Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Annual Report 2022
【Date of Disclosure】28 March 2023
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the
directors, supervisors and senior manage ment of Guangdong Dongfang Precision Science &
Technology Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee that the
contents of this Report are true, accurate and complete and free of any misrepresentations,
misleading statements or material omissions, and collectively and individually accept legal
responsibility for such contents.
Tang Zhuolin, the Company’s legal representative, Shao Yongfeng, the Company’s Chief
Financial Officer, and Yao Bin, the Head of the Company’s Accounting Department
(equivalent to Financial Manager) hereby guarantee that the financial statements carried in
this Report are truthful, accurate and complete.
All directors of the Company attended in person the board meeting for the approval of
this Report.
The future development strategies, business plans and other forward-looking statements
me ntioned in this Report shall be deemed as uncertain plans instead of promises to investors.
Therefore, investors are reminded to exercise caution when making investment decisions.
For possible risks with respect to the Company, please refer to “(III) Possible Risks and
Countermeasures” in “XI Prospects” of “Part III Manage ment Discussion and Analysis”
herein. And investors are kindly advised to read through the aforesaid contents.
The Company planed not to distribute cash dividends, neither give away bonus shares,
nor capitalize from public reserve.
This Report has been prepared in Chinese and translated into English. Should there be
any discrepancies or misunderstandings between the two versions, the Chinese version shall
prevail.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Table of Contents
Part I Important Notes, Table of Contents and Definitions ........................................................... 2
Part II Corporate Information and Key Financial Information ................................................... 8
Part III Manage ment Discussion and Analysis ............................................................................. 13
Part IV Corporate Governance ...................................................................................................... 92
Part V Environme ntal and Social Responsibilities ..................................................................... 124
Part VI Significant Events ............................................................................................................. 126
Part VII Share Changes and Shareholder Information ............................................................. 139
Part VIII Preference Shares .......................................................................................................... 149
Part IX Corporate Bonds .............................................................................................................. 150
Part X Corporate Financial Statement ........................................................................................ 152
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Documents Available for Reference
1. The financial statements signed and sealed by the Company’s legal representative, Chief Financial Officer,
and the person-in-charge of the financial organ.
2. The original of the Auditor’s Report sealed by the CPA firm as well as signed and sealed by the certified
public accounts.
3. All the originals of the Company’s announcements and documents that were disclosed to the public during
the Reporting Period on the media designated by the CSRC for information disclosure.
4. The 2022 Annual Report carrying the signature of the legal representative.
5. The documents above are lodged in the Securities Department of the Company, 18A, China Merchants
Plaza, 1166 Wanghai Road, Shekou, Shuiwan Community, Zhaoshang Street, Nanshan District, Shenzhen City,
Guangdong Province, China.
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Definitions
Term Definition
Guangdong Dongfang Precision Science & Technology Co., Ltd., and its
Dongfang Precision, or the “Company”
consolidated subsidiaries, except where the context otherwise requires
The corrugated box packaging machinery division of Guangdong Dongfang
Dongfang Precision (China)
Precision Science & Technology Co., Ltd.
Fosber Italy Fosber S.p.A.
Fosber Asia Guangdong Fosber Intelligent Equipment Co., Ltd.
Fosber America Fosber America, Inc.
Fosber Tianjin Fosber Machinery (Tianjin) Co., Ltd.
The business group including subsidiaries Fosber Italy, Fosber America, Qcorr,
Fosber Group
Tirua Group, etc.
Tirua Group Tirua Grupo Industrial S.L.
Tirua America Tirua America Inc.
Tirua China Tirua (Guangdong) Intelligent Equipment Manufacturing Co., Ltd.
QCorr QuantumCorrugated S.r.l.
Dongfang Precision (Europe)/EDF EDF Europe S.r.l.
Dongfang Precision (Netherland) Dong Fang Precision (Netherland) Cooperatief U.A.
Dongfang Precision (HK) Dong Fang Precision (HK) Limited
Shenzhen Wonder Digital Technology Co., Ltd. (formerly known as “Shenzhen
Wonder Digital
Wonder Printing System Co., Ltd.”)
Parsun Power Suzhou Parsun Power Machine Co., Ltd.
Suzhou High-Tech Zone Jinquan Business Management Partnership (Limited
Suzhou Jinquan
Partnership)
Shunyi Investment Suzhou Shunyi Investment Co., Ltd.
Yinglian Digital Foshan Yinglian Digital Printing Equipment Co., Ltd.
Jaten Robot Guangdong Jaten Robot & Automation Co., Ltd.
Yineng Investment Hainan Yineng Investment Co., Ltd.
Yineng International Dongfang Yineng International Holding Co., Ltd.
Dongfang Digicom Dongfang Digicom Technology Co., Ltd.
Dongfang Digicom (Guangdong) Dongfang Digicom Technology (Guangdong) Co., Ltd.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Corrugated cardboard is a multi-layer paper-bonding object composed of at least
one sandwich layer of wavy medium (commonly known as "corrugated paper",
Corrugated cardboard
"corrugated medium paper", "corrugated paper medium" and "corrugated base
paper") and one layer of cardboard (also known as "liner board").
Corrugated box is a rigid paper container made of corrugated boards through die
Corrugated box cutting, indenting, nailing, or gluing. Corrugated box is one of the most widely
used packaging containers in modern business and trade.
Corrugated box printing and packaging production line equipment include
corrugated box printing and packaging line and stand-alone products that
integrates pre-feeding, printing, grooving, die cutting, forming and packaging
Corrugated box printing and packaging production functions in whole or in part, which is highly functionally integrated, highly
line equipment automated and highly technical, can save the capital and manpower investment,
reduce workers' workload and improve the production efficiency of box
manufacturers, and requires equipment manufacturers to be highly competent in
design, technological innovation, assembly and finishing of parts.
Corrugated cardboard production lines are assembly lines comprising
corrugating, gluing, agglutinating, bundle breaking, dimension board cutting and
output processes, which are used to produce and process corrugated boards.
A corrugated cardboard production line has two independent process sections as
the wet section and the dry section. The wet section, composed of the base paper
stand, auto splicer, preheat pre-regulator, single-face corrugator, feeding bridge,
Corrugated cardboard production lines glue machine and double facer, is used to make corrugated based paper into
three-layer, five-layer, and seven-layer corrugated boards of different corrugated
combinations. The dry section, composed of the rotary shear, slitter indenter,
cut-off knife and stacker, is used to slit, indent, cut off and stack corrugated
boards as ordered.
Corrugated cardboard production lines are key production equipment for
corrugated board and box manufacturers.
Pre-printing and post-printing intelligent automatic packaging machinery refers
to equipment that is compatible with the corrugated box printing line or stand-
Pre-printing and post-printing intelligent automatic
alone products and can provide functions related to pre-printing and post-
packaging machinery
printing processes of corrugated box printing and packaging. It includes the pre-
feeder, stripper conveyor, intelligent stacker, and folder gluer.
Outboard motors are a kind of detachable power units that are mounted on the
Outboard motors
stern plate of a boat to drive the boat to sail.
General utility small gasoline motors are a kind of thermo-dynamic machinery
of 20kW power or less with a wide range of applicability. It is characterized by
small size, light weight, and easy operation, and is usually used as a power
General utility small gasoline motors engine for a variety of terminal products. By the structure of engine and
principle of work, general utility small gasoline motors can be divided into two-
stroke general utility small gasoline motors and four-stroke general utility small
gasoline motors.
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CSRC China Securities Regulatory Commission
SZSE, or the “Stock Exchange” Shenzhen Stock Exchange
Expressed in the Chinese currency of Renminbi, expressed in tens of thousands
RMB yuan, RMB’0,000
of Renminbi
The “Reporting Period” or “Current Period” The period from 1 January 2022 to 31 December 2022
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name Dongfang Precision Stock code 002611
Stock exchange Shenzhen Stock Exchange
Company name in Chinese 广东东方精工科技股份有限公司
Abbr. 东方精工
Company name in English (if
Guangdong Dongfang Precision Science & Technology Co., Ltd
any)
Abbr. (if any) Dongfang Precision
Legal representative Tang Zhuolin
(Office Building, Plant A, Plant B) 2 Qiangshi Road, Shishan Town, Nanhai District, Foshan City,
Registered address
Guangdong Province, China
Previous registered address N/A
Zip code 528225
18A, China Merchants Plaza, 1166 Wanghai Road, Shekou, Shuiwan Community, Zhaoshang
Office address
Street, Nanshan District, Shenzhen City, Guangdong Province, China
Zip code 518000
Company website http://www.df-global.cn/
Email address ir@vmtdf.com
II Contact Information
Board Secretary Securities Representative
Name Feng Jia Zhu Hongyu
18A, China Merchants Plaza, 1166 18A, China Merchants Plaza, 1166
Wanghai Road, Shekou, Shuiwan Wanghai Road, Shekou, Shuiwan
Office address Community, Zhaoshang Street, Nanshan Community, Zhaoshang Street, Nanshan
District, Shenzhen City, Guangdong District, Shenzhen City, Guangdong
Province, China Province, China
Tel. 0755-36889712 0755-36889712
Fax 0755-36889822 0755-36889822
Email address ir@vmtdf.com ir@vmtdf.com
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III Media for Information Disclosure and Place where this Report Is Lodged
Newspapers designated by the Company for
China Securities Journal, Shanghai Securities News, and Securities Times
information disclosure
Website designated by the CSRC for publication of
http://www.cninfo.com.cn
this Report
Securities Department of the Company, 18A, China Merchants Plaza, 1166
Place where this Report is lodged Wanghai Road, Shekou, Shuiwan Community, Zhaoshang Street, Nanshan
District, Shenzhen City, Guangdong Province, China
IV Change to Company Registered Information
Unified social credit code 914406002318313119
Change to the principal activities of the
Unchanged
Company since its listing (if any)
Every change of controlling shareholder
Unchanged
since incorporation (if any)
V Other Information
The independent auditor hired by the Company:
Name of independent auditor Ernst & Young Hua Ming LLP
18/F, Ernst & Young Tower, 13 Pearl River East Road, Tianhe District, Guangzhou City, China
Office address (the Headquarters: Rooms 01-12, 17/F, Ernst & Young Tower, Oriental Plaza, 1 East Chang An
Avenue, Dongcheng District, Beijing, China)
Accountants writing signatures Feng Xingzhi and Hu Chuan
The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable √ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable √ Not applicable
VI Key Financial Information
Indicate whether there is any retrospectively restated datum in the table below.
□ Yes √ No
2022-over-2021
2022 2021 2020
change (%)
Operating revenue (RMB) 3,892,708,509.64 3,524,734,783.94 10.44% 2,916,270,143.13
Net profit attributable to the listed 447,177,897.38 467,333,661.79 -4.31% 389,180,624.08
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company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before 398,376,648.08 380,806,233.00 4.61% 263,426,429.87
exceptional gains and losses (RMB)
Net cash generated from/used in
506,294,460.95 306,659,276.02 65.10% 550,996,031.75
operating activities (RMB)
Basic earnings per share (RMB/share) 0.37 0.35 5.71% 0.26
Diluted earnings per share
0.37 0.35 5.71% 0.26
(RMB/share)
Weighted average return on equity (%) 11.72% 11.72% 0.00% 6.20%
Change of 31
December 2022 over
31 December 2022 31 December 2021 31 December 2020
31 December 2021
(%)
Total assets (RMB) 6,928,577,115.10 6,357,168,835.19 8.99% 6,323,236,687.05
Equity attributable to the listed
4,063,966,310.23 3,681,970,298.39 10.37% 4,158,538,499.75
company’s shareholders (RMB)
Indicate whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional gains and
losses was negative for the last three accounting years, and the latest independent auditor’s report indicated that there was uncertainty
about the Company’s ability to continue as a going concern.
□ Yes √ No
Indicate whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional gains and
losses was negative.
□ Yes √ No
VII Accounting Data Differences under China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign
Accounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
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VIII Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 636,006,580.11 899,609,054.15 895,261,467.25 1,461,831,408.13
Net profit attributable to the listed
37,109,411.15 111,090,506.68 24,117,374.49 274,860,605.06
company’s shareholders
Net profit attributable to the listed
company’s shareholders before 45,662,017.31 74,234,007.98 51,027,976.21 227,452,646.58
exceptional gains and losses
Net cash generated from/used in
85,523,348.92 66,727,357.81 16,185,021.02 337,858,733.20
operating activities
Indicate whether any of the quarterly financial data in the table above or their summations differs materially from what have been
disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
IX Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item 2022 2021 2020 Note
Gain or loss on disposal of non-current
assets (inclusive of impairment allowance -351,386.78 -65,995.13 -52,742.69
write-offs)
Government grants through profit or loss
(exclusive of government grants given in the
Company’s ordinary course of business at 20,933,377.44 14,700,007.84 10,749,683.55
fixed quotas or amounts as per the
government’s uniform standards)
Gain equal to the amount by which
investment costs for the Company to acquire
subsidiaries, associates and joint ventures
866,489.40
are lower than the Company’s enjoyable fair
value of identifiable net assets of investees
when making investments
Gain or loss on fair-value changes on held-
for-trading and derivative financial assets
and liabilities & income from disposal of
35,196,327.83 73,435,063.51 96,118,955.74
held-for-trading and derivative financial
assets and liabilities and other debt
investments (exclusive of the effective
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portion of hedges that arise in the
Company’s ordinary course of business)
Non-operating income and expenses other
1,761,273.49 4,779,490.65 33,173,454.66
than the above
Other gains and losses that meet the
1,229,987.66
definition of exceptional gain/loss
Less: Income tax effects 7,277,576.78 6,017,410.70 15,906,631.40
Non-controlling interests effects (net
1,460,765.90 303,727.38 425,002.71
of tax)
Total 48,801,249.30 86,527,428.79 125,754,194.21 --
Details of other profit and loss items that meet the definition of non-recurring profit or loss.
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public —Exceptional Gain/Loss
Items:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Part III Management Discussion and Analysis
I Industry Overview for the Reporting Period
(I) Industries in which the Company principally operates
The principal operations of Dongfang Precision include four major business divisions: smart corrugated
packaging equipment, industrial Internet industry solutions, digital printing solutions, and water powersports
products.
Among them, the smart corrugated packaging equipment business and the industrial Internet industry
solutions business are positioned as the core business divisions of Dongfang Precision. The digital printing
solutions business is operated by the majority-owned subsidiary Wonder Digital, while the water powersports
products business is run by the majority-owned subsidiary Parsun Power.
According to the Classification of Strategic Emerging Industries (2018) and the Industrial Classification for
National Economic Activities (GB/T 4754-2017), the industries in which the Company principally operates are
shown below:
The Company’s Principal Business Divisions and Their Industries
Strategic
Principal
emerging Industry Primary products and their applications
business division
industry
1. Corrugated cardboard production lines: The corrugated
cardboard production lines are used for the production of
corrugated cardboards of different specifications, are the core
machinery for corrugated packaging production, and are widely
used by medium and large enterprises (cardboard plants) that
produce corrugated cardboards in the corrugated packaging
industry.
Smart 2. Corrugated box printing and packaging production line
Intelligent Specialised equipment: The corrugated box printing and packaging production
corrugated
manufacturing equipment line equipment is used to produce and process corrugated
packaging
equipment manufacturing cardboards into corrugated boxes of different specifications and is
equipment
the back-end machinery of the corrugated cardboard production
lines. Of the machinery, the printing unit is the core machinery, of
which the peripheral equipment units includes the paper feeder
unit, slotting and die cutter unit, stripper transfer unit, FFG and
stitching unit, and the counting and palletizer unit. The corrugated
box printing and packaging production line equipment is widely
used by various enterprises (box plants) that produce corrugated
boxes in the corrugated packaging industry.
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Strategic
Principal
emerging Industry Primary products and their applications
business division
industry
Digital printing is a printing method that generates sheet-by-sheet
variable graphic images from digital information. With the help of
printhead ink, digital printing enables the formation of the image
directly on the printing stocks and can indirectly transmit the
colour and auxiliary substances to the print stocks to form the
Digital printing presswork. Digital printing can meet the requirement for industrial
solutions production.
Wonder Digital, one of the subsidiaries controlled by Dongfang
Precision, is an industry-leading and professional supplier of
digital printing solutions. It is committed to providing digital
printing solutions for customers from industries such as corrugated
packaging, advertising, and home building materials.
Build the Industrial Internet Platform for industry, provide end-to-
end solutions and operational services that range from intelligent
machinery, integrated management of production and operations
Industrial Industrial
Software and of enterprises, intelligent business decision-making, to agile
Internet and Internet
information corporate reforms and innovation for corporate customers from
supporting industry
services more than the paper packaging industry, and promote the step-by-
services solutions
step digital transformation of the business with a focus on
essentials such as “connecting + data processing and modeling +
data intelligence applications”.
Railway, Outboard motors are a kind of detachable power units that are
shipping, mounted on the stern plate of a boat to drive the boat to sail and
Manufacturing aviation and Water can be applied to boats shorter than 24m in inland rivers, lakes,
of ship auxiliary other transport powersports and coastal waters. They are widely used in water recreation,
equipment equipment products fishing, water traffic, emergency rescue, shore landing and
manufacturing maritime patrol.
industries
(II) Industry overview
1. Industry of the smart corrugated packaging equipment and digital printing solutions business
(1) Demand side:
The downstream industry of the Company’s core business, “smart corrugated packaging equipment”, is the
corrugated packaging industry, and the main customers include cardboard plants, box plants, and other business-
end (B-end) customers. As a machinery supplier, the Company provides various single machine and complete
production line products for cardboard and box production and manufacturing, which is relevant to the
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development of the downstream paper packaging industry.
The corrugated box field is one of the major fields of the paper packaging industry, of which the terminal
demand is relevant to the prosperity of consumption and business activities. Corrugated packaging products are
used in a vast number of fields, including food and beverage, household chemicals, e-commerce, and express, and
are inelastically demanded by consumers. Concerning the growth rate of demand in these fields for corrugated
packaging, the express and logistics field has grown rapidly, with its share in the total downstream corrugated box
share continuously increasing between 2017 and 2021.
Between 2017 and 2021, the domestic express business recorded rapid growth, with a compound annual
growth rate (CAGR) of approximately 28%. Despite a slight drop in growth in 2022, the volume of express
business across China still maintained growth. By estimation, with the recovery of GDP growth in 2023, the
growth of the volume of express business is expected to get back onto the rapid growth track. This will boost the
development of the corrugated packaging industry.
Movements in the Business Volume of Express Enterprises above the Designated Size in China between 2016 and 2022
1,200 1,106
1,083
1,000
834
800
635
600 507
401
400 313
200
0
2016 2017 2018 2019 2020 2021 2022
Volume of Chinese Express Business (单位：件）
2016年-2022年中国快递业务量 between 2016 and 2022 (Unit: Piece)
According to the monitoring data released by the State Post Bureau of the People’s Republic of China, as at 8
March 2023, the volume of Chinese express business has reached 20.09 billion pieces, which is achieved 72 days
earlier than the volume of 20 billion in 2019 and six days earlier than the volume in 2022. This year, it takes 39
days to achieve the first 10 billion pieces in the express business volume in China and 28 days to achieve the
second 10 billion pieces, shortened by 10 days. This has displayed the vitality and momentum of the express
industry and vividly indicates that China maintains strong resilience and sufficient potential in the consumer
market as well as the long-term upward fundamental of consumption development.
