personnel
Unit: CNY
Item Current period amount Prior period amount
Remuneration for key management
13,227,889.94 12,192,656.29
personnel
6. Receivables and payables of related parties
(1) Receivables
Unit: CNY
Closing balance Opening balance
Item Related party
Book balance Bad debt provision Book balance Bad debt provision
Zhejiang Guozi
Accounts
Robotics Co., Ltd. 19,380,071.99 1,220,477.10 10,664,320.29 533,216.01
receivable
and its affiliated
236
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
enterprises
Changzhou Huada
Accounts Xidebao Laser
2,886,966.26 144,348.31 8,233,675.28 411,683.76
receivable Instrument Co.,
Ltd.
Shanghai Lainuo
Accounts Photoelectric
3,780,753.57 3,780,753.57 3,779,983.57 188,999.18
receivable Technology Co.,
Ltd.
Hangcha Group
Accounts Co., Ltd. and its
2,302,883.58 115,144.18 1,229,141.76 61,457.09
receivable affiliated
enterprises
Hangzhou
GreatStar
Accounts
Precision 472.05 23.60 0.00 0.00
receivable
Machinery Co.,
Ltd.
Accounts Zhejiang Hangcha
672.00 33.60 0.00 0.00
receivable Holding Co., Ltd.
Subtotal 28,351,819.45 5,260,780.36 23,907,120.90 1,195,356.04
Zhejiang Guozi
Notes receivable 2,300,000.00 0.00 20,702.51 0.00
Robotics Co., Ltd.
Subtotal 2,300,000.00 0.00 20,702.51 0.00
Hangcha Group
Co., Ltd. and its
Prepayment 37,000.00 1,850.00 0.00 0.00
affiliated
enterprises
Subtotal 37,000.00 1,850.00 0.00 0.00
Hangzhou
Weiming
Other receivables Investment 0.00 0.00 6,160,202.73 308,010.14
Management Co.,
Ltd.
Changzhou Huada
Xidebao Laser
103,556.95 5,177.85
Instrument Co.,
Ltd.
Subtotal 103,556.95 5,177.85 6,160,202.73 308,010.14
(2) Payables
Unit: CNY
Book balance at the end of the Book balance at the beginning
Item Related party
reporting period of the reporting period
Hangcha Group Co., Ltd. and
Accounts payable 2,557,004.00 2,595,530.60
its affiliated enterprises
Zhejiang Guozi Robotics Co.,
Accounts payable Ltd. and its affiliated 778,570.66 920,220.37
enterprises
Zhongce Rubber Group Co.,
Accounts payable Ltd. and its affiliated 7,567,269.62 2,064.00
enterprises
Hangzhou GreatStar Precision
Accounts payable 36,500.00 124,000.00
Machinery Co., Ltd.
Subtotal 10,939,344.28 3,641,814.97
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Other amounts payable Qiu Jianping, Wang Lingling 0.00 583,570,527.78
Subtotal 0.00 583,570,527.78
XIII. Commitments and contingencies
1. Important commitments
Important commitments that exist at the balance sheet date
As of the date of approval of this report, the Company has no important commitments to be disclosed.
2. Contingencies
(1) Material contingencies that exist at the balance sheet date
As of the date of approval of this report, the Company has no major contingencies to be disclosed.
(2) The Company shall explain the material contingencies to be disclosed, even if there are no important
contingencies to be disclosed
The Company has no material contingencies to be disclosed.
XIV. Matters after the balance sheet date
1. Description of other events after the balance sheet date
Information about profit distribution after the balance sheet date
On April 21, 2023, the 30th Meeting of the 5th Session of Board of Directors of the Company deliberated and approved the
Proposal on the Company's Profit Distribution Plan in 2022. The Company intends to pay a cash dividend of CNY 1.66 (including
tax) per 10 shares to all shareholders on the basis of 1,194,478,182 shares, namely 1,202,501,992 shares of the total capital stock
of the Company as at December 31, 2022 after deducting 8,023,810 shares held in the Company's special securities account for
repurchase. It is estimated that the total cash dividend will be CNY 198,283,378.21, and the remaining undistributed profit will be
carried forward to the next year without bonus shares or capital reserve conversion to capital increase. The distribution plan is still
subject to the review and approval of the Company's general meeting of shareholders.