The terminal market demand is constantly unleashed, increasing the demand for the expansion of the
industry’s capacity: Over the past few years, the scale of China’s express corrugated packaging market has been
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on the rise. According to the data released by the China Paper Association, the express corrugated packaging
market is continuously scaled up in China. By the forecast of Qianzhan Industry Research Institute, the scale of
China’s express corrugated packaging market will continue to rise in the upcoming years and is estimated to reach
RMB86.4 billion by 2025 (CAGR for 2019 to 2025: Approximately 15%). Terminal markets, including the
express, electronics, and household chemicals terminal markets, show an increasing demand for corrugated box
and board packaging, which will drive the expansion of the capacity of corrugated packaging enterprises and thus
increase the demand for corrugated packaging machinery, benefiting the machinery manufacturers.
Phase and clear out machinery with backward capacity and continue to upgrade machinery: China’s
paper packaging industry market shows a low concentration degree. In 2021, the CR5 of paper packaging
enterprises above the designated size was only 14%. Additionally, the industry has a number of low-end small and
medium box plants, presenting a highly decentralized competitive landscape. With the brand-based development
and upgrading of the downstream terminal consumer industry, the requirements of corporate customers for
corrugated boxes gradually increase. Concurrently, the supply-side upgrading of the industry is an inevitable trend,
and the industry will boost its concentration through market competition, capacity upgrading, and M&A. This
trend will boost the upgrading and iteration of technologies and machinery and accelerate industry integration.
Additionally, it is estimated that the line machinery that is more intelligent and productive will replace the existing
corrugated cardboard production lines and corrugated box printing and packaging production line equipment in
the upcoming five to ten years. By statistics, there are over 6,000 existing corrugated cardboard production lines
in the domestic market, and more corrugated box printing and packaging machinery, which will be replaced by
more intelligent ones with higher production efficiency in the next five to ten years.
Digital and intelligent upgrading of the paper packaging and printing industry bring new development
opportunities: The traditional production mode has caused domestic paper packaging and printing enterprises to
be overly dependent on skilled technicians at critical positions and slow to identify the outdated management
mode. The “strategy of robot assembling line” and “smart factory” are increasingly recognized by the industry.
Amid intelligent manufacturing, the paper packaging and printing industry will usher in industrial upgrading and
transformation. Additionally, leading packaging enterprises, including Xiamen Hexing Packaging Printing Co.,
Ltd. (HXPP), MYS Group Co. Ltd. (MYS), Shenzhen YUTO Packaging Technology Co., Ltd., and Shenzhen
Jinjia Group Co., Ltd., have pushed ahead with Internet-based development in recent years by entering into
intelligent manufacturing, cloud printing, or other markets, expected to launch a revolution in the Internet-based
development of the paper packaging and printing industry and injecting new impetus into industry integration.
Concurrently, amid intelligent manufacturing and Internet-based packaging, leading enterprises engaged in
corrugated packaging machinery are also expected to embrace new development opportunities.
By estimate, the scale of the global corrugated packaging machinery market is approximately RMB30 to 40
billion.
(2) Supply side:
A. World-leading comprehensive strength
Corrugated cardboard production lines: Major manufacturers of corrugated cardboard production lines
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around the world include Fosber Group, BHS (Germany), Marquip (a wholly-owned subsidiary of the American
Barry-Wehmiller), and J.S. Machine. Among them, Fosber Group and its major rival from Germany, BHS, lead
the others and are leaders in the global middle- and high-end corrugated cardboard production line field. Fosber
Group holds approximately 30% of the global middle- and high-end corrugated cardboard production line market
and more than 50% of the North American market.
Corrugated rollers, key components of corrugated cardboard production lines: The subsidiary Tirua Group
is a time-honoured and prestigious corrugated roller supplier, specializing in the production of corrugated rollers
and pressure rollers for industrial corrugated cardboards. It leads the global market.
Corrugated box printing and packaging production line equipment: Major manufacturers in this field include
Dongfang Precision, Bobst (Switzerland), Gopfert (Germany), Ward (a wholly-owned subsidiary of the American
Barry-Wehmiller), Ding Long (Shanghai), and Guangzhou Keshenglong. Dongfang Precision is an industry leader
in China and is competitive with the global industry leader, Bobst, from Switzerland. With an advantage in global
resource coordination, leading design concept, excellent overall R&D strength, and a product system featuring
complete categories and rich specifications, the Company can produce products that meet dozens of specifications
and different market positioning, covering fixed/open-close type, top printing/bottom printing, and complete
production line (inline) products/single machine, and has the completest product lines and richest product base of
the corrugated box printing and packaging production line equipment worldwide.
Digital printing: Major manufacturers include Wonder Digital, Hanway (China), Atexco, HP (the US), and
EFI (the US). The subsidiary, Wonder Digital, takes the lead among global suppliers of digital printing solutions in
applying high-speed inkjet printing technology to corrugated packaging and is committed to extending digital
printing technology to such fields as home building materials, label printing, and advertising. Digital printers
under the brand Wonder has been sold at home and abroad since Wonder Digital was established in 2011.
Statistically, more than 1,400 pieces of machinery have been sold to over 80 countries around the world.
In conclusion, Dongfang Precision leads the world in terms of its comprehensive strength in smart corrugated
packaging equipment business and can provide downstream customers such as cardboard plants and box plants
with “one-stop” machinery and service support that covers each production process, including corrugated
cardboard production, corrugated box production, and pre-printing and post-printing production processes, and
different technology roadmaps, including flexographic printing and digital printing. In terms of the size of revenue,
Dongfang Precision’s corrugated packaging machinery business accounts for approximately 10% of the
global industry market, ranking first among domestic enterprises of the same type and second in the global
market.
B. The rapid development of digital printing technology brings more development opportunities for
the industry.
According to the report The Future of Inkjet Printing to 2023 released by the research institution, Smithers
Pira, in the global presswork and packaging field, the market scale of inkjet printing technology between 2013 and
2018 increased from USD43.4 billion to USD69.6 billion and is expected to reach USD109 billion in 2023, with a
CAGR of nearly 10%. The percentage of inkjet printing in the entire printing market is expected to increase to
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13.0% in 2023.
Scale of the Inkjet Printing Market in the Global Presswork and Packaging Field
The scale of the global inkjet
全球喷墨印刷市场规模/亿美元 Percentage of the inkjet
喷墨印刷市场占比% printing
printing market/USD’00 million market %
1200 1090 20%
1000
15%
773
800 696 13.0%
634
600 9.7% 10%
434
400 8.8%
8.1%
5.7% 5%
200
0 0%
2013 2017 2018 2019 2023E
Other fields where digital printing technology is applied: Home decoration, textile printing, ceramics,
electronics, glass, automobiles, biomedicine, and 3D printing. According to the report released by Smithers Pira,
the overall scale of markets of other application fields is expected to increase from USD25.691 billion in 2018 to
USD41.076 billion in 2023, with a CAGR of approximately 9.8%.
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Market Scales in the Global Digital Inkjet Printing Application Fields
450
Unit: USD’ 00 million
400
350
300
250
200
150
100
50
0
2013 2017 2018 2019 2023E
Home decoration 5.36 13.65 16.41 18.48 27.46
Promotion and other
13.66 20.20 22.38 24.47 31.16
decorations
Ceramics 12.28 22.97 24.30 26.69 33.36
Miscellaneous (electronics,
glass, automobiles, and 6.68 45.07 52.33 59.79 82.32
biomedicine)
3D printing (application in
41.99 121.96 141.49 160.35 236.47
other aspects, including inkjet)
Wonder Digital is committed to dealing with small batches of online shopping and FMCG orders of different
categories. Specifically, end customers could transmit documents for printing and commands to the digital
machinery through remote control via computers/mobile phones, enabling PDF patterns to be printed on the
packaging materials. Concurrently, the seamless exchange between orders provides flexible and personalized
packaging solutions for end brand customers. Concerning the explosive stock keeping unit (SKU) as a result of
traditional e-commerce and live-streaming e-commerce and the drastic order fluctuation faced by end brand
customers, to remove the pressure and pain points regarding the management of the supply chain of end-brand
packaging supplies, Wonder Digital provides a complete set of solutions to the management of packaging supplies
featuring high turnover, zero stock, low cost, and super high flexibility. In the subsequent development, Wonder
will constantly strengthen the driving force of innovation and refine its R&D mechanism to expand digital
printing technology into more fields.
Wonder Digital’s digital printing technology enables the documents on the computer/mobile phone to be
directly printed on corrugated cardboards, offset cartons, and other packaging materials. The technology allows
one-sheet printing and can present the effects of the finished products without platemaking, imposition, and colour
calibration. Additionally, the technology enables immediate problem remediation, variable printing, and printing
on demand. The major advantages of the technology are shown as follows:
(1) Convenient and fast
Digital printing enjoys an absolute advantage in small and medium batches of printing and urgent printing
needs as it saves tedious processes, such as platemaking, imposition, and colour calibration. It enables electronic
documents generated via typesetting software, design software, and office applications to be directly output to
digital printers.
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(2) Cost-saving
Digital printers require no platemaking, so no platemaking fees will be incurred. Additionally, there are
multi-pass and single-pass digital printers, and the volume of waste ink every month is only 1 L to 20 L.
(3) Flexible and efficient
The full digitization of digital printing enables a more flexible printing method that is, modifying while
printing, and vice versa, enabling zero stock. Such a flexible and quick printing method has strengthened the
competitiveness of customers in a competitive environment where every minute counts. With regard to pattern
design, platemaking in traditional printing is not required in digital printing, allowing more freedom for design
and enabling designers to give full play to their professionalism and tailor products to customers’ needs.
(4) One-sheet printing
Although it does not take long to complete small batches of printing orders, such orders still share the same
complex and time-consuming printing commissioning process with large batches of printing orders. Therefore,
box printing and colour printing usually have standards for the base number of sheets for printing. If the base
number cannot be met, the printing cost of a single sheet will be increased. Digital printing enables one-sheet
printing and immediate availability. Additionally, it can flexibly perform small and medium batches of production.
Moreover, one piece of neutral machinery can be fully operated by one person and covers less production space.
(5) Product quality
Digital printing adopts inkjet printing technology. It can be divided into water-based ink printing and UV
printing in terms of the ink type and printing effects. As digital printing technology constantly improves, Wonder
Digital’s WD200 series can rival traditional HD water-based ink printing in terms of printing effects, while
Wonder Digital’s WDUV series achieves the spot colour effects of traditional offset printing.
(6) Production efficiency
Inkjet printing technology enables immediate availability in just three steps, substantially boosting
production efficiency.
Wonder Digital has introduced special digital printers in advertising, home decoration, and other fields,
including flatbed printing and roll to roll printing technologies. The flatbed models can be used for digital printing
on materials such as aluminum panels, glass, ceramic tiles, metal plates, acrylic sheets, and alucobond panels,
while the roll-to-roll models are applicable for digital printing on materials such as corrugated cardboard, vehicle
paste paper, lamp box fabric, PVC film, decorated paper, and metal coils.
2. Industry of the industrial Internet industry solutions business
According to the Classification of Strategic Emerging Industries (2018), Dongfang Precision’s “industrial
Internet industry solutions” business division falls under the “industrial Internet and supporting services” industry.
Policy side: The Guiding Opinions of the State Council on Deepening the “Internet plus Advanced
Manufacturing” and Developing the Industrial Internet released by the State Council in 2017 marked China’s
official entry into digital development from information-based development in terms of industries. “Accelerate the
development of the industrial Internet” was proposed for the first time in the report on government work in 2018
and became a frequent visitor in the reports on government work for the next five years. In 2020, the National
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Development and Reform Commission stated that, as one of the new network infrastructure types, the industrial
Internet is a part of the new infrastructure. Under the guidance of a range of policies, the industrial Internet and
smart factory have become the strategic development orientation of the transformation and upgrading of China’s
manufacturing.
Checklist of Supportive Policies on the Industrial Internet Introduced by the Government between 2020 and 2022
Time Agency Policy Description
The Standardization Administration released an announcement on the
13th National Standard of the People’s Republic of China for 2022 and
approved and released the National Standard GB/T 42021-2022:
Industrial Internet-General Network Architecture. This is China’s first
national standard in the industrial Internet network field and marks a solid
step made by China in the construction of the industrial Internet system.
Official release of the With a focus on the industrial Internet network planning, design,
October Standardization national standard for construction, upgrading, and transformation, the Industrial Internet-
2022 Administration Industrial Internet-General General Network Architecture national standard standardized the target
Network Architecture architecture and function requirements for the internal and external
network architecture of plants in the industrial Internet field and put
forward the implementation framework and safety requirements for the
industrial Internet network. This can facilitate the construction of high-
quality industrial Internet network infrastructure and the improvement of
the digital, network-based, and intelligent development of all industries
and expedite the digital transformation of the industry.
Financial support will be channelled by the central government in three
Ministry of
Notification on Launching batches between 2022 and 2025 to support local small and medium
Industry and
the Pilot Digital enterprises in launching digital transformation, which will improve the
August Information
Transformation of Small capability of digital public service platforms (including digital
2022 Technology
and Medium Enterprises transformation service platforms and industrial Internet platforms) in
and Ministry of
with Financial Support serving small and medium enterprises and give rise to a range of small,
Finance
rapid, light, and precise digital system solutions.
Five ministries, Give full play to the role of the industrial Internet platforms and identity
including the resolution systems to boost the cooperation between upstream and
Guidelines on Advancing
Ministry of downstream enterprises along the industrial chain. Support leading
June 2022 High-quality Development
Industry and enterprises in developing intelligent manufacturing platforms and
of Light Industries
Information compete for national industrial Internet and integrated information
Technology technology and industrialization projects.
Develop reliable, flexible, and safe industrial Internet infrastructure and
Plan for the Development support the wide connection, flexible supply, and efficient configuration
January of a Digital Economy of manufacturing resources. Strengthen technological integration and
State Council
2022 during the “14th Five-Year production innovation in diversified application scenarios, improve the
Plan” Period competitiveness of critical processes of the industrial chain, and refine the
supply chain systems in key industries, such as the industrial Internet.
Accelerate the development of the industrial Internet, develop and expand
digital industries such as integrated circuits and artificial intelligence, and
improve technological innovation and supply capability in critical
Report on Government
2022 State Council software and hardware; refine the governance of the digital economy,
Work for 2022
cultivate the market for data elements, unleash the potential of data
elements, and improve application capabilities, in order to empower
economic growth and enrich people’s lives.
Eight A two-step plan was proposed. Specifically, by 2025 most manufacturing
ministries, Plan for the Development enterprises above the designated size will achieve digital and network-
including the of Intelligent based development, and critical enterprises in key industries will achieve
December
Ministry of Manufacturing during the the preliminary intelligent application. By 2035, digital and network-
2021
Industry and “14th Five-Year Plan” based development will be fully popularized among manufacturing
Information Period enterprises above the designated size, and critical enterprises in key
Technology industries will basically achieve intelligent development.
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Time Agency Policy Description
Plan for In-depth and
By 2025, the application penetration rate of the industrial Internet
Ministry of Integrated Development of
platforms will reach 45%, and the service capability of system solutions
November Industry and Information Technology
will be obviously strengthened, forming a new development pattern
2021 Information and Industrialization
featuring empowerment by platform enterprises and integration of small,
Technology during the “14th Five-Year
medium, and large enterprises.
Plan” Period
Strengthen the self-supporting capability and controllability of industrial
and supply chains, implement projects for upgrading foundational
industrial infrastructure, and give full play to large enterprises’ capacity
to provide leadership and support and to the collaborative and supporting
Report on Government
2021 State Council role of micro, small, and medium enterprises; develop the industrial
Work for 2021
Internet, promote the integration of industrial and innovation chains, and
build additional platforms for generic technology R&D to enhance the
capacity of micro, small, and medium enterprises for making innovations
and engaging in specialized production.
The plan proposed constantly refining the industrial Internet standard
system until 2023. Specifically, the special industrial Internet group
would formulate more than 15 basic and generic standards would be
formulated, involving term definition, generic demand, supply
chain/industrial chain, and talent, over 40 standards for critical
Ministry of technologies, such as “5G + industrial Internet”, information model, big
Industry and data on industries, and safe protection, and more than 25 application
Information 2020 Work Plan of the standards for critical industries and fields, including automobiles,
November
Technology Special Industrial Internet electronic information, and iron and steel. It intended to encourage
2021
and Group enterprises to comply with standards in processes such as R&D,
Standardization production, and management by promoting the application of standards in
Administration critical industries and fields. Additionally, the Group planned to
formulate more than 100 standards for critical technologies, products,
management, and applications regarding the industrial Internet and
developed a unified, integrated, and open industrial Internet standard
system, thereby forming a sound momentum where standards are widely
applied and in alignment with world-leading ones, by 2025.
Launch intelligent manufacturing projects, the campaign of digital
transformation of the manufacturing industry, and the campaign of 5G
application innovation, organize and implement the plan for the campaign
Six ministries,
Guidelines on Expediting of the digital transformation of state-owned enterprises, develop a range
including the
the Cultivation and of benchmark enterprises in the manufacturing industry in terms of digital
Ministry of
June 2021 Development of High- transformation, cultivate a range of highly comprehensive and widely
Industry and
quality Enterprises in the influential demonstrative scenarios, build and promote industrial Internet
Information
Manufacturing Industry platforms, initiate the campaign of developing one million industrial apps,
Technology
carry out classified and hierarchical network safety management, and
vigorously develop a new model and business form of service-oriented
manufacturing.
The plan proposed cultivating 15 comprehensive industrial Internet
platforms that cover different industries and fields, selecting
approximately 40 featured industrial Internet platforms oriented toward
Ministry of key industries, such as power devices, energy, food, and textile, and
2021 Work Plan of the
Industry and developing three to five demonstrative plant benchmarks with a full 5G
May 2021 Special Industrial Internet
Information connection in 2021, thereby boosting the development of the industrial
Working Group
Technology Internet. Everything in a digital era is interconnected. Applying
information technology in the industrial field not only can improve
production and management efficiency but also can create a new mode
and unleash new impetus.
Build a number of international-level industrial Internet platforms and
Plan for the Development digital transformation promotion centres in key industries and regions,
Ministry of
of Intelligent deepen the digitalized application of R&D and design, manufacturing,
April Industry and
Manufacturing during the operations management, market services, and other processes, cultivate
2021 Information
“14th Five-Year Plan” and develop new models such as personalized customization and flexible
Technology
Period (Exposure Draft) manufacturing, and accelerate the digital transformation of industrial
parks.
Implement “Migrating to the Cloud, Using Digital Tools, and Enabling
March Intelligence” actions and promote data-enabled coordinated
State Council “14th Five-Year” Plan
2021 transformations of entire production chains; build a number of
international-level industrial Internet platforms and digital transformation
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Time Agency Policy Description
promotion centres in key industries and regions, deepen the digitalized
application of R&D and design, manufacturing, operations management,
market services, and other processes, cultivate and develop new models
such as personalized customization and flexible manufacturing, and
accelerate the digital transformation of industrial parks.
Report on Government Develop the industrial Internet, advance intelligent manufacturing, and
2020 State Council
Work for 2020 cultivate clusters of emerging industries.
The plan proposed continuing to refine and cover the industrial Internet
Ministry of Action Plan for the infrastructure in each region and industry and developing 30 plants with a
December Industry and Innovative Development of full 5G connection in ten key industries. It also put forward the basic
2020 Information the Industrial Internet completion of the national big data centre system on industrial Internet
Technology (2021-2023) and the development of 20 regional sub-centres and ten industrial sub-
centres.
The plan proposed basically forming a pattern of coordinated promotion
Ministry of and development of the industrial Internet and safe production and
Action Plan for “Industrial
October Industry and substantially boosting the intrinsic safety level of industrial enterprises by
Internet + Safe Production”
2020 Information the end of 2023, in order to raise awareness of safe industrial production
(2021-2023)
Technology and thoroughly implement the innovative development strategy for the
industrial Internet.