XV. Other important matters
1. Information of division
(1) Determination basis and accounting policies of reporting divisions
The Company determines the reporting divisions according to internal organizational structure, management requirements, internal
reporting system, etc. from the perspective of products. Assets and liabilities used in common with the divisions are distributed
among different divisions in proportion to their sizes.
(2) Reporting of financial information of divisions
Unit: CNY
Item Hand Tools & Power Tools & Others Interdivisional Total
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Storage Laser offset
Measurement &
Power Stations
Operating
10,004,744,537.61 2,540,542,039.17 64,903,013.55 12,610,189,590.33
proceeds
Operating costs 7,332,189,779.90 1,912,214,386.29 22,518,138.56 9,266,922,304.75
Total assets 15,951,566,250.03 2,505,829,990.73 122,158,556.01 18,579,554,796.77
Total liabilities 4,305,685,441.29 623,837,243.54 25,502,875.18 4,955,025,560.01
2. Others
(II) Lease
1. The Company as lessee
(1) For relevant information of the assets to be used, see the notes in Section X, VII, 19 of this report;
(2) For details of the Company's accounting policies for short-term leases and low-value asset leases, see the notes in Section X, V,
36 of this report. The amounts of short-term leasing expenses and low-value asset leasing expenses included in current profit and
loss are as follows:
Amount in the same period
Item Amount in the current period
of the prior year
Short-term lease charge 41,007,534.99 44,003,860.27
Low value asset lease expense (except short-term lease) 640,296.62 657,286.80
Total 41,647,831.61 44,661,147.07
(3) Current profit and loss and cash flow related to lease
Amount in the same period
Item Amount in the current period
of the prior year
Interest expense on lease liabilities 10,349,638.07 9,721,218.32
Total cash outflow related to leases 128,383,212.90 59,939,559.59
(4) For the maturity analysis of lease liabilities and the corresponding liquidity risk management, see Note VIII, (II) to the
financial statements.
2. The Company acts as lessor
(1) Operating lease
1) Lease income
Amount in the same period
Item Amount in the current period
of the prior year
Lease income 23,799,395.61 18,779,421.23
2) Operating leased assets
Number at the end of
Item Closing balance
prior year
Fixed assets 10,845,503.63 6,623,884.70
Investment real estate property 122,158,556.01 127,058,966.69
Subtotal 133,004,059.64 133,682,851.39
For details of leased fixed assets, see Note V, (I), 15 to the financial statements.
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
3) According to the lease contract signed with the lessee, the undiscounted lease receipts that will be received in the future under
the irrevocable lease
Number at the end of prior
Remaining term Closing balance
year
Within 1 year 17,223,063.97 17,983,746.50
More than 1 years 110,837,023.47 157,079,216.00
Total 128,060,087.45 175,062,962.50
(2) Finance lease
1) Current profit and loss related to finance lease
Amount in the same period
Item Amount in the current period
of the prior year
Financing income on net lease investment 84,672.00 84,811.20
2) According to the lease contract signed with the lessee, the undiscounted lease receipts that will be received in the future under
the irrevocable lease
Number at the end of prior
Remaining term Closing balance
year
Within 1 year 98,061.60 90,708.80
1-2 years 78,321.04 90,708.80
2-3 years 78,321.04 90,708.80
3-4 years 78,321.04 90,708.80
4-5 years 68,608.14 90,708.80
After 5 years 97,686.40
Total 401,632.86 551,230.40
3) Reconciliation statement of undiscounted lease receipts and net lease investments
Number at the end of prior
Item Closing balance
year
Undiscounted lease receipts 401,632.86 551,230.40
Less: Unrealized financing gains related to lease receipts 4,002.95 14,135.20
Net lease investment 397,629.91 537,095.20
XVI. Notes to major items of the parent company's financial statements
1. Accounts receivable
(1) Classification of accounts receivable
Unit: CNY
Categor Closing balance Opening balance
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2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
y Book balance Bad debt provision Book balance Bad debt provision
Book Book
Proporti Provisio value Proporti Provisio value
Amount Amount Amount Amount
on n ratio on n ratio
Includ
ing:
Account
s
receivab
le set
1,160,30 66,003,3 1,094,30 1,030,06 57,148,7 972,916,
aside for 100.00% 5.69% 100.00% 5.55%
7,684.08 82.68 4,301.40 4,717.88 16.92 000.96
bad
debts on
a group
basis
Includ
ing:
Account
s
receivab
le with
provisio
1,160,30 66,003,3 1,094,30 1,030,06 57,148,7 972,916,
n for bad 100.00% 5.69% 100.00% 5.55%
7,684.08 82.68 4,301.40 4,717.88 16.92 000.96
debts
using
aging
combina
tions
1,160,30 66,003,3 1,094,30 1,030,06 57,148,7 972,916,
Total 100.00% 5.69% 100.00% 5.55%
7,684.08 82.68 4,301.40 4,717.88 16.92 000.96
Bad debt provision assessed by groups:
Unit: CNY
Closing balance
Name
Book balance Bad debt provision Provision ratio
Aging groups 1,160,307,684.08 66,003,382.68 5.69%
Total 1,160,307,684.08 66,003,382.68
Instructions for determining the basis of the combination:
If the provision for doubtful accounts receivable is made according to the general model of expected credit losses, please refer to
other methods of disclosure of receivables to disclose the relevant information of doubtful accounts:
□ Applicable N/A
Aging disclosure
Unit: CNY
Aging Book balance
Within 1 year (inclusive) 1,129,025,055.05
1-2 years 15,584,716.05
2-3 years 4,726,442.38
More than 3 years 10,971,470.60
3-4 years 3,922,817.49
4-5 years 2,354,257.02
241
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
More than 5 years 4,694,396.09
Total 1,160,307,684.08
(2) Bad debt provision withdrawn, recovered or reversed in the current period
Details of bad debt provision:
Unit: CNY
Changes in the current period
Opening
Category Recovery or Closing balance
balance Provision Write-off Others
reversal
Provision for
bad debts shall
be made on a 57,148,716.92 8,518,333.50 67,584.40 403,916.66 66,003,382.68
combination
basis
Total 57,148,716.92 8,518,333.50 67,584.40 403,916.66 66,003,382.68
Among them, the amount of the current bad debt provision recovery or reversal is important:
Unit: CNY
Name of unit Recovery or reversal Recovery mode
No reversal or recovery.
(3) Receivables among the top five closing balances collected by the debtor
Unit: CNY
Percentage of total closing
Closing balance of accounts Closing balance of bad debt
Name of unit balance of accounts
receivable provision
receivable
Customer 1 479,140,221.04 41.29% 23,957,011.05
Customer 2 160,111,492.17 13.80% 8,005,574.61
Customer 3 45,423,332.56 3.91% 2,271,166.63
Customer 4 43,523,472.78 3.75% 2,176,173.64
Customer 5 29,743,912.80 2.56% 1,527,351.11
Total 757,942,431.35 65.31%
2. Other receivables
Unit: CNY
Item Closing balance Opening balance
Other receivables 2,755,900,353.60 1,458,883,819.83
Total 2,755,900,353.60 1,458,883,819.83
(1) Other receivables
1) Classification of other receivables by nature
Unit: CNY
Nature of money Book balance at the end of the reporting Book balance at the beginning of the
242
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
period reporting period
Amounts receivable from related parties
2,841,560,502.29 1,519,230,520.47
within the scope of combination
Export tax rebate receivable 15,408,984.91 22,067,723.30
deposit 7,280,560.36 5,173,827.26
Provisional payment receivable 1,762,196.83 1,175,931.64
Employee reserve fund 178,008.90 0.00
Equity disposal receivable 0.00 6,160,202.73
Total 2,866,190,253.29 1,553,808,205.40
2) Provision for bad debts
Unit: CNY
Stage I Stage II Stage III
Bad debt provision Lifetime ECL (not Lifetime ECL Total
12-month ECL
impaired) (impaired)
As at January 1, 2022 76,248,927.82 217,514.25 18,457,943.50 94,924,385.57