The key tasks for 2020 include supporting industrial enterprises in
Ministry of
2020 Work Plan of the developing and transforming their industrial intranets, encouraging
Industry and
June 2020 Special Industrial Internet industrial enterprises to upgrade and transform industrial intranets, and
Information
Working Group transforming industrial intranets using 5G in cooperation with basic-
Technology
telecom enterprises.
The guidelines proposed following the guidance of Xi Jinping Thought on
Socialism with Chinese Characteristics for a New Era and implementing
the guiding principles of the 19th National Congress of the Communist
Party of China and the second, third, and fourth plenary sessions of the
Guidelines of the Ministry
Ministry of 19th CPC Central Committee. Additionally, according to the guidelines,
of Industry and
April Industry and the new development concept and the high-quality development
Information Technology on
2020 Information requirement must be upheld in order to promote the gathering and sharing
the Development of
Technology of industrial data, deepen data integration and innovation, improve data
Industrial Data
governance capabilities, and strengthen data security management,
thereby by gathering momentum to build an industrial data ecosystem
featuring abundant and centralized resources, booming application,
progressive industries, and orderly governance.
The notification proposed 20 initiatives in six aspects, including
Ministry of Notification on accelerating the construction of new infrastructure, the expansion of
March Industry and Accelerating the integrated and innovative applications, the refinement of safety and
2020 Information Development of the security systems, the increase of impetus of innovative development,
Technology Industrial Internet improvement of the ecological layout of industries, and the increase of
policy support.
Market side: China is the only country in the world whose industries cover all industrial categories in the
United Nations’ industrial classification. Concurrently, it is expected to grow into the world’s largest industrial
digitalization market. For the current manufacturing industry of China, digital transformation is no longer an
“option” but a “compulsory course” that is critical to its survival and long-term development.
As the manufacturing industry enters the “Industry 4.0” era, an increasing number of manufacturing
enterprises have realized that buying production equipment, enterprise resource planning (ERP) systems, or
manufacturing executive systems (MES) cannot meet the systematic requirements of intelligent manufacturing.
By contrast, industrial Internet platforms can systematically resolve all critical issues that cannot be handled
through traditional means. According to the Bluebook on the Digital Transformation of Enterprises--Empowering
the Low-carbon and Green Transformation of the Real Economy with New IT released by the China Academy of
Information and Communications Technology, after relevant manufacturing enterprises complete digital
transformation, on average, their production efficiency will be boosted by 37.6%, their operating expenses will be
lowered by 21.2%, and their energy utilisation rate will be improved by 16.1%. Concurrently, with the rapid
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development and continuous iteration of the new-generation information technology, the cost of digital
transformation of enterprises is gradually decreasing, and more and more industrial enterprises will implement
industrial Internet-based digital transformation.
According to the data released by Frost & Sullivan, the scale of the market of industrial Internet platforms
and relevant solutions in China by 2025 is estimated to reach RMB193.12 billion. Between 2021 and 2025, the
CAGR of the market of industrial Internet platforms and relevant solutions in China is approximately 45.3%.
The Scale of the Market of Industrial Internet Platforms and Relevant Solutions and Forecast between 2020 and 2025
2,500 RMB'00 million
2,000 1,931.2
1,500
1,301.6
1,000 885.9
601.3
500 432.8
302.4
0
2020 2021 2022E 2023E 2024E 2025E
Supply side: According to the White Paper on the Economic Development of the Industrial Internet Industry
in China (2022), participants in the construction of industrial Internet platforms in China are diversified. Leading
manufacturing enterprises, information and communications enterprises, and Internet-based enterprises build
industrial Internet platforms in different dimensions and from different perspectives based on their own
comparative advantages, enabling China’s industrial Internet industry to enjoy industrial enterprises, ICT
enterprises, and Internet enterprises at the same time.
The key technologies and industries that the industrial Internet involves are extensive and complex and can
hardly be fully covered by enterprises. Thus, developing the industrial Internet by relying on industrial
manufacturing enterprises becomes a typical development path of industrial Internet enterprises, such as Root
Cloud, Midea Cloud, and Baosight. In the packaging field, major manufacturers that provide industrial Internet-
related products and solutions services include Yunyin, Dongfang Digicom, and wantit.
The subsidiary Dongfang Digicom, carrying Dongfang Precision’s missions of expanding into the industrial
Internet industry and implementing “digital and intelligent transformation strategies”, was established in 2020.
With the vision “to become a world-leading provider of industrial Internet industry solutions”, Dongfang Digicom
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is engaged in building industrial Internet platforms for industries using new-generation information technologies,
such as the IoT, cloud computing, big data, and artificial intelligence and becoming a leader in the domestic
manufacturing industry in digital and intelligent upgrading.
3. Industry of the water powersports products business
According to the Classification of Strategic Emerging Industries (2018), the water powersports products of
the subsidiary, Parsun Power, fall under the “manufacturing of marine equipment” industry. The outboard motors
are Parsun Power’s main water powersports products. Outboard motors are the key auxiliary equipment for small-
and medium-sized ships and are characterized by their compact structures, light weights, convenient installation
and maintenance, easy operations, and low noise. They are widely used in water recreation and sports, fishing,
water traffic, emergency rescue, shore landing, and maritime patrol.
Applications of Parsun Power’s Outboard Motors
Field Scenario Example
Recreational fishing,
Recreational
sailing and water sports
Fishing, water traffic and
Commercial
waterway maintenance
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Emergency rescue and
Official and maritime patrol
military Beach landing and water
reconnaissance
With global economic growth, personal income increase, and the change in personal consumption habits, the
global outboard motor market trends toward stable growth. Considering the development of China’s water tourism
and recreational industry and the emphasis of the government on maritime rights, the Chinese government
agencies at all levels have granted vigorous policy support to ship-related industries. For example, the National
Development and Reform Commission has included high-performance ships, such as superyachts, luxury cruise
ships, marine surveillance vessels, and small-waterplane-area twin hulls, among items for encouragement. The
Ministry of Industry and Information Technology has proposed developing brand products, such as luxury
superyachts, sightseeing boats, and official boats. The State Council has also proposed vigorously developing
marine tourism, manufacturing localised tourism equipment such as cruises and cruise yachts, and vigorously
developing cruise yacht tourism. Under the guidance of policies, China’s yacht industry will usher in rapid
development.
According to the report released by Global Market Insights Research Private Limited, an international market
research institution, in terms of sale volume, the sale volume of the global outboard motors in 2022 reached
888,600 and is expected to reach 1.171 million by 2030, with a CAGR of 3.50% from 2022 to 2030. In terms of
revenue, the size of the global outboard motor market in 2022 was USD10.572 billion and is expected to reach
USD15.975 billion by 2030, with a CAGR of 5.30% from 2022 to 2030. With global economic growth, personal
income increase, and the change in personal consumption habits, the global outboard motor market trends toward
stable growth.
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Global Sales and Market Size of Outboard Motors between 2022 and 2030 (Units: ’0,000 Pieces; USD’00 Million)
120 180
160
100
140
80 120
100
60
80
40 60
40
20
20
0 0
2022 2023 2024 2025 2026 2027 2028 2029 2030
数量
Number 金额（右轴）axis)
According to the GMI report, the sizes of the global low-horsepower and medium- and high-horsepower
outboard motor markets in 2022 were USD2.145 billion and USD8.426 billion, representing 20.29% and 79.71%
of the total, respectively. Among the two types of markets, the medium- and high-horsepower outboard motor
market had a larger size. Between 2022 and 2030, the CAGRs of the global low-horsepower and medium- and
high-horsepower outboard motor markets are 5.40% and 5.27%, respectively, indicating that the global outboard
motor market is driving the development recreational and luxury yachts and obviously trending toward high-
horsepower outboard motors.
The Sizes of Markets of Outboard Motors with Different Horsepowers between 2022 and 2030 and Estimations
(USD’00 Million)
140
120
100
80
60
40
20
0
2022 2023 2024 2025 2026 2027 2028 2029 2030
Low-hp 中大马力and high-hp
In terms of Chinese market, by the GMI report, the sale volume of outboard motors in the Chinese market in
2022 reached 43,000 and is expected to reach 75,800 by 2030, with a CAGR of 7.34% from 2022 to 2030,
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substantially larger than the 3.50% of the global market. In terms of sales, the size of the Chinese outboard motor
market in 2022 was USD282 million and is expected to reach USD588 million by 2030, with a CAGR of 9.62%
from 2022 to 2030, also substantially larger than the 5.30% of the global market.
Size of the Chinese Outboard Motor Market and Estimation between 2022 and 2030 (Units: ’0,000 Pieces; USD’00
Million)
8 6
7
5
6
4
5
4 3
3
2
2
1
1
0 0
2022 2023 2024 2025 2026 2027 2028 2029 2030
数量
Number 金额（右轴）axis)
Amount (right
Worldwide, the outboard motor industry is dominated by Japanese and American brands, including Yamaha,
Japan (an outboard motor brand under Yamaha Motor) and Mercury, USA (an outboard motor brand under
Bentfield Group). China has become one of the world’s fastest-growing outboard motor markets owing to its rapid
economic growth and changing recreational habits. With the rise of domestic brands represented by Parsun Power,
domestic substitution has gradually become one of the mainstream trends in the development of the outboard
motor industry in China, and there is the huge market potential for domestic substitution.
II Principal Activities of the Company in the Reporting Period
(I) Overview
The principal operations of Dongfang Precision include four major business divisions: smart corrugated
packaging equipment, industrial Internet industry solutions, digital printing solutions, and water powersports
products.
Among them, the smart corrugated packaging equipment business and the industrial Internet industry
solutions business are positioned as the core business divisions of Dongfang Precision. The digital printing
solutions business is operated by the majority-owned subsidiary Wonder Digital, while the water powersports
products business is run by the majority-owned subsidiary Parsun Power.
(II) The smart corrugated packaging equipment business
Dongfang Precision’s smart corrugated packaging equipment business includes corrugated cardboard
production lines and corrugated box printing and packaging production line equipment.
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Relationship between Corrugated Packaging Manufacturing Value Chain and the Company's Smart Corrugated Packaging Equipment
Intelligent high-speed corrugated cardboard production line
Raw paper
Kraft paper High-precision corrugated cardboard production line
Corrugated cardboard
Corrugated box printing and packaging production line (top printing fixed type)
Corrugated boxes
Corrugated box printing and packaging production line (bottom printing open-close type)
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1. Corrugated cardboard production lines
Dongfang Precision’s corrugated cardboard production line business primarily consists of Fosber Group and
the majority-owned subsidiaries Fosber Asia and Tirua China. Fosber Group includes Fosber Italy, Fosber
America, QCorr, Tirua Group, etc.
(1) Fosber Italy
Fosber Italy, a subsidiary, specializes in manufacturing mid-to-high-end corrugated cardboard production
lines under the Fosber brand. The product line includes two major series, namely S-Line and C-Line, which cater
to widths ranging from 2.5 meters to 2.8 meters and speeds ranging from 250 meters/minute to 470 meters/minute.
These corrugated lines are applicable for producing corrugated cardboard with a thickness of 2mm to 13mm,
known for their high load-bearing capacity, excellent shock resistance, plasticity, and environmental performance.
The resulting corrugated cardboard is extensively used in fields such as logistics and express delivery, furniture
and household appliances, and electronic product packaging, serving as the outer packaging for various types of
corrugated boxes.
The primary markets for Fosber Italy’s mid-to-high-end corrugated cardboard production line products are
Europe, North America, and Latin America. The company’s primary research and production base is situated in
Lucca, Italy.
(2) Fosber America
Fosber America, a subsidiary, is a top-notch provider of equipment and services for corrugated cardboard
production lines in the North American market. The company is renowned for its world-class installation, training,
service, spare parts, and upgrade support. Fosber America’s production base is located in Green Bay, Wisconsin,
and it has a market share of over 50% in the mid-to-high-end corrugated cardboard production line industry in the
United States, making it the top-ranked company in the market.
(3) Fosber Asia
Fosber Asia, a subsidiary, specializes in producing the Pro-Line series, specifically tailored for the Chinese
and Asian markets. These production lines cover widths ranging from 2.2 meters to 2.8 meters and speeds ranging
from 180 meters/minute to 320 meters/minute, catering to markets in China, Southeast Asia, South Asia, and
Russia, among others. Fosber Asia also introduces high-end corrugated lines, such as the S-Line and Quantum
Line, to China, customizing them to meet the requirements of Chinese and Asian industry customers, and
producing them in domestic factories to create locally-made high-end corrugated line products.
(4) QCorr
QCorr, a subsidiary, specializes in manufacturing Quantum Line, Wavy Line, and other related products. The
Quantum Line production line is primarily used for creating solid fiberboard below 2mm and micro flute
corrugated board, covering widths ranging from 1.8 meters to 2.5 meters. With innovative designs and new
production process concepts, the Quantum Line boasts unique technical features and compact dimensions. Solid
fiberboard and micro flute corrugated board are known for being lightweight, strong, moisture-resistant, and
environmentally friendly. As such, they are widely used in offset carton packaging, high-end products, electronic
products, and cultural and artistic product packaging.
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QCorr and Fosber’s corrugated cardboard production lines have excellent complementarity from the
standpoint of the end-use application fields of the manufactured cardboard products. The diverse range of
products offered by both brands covers the entire spectrum of end-use application requirements, ensuring
comprehensive coverage.
(5) Tirua Group
Tirua Group, a subsidiary, is a specialist in the production of corrugated rollers and pressure rollers for the
corrugated cardboard industry. Leveraging years of experience in the field, Tirua is well-versed in all types of
corrugated cardboard production lines and can manufacture a diverse range of corrugated rollers and pressure
rollers. Additionally, the company can design and produce customized rollers to meet the specific needs of
customers, taking into account their machine types, special coating requirements, and paper characteristics. Tirua
possesses state-of-the-art coating roll equipment and patented polishing equipment, and is highly specialized in re-
cutting, re-casting, and coating techniques.
Dongfang Precision aims to further strengthen synergy across its various business divisions within the Group
and capitalize on China’s competitive advantage in global manufacturing. To better support the domestic high-end
corrugated cardboard production line business, the company plans to introduce Tirua’s corrugated roller and
pressure roller business to China in 2023. This will involve the establishment of the Tirua China team and the
creation of a new subsidiary, Tirua China, located in the Nanhai District of Foshan City. This strategic move will
enable the localization of corrugated roller and pressure roller business, catering to the needs of Dongfang
Precision’s corrugated cardboard production line business. At the same time, it will expand the Tirua brand’s
corrugated roller and pressure roller into new markets in China and Asia.
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Primary Product Portfolio of Dongfang Precision’s Smart Corrugated Packaging Equipment Business - Corrugated Cardboard Production Lines
Product category Brand Product pictures Key features
Width: 2.5 -2.8 meters
Speed：250~ 470 mpm
Pro/Care, Pro/Quality, etc.
Industry 4.0 Production
Information System
Width: 1.8 -2.5 meters
Innovative design
Compact body and high
flexibility
Corrugated More suitable for producing
cardboard
lightweight corrugated
production lines
cardboard
Width: 2.2 - 2.8 meters
Speed: 180~ 320 mpm
A leading global supplier of
corrugated rollers and pressure
rollers, with industry-leading
precision machining and
tungsten carbide treatment
technology
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2. Corrugated box printing and packaging production line equipment
In this regard, the primary business entities are Dongfang Precision (China) and Dongfang Precision
(Europe). Dongfang Precision (China) specializes in offering a diverse range of corrugated box printing and
packaging complete lines, including fixed/open-close type, top printing/bottom printing corrugated converting
lines. The “Dongfang Star” series consists of top printing fixed type and top printing open-close type FFG inlines,
while the “Super Star” series comprises bottom printing die cutter stripper vacuum stacker converting lines,
bottom printing open-close type FFG inlines, bottom printing open-close type/FFG & stitchers, and other products.
Furthermore, Dongfang Precision (China) provides a wide range of market-oriented corrugated box printing and
packaging production line equipment in different specifications to meet customer demands. The products are
highly popular not only in the domestic market but also exported to over 30 countries and regions worldwide,
including Europe, America, Asia, Africa, Latin America, and Oceania.
Dongfang Precision (Europe), a subsidiary, specializes in high-end corrugated converting line products. The
company offers a range of products, including FD series quickset top printing FFG, HGL series quickset bottom
printing FFG, and quickset bottom printing/die cutter stripper vacuum lines. These products are designed with
non-crush feeder design, full servo control, and fully automatic control features, making them suitable for high-
definition printing. Dongfang Precision (Europe) also provides various pre-printing and post-printing equipment
compatible with the complete line products, such as feeder unit, stripper transfer, intelligent palletizer, and folder
gluer, to enhance the efficiency and quality of the entire production process. Dongfang Precision (Europe)
primarily targets the European and American markets.
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Primary Product Portfolio of Dongfang Precision’s Smart Corrugated Packaging Equipment Business - Corrugated Box Printing and Packaging Production Line Equipment
Product category Brand Product pictures Key features
Top printing fixed type
DONGFANG STAR I QUICKSET TOP PRINTING FFG Full servo control
Quick set
2 minutes order set up
Integrated with energy saving,
high efficiency and
intelligence
DONGFANG STAR II TOP PRINTING OPEN-CLOSE TYPE FFG
Top printing open-close type
INLINE
Corrugated
Servo motor control
converting
Labour efficiency by only 2-3
machine
workers
High efficiency and stability
Excellent waste cleaning
SUPER STAR I BOTTO M PRINTING DIE CUTTER STRIPPER VACUUM STACKER
CONVERTING LINE Count accurately
Automatic palletizing
Suitable for complex irregular
boxes, auto-pack boxes,
pre-printed boxes, and etc.
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Product category Brand Product pictures Key features
Solved the headache of the
industry by achieving the
multi-out die cut cardboard
with nips
2-3 operators for the entire
line
Professional die cutter FFG
Corrugated
SUPER STAR II BOTTOM PRINTING OPEN-CLOSE TYPE FFG INLINE inline
converting
machine Suitable for RSC or RDC box
Servo motor control
Labour efficiency by only 2-3
workers
Well-established design
philosophy for bottom
printing machine inline with
SUPER STAR III BOTTOM PRINTING OPEN-CLOSED TYPE/FFG & STITCHER
folder gluer & stitcher
Integration control, easy
operation
Multiple use to satisfy the
different order change
Shorten the process and
reduce the human cost
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Product category Brand Product pictures Key features
High-end bottom fixed
printing FFG
Spindle servo drive
Switch orders quickly
Complete peripheral
HGL RDC 1628，HIGH BOARD LINE BOTTOM PRINTING MACHINE equipment unit
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3. Business model of the Company’s smart corrugated packaging equipment business
R&D model: The Company has industry-leading independent design and R&D capabilities, continually
establishing high-level R&D innovation management mechanisms. The R&D team, spearheaded by industry
experts, employs a blend of long and short-term product R&D planning, supported by a market-oriented R&D
mechanism. Additionally, a robust R&D talent incentive mechanism enhances the Company’s overall technical
proficiency, cementing its leadership position in the industry.
Procurement and production model: The Company procures raw materials, such as steel plates, metal
components, and electrical parts (such as motors and PLCs), from external suppliers, while producing some core
components and corrugated rollers in-house.
The majority of the Company’s equipment products adhere to a “made-to-order production” model. Upon
receiving orders and partial deposits from customers, the Company purchases raw materials from suppliers based
on specific customer requirements and inventory levels, and develops production plans and schedules. The
Company advocates a “lean production” model for production and operational management, ensuring precise
control over BOM costs and manufacturing expenses, while continuously enhancing operational efficiency.