Changes due to
financial instruments
recognized as at
January 1, 2022
- Transfer to stage II -56,226.58 56,226.58 0.00
- Transfer to stage III -131,727.92 131,727.92 0.00
Provision 10,316,214.04 -29,559.75 3,170,859.83 13,457,514.12
Other changes 1,908,000.00 1,908,000.00
As at December 31,
86,508,915.28 112,453.16 23,668,531.25 110,289,899.69
2022
Loss reserve for a significant change in book balance during the current period
□ Applicable N/A
Aging disclosure
Unit: CNY
Aging Book balance
Within 1 year (inclusive) 2,863,002,414.81
1-2 years 264,500.31
2-3 years 410,304.20
More than 3 years 2,513,033.97
3-4 years 459,300.00
4-5 years 85,160.64
More than 5 years 1,968,573.33
Total 2,866,190,253.29
3) Bad debt provisions withdrawn, recovered or transferred back in the current period
Details of bad debt provision:
Unit: CNY
Category Opening Changes in the current period Closing balance
243
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
balance Recovery or
Provision Write-off Others
reversal
Bad debt
provisions
94,924,385.57 13,457,514.12 1,908,000.00 110,289,899.69
assessed by
groups
Total 94,924,385.57 13,457,514.12 1,908,000.00 110,289,899.69
Among them, the amount of the reversal or recovery of the current bad debt provision is important:
Unit: CNY
Name of unit Amount transferred back or recovered Recovery mode
4) Other receivables among the top five closing balances collected by the debtor
Unit: CNY
Percentage of the
total closing Closing balance of
Name of unit Nature of payment Closing balance Aging
balance of other bad debt provision
receivables
Amounts
receivable from
Unit 1 related parties 1,527,279,127.95 Within 1 year 53.29% 21,098,217.85
within the scope of
combination
Amounts
receivable from
Unit 2 related parties 681,532,438.52 Within 1 year 23.78% 34,076,621.93
within the scope of
combination
Amounts
receivable from
Unit 3 related parties 201,973,400.00 Within 1 year 7.05% 10,098,670.00
within the scope of
combination
Amounts
receivable from
Unit 4 related parties 135,000,000.00 Within 1 year 4.71% 6,750,000.00
within the scope of
combination
Amounts
receivable from
Unit 5 related parties 94,545,636.09 Within 1 year 3.30% 4,727,281.80
within the scope of
combination
Total 2,640,330,602.56 92.13% 76,750,791.58
3. Long-term equity investment
Unit: CNY
Closing balance Opening balance
Item
Book balance Reserve for Book value Book balance Reserve for Book value
244
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
impairment impairment
Investment in 4,105,047,447. 4,105,047,447. 4,157,167,492. 4,157,167,492.
subsidiaries 89 89 92 92
Investment in
2,541,550,254. 2,541,550,254. 2,352,069,024. 2,352,069,024.
joint venture or
17 17 80 80
associate
6,646,597,702. 6,646,597,702. 6,509,236,517. 6,509,236,517.
Total
06 06 72 72
(1) Investment in subsidiaries
Unit: CNY
Changes in the current period Impairment
Opening Closing
reserve
Investee balance Additional Reduction of Provision for balance
Others closing
(book value) investment investment impairment (book value)
balance
Changzhou
Huada Kejie
200,864,082. 200,864,082.
Opto-Electro
56 56
Instrument
Co., Ltd
Guangdong
Shiwanke
50,000,000.0 50,000,000.0
Electric
0 0
Appliance
Co., Ltd.
Haining
GreatStar
Hardware 2,000,000.00 2,000,000.00
Tools Co.,
Ltd.
Hangzhou
GreatStar
2,000,000.00 1,120,000.00 3,120,000.00 0.00
Power Tools
Co., Ltd.
Hangzhou
GreatStar
Craftsman 4,250,000.00 4,250,000.00
Tools Co.,
Ltd.
Hangzhou
GreatStar 63,772,246.8 63,772,246.8
Tool Co., 6 6
Ltd.
Hangzhou
GreatStar
Hardware 3,406,500.00 3,406,500.00
Tools Co.,
Ltd.
Hangzhou
GreatStar
Sheffield 5,000,000.00 5,000,000.00
Trading Co.,
Ltd.
Hangzhou 22,000,000.0 22,000,000.0
245
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
GreatStar 0 0
Intelligent
Technology
Co., Ltd.
Hangzhou
120,000,000. 120,000,000.
Juye Tool
00 00
Co., Ltd.
Hangzhou
Lianhe
21,185,561.8 21,185,561.8
Electric
6 6
Manufacturin
g Co., Ltd.
Hangzhou
Lianhe Tool 12,804,728.0 12,804,728.0
Manufacturin 0 0
g Co., Ltd.
Hangzhou
Lianhe
7,677,294.07 7,677,294.07 0.00
Machinery
Co., Ltd.
Hangzhou
Liansheng
Measuring 10,030,288.2 10,030,288.2
Tool 6 6
Manufacturin
g Co., Ltd.
Hangzhou
Ole-Systems 9,600,000.00 9,600,000.00
Co., Ltd.
Longyou
Hugong
104,612,153. 104,612,153.
Forging No.
88 88
3 Tools Co.,
Ltd.
Longyou
Yiyang 48,437,846.1 48,437,846.1
Forging Co., 2 2
Ltd.
Ningbo
Fenghua
22,558,141.6 22,558,141.6
Giant Star
5 5
Tool Co.,
Ltd.
Pretest Laser
Measuring
Tool 3,920,000.00 3,920,000.00
(Hangzhou)
Co., Ltd.
Suzhou
Xindadi
60,000,000.0 60,000,000.0
Hardware
0 0
Product Co.,
Ltd.
Zhejiang
25,750,000.0 25,750,000.0
Guoxin Tool
0 0
Co., Ltd.
Zhejiang 464,800,000. 464,800,000.
246
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
GreatStar 00 00
Tool Co.,
Ltd.
Zhejiang
Shiwanke
10,000,000.0 10,000,000.0
Electric 0.00
0 0
Appliance
Co., Ltd.
Geelong(Tha
196,077,940. 196,077,940.
iland) Co., 0.00
00 00
Ltd.
GreatStar
955,660,000. 955,660,000.
Tools USA,
00 00
Inc
GreatStar 732,567,215. 62,416,889.0 794,984,104.
Europe AG 00 4 04
GreatStar
Industrial 110,499,800. 110,499,800.
Vietnam Co., 00 00
Ltd.
Hong Kong
GreatStar 897,693,694. 81,218,300.0 978,911,994.
International 66 0 66
Limited
4,157,167,49 154,755,189. 206,875,234. 4,105,047,44
Total
2.92 04 07 7.89
(2) Investment in joint venture or associate
Unit: CNY
Changes in the current period
Investm
ent
Openin gains Impair
Other Declara Closing
g and ment
Investo Additio Reducti compre Other tion of Provisi balance
balance losses reserve
r nal on of hensive changes cash on for (book
(book recogni Others closing
investm investm income in dividen impair value)
value) zed balance
ent ent adjustm equity d or ment
under
ents profit
the
equity
method
I. Joint ventures
II. Associates
Hangzh
ou
Micro
-
Nano 84,244, 7,684,6 91,920,
8,963.7
Technol 601.17 12.65 250.06
6
ogy
Co.,
Ltd.
Zhejian -
75,805, 1,521,2 62,379,
g Guozi 14,947,
856.54 87.22 261.25
Robotic 882.51
247
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
s Co.,
Ltd.
Zhejian
g
Hangch
732,591 95,134, 3,648,4 6,495,7 40,000, 797,869
a
,395.62 172.50 30.69 30.54 000.00 ,729.35
Holdin
g Co.,
Ltd.
Ningbo
Dongha -
190,561 12,234, 201,743
i Bank 1,053,1
,324.86 926.64 ,081.34
Co., 70.16
Ltd.
Hangzh
ou
Zhongc
e
Haicha
1,268,8 1,387,6
o 85,019, 28,287, 5,465,5
65,846. 37,932.
Enterpr 436.77 071.60 77.19
61 17
ise
Manage
ment
Co.,
Ltd.
2,352,0 2,541,5
Subtota 185,125 30,873, 13,482, 40,000,
69,024. 50,254.
l ,266.05 368.37 594.95 000.00
80 17
2,352,0 2,541,5
185,125 30,873, 13,482, 40,000,
Total 69,024. 50,254.