Typically, the delivery time for corrugated cardboard production line orders ranges between 4 to 6 months, while
the delivery time for corrugated box printing and packaging production line equipment orders is approximately 2
to 3 months.
Marketing Model: The Company employs a “direct selling + distribution” marketing model. It utilizes a
direct sales approach for the domestic market and a combination of direct sales and agent distribution for overseas
markets, tailoring the strategy to suit the unique needs of different countries and regions. This approach not only
widens the scope of sales channels and increases sales volume but also reduces market expansion and sales costs.
The Company’s complete production line and single machine products are typically one-time sales, with
more significant transaction amounts. However, accessories, software, and services can be sold multiple times
throughout the lifecycle of complete production line or single machine products. The growing number of existing
equipment sold in the downstream industry market presents a steady stream of sales opportunities for accessories,
software, and services. Additionally, providing high-quality technical support and services helps to promote the
sales of complete production line products.
In terms of the settlement of orders, the Company enjoys a high brand awareness and superior bargain power
in the industry, so it collects down payment in advance and payment by stages for the sales of corrugated
cardboard production lines and corrugated box printing and packaging equipment. Generally, 80% to 90% of the
sales payment can be collected upon the delivery of products.
(III) The industrial Internet industry solutions business
Dongfang Digicom, a subsidiary of Dongfang Precision, serves as the primary business entity for “industrial
Internet industry solutions”. The company’s business comprises two main divisions: the “Industrial Internet
Platform for Industry” and the “Factory-wide Intelligent Logistics System”.
1. Industrial Internet Platform for Industry
Leveraging the extensive industry experience of Dongfang Precision spanning over three decades in the field
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of corrugated packaging equipment, Dongfang Digicom employs cutting-edge technologies such as the Internet of
Things (IoT), cloud computing, big data, 5G, and artificial intelligence (AI) to develop an advanced industrial
Internet platform for the industry. This platform comprises three levels:
(1) Equipment digital acquisition (IoT platform): By leveraging IoT, 5G, and edge computing technologies,
the focus is on the core hardware of equipment to establish connections between different equipment and integrate
equipment data with enterprise-specific system data. This approach enables the equipment layer to become
digitized and networked.
(2) Data processing and modeling (middle platform): By utilizing data modeling, data mining, algorithm
analysis, cloud computing, and other cutting-edge technologies, the collected data is integrated and analyzed to
build an enterprise data hub. Based on this foundation, a business integration hub is created to offer industrial
models and algorithms, which aid enterprises in transforming their operational experience into data models. This
approach assists enterprises in achieving comprehensive business trend analysis and prediction while providing
visual BI tools that present key data and analysis results in an intuitive manner.
(3) Data intelligence application solutions (application platform): The use of big data, artificial intelligence,
and other cutting-edge technologies can facilitate the development of intelligent applications. These applications,
including equipment maps, fault prediction, remote operation and maintenance, digital twins, and full lifecycle
management, can cover all value chain segments from procurement, production operations, sales, and after-sales
services. By adopting these tools, enterprises can achieve data-based management and decision-making,
ultimately promoting their digital transformation.
Dongfang Digicom released the Industrial Internet Platform v1.0 in 2022, which features independent
intellectual property rights. The product is comprised of three key components: an IoT platform, a middle platform,
and an intelligent application platform. It effectively facilitates data collection, processing, and analysis, providing
intelligent applications based on data insights. The platform supports integrated applications across multiple
terminals and can be deployed in various ways, including public cloud, private cloud, or hybrid cloud.
Additionally, customers have the ability to independently develop secondary applications using the platform.
Dongfang Digicom distinguishes itself from other information service providers in the paper packaging
industry by offering an Industrial Internet Platform specifically designed for this sector. As a result, Dongfang
Digicom is currently the leading provider of Industrial Internet Platform solutions for the paper packaging
industry.
DFDIGICOM Industrial Internet Platform offers end-to-end services, including equipment connectivity for
data collection, data integration and analysis, and intelligent applications. By utilizing these services, customers
can achieve intelligent manufacturing capabilities.
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Architecture of DFDIGICOM Industrial Internet Platform
2. Intelligent Logistics
As the manufacturing industry undergoes an intelligent upgrade, the “factory-wide intelligent logistics
system” has emerged as a crucial area of focus for packaging enterprises seeking to transition towards “intelligent
manufacturing.” This system utilizes digital technology to transform production lines, warehouses, and logistics
distribution within the factory into digitally intelligent entities. By doing so, it facilitates comprehensive
automation control and management of production, warehousing, and distribution processes, reducing human
intervention and management costs, improving production efficiency, and enhancing product and logistics service
quality.
The “factory-wide intelligent logistics system” can be integrated with the industrial Internet platform to
enable real-time monitoring and control of production and logistics data. Through the analysis and mining of
logistics data, it can provide accurate decision-making support for enterprises, facilitating their digital
transformation and intelligent upgrading.
To address the challenges faced by domestic corrugated packaging enterprises, such as poor production
resource integration capabilities, labor recruitment/employment difficulties, unreasonable workshop layouts, and
low production efficiency, Dongfang Digicom’s intelligent logistics business team is utilizing Dongfang
Precision’s extensive industry experience, advanced international technical concepts, and unique understanding of
the Chinese paper packaging market. They are customizing factory-wide intelligent logistics systems specifically
for Chinese paper packaging enterprises.
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Application Model of Industrial Internet Platform + Factory-wide Intelligent Logistics System
DFDS
platform
(data
application)
AP P Large screen dashboard Data report
Bog data
Data cleansing Data processing Data storage Data analysis
platform
Fast moving consumer goods
Pharmaceuticals industry
Equipment access Data collection Data storage Rules Engine
IOT
Electronics industry
Appliance industry
Other industries
Light industry
Border gateway (edge acquisition terminal + intelligent sensing terminal)
Corrugated packaging enterprises
Internet of Machines Internet of Internet of
Things P ersons
Equipment
Smart Smart Intelligent
Printer Flat-pressing flat die Visual sensor for RFID/bar Field
cutter FFG & stitcher Corrugator lines inspection electric water environmental code tag operators
meter meter monitoring
Industrial Internet Platform
End-market application
Factory-wide Intelligent Logistics System
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(IV) The digital printing solutions business
The business is primarily led by the subsidiary Shenzhen Wonder Digital Technology Co., Ltd. Wonder
Digital provides digital printing solutions for industry customers, including digital printers, ink, accessories, and
professional services. Wonder Digital has introduced a variety of digital printer products to meet the diverse needs
of different market segments and customer levels, including:
● Multi Pass digital printer series applicable for small-batch paper packaging printing
● Single Pass digital printer series applicable for large/medium/small batch paper packaging printing
● Single Pass digital series applicable for pre-printing on raw paper
● Hybrid printer series that combines Multi Pass high-precision printing and Single Pass high speed
printing into one, supporting both scanning mode printing for large size, high precision, and full color orders, and
instantly switching to Single Pass mode for printing large volumes of small size orders, meeting a wider range of
corrugated digital printing needs.
The Multi Pass series targets small and medium-sized customers and delivers high cost-performance value,
significantly reducing overall packaging costs for e-commerce and export OEM models such as “one-piece drop
shipping” and “transit warehouse” sales. The Single Pass models retain all the features of the Multi Pass series and
are primarily designed for fast printing of medium-sized orders. In contrast, the Single Pass digital series for raw
paper pre-printing primarily caters to large-volume order printing, providing comprehensive costs similar to
traditional printing and superior printing effects.
Wonder Digital offers a diverse range of products that cover various types and specifications, from post-
printing to pre-printing, from water-based dye/pigment ink to spot color UV ink, from corrugated box to offset
carton. The products also support a range of application modes and scenarios, from single-sheet printing to
exchange orders seamlessly with variable data printing, and from single machine printing to integration with ERP
systems. Wonder Digital’s large format roll to roll high speed digital printer outperforms domestic competitors in
terms of width and resolution. Additionally, it offers a compact size, low energy consumption, and high cost-
performance ratio compared to similar machines from both domestic and foreign competitors.
With a comprehensive digital printer product matrix, Wonder Digital provides corrugated packaging digital
printer products that meet the diverse needs of industry customers with different market positions and levels.
Since its establishment in 2011, Wonder Digital’s digital printer products have been exported to countries and
regions such as Europe, America, the Middle East, Latin America, and Southeast Asia, with over 1,400 units of
equipment installed in more than 80 countries worldwide.
Apart from digital printers, Wonder Digital also sells supporting units after printing section including slotting
and varnish coating units, as well as special ink products that are compatible with its own-brand equipment. These
special ink products, including water-based dye ink, water-based pigment ink, and UV ink. Wonder Digital’s high
cost-performance digital printing solution provides customers with cost-effective configuration plans for digital
inkjet printing equipment and ink formulation plans. The cost-performance ratio of the ink is a crucial factor for
customers to consider when evaluating the overall solution.
Based on accumulated know-how and experience, Wonder Digital has introduced digital printing solutions
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for advertising, home decoration, and other fields, including flatbed printing and roll to roll printing technologies.
The flatbed models can be used for digital printing on materials such as aluminum panels, glass, ceramic tiles,
metal plates, acrylic sheets, and alucobond panels, while the roll-to-roll models are applicable for digital printing
on materials such as corrugated cardboard, vehicle paste paper, lamp box fabric, PVC film, decorated paper, and
metal coils.
Wonder Digital aims to offer its customers more than just individual products or services. It strives to provide
assistance in producing high-quality printed products that are convenient, efficient, and cost-effective, while
ensuring profitability. Achieving this goal requires more than just providing isolated printing equipment, ink, or
accessories; a complete solution is necessary. Different application areas and customer requirements require
tailored solutions. Hence, Wonder Digital equips the most suitable printheads and inks, develops exclusive inkjet
control systems, optimizes pre-printing, printing, and post-printing processes, and matches corresponding
equipment and consumables to help customers improve production efficiency, reduce inventory, and lower costs
based on their specific needs.
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Primary Product Portfolio of Dongfang Precision’s Smart Corrugated Packaging Equipment Business——Digital Printers
Industrial printing, basic
resolution 1200DPI
Printing speed 150m/min
8 color printing optional
WD200++SINGLE-PASS Industrial High Speed Customizable printing width
Corrugated Board Digital Printer
Roll to roll printing,
applicable on paper, vehicle
paste paper,
Digital printers Lamp box fabric, PVC film,
decorated paper, aluminum
sheets, etc
24h continuous operation,
Ind ustrial SINGLE PASS Roll to Roll High
centralized printing and
Speed Digital Printer
scattered folding and gluing,
saving costs
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Combining two different
digital printing methods:
Multi Pass high-precision
printing and Single Pass high-
speed printing.
Reduce investment on
equipment, save room, labor,
MULTI PASS-SINGLE PASS Digital maintenance and other costs,
Hybrid Printer and significantly improve
production efficiency
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(V) The water powersports products business
The subsidiary, Parsun Power, is the main business entity for the Company’s water powersports products
(outboard motors) and is a leading enterprise in the domestic outboard motor industry. It ranked first in the
industry’s market share in China from 2018 to 2020. Parsun Power’s main products are outboard motors of
various specifications and different series, with horsepower ranging from 2 to 115. The outboard motor products
are exported to hundreds of countries and regions, including Europe, Africa, Oceania, South America, North
America, the Middle East, and Southeast Asia.
1. Outboard Motor Products
By the source of power, outboard motor products of Parsun Power are divided into gasoline outboard motors,
electric outboard motors, and diesel outboard motors.
Gasoline outboard motors enjoy the most abundant specifications and varieties. Parsun Power has
accumulated years of industry experience in the field and has had several proprietary technologies and applied
them to products. It has achieved mass production of the maximum 115hp gasoline outboard motors, and has
successfully broken the long-term monopoly by international well-known brands in the 115hp sector. With stable
and reliable quality of its 115hp gasoline outboard motors, Parsun Power has won more and more product orders
in Europe and China, contributing to domestic substitution of medium- and high-horsepower outboard motors and
the improvement of the global market share of domestic brands. After successfully conquering the 115hp gasoline
model, Parsun Power's R&D team marches toward higher-horsepower models and strives the make domestic-
brand high-horsepower outboard motors take a place in the global competition of the high-horsepower outboard
motor market.
Electric outboard motors are powered by batteries. They convert electric power into kinetic power through
motors, and are characterized by zero emissions, low noise, and easy operation, and are mainly used in scenic
spots and other sectors requiring stricter environmental protection. Parsun Power's electric outboard motors are
divided into 7hp motors and 9.9hp motors, which are being sold in developed countries such as the United States.
Diesel outboard motors not only retain the characteristics of easy assembly, easy maintenance and easy
operation of gasoline outboard motors but also enjoy the advantages of fuel saving, lower emissions, greater
torque and being safer, more reliable, and easier for maintenance, which are mainly used in commercial
transportation and public law enforcement. Parsun Power now has diesel outboard motors and is selling the high-
horsepower outboard motors of 150hp to 300hp of OXE Marine (a Swedish brand) in the domestic market.
Parsun Power has achieved a complete product line layout of “gasoline-diesel-electric” outboard motors, and
will rely on its years of technical expertise and leading market share in the gasoline outboard motor field to
expand into high-horsepower diesel outboard motors and electric outboard motors.
Parsun Power's outboard motor products have stable quality and reliable performance, and some of them
enjoy the comprehensive performance comparable to that of internationally well-known brands and emissions
reaching European and American standards. In the future, Parsun Power will focus on medium- and high-
horsepower outboard motors, enrich electric outboard motor production lines, continuously optimize the product
structure of outboard motors, and consolidate its leading position among domestic outboard motor manufacturers.
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2. Sales Model
Parsun Power follows an industry-standard sales model that primarily relies on distribution, supplemented by
direct selling. The demand for outboard motors, which are the company’s main product, is mainly distributed
overseas, with end customers scattered throughout the world. Adopting a distribution-centric sales model enables
Parsun Power to reach end customers to the fullest extent possible.
3. Production Model
Parsun Power produces outboard motor products independently, utilizing sales demand forecasts, customer
orders, product inventory status, material delivery progress, and product production cycles to formulate
production plans. The company then organizes the production of components in accordance with specialized
processes and procedures.
4. Procurement Model
Following the principle of “sales determine production, production determines procurement,” Parsun Power
determines the procurement requirements for its outboard motor business, while also taking into account
reasonable safety stock.
III Core Competitiveness Analysis
The analysis of the Company’s core competitiveness in the Reporting Period is as follows:
(I) Complete layout in the corrugated packaging machinery industry chain and the most complete and
richest product portfolio in the industry
Among enterprises of the same type in the domestic corrugated packaging machinery industry, Dongfang
Precision has the most complete and comprehensive industry chain layout, with its business covering almost all
key processes in the corrugated packaging production and processing business chain. Meanwhile, the Company
has the most complete and richest corrugated packaging production line equipment in the industry, making it
capable of meeting the demands for complete production line and single machine products of different market
positioning, different customer types and dozens of specifications and models, second to none in China.
Corrugated cardboard production lines: Business entities, such as Fosber Italy, Fosber America, Fosber
Asia, and QCorr, provide corrugated cardboard production lines of different specifications and types that meet
varied market levels and positioning to multiple countries and regions worldwide. Fosber is one of the two
companies with the strongest comprehensive technical strength in middle- and high-end corrugated cardboard
production lines worldwide. The extensive application of software systems based on Industry 4.0 to its corrugated
lines results in industry-leading digitalization. Featuring unique technological characteristics and compact size, the
high-speed corrugated cardboard production line, Quantum Line, launched by the subsidiary QCorr can produce
single-layer corrugated cardboards in line with any standards and allow the embedding and matching of digital
printing technology. The corrugated cardboard production lines of Fosber and QCorr are highly complementary,
and multiple product series of the two brands fully cover terminal application needs.
Corrugated rollers (key components in a corrugated cardboard production line): Tirua Group, a
subsidiary, is a time-honored, prestigious, and world-leading corrugated roller supplier in Europe, specializing in
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the production of corrugated rollers and pressure rollers for corrugated cardboards.
Corrugated box printing and packaging production lines: Business units, such as Dongfang Precision
(China) and Dongfang Precision (Europe), serve domestic and overseas markets by supplying high-quality
corrugated converting line and single machine products covering multiple specifications. They can produce
products that meet dozens of specifications and different market positioning, covering fixed type/open-close type,
top printing/bottom printing, and converting line (inline)/single machine products, and has the most complete
product lines and riches product portfolio of the corrugated box printing and packaging production line equipment
worldwide.
Digital printers: In terms of digital printing, Wonder Digital is one of the earliest enterprises worldwide that
have taken the lead in applying the high-speed inkjet printing technology to corrugated packaging and home
building materials, and service provider that can provide customers with a full set of digital printing solutions.
Industrial Internet industry solutions: Dongfang Digicom, a subsidiary, is the only industrial Internet
platform enterprise in the paper packaging industry. Based on its “Industrial Internet Platform for Industry” and
“Factory-wide Intelligent Logistics System” with independent property rights, it is committed to becoming a
service provider and ecosystem operator that provides customers with one-stop overall solutions for intelligent
plants.
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Business Divisions and Entities of Dongfang Precision
(II) Industry-leading technology level and strong capabilities of R&D and innovation
The Company’s overall R&D strength and technology level are at the forefront among domestic enterprises
of the same type. As of the end of 2022, the Company had 327 R&D and technical employees, and held 371
patents at home and abroad and 33 software copyrights.
● The smart corrugated packaging equipment business:
The middle- and high-end corrugated cardboard production lines under the Fosber brand are industry-leading
in speed, width, precision, stability, reliability, failure rate, and intelligence, characterized by high efficiency,
energy saving, stability, reliability, intelligent control, and easy operation and maintenance. The corrugated
cardboard production lines under the Fosber brand boast machinery with high technology, quality, and reliability,
advanced intelligent software systems, and technical support services and have won the praise of customers
worldwide.
Fosber Asia has launched the “Instant Set” unit and applied it to corrugated cardboard production lines. Each
cutting blade and indentor are independently controlled by the servo motor, thus significantly improving the speed
of the order change of the dry section of corrugated lines and shortening the average time of order change from 8-
15 seconds to around 3 seconds. Moreover, it can better support the quick order switch of downstream customers
and meet the characteristics of multiple types and small batches of paper packaging orders in China.
Fosber Group has developed special software systems based on Industry 4.0 for its middle- and high-end
corrugated cardboard production lines, including Syncro4, PCS, Pro/Care, and Pro/Quality, to achieve highly
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digital and intelligent management and control of the machine status, production process, routine maintenance,
technical support, and quality inspection of corrugated cardboard production lines. Advanced technologies, such
as sensors, Advanced Reality (AR), algorithm analysis, big data, and cloud computing, are adopted to realize the
full automation and intelligence of the whole process of production and processing of corrugated cardboards,
monitor the temperature, humidity, heat, folds, and other data of corrugated cardboard production lines in real
time, and monitor the dashboard dynamically in the production process. Through data-based production
performance analysis and cost analysis, it helps customers improve production efficiency. Through the “self-
diagnosis system”, it identifies abnormal operations and sends alerts, and identifies solutions in an intelligent
manner. Through the “big data analysis system” module, it collects real-time data in the corrugator production
process through sensors, outputs recommended configuration parameters and improvements through algorithm
analysis, and helps customers improve the effectiveness of production process control.