,266.05 368.37 594.95 000.00
80 17
4. Operating proceeds and operating costs
Unit: CNY
Current period amount Prior period amount
Item
Revenues Costs Revenues Costs
Main business 4,800,335,671.96 3,904,877,757.04 5,212,156,918.90 4,187,985,128.21
Other business 23,591,822.09 12,108,053.03 9,471,135.66 3,601,242.42
Total 4,823,927,494.05 3,916,985,810.07 5,221,628,054.56 4,191,586,370.63
Revenue-related information:
Unit: CNY
Classification of
Branch 1 Branch 2 Total
contract
Type of commodity
Including:
Hand tools and
4,337,685,453.80 4,337,685,453.80
storages
Power tools and laser
462,650,218.16 462,650,218.16
measurements
Other business 23,591,822.09 23,591,822.09
Classification by
248
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
operating area
Including:
America 3,444,088,900.00 3,444,088,900.00
Europe 740,763,400.00 740,763,400.00
Domestic 237,783,571.96 237,783,571.96
Other regions 377,699,800.00 377,699,800.00
Other business 23,591,822.09 23,591,822.09
Type of market or
customer
Including:
Type of contract
Including:
Classification by time
of transfer of goods
Including:
Classification by
contract term
Including:
Classification by sales
channel
Including:
Total
Information related to performance obligations:
On the commencement date of the contract, the Company evaluates the contract, identifies the individual performance obligations
contained in the contract, and determines whether the individual performance obligations shall be performed within a certain
period or at a certain point.
If one of the following conditions is met, the performance obligation shall be performed within a certain period; otherwise, the
performance obligation shall be performed at a certain point: (1) The customer shall obtain and consume the economic benefits
brought by the performance of the Company meanwhile; (2) The customer can control the goods under construction during the
company's contract performance; (3) The commodities produced by the Company during the performance of the Contract have
irreplaceable uses, and the Company has the right to collect payment for the performance part accumulated so far during the whole
contract period.
For the performance obligations performed within a certain period of time, the Company recognizes revenue in accordance with
the progress of the performance within that period of time. If the performance progress cannot be reasonably determined, and the
cost already incurred is expected to be compensated, the income shall be recognized according to the amount of cost already
incurred until the performance progress can be reasonably determined. For performance obligations performed at a certain point,
revenue is recognized when the customer obtains control of the relevant goods or services. In determining whether the customer
has acquired control of the commodity, the company considers the following indications: (1) The Company has a current right to
collect on the commodity, that is, the customer has a current obligation to pay for the commodity; (2) The Company has
transferred the legal ownership of the commodity to the customer, that is, the customer has the legal ownership of the commodity;
(3) The Company has physically transferred the commodity to the customer, that is, the customer has physically possessed the
commodity; (4) The Company has transferred the main risks and rewards of the ownership of the commodities to the customer,
249
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
that is, the customer has acquired the main risks and rewards of the ownership of the commodities; (5) The customer has accepted
the commodity; (6) Other indications indicating that the customer has taken control of the goods.
2. Principles of income measurement
(1) The Company measures its income according to the transaction price apportioned to each individual performance obligation.
The transaction price is the amount of consideration that the Company expects to be entitled to receive in connection with th e
transfer of goods or services to the customer, excluding amounts collected on behalf of third parties and amounts expected to be
refunded to the Customer.
(2) If there is variable consideration in the contract, the Company shall determine the best estimate of the variable consideration in
accordance with the expected value or the amount most likely to occur, provided that the transaction price containing the variable
consideration does not exceed the amount of cumulative recognized revenue that is highly unlikely to be materially reversed when
the relevant uncertainty is eliminated.
(3) If there is a significant financing component in the contract, the Company shall determine the transaction price according to the
amount payable in cash, which is assumed to be paid by the customer upon acquisition of control of the commodity or service. The
difference between the transaction price and the contract consideration shall be amortized by the effective interest rate method
during the contract period. On the commencement date of the contract, if the Company expects that the interval between the
customer acquiring the control of the commodity or service and the customer paying the price is not more than one year, it will not
consider the significant financing element in the contract.
(4) If the contract contains two or more performance obligations, the Company shall, on the commencement date of the contract,
apportion the transaction price to the performance obligations of each individual item in accordance with the relative proportion of
the individual selling price of the commodity promised by the performance obligations of each individual item.
3. Specific methods of income recognition
The sales business of Hand Tools, Power Tools, Laser Measurement, Storage and other products of the company belong to the
performance obligations performed at a certain point. Domestic sales income will be recognized when the company delivers the
products to the place of delivery agreed in the contract and the customer confirms acceptance, the company has received the price
or has obtained the right to collect payment, and the related economic benefits are likely to flow in. Export sales income is
recognized when the company has declared the products to customs according to the contract, obtained the bill of lading or arrived
at the destination designated by the customer and confirmed by the customer, received the payment for goods or obtained the right
to collect payment and the related economic benefits are likely to flow in.
Information relating to the transaction price apportioned to the remaining performance obligations:
The amount of revenues corresponding to the performance obligations of the contract signed but not yet performed or completed at
the end of the current reporting period is CNY 43,237,007.23, among which CNY 43,237,007.23 is expected to be recognized in
2023, and CNY 0.00 is expected to be recognized in 2024, and CNY 0.00 is expected to be recognized in 2025.
Other notes:
The income that is recognized in the current period and is included in the opening book value of contract liabilities is CNY
46,268,755.74.
5. Investment income
Unit: CNY
Item Current period amount Prior period amount
Cost-based returns on long-term equity
22,750,000.00
investments
Income from long-term equity 185,125,266.05 254,321,468.97
250
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
investments accounted for by the equity
method
Investment income from disposal of
-3,000,600.68
long-term equity investments
Investment income from the disposal of
3,455,425.60 78,486,454.00
trading financial assets
Dividend income from other equity
12,400,000.00
instruments during the holding period
Loss on discounted receivables financing -7,931,415.18 -4,570,835.23
Total 212,798,675.79 328,237,087.74
XVII. Supplementary information
1. Details of current non-recurring profit and loss
Applicable □ N/A
Unit: CNY
Item Amount Remarks
Gains and losses on disposal of non-
-24,332,379.79
current assets
Government grants accounted for, in the
profit or loss for the current period
(except for the government grants closely
related to the business of the Company 46,471,430.13
and continuously given at a fixed amount
or quantity in accordance with certain
standards)
Gains or losses on assets entrusted for
2,368,356.03
investment or management
In addition to the effective hedging
business related to the Company’s
normal operation, the profit and loss of
fair value changes arising from the
holding of trading financial assets,
-66,784,931.44
derivative financial assets, trading
financial liabilities, and the investment
income obtained from the disposal of
trading financial assets and trading
financial assets available for sale
Other non-operational income and
expenditure in addition to the items listed -12,290,983.36
above
Other items of gains and losses that fall
into the category of non-recurring gains 12,733,584.83
and losses
Less: Income tax impact -9,422,034.54
Impact on minority shareholders'
2,671,376.16
equity
Total -35,084,265.22 --
Details of other items of gains and losses that fall into the category of non-recurring gains and losses:
251
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
□ Applicable N/A
The Company has no other items of gains and losses that fall into the category of non-recurring gains and losses.
Remarks on the situation that non-recurring profit and loss items listed in the Explanatory Announcement No. 1 of Information
Disclosure of Companies Offering Securities to the Public – Non-recurring Profit and Loss are defined as recurring profit and loss
items
□ Applicable N/A
2. Return on equity and earnings per share
Earnings per share
Weighted average return on
Profit in the reporting period Basic earnings per share Diluted earnings per share
equity (ROE)
(CNY/share) (CNY/share)
Net profit attributable to the
Company's ordinary 12.31% 1.24 1.24
shareholders
Net profit attributable to the
Company's ordinary
shareholders after deducting 12.61% 1.28 1.28
non-recurring gains and
losses
3. Others
1. Calculation process of weighted average return on equity
Amount in the current
Item No.