With respect to technical support and service, Fosber Group offers technical services, such as Pro/Visionair
and Remote Control. Through online remote diagnosis, it allows customers to achieve real-time synchronization
with its technicians so as to complete technical diagnosis or machine maintenance and remove the barriers caused
by geographical distance and language differences. Meanwhile, the time for technical support, machine
maintenance, and customer training is greatly shortened to help customers cut costs and raise efficiency.
How Fosber Group’s PRO Series Intelligent Production Management Information Technology System Works
● The industrial Internet industry solutions business:
The “DFDIGICOM Industrial Internet Platform”, independently developed by Dongfang Digicom, a
subsidiary, enables digital, visual, and transparent equipment connection, and facilitates intelligent plants to
become self-adaptive, systematic, and end-to-end. Big data, algorithm analysis, and artificial intelligence (AI) are
employed to achieve low coupling, high availability, high performance, independence, safety, and controllability.
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Moreover, the platform can be used at multiple terminals, deployed on public, private, and hybrid cloud, and
independently and secondarily developed by customers.
The architecture of the industrial Internet platform products independently developed by Dongfang Digicom
consists of an Internet of Things (IoT) platform, a middle platform, and an intelligent application platform,
covering multiple functional modules, such as EMS, MES, QMS, WMS, and PMS. The basic architecture of this
industrial Internet platform includes the sensing layer (the IoT platform), the network layer (the IoT platform/the
middle platform), the platform layer (middle platform), and the application layer (the intelligent application
platform).
Dongfang Digicom is currently the only enterprise in the paper packaging industry that can provide all-round
industrial Internet platform products and overall solutions. It can provide the industry with end-to-end solutions
and operating services, such as intelligent equipment, integrated management of production and operations of
enterprises, intelligent business decision-making, agile corporate reforms and innovation. Most core members of
the Dongfang Digicom team come from famous manufacturers in the Internet, industrial Internet, and ERP
industries at home and abroad. Of IT manufacturers in the paper packaging industry, Dongfang Digicom boasts
high professionalism and strong R&D strength. Dongfang Digicom, in the past two years since its establishment,
has cumulatively submitted 37 software copyright applications and 49 patent applications. As of March 2023, it
has been cumulatively granted 37 software copyrights and 21 patents, including 12 invention patents.
● The outboard power products business:
The subsidiary Parsun Power is committed to independent R&D and innovation of China-made outboard
motors, and is a state-level "Little Giant" enterprise with specialties, refined management, unique technologies
and innovation, a national high-tech enterprise, the Provincial Outboard Motor Engineering and Technology
Research Institute of Jiangsu, a technology center recognized by Jiangsu Province, a leading enterprise in China's
internal combustion engine industry and a council member of the Small Gasoline Motor Branch of China Internal
Combustion Engine Industry Association. Its outboard motor products have won the Certificate for
Industrialization Demonstration Program under the National Torch Plan and honors including Innovative Products
in Chinese Machinery Industry, Products of Well-known Brands in Jiangsu, and Products of Well-known Brands
in Suzhou.
Parsun Power has been developing in the outboard motor industry for over ten years and has had several
China-leading core technologies and accumulated rich scientifically innovative achievements after long-term
R&D input and technical accumulation. As at the end of the Reporting Period, it has been cumulatively granted 57
patents (inclusive of 11 invention patents) and won two second prizes of the China Machinery Industry Science
and Technology Award and is one of the main drafters of two industry standards including Outboard Gasoline
Engines- General Requirements (JB/T 11875-2014) and General Technical Specification of Outboard Engine
(CB/T 4505-2020). In 2021, Parsun Power successfully realized the mass production of 115hp outboard motors,
breaking the long-standing monopoly of internationally well-known brands in the 115hp sector.
(III) Profound Know-How experience and experienced team in the industry
Dongfang Precision has an experienced team with profound Know-How experience in the industry, which
has 20 years of experience in both global and domestic industry markets and has an in-depth understanding of the
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Company's industrial layout, development planning, R&D approach, production operation, marketing, and team
management. The core management team has a broad vision, can promptly keep up with the general development
trend of the smart corrugated packaging equipment manufacturing industry, and can enable the Company to
achieve steady and sustainable development through forward-looking strategic planning and layout.
As an enterprise that practices the management model of professional manager team and attaches great
importance to authorization management, Dongfang Precision takes "a wealth of talent" and "cultural guidance"
as the basis of its corporate strategy and corporate culture, and develops its organizational capacity, improves the
Group's control over all business units and subsidiaries and integration of resources and assistance and aid,
improves the Group's overall operational efficiency and reduces the Group's operation cost and promotes the
Company's healthy and sustainable development by optimizing the organizational structure design, standardizing
the authorization and control system, implementing medium- and long-term incentives and further developing the
corporate culture.
(IV) High brand popularity and customer recognition worldwide
Dongfang Precision-branded corrugated box printing and packaging production line equipment, Fosber-
branded corrugated cardboard production lines, Wonder Digital-branded digital printers, Quantum-branded
corrugated cardboard production lines, Tirua-branded corrugated rollers and Parsun-branded outboard motors of
the Company are enjoying considerable brand recognition and industry influence at home and abroad.
The Company has become an influential enterprise in the industry, as evidenced by its honors like the "Top
500 Private Manufacturers of China", the "Champion in Single Aspect", and the "Leader in Industry Segment".
In the business division of "corrugated packaging equipment", the Company has established good
partnerships with domestically leading enterprises in the corrugated packaging industry including Nine Dragons
Paper, Shanying Intl, Yuen Foong Yu, HXPP, MYS, XTL, Great Shengda, Forest Packing Co., Ltd., UCPS and
Zhengye International, and large international groups in the corrugated packaging industry including International
Paper, Smurfit Kappa, DS Smith, APP Sinar Mas and Mpact.
With the constant growth in concentration and the continuous upgrading of capacity in the downstream
industry, large- and medium-sized packaging enterprises will need more middle- and high-end production line
equipment, digital printing solutions, and industrial Internet industry solutions. The Company has seized
opportunities and formed a better competitive edge by virtue of its stable business partnership during the industry
changes.
(V) Global layout of business assets
The Company mainly serves customers in the corrugated packaging industry worldwide, and has realized the
global layout of its business assets:
In Asia, the Company has three domestic R&D and production bases in Foshan, Suzhou, and Shenzhen, in
Europe, it has R&D and production bases in Lucca, Bologna and Milan, Italy, and Pamplona, Spain, and in North
America, it has a production base in Green Bay, Wisconsin, USA. With such a layout in the three continents, the
Company has formed a global marketing and service network.
An internationalized marketing and service network enables the Company to seize all opportunities in the
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global industry market and to provide product machinery and technical services for customers in the industry in
over 100 countries and regions worldwide.
An internationalized product R&D, production and supply chain layout enables the Company to make
prompt responses worldwide and meet customer demands and is conducive to the Company's integration of global
resources, improvement of resource allocation efficiency, complement of advantages, reduction of the total cost
and improvement of the allocation efficiency, so that the Company can be increasingly competitive in the world
when it is operated as a group.
Global Layout of the Company’s Business Assets and Marketing Network
(VI) Strong capabilities of strategic control and integration
Since listing, the Company has kept expanding its presence in the upstream and downstream of the industry
chain of its core business. After years of practice, the Company has developed strong strategic control and deep
integration of its business divisions and accumulated rich experience and practice, through the deep perception of
the industry, forecast of industry trends, and a clear understanding of its own strategic development objectives.
Strategic control is the core capability that the Company relies on to manage its various business entities. In
practice, the Company adjusted the strategic development plans, business models, product portfolios, market
strategies, and core management teams of the companies acquired with its in-depth understanding of the industry,
forward-looking foresight to the development trend of the industry, clear awareness of its strategic development
objectives, and well-established understanding of the capabilities and resources of all its business entities, so that
these companies can be energized for new growth and step on a new development stage.
In terms of post-investment integration, the Company has formulated a set of effective controls for post-
investment integration, including the corporate governance standardization policy, the “Board of Directors-
Supervisory Committee-General Meeting” operation mechanism, the strategic and financial control system,
decentralized authorization management, complete audits, and management incentives, forming a set of measures
for effective controls for post-investment integration with the Company’s own characteristics to secure the
effective implementation of the strategic plan.
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● Corrugated cardboard production lines: Fosber Group recorded a compound annual growth rate (CAGR)
of net profit of 25%
After acquiring the controlling stake of Fosber Italy in 2014, the Company and its management took several
effective measures for integration, helped Fosber Group adjust its strategic planning and business strategies and
standardize the authorization management system, implemented the performance incentive policy for the core
management, and strengthened financial control. Such measures have successfully stimulated Fosber Group’s
business vitality. From 2015 to 2022, the CAGR of the operating revenue of Fosber Group was approximately
16%, and that of its net profit was 25%.
● Water powersports products: Parsun Power’s CAGRs of operating revenue and net profit exceeded 20%
After acquiring the controlling stake of Parsun Power in 2015, the Company helped Parsun Power streamline
and adjust its strategies, develop the new development roadmap, increase inputs in technology, products, and
R&D, strengthen the marketing force, and improve the efficiency of the supply chain and production. It also
supported Parsun Power to introduce excellent talent for a more powerful core team. These measures enabled
Parsun Power to realize continuous and stable growth. From 2017 to 2022, both CAGRs of the operating revenue
and net profit of Parsun Power surpassed 20%.
● Tirua Group and, the manufacturing pioneer, Agnati, were expanded to effectively stimulate new
momentum of established enterprises
In 2019 and 2020, the Company acquired the relevant business assets of Tirua Group, a nearly century-old
corrugated roller manufacturer, and merged Agnati, an Italian corrugated cardboard production line manufacturer
enjoying a high reputation for more than eight decades, into QCorr, a subsidiary of Dongfang Precision. The
Company and its management fully streamlined and standardized the development strategies, R&D planning,
product positioning, marketing, team building, and authorization management of these two established enterprises,
based on which optimization and adjustment were performed. These measures effectively stimulated the vitality
of the two old European companies and the enthusiasm of their manager teams. In 2022, the operating revenues of
Tirua Group and QCorr exceeded 10%. Particularly, Tirua Group’s orders of corrugated rollers hit a record high.
Relying on its strong strategic control and integration of business divisions, based on “mutual respect and
mutual trust” and with an open mind seeking common grounds while putting aside differences, the Company
effectively integrated all its business entities continuously released the synergy with the industry chain. Moreover,
it conducted active practice and accumulated precious experience in helping domestic private enterprises go
global and perform overseas industrial M&As and overseas companies carry out post-investment integration and
management optimization. Concurrently, such practice and experience facilitated the Company to lay a solid
foundation and provided strong support for the Company to promote the implementation of the five-year strategic
planning and realize long-term, sustainable, and steady development.
IV Analysis of Principal Operations
(I) Overview
In 2022, the Company faced a rapidly changing and complex external environment both at home and abroad.
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Under the strong leadership of the Board of Directors and the management team, everyone in the Company
devoted themselves to hard work. As a result, the Company achieved impressive growth in the core business
against headwinds, representing solid growth in the principal business for 12 consecutive years since its listing.
In the Reporting Period, the Company recorded operating revenue of approximately RMB3,893 million,
+10.44% YoY; a net profit attributable to its shareholders of approximately RMB447 million, -4.31% YoY; a net
profit attributable to its shareholders before exceptional gains and losses of approximately RMB398 million,
+4.61% YoY; and net cash generated from operating activities of approximately RMB506 million, +65.10% YoY.
In 2022, the Company’s domestic and international business entities received orders amounting to
approximately RMB5,404 million, an increase of 31% YoY, which is the largest amount of orders received by the
Company in many years. 2023 is expected to see the alleviation of unfavourable factors in 2022 such as overseas
inflation, rising energy prices and significant fluctuations in the euro exchange rate, and the Company’s strong
order book has laid a solid foundation for growth in the year.
(II) Business division operations during the Reporting Period
1. The smart corrugated packaging equipment business
(1) The corrugated cardboard production line business
Fosber Group, which caters mainly to the European and American markets, has achieved rapid growth,
benefiting from the rapid growth of the e-commerce market in the US and Europe since 2020, increased capital
expenditure by medium and large manufacturers in the paper packaging industry, and a combination of factors
such as sustainability and the green economy. 2022 saw Fosber Group’s main business units, Fosber Italy and
Fosber America, achieving record sales orders and revenue, with orders for 2023 already fully booked and some
orders already scheduled for 2024; Fosber Asia’s sales orders increased by about 41% YoY, and the sales area in
overseas markets was further expanded; the total sales orders of Tirua Group’s corrugated rollers increased by 27%
YoY, and the orders also hit a record high.
Fosber Italy and Fosber America have established stable partnerships with major manufacturers in the
corrugated packaging industry in Europe and the US, such as Smurfit Kappa, International Paper, DS Smith,
SAICA and others, and have continued to consolidate their leading positions in the market. The business, assets
and staff of the two subsidiaries are located in Europe and North America. They and their subsidiaries adopt a
local management and operation model, with product design, development and manufacturing in Europe and the
US. The end use of their products is to produce and process various types of corrugated packaging products which
are rigid consumer products in European and American countries. According to Statista data, the US e-commerce
market is expected to grow at a compound annual growth rate of 12.7% from 2017 to 2027. The trend of
“sustainability” is gaining ground in Europe and the US, which continues to drive the trend of "replacing plastics
with paper" in the packaging industry. Demand for corrugated packaging products in the end-consumer market
continues to grow, helping to drive demand for corrugated packaging production line equipment.
A. Fosber Italy
In 2022, Fosber Italy achieved an order intake of approximately EUR278 million, an increase of 53% YoY
and a compound annual growth rate of approximately 15% from 2018 to 2022, and sales revenue of
approximately EUR201 million, an increase of 10% YoY and a compound annual growth rate of approximately 8%
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from 2018 to 2022.
B. Fosber America
The main business unit, Fosber America, achieved an order intake of approximately USD212 million, an
increase of 52% YoY and a compound annual growth rate of approximately 17% from 2018 to 2022, and sales
revenue of approximately USD158 million, an increase of 40% YoY and a compound annual growth rate of
approximately 14% from 2018 to 2022. Fosber Group outperformed its key competitors in terms of sales volume
and value in North America in 2022, leveraging the competitive advantage of the Fosber brand of corrugated
cardboard production lines in the North American market. With the support of Fosber America, QCorr
successfully sold its first 2.5m wide Quantum Line in the US, achieving a sales breakthrough in the North
American market.
C. Fosber Asia
Fosber Asia, a subsidiary, focuses on the Chinese and Southeast Asian markets. The Pro-Line series
corrugated cardboard production lines are tailor-made for corrugated packaging customers in the Chinese market,
with a component localisation rate of around 90%, and fully relies on the advantages of China’s supply chain,
which has the most complete range of industrial categories and the most complete support in the world, and
completes the design and manufacturing in China to provide industry customers with high-quality high-end
domestic corrugated cardboard production lines.
Fosber Asia achieved an order intake of approximately RMB320 million in 2022, an increase of
approximately 41% YoY. It entered the Russian market for the first time, filling the gap of overseas markets.
Fosber Asia’s internationally leading high-end corrugated cardboard production line localisation project and
Quantum Line localisation project are both progressing steadily.
In early 2023, a groundbreaking ceremony was held for Fosber Asia’s new corrugated cardboard production
line intelligent plant construction project, which is located in Songxia Industrial Park, Foshan City, Guangdong
Province, covering an area of approximately 80 mu. It is expected that upon completion of the new plant, Fosber
Asia’s production capacity will be significantly increased, allowing it to respond to customer demand and serve
customers faster and better, and to drive the industry towards high-end, green and intelligent development.
D. Tirua Group
In 2022, member company Tirua Group recorded a record order intake for corrugated rollers with a total
order intake of approximately EUR28.9 million in 2022, an increase of 27% YoY; it achieved sales revenue of
approximately EUR28 million throughout the year, an increase of 11% YoY. Following the acquisition by
Dongfang Precision, the Tirua Group’s sales orders grew at a compound annual growth rate of approximately 15%
between 2020 and 2022.
In July 2022, Fosber Group completed the acquisition of 30% of the shares of Tirua Group. Upon
completion of the transaction, Fosber Group held 100% of the shares in Tirua Group, and Tirua Group became
a wholly-owned subsidiary of Dongfang Precision. The transaction is conducive to the further integration of
business divisions within Dongfang Precision and the further release of synergies in the industrial chain; with the
completion of the transaction, the integration measures for the Tirua Group will be further deepened, which is
conducive to further stimulating the operational vitality and development potential of the Tirua Group and
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improving its operating results.
In order to further strengthen synergies among the business divisions within the Dongfang Precision,
leverage the competitive advantages of Chinese manufacturing on a global scale, and better support the
development of the high-end domestic corrugated cardboard production line business, in 2023, the Company will
introduce the Tirua corrugated roller & pressure roller business to China, establish a new subsidiary, Tirua
China, in Nanhai District, Foshan City, and build up the Tirua China team for localisation of corrugated roller &
pressure roller business and expansion of new markets of Tirua corrugated roller & pressure roller in China and
entire Asia while satisfying the needs of the corrugated cardboard production line business of Dongfang Precision.
(2) The corrugated box printing and packaging production line business
In 2022, Dongfang Precision (China) achieved annual sales revenue of approximately RMB475 million, an
increase of approximately 14% YoY, and a net profit of approximately RMB120 million, an increase of
approximately 60% YoY. Export business for overseas markets achieved rapid growth; benefiting from the
release of market demand in overseas industries and increased efforts in direct sales and channel building in
international markets, orders for machines from overseas markets increased by 28% YoY, and the promotion of
inline products in international markets was effective, strengthening the leading position of Dongfang Precision
printers in overseas markets. In terms of research and development, a number of products were optimised and
improved to enhance performance, speed and stability while further improving the price/performance level.
Dongfang Precision (Europe) continued to improve its operating performance results in 2022 while
maintaining stable sales revenue, with significant improvements in both profit and operating cash flow. In terms
of market development, we entered the North and South American markets for the first time and continued to
develop new customers.
2. The industrial Internet industry solutions business
(1) Product development
In 2022, Dongfang Digicom made positive progress in the development of industrial Internet platform
products: it successfully completed the development of DFDIGICOM Industrial Internet Platform v1.0, including
the development of an IoT platform, a middle platform and an intelligent application platform, which has passed
two safety tests by third-party authoritative institutions during the year, with the testing standards conforming to
national and industry standards. In addition, the Company has also completed the development of an intelligent
production execution system for supporting printing and packaging equipment. In terms of fully automated
factory-wide logistics systems, Dongfang Digicom has completed the design and development of a full range of
hardware and sample production.
(2) R&D/IP
Dongfang Digicom, in the past two years since its establishment, has cumulatively submitted 37 software
copyright applications and 49 patent applications. As of March 2023, it has cumulatively obtained 37 software
copyrights and 21 patents, including 12 invention patents.
(3) Sales and delivery
In terms of sales and delivery, in 2022, Dongfang Digicom has signed contracts with a number of domestic
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and overseas industrial customers and completed delivery of some of its products. Using such technologies as 5G
and artificial intelligence, Dongfang Digicom achieved the first remote delivery of an overseas project during the
year and successfully passed the initial inspection.
Up to now, more than 10 domestic or overseas projects are being delivered or pending delivery in Dongfang
Digicom, and strategic cooperation agreements have been signed with some of the leading customers in the
domestic paper packaging industry to jointly create a model benchmark for smart factories in the industry.
(4) Industry impact
In 2022, Dongfang Digicom joined the China Alliance of Industrial Internet to assist the Alliance and
national authorities in promoting the in-depth implementation of the Industrial Internet in the packaging industry.