period
Net profit attributable to the Company's ordinary shareholders A 1,419,559,507.10
Non-recurring profit or loss B -35,084,265.22
Net profit attributable to the Company's ordinary shareholders after
C=A-B 1,454,643,772.32
deducting non-recurring gains and losses
Opening net assets attributable to the Company's ordinary shareholders D 10,598,896,746.70
New net assets attributable to the Company's ordinary shareholders by
E 1,071,328,296.24
issuing new shares or exchanging debt for equity
Cumulative number of months from the next month of new net assets
F 1
to the end of the reporting period
Net assets that are reduced by buybacks or cash dividend and are
G 50,184,047.52
attributable to the Company's ordinary shareholders
Cumulative number of months from the next month of reduced net
H 10, 11
assets to the end of the reporting period
Differences of accounting data under domestic and
I1 371,093,201.58
foreign accounting standards
Cumulative number of months from the next month of
increased/reduced net assets to the end of the reporting J1 6
period
Others Share of other comprehensive income of Hangzhou
Zhongce Haichao Enterprise Management Co., Ltd., I2 28,287,071.60
calculated according to the equity method
Cumulative number of months from the next month of
increased/reduced net assets to the end of the reporting J2 6
period
252
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Share of other comprehensive income of Ningbo
Donghai Bank Co., Ltd., as calculated under the I3 -1,053,170.16
equity method
Cumulative number of months from the next month of
increased/reduced net assets to the end of the reporting J3 6
period
Share of other comprehensive income of Zhejiang
Hangcha Holding Co., Ltd., as calculated under the I4 3,648,430.69
equity method
Cumulative number of months from the next month of
increased/reduced net assets to the end of the reporting J4 6
period
Share of other comprehensive income of Hangzhou
Micro Nano Technology Co., Ltd., as calculated under I5 -8,963.76
the equity method
Cumulative number of months from the next month of
increased/reduced net assets to the end of the reporting J5 6
period
Share of shareholders’ equity changes in Zhejiang
Guozi Robotics Co., Ltd., excluding net profit and
I6 1,521,287.22
loss, other comprehensive income and profit
distribution, as calculated under the equity method
Cumulative number of months from the next month of
increased/reduced net assets to the end of the reporting J6 6
period
Share of shareholders’ equity changes in Zhejiang
Hangcha Holding Co., Ltd., excluding net profit and
I7 6,495,730.54
loss, other comprehensive income and profit
distribution, as calculated under the equity method
Cumulative number of months from the next month of
increased/reduced net assets to the end of the reporting J7 6
period
Share of shareholders’ equity changes in Hangzhou
Zhongce Haichao Enterprise Management Co., Ltd.,
excluding net profit and loss, other comprehensive I8 5,465,577.19
income and profit distribution, as calculated under the
equity method
Cumulative number of months from the next month of
increased/reduced net assets to the end of the reporting J8 6
period
Changes in remeasurement of the defined benefit plan I9 -57,181,824.00
Cumulative number of months from the next month of
increased/reduced net assets to the end of the reporting J9 6
period
Acquisition of minority equity of Hangzhou Juxing
Hardware Tools Co., Ltd. for payment of I10 79,700.41
consideration adjustment capital reserve
Cumulative number of months from the next month of
increased/reduced net assets to the end of the reporting J10 4
period
Number of months in the reporting period K 12
L= D+A/2+ E×F/K-
Weighted average net worth 11,533,924,629.26
G×H/K±I×J/K
253
2022 Annual Report of Hangzhou GreatStar Industrial Co., Ltd.
Weighted average return on equity (ROE) M=A/L 12.31%
Weighted average return on equity excluding non-recurring gains and
N=C/L 12.61%
losses
2. Calculation process of basic and diluted earnings per share
(1) Calculation process of basic earnings per share
Amount in the current
Item No.
period
Net profit attributable to the Company's ordinary shareholders A 1,419,559,507.10
Non-recurring profit or loss B -35,084,265.22
Net profit attributable to the Company's ordinary shareholders after
C=A-B 1,454,643,772.32
deducting non-recurring gains and losses
Total number of shares at the beginning of the period D 1,137,423,182
Number of shares increased due to conversion of capital stock from
E
provident fund or stock dividend distribution
Number of shares increased by issuing new shares or exchanging debt
F 59,063,500
for equity
Cumulative number of months from the next month of increased
G 1
shares to the end of the reporting period
Reduction of shares due to buybacks H 2,008,500
Cumulative number of months from the next month of reduced shares
I 10, 11
to the end of the reporting period
Shrinkage of shares in the reporting period J
Number of months in the reporting period K 12
Weighted average number of ordinary shares outstanding L=D+E+F×G/K-H×I/K-J 1,140,616,515.33
Basic earnings per share M=A/L 1.24
Basic earnings per share excluding non-recurring gains and losses N=C/L 1.28
(Note) The number of shares repurchased is excluded from the total number of shares at the beginning of the period
(2) The process for calculating diluted earnings per share is the same as that for calculating basic earnings per share.
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