3. The digital printing solutions business
In June 2022, the Company completed the settlement of the acquisition of equity interest in Wonder Digital,
through a combination of equity transfer and capital increase, by which the Company acquired 51% of its shares
and obtained a controlling stake in it. Through this acquisition, Dongfang Precision’s comprehensive strength in
digital printing solutions has been significantly enhanced; Wonder Digital has been included in the scope of the
Company’s consolidated financial statements since June 2022, becoming a new growth curve for the Company’s
performance.
In 2022, Wonder Digital achieved an order intake of approximately RMB130 million, an increase of 10%
YoY, with the order intake in overseas markets growing at a rate of over 60%. It also achieved operating revenue
of RMB132 million, an increase of approximately 12% YoY; and a net profit of approximately RMB17.61 million,
an increase of 50% YoY.
Good brand image and customer recognition, good product stability, cost performance and after-sales service
are the main competitive advantages of Wonder Digital in digital printing solutions. In terms of research and
development, by the end of 2022, Wonder Digital had accumulated 43 patents; the newly developed large format
roll to roll single-pass digital printer model is at the leading level in the domestic industry in terms of width,
resolution and other indicators, and has been significantly improved in machinery stability and production
efficiency, with the advantages of compact size, low energy consumption and high cost performance compared to
similar machines in the market. In August 2022, Wonder Digital moved into a new facility, which is nearly three
times the size of the previous one. This relocation enabled Wonder Digital to better meet the delivery of its
continuously growing orders and provided strong support to achieve continued growth in business performance.
4. The water powersports products business
In 2022, Parsun Power achieved operating revenue of approximately RMB572 million, an increase of 22.03%
YoY, of which revenue from outboard motor sales increased by 29% YoY; and its net profit was RMB73 million,
an increase of 27% YoY.
In terms of sales, benefiting from the continuous growth in demand for outboard motor products in overseas
markets and the trend of domestic substitution in the domestic market, during the Reporting Period, Parsun Power
continued to maintain rapid growth in outward sales revenue. From 2020 to 2022, the proportion of revenue of
medium and high horsepower increased from 8.29% to 31.77%, with a compound annual growth rate of 171.33%;
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benefiting from the steady growth of downstream market demand, the need for domestic replacement of medium
and high horsepower and the gradual maturity of the domestic industry chain, the Company has gradually realized
the transformation from medium and low horsepower to medium and high horsepower outboard motor products.
In terms of research and development, Parsun Power continued to increase investment in R&D: a brand new
R&D centre was put into operation during the year, 20 intellectual property applications were submitted in 2022,
and by the end of 2022, the cumulative number of patents granted was 57; the research and development of high
horsepower gasoline motors above 200 horsepower and electric outboard motors progressed steadily.
In terms of production, Parsun Power continued to tap the existing capacity potential, and outboard motor
output value hit a new high; in March 2023, the construction of a new green digital and intelligence factory with
an annual production capacity of 76,400 units of high-end water powersports products and the construction of a
new R&D centre was officially started, which will lay a solid foundation for the further development of Parsun
Power.
In January 2023, the application for Parsun Power’s IPO on the ChiNext board of the Shenzhen Stock
Exchange was approved at the second meeting in 2023 of the ChiNext Board Listing Committee of the Shenzhen
Stock Exchange.
5. The equity investment business
During the Reporting Period, the Company’s equity investments were as follows:
(1) Equity investment in Beijing Sinoscience Fullcryo Technology Co., Ltd.
During the Reporting Period, the subsidiary Yineng Investment indirectly invested in Beijing Sinoscience
Fullcryo Technology Co., Ltd. (referred to as "Fullcryo" in this Report) and Sinoscience Fullcryo (Zhongshan)
Equipment Manufacturing Co., Ltd. by making a capital contribution to a limited partnership and obtained non-
controlling interests of the two companies.
Fullcryo is a high-tech enterprise founded by the Technical Institute of Physics and Chemistry, CAS. It
focuses on the strategic guarantee of national big science research projects, the independent and comprehensive
development and utilization of strategic helium resources and the development needs of the green hydrogen
energy industry. Based on the decades of the large-scale cryogenic R&D led by two generations of academicians
of the Technical Institute of Physics and Chemistry, CAS, and with the research achievements of the two phases
of national projects for key scientific machinery at the core, Fullcryo has attracted famous experts and scholars
and marketing teams at home and abroad and used the core technologies with a working temperature of 20K to 2K
(-253°C to -271°C) to provide large-scale cryogenic refrigeration machinery with liquid helium and liquid helium
temperature zones, hydrogen liquefaction machinery, LNG-BOG helium extraction machinery, advanced
cryogenic machinery for the separation and purification of rare gases (such as neon, helium, krypton and xenon),
solutions for hydrogen energy application systems, engineering of highly pure rare gases and industrial gases, and
other services. Fullcryo is a national supplier in China with independent intellectual property rights, whose
services cover the design and manufacturing of large-scale cryogenic refrigeration machinery, cryogenic system
engineering, and industrial gas provision. Being a subsidiary controlled by Fullcryo, Sinoscience Fullcryo
(Zhongshan) Equipment Manufacturing Co., Ltd. is the only advanced machinery manufacturer in china that owns
independent intellectual property and technologies for large-scale cryogenic machinery with a working
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temperature of below 20K (-253°C to -271°C). It is also the only manufacturer and service provider worldwide
that can simultaneously provide the non-standard customization, leasing, and entrusted operation of large-scale
cryogenic machinery with working temperatures of 4.2K (-269°C) and 20K (-253°C).
As one of the limited partners of the partnership, Yineng Investment accounts for 94.86% of the total capital
contributions. Considering the partnership's agreements on investment orientation, investment decisions, operation
and management, income apportionment, and loss bearing, and the fact that Yineng Investment accounts for the
majority of the capital contributions to the partnership, the partnership is included in the consolidated statements
of Dongfang Precision as a "structured body controlled by the Company" from the perspective of commercial
substance and after complying with the Accounting Standard for Business Enterprises and referring to the
professional opinions of the independent auditor.
(2) Equity investment in Yunnan Yuze Semiconductor Co., Ltd.
During the Reporting Period, the subsidiary Yineng Investment indirectly invested in Yunnan Yuze
Semiconductor Co., Ltd. (referred to as "Yunnan Yuze" in this Report) by making a capital contribution to a
limited partnership. Yunnan Yuze mainly engages in the manufacturing of photovoltaic silicon wafers. It is a
leading manufacturer of N-type photovoltaic silicon wafers and silicon rods. It has been exploring the R&D and
manufacturing of N-type single-crystal silicon wafers since 2019. With significant first-mover advantages in
technology and talent reserves as well as customer expansion, Yunnan Yuze has created a good image in the
industry as a professional supplier of N-type single-crystal silicon wafers.
As one of the limited partners of the partnership, Yineng Investment accounts for 39.37% of the total capital
contributions. By the agreement on the fund investment decisions in the partnership agreement, the limited partner
Yineng Investment does not participate in the operation of the Fund Investment Decision Committee and does not
have veto power over fund investment decisions. Considering the partnership's agreements on investment
orientation, investment decisions, operation and management, income apportionment, and loss bearing, and by the
related regulations in the Accounting Standard for Business Enterprises, the Company does not control funds, so
funds are not included in the consolidated statements of the Company. They will be presented under the "Other
non-current financial assets--Financial assets at fair value through profit or loss" item in the consolidated financial
statements.
(3) Equity investment in Yunyin Technology (Shenzhen) Co., Ltd.
During the Reporting Period, the Company participated in the equity financing of Yunyin Technology
(Shenzhen) Co., Ltd. by way of direct investment and held a 4.55% equity interest in it. Yunyin Technology
(Shenzhen) Co., Ltd. is dedicated to the exploration of the digital business value of the packaging industry,
combining new technologies such as cloud computing, big data and machine intelligence with the production of
the packaging industry, “commanding the 20th-century machineries with the wisdom of the 21st century”, and
helping corporate customers in the printing and packaging industry to achieve “efficiency improvement in single
plants and multi-plant collaboration”, so as to facilitate industry transformation and upgrading, achieve production
and sales synergy across the supply chain of paper packaging, and improve the efficiency of enterprise services. In
terms of factory capacity specialization, around the digital transformation of packaging enterprises, Yunyin has
developed four digital products, namely Yunyin Juhaodan, Yunyin Baoyintong, Yunyin Zhikongbao and Yunyin
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Xiangyitong, which are aimed at “production and sales matching”, “workflow collaboration”, “intelligent control”,
“terminal services” and other scenarios to open up the connection between workers, machineries, factories and the
market, so as to better coordinate and allocate resources within the industry. In terms of industry chain
collaboration, Yunyin has built a customer-centric collaborative supply chain system, relying on its product
services and Yunyin Magic Cube’s packaging industry big data technology to achieve transactional connectivity,
data connectivity and machinery connectivity between upstream and downstream enterprises in the supply chain.
(4) Capital increase to Chengdu Dajin Aero-Tech Co., Ltd.
In 2021, the Company indirectly invested in Chengdu Dajin Aero-Tech Co., Ltd. ("Dajin Aero-Tech")
through Tianjin Hangchuang Zhijin Investment Partnership (Limited Partnership). Dajin Aero-Tech is specialized
in the precision machining and manufacturing of critical parts for aircraft engines, and has the qualification for the
R&D of national defense equipment. Its core products are the critical parts for aircraft engines, which are
characterized by complex structures, great difficulties in testing and high tolerance. Dajin Aero-Tech enjoys a
leading position in its segmentation, and is one of the private enterprises with strong comprehensive strength in
the aviation engine parts industry in China. It is not only an important supplier of China's major aero-engine
models but also the core supplier for the main maintenance plants of the aero-engines of air forces, and has been
shouldering the great mission of acting as strong support for Aero Engine Corporation of China, the main force in
the whole-machine manufacturing of China's aero-engine industry. While enjoying a firm position in the aviation
field, Dajin Aero-Tech has been gradually using the advanced manufacturing technologies it has accumulated in
the fields of aerospace, missiles, rail transportation and petroleum machinery manufacturing.
In 2022, based on the continued optimism in the future development space and the development trend of the
main business of Chengdu Dajin Aero-Tech Co., Ltd., the subsidiary Yineng Investment participated in its new
round of equity financing by way of direct investment. After the completion of this investment, Dongfang
Precision indirectly holds approximately 2.87% of the equity interest of Chengdu Dajin Aero-Tech Co., Ltd.
The business objective of the subsidiary, Yineng Investment, is to take the principal businesses as the core
and extended investment as the support, follow the guidance of the Company's strategic plan, focus on industries
related to the Company’s principal businesses and carry out M&As, while seeking investment opportunities in
industries encouraged by the National 14th Five-Year Plan, such as high-end equipment manufacturing, so as to
explore emerging business opportunities for the Company, and share the benefits in the process of growth and
development of the investees, and help improve the overall profitability of the Company.
The aforesaid equity investments do not constitute related-party transactions or major assets restructuring and
exert no significant impacts on the Company's operating results or financial condition in the Reporting Period.
(III) Capital operation
1. The spin-off listing of the subsidiary Parsun Power
During the Reporting Period, the preliminary plan for the spin-off listing of the subsidiary Parsun Power on
the ChiNext board of the Shenzhen Stock Exchange was approved by the Company’s Board of Directors and
general meetings of shareholders. The plan was accepted by the Shenzhen Stock Exchange in June 2022, passed
in two rounds of review inquiries during July~December 2022, and approved at the second meeting in 2023 of the
ChiNext Board Listing Committee of the Shenzhen Stock Exchange in January 2023. Currently, P arsun Power is
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proceeding with the application for its initial public offering on the ChiNext board.
2. The share repurchase has been completed as scheduled.
During the Reporting Period, the Company carried on with the 2021 share repurchase plan. During the
implementation period of the share repurchase (23 September 2021 ~ 22 September 2022), the Company
repurchased a total of 106,652,136 shares (or 8.04% of the Company’s total share capital) through centralized
bidding. With the highest trading price being RMB6.30/share and the lowest being RMB3.59/share, the total
amount paid was approximately RMB551 million (exclusive of transaction costs).
According to the share repurchase plan, no lower than 80% of the repurchased shares will be retired to
reduce the Company's registered capital while no more than 20% will be used for equity incentives or employee
stock ownership plans. On 10 October 2022, the Company completed the retirement of 85,321,704 shares (80% of
the total shares repurchased) with the Shenzhen branch of China Securities Depository and Clearing Corporation
Limited.
3. Equity incentives were steadily promoted to stimulate the internal power
During the Reporting Period, the Company launched the 2022 Restricted Share Incentive Plan. In April 2022,
the first grant was completed, where 2,650,000 restricted shares were granted to seven key managerial,
technological, and business personnel. In June 2022, as the unlocking conditions were met for the second
unlocking period of the first grant under the 2022 Restricted Share Incentive Plan, a total of 8,620,000 restricted
shares of 37 awardees were unlocked for public trading.
Steady promotion of equity incentives is beneficial to the Company's sustainable and healthy development
and gathering of internal power, to "stabilize the team, boost the morale, gather talents and improve performance".
By closely binding the interests of the Company's key personnel with the Company's future performance and the
improvement of the capability to seek returns for shareholders, the Company will see continuous improvement in
its business performance and the ability to create value.
(IV) Analysis of key financial indicators
1. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
2022 2021
As a % of total As a % of total
Change (%)
Operating revenue operating revenue Operating revenue operating revenue
(%) (%)
Total 3,892,708,509.64 100% 3,524,734,783.94 100% 10.44%
By operating division
Intelligent
3,892,708,509.64 100.00% 3,524,734,783.94 100.00% 10.44%
manufacturing
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
By product category
Corrugated
cardboard 2,603,549,326.99 66.89% 2,451,607,852.79 69.55% 6.20%
production lines
Corrugated box
printing and
packaging 717,169,922.31 18.42% 604,395,295.49 17.15% 18.66%
production line
equipment
Water powersports
products and 571,989,260.34 14.69% 468,731,635.66 13.30% 22.03%
general machines
By operating segment
Mainland China 441,664,388.05 11.35% 528,007,403.05 14.98% -16.35%
Other countries
3,451,044,121.59 88.65% 2,996,727,380.89 85.02% 15.16%
and regions
By sales mode
Direct selling 3,229,852,665.56 82.97% 3,096,762,855.79 87.86% 4.30%
Distribution
662,855,844.08 17.03% 427,971,928.15 12.14% 54.88%
selling + reselling
(2) Operating Division, Product Category or Operating Segment Contributing over 10% of Operating
Revenue or Operating Profit
√ Applicable □ Not applicable
Unit: RMB
YoY change
YoY change YoY change
Gross profit in gross
Operating revenue Cost of sales in operating in cost of
margin profit
revenue (%) sales (%)
margin (%)
By operating division
Intelligent manufacturing 3,892,708,509.64 2,833,305,748.54 27.22% 10.44% 10.89% -0.30%
By product category
Corrugated cardboard
2,603,549,326.99 1,941,758,020.93 25.42% 6.20% 10.26% -2.75%
production lines
Corrugated box printing
and packaging production 717,169,922.31 458,727,210.78 36.04% 18.66% 5.98% 7.65%
line equipment
Water powersports 571,989,260.34 432,820,516.83 24.33% 22.03% 19.85% 1.38%
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
YoY change
YoY change YoY change
Gross profit in gross
Operating revenue Cost of sales in operating in cost of
margin profit
revenue (%) sales (%)
margin (%)
products and general
machines
By operating segment
Mainland China 441,664,388.05 327,373,818.37 25.88% -16.35% -7.29% -7.25%
Other countries and
3,451,044,121.59 2,505,931,930.17 27.39% 15.16% 13.80% 0.87%
regions
By sales mode
Direct selling 3,229,852,665.56 2,352,642,921.94 27.16% 4.30% 4.64% -0.24%
Distribution selling +
662,855,844.08 480,662,826.60 27.49% 54.88% 56.69% -0.84%
reselling
Under the circumstances that the statistical caliber of the Company's main business data is adjusted in the Reporting Period, the
Company's main business data that adjusted according to the caliber at the end of the Reporting Period
□ Applicable √ Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
√ Yes □ No
Operating division Item Unit 2022 2021 Change (%)
Corrugated Unit sales Unit 160 144 11.11%
cardboard
Output Unit 162 144 12.50%
production lines
Inventory Unit 3 1 200.00%
Corrugated box Unit sales Unit 233 177 31.64%
printing and Output Unit 229 168 36.31%
packaging
production line Inventory Unit 51 35 45.71%
equipment
Water powersports Unit sales Unit 32.05 32.73 -2.08%
products and Output Unit 30.10 34.80 -13.51%
general machines
Inventory Unit 0.94 2.89 -67.47%
Any over 30% YoY movements in the data above and why:
√ Applicable □ Not applicable
The over 30% YoY movements in the unit sales, output and inventory of corrugated box printing and packaging production line
equipment are primarily driven by the acquisition of Wonder Digital in 2022.
The over 30% YoY movement in the inventory of water powersports products and general machines is primarily driven by the
increased output and unit sales of high-horsepower outboard motors in 2022.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
Unit: RMB
2022 2021
Product As a % of As a % of
Item Change (%)
category Cost of sales total cost of Cost of sales total cost of
sales (%) sales (%)
Corrugated Raw materials 1,132,363,095.01 39.98% 1,170,044,178.76 45.80% -3.22%
cardboard
Labor cost 335,242,775.36 11.83% 304,463,892.98 11.92% 10.11%
production
lines Other 474,152,150.56 16.73% 286,585,807.36 11.22% 65.45%
Corrugated box Raw materials 345,662,621.86 12.20% 338,673,324.30 13.25% 2.06%
printing and Labor cost 53,218,657.90 1.88% 46,616,621.84 1.82% 14.16%
packaging
production line Other 59,845,931.02 2.11% 47,550,069.99 1.86% 25.86%
equipment
Water Raw materials 384,529,146.81 13.57% 320,751,829.30 12.55% 19.88%
powersports Labor cost 24,165,439.52 0.85% 23,219,196.74 0.91% 4.08%
products and
general Other 24,125,930.50 0.85% 17,167,138.52 0.67% 40.54%
machines
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
√ Yes □ No
In February 2022, the Company established Dongfang Yineng International Holding Co., Ltd. ("Yineng International") with a
registered capital of RMB50 million and 100% ownership.
In February 2022, Yineng Investment, a subsidiary of the Company, established Changzhou Xinchen Venture Capital
Partnership (Limited Partnership) (“Changzhou Xinchen”) with a capital contribution of RMB48 million and a 94.86% ownership.
In February 2022, Parsun Power, a subsidiary of the Company, established Suzhou Baisheng International Trade Co., Ltd.
(“Baisheng International”) with a registered capital of RMB3 million and a 69.62% ownership.
In 2022, the Company acquired a 51% ownership in Shenzhen Wonder Digital Technology Co., Ltd. (formerly known as
“Shenzhen Wonder Printing System Co., Ltd.”) at RMB173,800,000.00 in cash, inc luding a capital increase of RMB50,000,000.00
and a consideration of RMB123,800,000 for equity acquisition. The Group completed the ownership change formalities with the
industrial and commercial administration in relation to the equity acquisition on 7 June 2022, with the date of acquisition on 7 June
2022.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √Not applicable
(8) Major Customers and Suppliers
Major customers:
Total sales to top five customers (RMB) 813,510,490.50
Total sales to top five customers as a % of total sales of the
20.90%
Reporting Period (%)
Total sales to related parties among top five customers as a %
0.00%
of total sales of the Reporting Period (%)
Top five customers:
Sales revenue contributed for As a % of total sales revenue
No. Customer
the Reporting Period (RMB) (%)
1 Customer A 266,564,036.76 6.85%
2 Customer B 223,281,418.70 5.74%
3 Customer C 158,486,940.33 4.07%
4 Customer D 91,618,525.93 2.35%
5 Customer E 73,559,568.78 1.89%
Total -- 813,510,490.50 20.90%
Other information about major customers:
□ Applicable √ Not applicable
Major suppliers:
Total purchases from top five suppliers (RMB) 254,595,256.42
Total purchases from top five suppliers as a % of total
12.21%
purchases of the Reporting Period (%)
Total purchases from related parties among top five suppliers as
0.00%
a % of total purchases of the Reporting Period (%)
Top five suppliers:
Purchase in the Reporting
No. Supplier As a % of total purchases (%)
Period (RMB)
1 Supplier A 103,183,961.45 4.95%
2 Supplier B 46,527,416.82 2.23%
3 Supplier C 37,489,093.26 1.80%
4 Supplier D 37,384,345.23 1.79%
5 Supplier E 30,010,439.66 1.44%
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Total -- 254,595,256.42 12.21%
Other information about major suppliers:
□ Applicable √ Not applicable
2. Expenses
Unit: RMB
Reason for any
2022 2021 Change (%)
significant change
Selling expenses 182,555,875.71 185,327,678.18 -1.50% No significant change
Administrative Increased labor cost in
311,463,613.16 272,090,728.08 14.47%
expenses the current period
Increased exchange
Finance costs -8,970,693.69 -5,996,474.46 49.60% gains in the current
period
R&D expenses 97,954,453.40 99,557,565.46 -1.61% No significant change
3. R&D Investments
√ Applicable □ Not applicable
Objectives to be Expected impact on the
Main R&D projects Purpose Project progress
achieved Company
The project includes
IoT platform, data
middle platform and
intelligent application
To provide one-stop platform products to
smart factory solutions help customers achieve Become a profit growth
Industrial Internet for corporate customers intelligent point for the Company's
V1.0 completed
Platform for Industry including but not transformation of industrial Internet
limited to the paper equipment, integrated platform business
packaging industry production, operation
and management,
intelligent decision-
making and agile
innovation.
To introduce the world-
leading high-end Further enrich the
corrugated cardboard Company's product
production line and portfolio which can
Localization of a world-
make it localized to Mass production for become a new profit
leading high-end
meet the needs of Promote as planned sales in the domestic growth point for the
corrugated cardboard
Chinese customers for market Company's corrugated
production line
the highest-end and box printing and
highest-speed packaging production
corrugated cardboard line machinery.
production line.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Meet the demand for
To make up the blank
high-horsepower
market of high-
outboard motors in
horsepower outboard
High-horsepower Mass production for domestic and
motors, and further Promote as planned
outboard motors sales in the world international markets,
enhance the
becoming a new profit
competitiveness of
growth point for the
products.
Company.
To develop a battery-
powered outboard
Meet market demand
motor to further
Electric outboard Mass production for and become a new
enhance product Promote as planned
motors sales in the world profit growth point for
competitiveness in the
the Company.
new energy outboard
motor market.
Details about R&D personnel:
2022 2021 Change (%)
Number of R&D personnel 327 284 15.14%
R&D personnel as a % of total
15.49% 15.33% 0.16%
employees
Educational background of R&D personnel
Bachelor’s degree 146 133 9.77%
Master’s degree 25 18 38.89%
Other 156 133 17.29%
Age structure of R&D personnel
Under 30 80 68 17.65%
30-40 140 113 23.89%
Other 107 103 3.88%
Details about R&D investments:
2022 2021 Change (%)
R&D investments (RMB) 101,656,683.16 99,557,565.46 2.11%
R&D investments as a % of
2.61% 2.82% -0.21%
operating revenue
Capitalized R&D investments
3,702,229.76 0.00 0.00%
(RMB)
Capitalized R&D investments
as a % of total R&D 3.64% 0.00% 3.64%
investments
Reasons for any significant change to the composition of R&D personnel and the impact:
□ Applicable √ Not applicable
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Reasons for any significant YoY change in the percentage of R&D investments in operating revenue:
□ Applicable √ Not applicable
Reason for any sharp variation in the percentage of capitalized R&D investments and rationale:
√ Applicable □ Not applicable
Independent research and development was carried out on Industrial Internet Platform for Industry during the year.
4. Cash Flows
Unit: RMB
Item 2022 2021 Change (%)
Subtotal of cash generated
4,083,606,350.48 3,506,294,160.56 16.47%
from operating activities
Subtotal of cash used in
3,577,311,889.53 3,199,634,884.54 11.80%
operating activities
Net cash generated from/used
506,294,460.95 306,659,276.02 65.10%
in operating activities
Subtotal of cash generated
5,502,146,075.67 7,120,320,577.02 -22.73%
from investing activities
Subtotal of cash used in
5,939,677,869.61 5,814,962,692.72 2.14%
investing activities
Net cash generated from/used
-437,531,793.94 1,305,357,884.30 -133.52%
in investing activities
Subtotal of cash generated
998,366,302.50 598,858,984.67 66.71%
from financing activities
Subtotal of cash used in
1,133,800,124.92 1,757,363,205.25 -35.48%
financing activities
Net cash generated from/used
-135,433,822.42 -1,158,504,220.58 -88.31%
in financing activities
Net increase in cash and cash
-25,583,078.47 398,702,538.96 -106.42%
equivalents
Explanation of why any of the data above varies significantly on a year-on-year basis:
√ Applicable □ Not applicable
(1) Net cash generated from operating activities was RMB506.2945 million, primarily because the Company's revenue growth
during the Reporting Period.
(2) Net cash used in investing activities was RMB437.5318 million, primarily driven by the Company’s acquisition of Wonder
Digital and purchase of long-term assets during the Reporting Period.
(3) Net cash used in financing activities was RMB135.4338 million, primarily driven by the Company’s repayment of debt
during the Reporting Period.
(4) Net decrease in cash and cash equivalents was RMB25.5831 million, primarily driven by net cash used in investing and
financing activities during the Reporting Period.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Explanation of why the net cash generated from/used in operating activities varies significantly from the net profit of the Reporting
Period:
□ Applicable √ Not applicable
V Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
Amount As a % of gross profit Primary source/reason Recurrent or not
Gains on wealth management product
Return on investments and share of profits of
19,131,077.82 3.78% Yes
investment associates recognized using the equity
method
Gain/loss on
Fair value changes of securities
changes in fair 17,917,046.61 3.54% Yes
investments and financial investments
value
Asset impairment
-12,796,323.56 -2.53% No significant impact. No
loss
Non-operating
2,459,567.33 0.49% No significant impact. No
income
Non-operating
880,845.25 0.17% No significant impact. No
expenses
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
31 December 2022 1 January 2022 Change in
As a % of As a % of percentage Reason for any significant change
Amount Amount
total assets total assets (%)
The share repurchase and the payment
Cash and bank for the acquisition of equity interests
1,274,447,199.74 18.39% 1,664,336,339.35 26.18% -7.79%
balances in Wonder Digital in the current
period
Accounts
837,305,757.46 12.08% 741,135,648.09 11.66% 0.42% Increased sales
receivable
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Contract assets 65,089,851.21 0.94% 24,414,117.64 0.38% 0.56% Increased sales
Increased stocks as a result of more
Inventories 1,092,981,884.51 15.77% 867,280,013.47 13.64% 2.13%
orders
Investment
0.00%
property
Long-term
equity 95,352,681.52 1.38% 84,777,596.67 1.33% 0.05% No significant change
investments
Fixed assets 570,200,113.79 8.23% 544,180,159.09 8.56% -0.33% No significant change
Construction in
38,904,537.85 0.56% 12,298,259.58 0.19% 0.37% No significant change
progress
Right-of-use
86,448,978.02 1.25% 80,386,832.91 1.26% -0.01% No significant change
assets
Short-term Repayment of short-term borrowings
41,815,129.24 0.60% 228,312,880.73 3.59% -2.99%
borrowings in the current period
Increased advances from customers as
Contract
692,567,968.60 10.00% 405,842,932.51 6.38% 3.62% a result of more orders in the current
liability
period
Long-term Reclassification of the current portion
57,884,494.89 0.84% 325,026,188.49 5.11% -4.27%
borrowings of borrowings in the current period
Lease liabilities 68,989,111.33 1.00% 65,213,555.87 1.03% -0.03% No significant change
Current portion
Reclassification of the current portion
of non-current 311,763,750.00 4.50% 108,385,000.00 1.70% 2.80%
of security deposits for borrowings
assets
Acquisition of Wonder Digital in the
Goodwill 430,916,848.74 6.22% 306,969,147.76 4.83% 1.39%
current period
Current portion
Reclassification of the current portion
of non-current 315,767,431.26 4.56% 38,495,724.83 0.61% 3.95%
of borrowings in the current period
liabilities
Overseas assets that take up a large percentage of the Company’s net asset value:
√ Applicable □ Not applicable
Control As a % of the
Any material
Asset value Management measures to Company’s
Asset Source Location Return impairment
(RMB) model protect asset net asset
risk or not
safety value
100% interest Producing
Operation
of Fosber M&A 852,412,893.39 Italy and Good 19.98% Not
management
S.p.A. marketing by
70 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Control As a % of the
Any material
Asset value Management measures to Company’s
Asset Source Location Return impairment
(RMB) model protect asset net asset
risk or not
safety value
itself
Producing
100% interest
and Operation
of EDF S.R. M&A 31,879,023.60 Italy Good 0.75% Not
marketing by management
L
itself
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Impai
Cumulat
rment
ive fair-
Gain/loss on allow
value
Opening fair-value ance Purchased in the Sold in the
Item changes Other changes Closing amount
amount changes in the for period period
recogniz
period the
ed in
perio
equity
d
Financial
assets
1. Financial
assets held
for trading
(exclusive
775,249,020.94 -19,374,879.84 0.00 0.00 5,457,711,892.97 5,353,536,475.48 0.00 860,049,558.59
of
derivative
financial
assets)
2.
Derivative
12,936,500.63 -8,534,136.34 0.00 0.00 16,195.63 3,635,839.63 0.00 782,720.29
financial
assets
Subtotal of
financial 788,185,521.57 -27,909,016.18 0.00 0.00 5,457,728,088.60 5,357,172,315.11 0.00 860,832,278.88
assets
Other non-
current 162,523,519.41 38,701,083.92 0.00 0.00 133,225,000.00 0.00 0.00 334,449,603.33
financial
71 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
assets
Total of the
950,709,040.98 10,792,067.74 0.00 0.00 5,590,953,088.60 5,357,172,315.11 0.00 1,195,281,882.21
above
Financial
246,925,243.48 -3,858,646.25 0.00 0.00 3,474,476.39 53,559,838.64 437,613.15 193,418,848.13
liabilities
Particulars about other changes:
Other changes in financial liabilities are mainly resulted from being recorded in other comprehensive income.
Indicate whether any significant change occurred to the measurement attributes of the major assets in the Reporting Period.
□ Yes √ No
3. Assets to which the Company’s Rights Were Restricted as at the Period-End
Unit: RMB
Item Closing carrying amount Reason for restriction
Used as deposits to obtain bank acceptance bills and
Cash and bank balances 40,726,502.47
letters of guarantee.
Fixed assets 4,409,110.42 Used to obtain bank loans for subsidiaries.
Current portion of other non-
310,300,000.00 Used as deposits for loans for subsidiaries.
current assets
Total 355,435,612.89
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
VII Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
Total investment amount in 2022 (RMB) Total investment amount in 2021 (RMB) Change (%)
1,227,440,484.73 1,608,856,907.68 -23.71%
2. Significant Equity Investments Acquired in the Reporting Period
√Applicable □ Not applicable
Unit: RMB
Whethe
Name Gain or loss
Type Progress r
of Sourc of Date of
Investme Investment Shareholdi Cooperatin Investme of as of the Expecte involve Index of
investee Main business e of investment disclosur
nt mode amount ng ratio g party nt period produ balance d return d in disclosure (if any)
compan funds for the e (if any)
ct sheet date litigatio
y period
n
Shenzhen
Wonder
Business
Production,
Service
sales, R&D
Partnershi
and technical
p (Limited
services of Published on
Self- Partnershi Completio
Wonder environmental 148,300,000. 18,633,830. 7 June www.cninfo.com.
M&A 51.00% funde p) and Indefinite Shares n of 0.00 None
Digital ly friendly 00 83 2022 cn, Announcement
d three transfer
packaging and No. 2022-049
persons,
printing
including
equipment and
Zhao
accessories
Jiang, Li
Yajun and
Luo
73 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Sanliang
148,300,000. 18,633,830.
Total -- -- -- -- -- -- -- -- 0.00 -- -- --
00 83
Note: The consideration of RMB148.3 million for the acquisition of Wonder Digital consists of (1) a cash payment of RMB123,800,000.00 for the equity interests acquired and (2) a portion of the capital
increase of RMB24,500,000.00 that is attributable to the minority shareholders in proportion to their shareholdings.
3. Significant Non-Equity Investments of which the Acquisition Was Uncompleted in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
Cum
ulati
ve
fair-
Gain/loss on value Fund
Secu Measure
Security Initial investment Opening fair-value chan Purchased in the Gain/loss in the Closing carrying Accounting ing
Security type rity ment Sold in the period
code cost carrying amount changes in the ges period period amount title sourc
name method
period recog e
nized
in
equit
y
Do mestically/ 002407 Do- 87,330,118.45 Fair value -8,686,340.08 87,330,118.45 38,385,381.75 -15,624,736.70 33,320,000.00 Financial Self-
74 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
overseas listed Fluor assets held fund
stocks ide for trading ed
Do mestically/ ADD Financial Self-
overseas listed 000547 SIN 48,396,183.60 Fair value -8,236,547.26 48,396,183.60 14,491,809.83 -5,896,107.13 28,008,266.64 assets held fund
stocks O for trading ed
Jingc
Do mestically/ Financial Self-
e
overseas listed 300567 74,055,562.31 Fair value -3,940,856.10 74,055,562.31 5,990,685.06 -2,804,877.25 65,260,000.00 assets held fund
Elect
stocks for trading ed
ronic
Do mestically/ Financial Self-
Avic
overseas listed 600760 71,584,544.20 Fair value 2,456,199.12 71,584,544.20 46,886,362.44 -10,040,681.76 14,657,500.00 assets held fund
Sac
stocks for trading ed
Faras
Do mestically/ Financial Self-
is
overseas listed 688567 30,265,333.10 Fair value -5,690,571.80 30,265,333.10 271,773.32 -5,685,805.14 24,307,754.64 assets held fund
Ener
stocks for trading ed
gy
Othe
Do mestically/ Financial Self-
r
overseas listed - 1,458,371,373.34 Fair value 1,458,371,373.34 1,487,480,778.65 29,109,405.31 assets held fund
stock
stocks for trading ed
s
Financial Self-
Trust products - - 6,631,573.01 Fair value 6,631,573.01 -2,868,965.53 3,196,419.88 -2,717,911.75 717,241.38 assets held fund
for trading ed
Financial Self-
Funds - - 628,007,924.74 Fair value 628,007,924.74 4,349,496.99 160,000,000.00 448,610,484.41 3,199,039.86 342,596,480.19 assets held fund
for trading ed
75 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Financial Self-
Others - - 140,609,523.19 Fair value 140,609,523.19 3,242,704.82 3,527,708,777.97 3,325,526,063.38 8,390,077.96 351,182,315.74 assets held fund
for trading ed
Total 2,545,252,135.94 -- 775,249,020.94 -19,374,879.84 0.00 5,457,711,892.97 5,370,839,758.72 -2,071,596.60 860,049,558.59 -- --
Disclosure date of the board
announcement approving the 15 March 2022
securities investments
Disclosure date of the general
meeting announcement approving N/A
the securities investments (if any)
(2) Investments in Derivative Financial Instruments
√ Applicable □Not applicable
1) Derivative Investments for Hedging Purposes in the Reporting Period
√ Applicable □Not applicable
Unit: RMB'0,000
Return on Cumulative fair- Closing amount
Initial Gain/loss on fair- Purchased in
investment in value changes Sold in the as % of the
Type of derivative investment value changes in the the Reporting Closing amount
the current recognized in Reporting Period Company’s closing
amount period Period
period equity equity
Aluminum futures 0 0 -5.83 0.00 114.65 108.83 0 0.00%
Forward forex settlement and
3,312.03 -35.42 -151.92 0.00 3,422.21 5,599.94 1,134.30 0.28%
sale contract
76 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Total 3,312.03 -35.42 -157.75 0.00 3,536.86 5,708.77 1,134.30 0.28%
Description of significant
changes in accounting policies
and specific financial
accounting principles in respect No significant change
of the Company's hedges for the
Reporting Period as compared
to the prior reporting period
Actual gains/losses in the
During the Reporting Period, the actual loss on derivative contracts for hedging purposes stood at RMB-1.9317 million.
Reporting Period
Results of hedges Currently not available
Funding source Self-funded
Risk analysis of positions held
in derivatives during the The Company's financial derivative transaction business is mainly intended to avert and prevent risks arising from fluctuations in exchange rates and commodity
Reporting Period and prices. In the Rules on the Management of Financial Derivative Transaction Business formulated by the Company, the operating rules, review and approval authority,
description of control measures routine management, and risk control mechanisms on the financial derivative transaction business have been prescribed to stan dardize business operation as well as
(Including but not limited to prevent and control related risks. Chinese futures exchanges have established well-improved risk control mechanisms. As future exchanges assume the performance
market risk, liquidity risk, credit responsibility, there is a low probability of credit risk. The Company will strengthen the understanding and mastering of national policies and requirements of relevant
risk, operational risk, legal risk, governing bodies to avoid related credit and legal risks.
etc.)
Changes in market prices or fair
value of derivative products
during the Reporting Period,
specific methods used, and Undue forward forex settlement and sale contracts are measured at fair value, i.e., the difference between the signing price of an undue forward forex settlement and
relevant assumption and sale contract held at the period-end and the bank’s forward forex rates at the period-end.
parameter settings shall be
disclosed for analysis of fair
value of derivatives
Legal matter (if applicable) N/A
Disclosure date of the
announcement about the
20 April 2022
board’s consent for the
derivative investment (if any)
Disclosure date of the 7 May 2022
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
announcement about the
general meeting’s consent for
the derivative investment (if
any)
1. Based on the realities and normal needs of routine operation, the Company and its subsidiaries intend to conduct the financial derivative transaction business, for the
purposes of reducing the risks arising from fluctuations in exchange rates and prices of related commodities to the principal business of the Company and decreasing
the impacts of market fluctuations on the principal business of the Company and its subsidiaries. By giving full play to the hedging function of financial derivative
instruments, the operating results and finance of the Company and its subsidiaries are increasingly robust. 2. The Company has prepared the rules on the internal
Special opinions expressed by control management of the financial derivate transaction business by relevant regulatory prescriptions, which is conducive to standardizing and strengthening the risk
independent directors control management of financial derivative transactions. The Board of Directors of the Company has performed the necessary re view and approval procedures for this
concerning the Company's matter in a legal and rule-compliant manner. No illegalities or violations of regulations and Articles of Association have occurred. 3. In strict compliance with the Stock
derivatives investment and risk Listing Rules of the Shenzhen Stock Exchange, the Guideline No. 7 of the Shenzhen Stock Exchange for the Self-regulation of Listed Companies--Transactions and
control Related-party Transactions, and other relevant laws and regulatory guidelines, the Company shall make prudent decisions and conduct prudent management,
inspections and monitoring of the financial derivative transactions of the Company and its subsidiaries, strictly control risks, and promptly discharge the information
disclosure duty. 4. We hold that the financial derivative transaction business of the Company and its subsidiaries does not prejudice the interests of the Company and
all shareholders, particularly not impair the interests of non-controlling shareholders. Therefore, we approve this matter and suggest submitting it to the General
Meeting of Shareholders of the Company for deliberation.
2) Derivative Investments for Speculative Purposes in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Use of Raised Funds
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
VIII Sale of Major Assets and Equity Investments
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IX Principal Subsidiaries and Joint Stock Companies
√ Applicable □ Not applicable
Principal subsidiaries and joint stock companies with an over 10% effect on the consolidated net profit:
Unit: RMB
Relations
hip with Principal Registered Operating Operating
Name Total assets Net assets Net profit
the activities capital revenue profit
Company
R&D,
processing,
manufacturin
g, and
marketing of
corrugated
Fosber Subsidiar EUR1.56 2,300,923,9 852,412,89 2,508,932,5 278,452,68 208,479,65
cardboard
Group y million 76.55 3.39 97.17 1.36 6.14
production
lines and
parts, as well
as provision
of after-sales
services
Shunyi
Investment is
principally
engaged in
business
entity and
Shunyi Subsidiar project RMB10 518,905,38 321,848,67 571,989,26 78,427,280. 71,596,963.
Investment y investments, million 5.25 7.65 0.34 91 32
etc. It is the
direct
controlling
shareholder
of Parsun
Power.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Subsidiaries acquired or disposed of in the Reporting Period:
√ Applicable □Not applicable
How the subsidiary was acquired or Impact on the Company’s operations and
Name of subsidiary
disposed of in the Reporting Period financial performance
Wonder Digital has been included in the
Company’s consolidated financial
statements since June 2022. It recorded
The Company acquired 51% equity operating revenue and a net profit of
interests in Wonder Digital through a RMB81,875,354.35 and
Wonder Digital
cash consideration for the equity interests RMB18,633,830.83, respectively, for
and a capital increase. June-December 2022. The consolidation
of Wonder Digital has strengthened the
Company’s financial performance for the
Reporting Period.
X Structured Bodies Controlled by the Company
√ Applicable □ Not applicable
1. In March 2021, the Company established Tianjin Hangchuang Zhijin Investment Partnership (Limited
Partnership) (the "Tianjin Hangchuang Fund" or the "Partnership") with AVIC Innovation Capital Management
Co., Ltd. The Company, as the sole LP of the Fund, subscribed for the Partnership's contribution share of
RMB20,000,000. The Fund is a special fund which is to invest in the equity of Sichuan Dajin Stainless Steel Co.,
Ltd. (now renamed as Chengdu Dajin Aero-Tech Co., Ltd.).
This investment is in line with the Company’s development strategy considering the Fund’s investment
direction, decision-making, management, income distribution, loss allocation, etc. From the perspective of
business nature, the Company provides the absolute majority of the capital of the Tianjin Hangchuang Fund, so it
is reasonable to include the Fund in the Company’s consolidated financial statements of the Reporting Period.
2. In March 2022, the wholly owned subsidiary Yineng Investment indirectly invested in Beijing Sinoscience
Fullcryo Technology Co., Ltd. (referred to as "Fullcryo" in this Report) and Sinoscience Fullcryo (Zhongshan)
Equipment Manufacturing Co., Ltd. by making a capital contribution to a limited partnership and obtained non-
controlling interests of the two companies.
As one of the limited partners of the partnership, Yineng Investment accounts for 94.86% of the total capital
contributions. Considering the partnership's agreements on investment orientation, investment decisions, operation
and management, income apportionment, and loss bearing, and the fact that Yineng Investment accounts for the
majority of the capital contributions to the partnership, the partnership is included in the consolidated statements
of Dongfang Precision as a "structured body controlled by the Company" from the perspective of commercial
substance and after complying with the Accounting Standard for Business Enterprises and referring to the
professional opinions of the independent auditor.
XI Prospects
(I) The Company's development strategy
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
1. Company vision
Business purposes of the Company: To become an industrial group with high influence in its areas, trust from
customers and shareholders, and respect from employees; uphold the business philosophies of "Integrity,
Innovation and Excellence", and achieve mutual benefits with customers, shareholders, employees and the society.
2. Corporate strategy
In 2022, the Company completed its strategic plan for the third five-year period (2018-2022). Looking back
at the past five years, the Company achieved 100.1% of its strategic objectives of operating revenue and 96.9% of
its strategic objectives of net profit. To be specific, the Company's annual operating revenue (excluding the impact
of Pride) has expanded from RMB2,377 million in 2018 to RMB3,893 million in 2022, representing a compound
annual growth rate of approximately 13.13%, and its annual net profit (excluding the impact of Pride) has
increased from RMB209 million in 2018 to RMB484 million in 2022, with a compound annual growth rate of
approximately 23.24%. These results demonstrate the strong capabilities of the Company’s management team in
scientific decision-making and strategic planning, as well as the competence of efficient strategic execution and
realization of all staff of the Company. These capabilities are a solid foundation for the Company's sound and
sustainable growth in the future.
Currently, the Company has formulated its strategic plan for the fourth five-year period (2023-2027). In the
period, the Company will adhere to the strategic idea of "1+N", with the strategy of "a wealth of talent" and
"cultural guidance" as the solid support, and promote the five strategies of "business concentration", "extended
investment", "globalization", "digitalization" and "collaboration" to achieve the goal of "to become an industrial
group with high influence in its areas, trust from customers and shareholders, and respect from employees".
The Company's strategic plan for the fourth five-year period (2023-2027)
To become an industrial group
with
high influence in its areas, trust from customers and
shareholders, and respect from employees
"1+N" development model
Business Extended
concentration investment Globalization Digitalization Collaboration
strategy
Focus on strategy
Follow the guidance
"integrated of the Group's Global marketing, Improve the Realize close
corrugated strategic plan, seek global operation, internal IT system, collaboration
packaging business synergies, and a global build digitalized among all business
solutions", carry on explore new business portfolio factories, increase divisions by giving
with the spin-off business management play to the Group
listing of the opportunities, and effectiveness, and Headquarters’
business of "water facilitate the support better functions
powersports Group's robust production
equipment", and development with efficiency
continuously the principal
optimize capital businesses as the
operation core and extended
investment as the
support
"A wealth of Talent" ×Cultural Guidance
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Details are as follows:
Business concentration strategy: Focus on the core business of “integrated corrugated packaging
solutions” and strengthen the endogenous growth constantly, as well as complete the spin-off listing of
the subsidiary Parsun Power with its business of "water powersports products", and continuously
optimize capital operation.
Extended investment strategy: Follow the guidance of the Group's strategic plan, seek business
synergies, explore new business opportunities, and facilitate the Group's robust development with the
principal businesses as the core and extended investment as the support, as well as use such means as
M&A, financial investment and the spin-off listing of subsidiary to accumulate momentum for higher
growth.
Globalization strategy: Committed to the globalization of the marketing network, management and
operation and the business portfolio, including assets, business, talent and operation and management.
Digitalization strategy: Internally, continue to enhance the IT system to improve management
effectiveness and support the improvement of operational efficiency; externally, provide modular digital
solutions for upstream and downstream enterprises through the subsidiary Dongfang Digicom, build a
digital platform for the whole chain, and promote the digital transformation of the whole industrial
chain.
Collaboration strategy: Build the organizing ability for group operation, strengthen collaboration among
internal business entities, optimize the internal collaboration mechanism, put in place a three-tier group
operation structure of "Group Headquarters + Business Divisions + Profit Generating Units", and
realize close collaboration among all business divisions by giving play to the Group Headquarters’
functions.
A wealth of talent strategy: Enhance cross-culture leadership, build an excellent talent team, optimize
the talent management system, etc.
Cultural guidance strategy: Establish common goals and values for the Group, build the Group as an
international family, and lead subsidiaries towards common growth.
(II) The Company's main business plan for 2023
1. Promote capacity expansion and support growth in operating performance
In 2022, the Company’s domestic and international business entities achieved a total order intake of
approximately RMB5,404 million, an increase of 31% YoY, which is the biggest annual order intake by the
Company for years. To actively seize market opportunities and meet order delivery needs, relevant business units
of the Company will vigorously promote capacity expansion in 2023. In early 2023, a groundbreaking ceremony
was held for the subsidiary Fosber Asia’s new corrugated cardboard production line intelligent plant construction
project, covering an area of approximately 80 mu. It is expected that upon completion of the new plant, Fosber
Asia’s production capacity will be increased by more than twice. In August 2022, the subsidiary Wonder Digital
moved into a new facility, which is nearly three times the size of the previous one. This relocation enabled
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Wonder Digital to better meet the delivery of its continuously growing orders and provided strong support to
achieve continued growth in business performance. Meanwhile, Fosber Italy, another subsidiary of the Company,
will also promote the construction of its new plant in 2023. In addition, in March 2023, the construction of a new
green digital and intelligence factory with an annual production capacity of 76,400 units of high-end water
powersports products and the construction of a new R&D centre was officially started by Parsun Power, which
will lay a solid foundation for the further development of Parsun Power.
2. Corrugated packaging equipment business: Improve business synergy and release growth potential
The smart corrugated packaging equipment business, as the Company’s core business, covers all the key
processes in the value chain of corrugated packaging production and processing. The industrial chain is well
arranged, and the products, technologies, sales networks and supply chains of different business entities have
many similarities and commonalities, so that they can learn and complement each other, which can promote the
integration of various business entities within the Group, and thus achieve business synergy.
In 2023, the Company will further improve the synergy between the medium- and high-end corrugated
cardboard production lines business of Fosber Italy and QCorr and the domestic corrugated cardboard production
lines business of Fosber Asia in such aspects as R&D design, production and manufacturing, and supply chain;
further deepen the collaboration between the corrugated box printing and packaging production line equipment
business of Dongfang Precision (China) and that of Dongfang Precision (Europe) in such aspects as R&D design,
production and manufacturing, and supply chain; promote the in-depth integration and adjustment of Tirua
Group to stimulate the latter’s operating vitality and development potential, and introduce the corrugated roller
and pressure roller products of Tirua into China to achieve the localized production of the corrugated roller and
pressure roller business, thus expanding new market for Tirua products in China and Asia while supporting the
development of the domestically high-end corrugated cardboard production lines business. The Company will
promote domestic business entities to introduce leading high-end equipment products from Europe into China,
redesign, modify and localize such products in combination with the needs of customers in China and Asia
markets, and launch appropriate domestically produced high-end equipment products to customers in both
domestic and Asia markets; promote the Group’s business entities at home and abroad to share resources in such
aspects as supply chain, production capacity and sales network to achieve advantage complementation and joint
resource utilization, thus improving the overall operating efficiency of core business, reducing the overall cost,
strengthening the overall market competitiveness, and exploring new markets on this basis; promote the collision
and integration between the corrugated packaging equipment business and the industrial Internet industry
solutions and digital printing solutions businesses, explore new business models, and create new product mixes, so
as to further expand the development space of and inject new development vitality into the Company’s core
business.
3. Digital printing solutions business: Expand new fields to achieve continuous growth
In 2023, Wonder Digital will continuously expand business with a focus on product R&D and sales. In terms
of R&D, Wonder Digital will, on the premise of consolidating the basic order of digital printing solution in the
field of corrugated packaging, develop new digital printing solution products in such fields as offset carton
printing, label and home building materials, to meet industry and market needs and further expand the
development space of Wonder Digital, thus achieving continuous growth of the industrial digital business and
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
improving the comprehensive competitiveness. In terms of sales, Wonder Digital will actively grasp market
opportunities, adjust dales strategies, expand sales areas, strengthen the building and layout of sales and after-sales
networks at home and abroad, enhance the professional training of dealers and after-sales personnel to improve
their professional skills and service level, thus providing better after-sales services for customers. Wonder Digital
will also increase its presence in exhibitions at home and abroad to further improve its market influence and
awareness. Wonder Digital strives to, through the efforts above, achieve new breakthroughs and development in
2023. In the future, with the promotion and application of its digital printing solutions in multiple fields, Wonder
Digital will have a broader development space.
4. Industrial Internet industry solutions business: Achieve rapid development and expansion
With the development of digital and intelligent technologies, the industrial Internet and intelligent plant have
become important approaches and means for digital transformation and intelligent upgrade of the manufacturing
industry. Dongfang Precision actively responds to national policies, fully seize the opportunities of the times,
continuously invest resources into industrial Internet and intelligent plant, and take the initiative to explore the
application of digital and intelligent technologies in the manufacturing industry, in an effort to inject new vitality
into industry development.
In 2023, the Company will unswervingly invest resources to promote the development of the industrial
Internet industry solutions business and help customers achieve digital transformation and intelligent upgrade.
In terms of R&D, Dongfang Digicom will continuously improve, rapidly iterate and upgrade independently-
developed industrial Internet platform products and intelligent production information management, and
constantly improve product performance and enrich product functions to provide solid support for the promotion
and application of the aforesaid products in the field of large packaging.
In terms of market expansion, the team of Dongfang Digicom will intensify efforts to promote the
application of the Industrial Internet Platform products of DFDIGICOM in the field of large packaging, and
expand the application scope of such products to the packaging fields beyond corrugated packaging. In addition,
the team of Dongfang Digicom will also actively conduct online and offline promotion activities, participate in the
annual industry exhibition in 2023, and establish and improve online product promotion and marketing channels.
In terms of industrial ecosystem, in 2023, Dongfang Digicom will join hands with more organizations and
enterprises in the field of industrial Internet in creating a win-win ecosystem and producing greater impacts in the
development wave of industrial Internet in the new era.
5. The extended investment business: Seek business synergies and explore new development
opportunities
The Company will adhere to the "1+N" strategic model with the co-development and mutual promotion of
"Core Business + Extended Investments" business. "1" represents the Company's main business of corrugated
packaging equipment and the cornerstone, the Company is making great efforts in developing it, and striving to
obtain a higher market share in the era of high-end, digital and intelligent trends; "N" represents the incubation
and cultivation of subsidiaries and joint-stock companies.
In 2023, the subsidiary, Yineng Investment, the main entity of the extended investment business, will
continue to take advantage of industries related to the principal operations of Dongfang Precision, focus on high-
quality companies in the industrial chain of China and the world. It will also carry out M&A around the industrial
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
chain according to the business needs and the actual situation of the Company, strengthen the horizontal and
vertical integration of the industrial chain, and seek for business synergies.
During M&As, Yineng Investment will fully participate in the industries supported by China's "14th Five-
Year Plan", focusing its equity investment on high-end equipment manufacturing, intelligent manufacturing and
other strategic emerging high-tech industries, and will aim at enterprises with extensive industrial development
opportunities and favorable industrial advantages. It will obtain good investment returns and at the same time
create new business development opportunities for the Group.
(III) Possible risks and countermeasures
1. Risks arising from fluctuations in exchange rates
The main settlement currency and recording currency of Fosber Italy, the principal overseas business entity
of the Company, are EUR, while the main settlement currency and recording currency of Fosber America and the
main settlement currency of the export business of domestic business entities are USD. Fluctuations in USD and
EUR exchange rates may exert certain impacts on the presentation of the assets and operating results of overseas
business entities in the Company’s consolidated financial statements. EUR declined sharply declined against
RMB in mid-2022, while USD significantly increased against RMB in 2022, even hitting a record high since 2020.
The decline of EUR against RMB exceeded the increase of USD against RMB, exerting certain negative impacts
on the presentation of the operating results of the Company in its consolidated financial statements in 2022.
Looking ahead to 2023, considering the uncertainty in the pace and path of interest rate hike by the US
Federal Reserve uncertain under the comprehensive influence of various factors and the inflation level and
development trend of the real economy in the US and the EU, USD and EUR exchange rates may fluctuate
beyond expectations in 2023.
Countermeasures:
The Company can closely track the global financial market and national exchange rate policies, make timely
decisions to select proper exchange rate management tools to manage exchange rate risks actively. It can also
reduce risk exposure and increase exchange gains by increasing debts of foreign currency and rely on Group
management to strengthen the level of capital coordination in different countries and regions, balance, and offset
fluctuation risks at the Group level.
2. Risk of inflation in overseas markets
All the business, assets and staff of Fosber Group are located in Europe and North America. They and their
subsidiaries adopt a localized management and operation model, with product design, development and
manufacturing being completed locally in Europe and the US. The raw materials required for the Company’s
corrugated packaging equipment products mainly include a variety of steel plates, steel parts. etc. In 2022, the
combination of high inflation in the US and Europe, complex geopolitics and insufficient supply of some raw
materials exerted certain impacts on the operating costs of overseas business entities. Looking ahead to 2023, the
change trend of inflation status remains unclear in the US and Europe. It is forecast that the inflation level in the
EUR area is expected to remain high, but that in the US is still uncertain somehow.
Countermeasures:
The Company will pay attention to the market prices of important raw materials and components constantly,
and conduct dynamic analysis and judgment; it will strengthen proactive management and collaboration by
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
adopting countermeasures such as proper adjustment of payment settlement and entering into long-term purchase
agreements for important raw materials to control the fluctuation of procurement prices; it will continuously
increase the operational efficiency of overseas business entities; it will give full play to the Group's strong
capability of cross-continent-and-country asset allocation brought about by the globalization of business assets,
and optimize asset allocation within the Group and reduce overall costs through rational planning and
management of internal transactions and sharing of resources.
3. Potential risks of financial investment business
In recent years, the Company has arranged some of its idle owned funds to carry out financial investment
business such as securities investment and entrusted wealth management in an appropriate manner, based on the
actual and development needs. There are certain risks of carrying out the above business due to fluctuations in the
financial market and uncertainty of income; and the risk that the Company may suffer certain investment losses in
case of risk events in the process of wealth management activities in terms of investment strategies and use of
funds.
Countermeasures:
On the premise that the funds required for the daily operation of the main business will not be affected, the
Company reasonably controls the capital scale for financial investment; it establishes and improves the internal
control system and mechanism standards for securities investment and entrusted financial management, and
strengthens the risk control management of securities investment business, safeguard the safety of investment
funds, and strictly control the risk exposure. In accordance with the economic situation and changes in the
financial market, it continuously tracks and analyses the progress of securities investment and the investment of
funds, the progress of project investment and the performance of the capital market, and timely takes
corresponding preservation measures to control investment risks.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
XII Communications with the Investment Community such as Researches, Inquiries and Interviews
√ Applicable □ Not applicable
Type of the Main discussions and
Way of Index to the relevant
Date Place communication Communication party materials provided by the
communication information
party Company
002611 Dongfang
Introduced the Company's
Precision-- Record on
operation, competitive
Conference Investor Relation
advantages, industry direction
16 March 2022 Room of the By phone Institution China Universal Asset Management, Zheshang Securities Activities on 16 March
and future strategic planning,
Company 2022 on
and answered investors'
http://www.cninfo.com.
questions
cn
ABC-CA Fund Management, AEGON-INDUSTRIAL Fund, CIB
Fund, China International Fund, China Southern Asset
Management, HFT Investment Management, Western Leadbank
FMC, Essence Fund, Rongtong Fund, Boyuan Fund
Management, Nuode Asset Management, Baoying Fund, Hwabao 002611 Dongfang
Introduced the Company's
WP Fund, Shangzheng Fund, JT Asset Management, Xinyuan Precision-- Record on
operation, competitive
Conference Asset Management, Goldstate Capital Fund, Hunan Qingyan Investor Relation
advantages, industry direction
24 March 2022 Room of the By phone Institution Venture Capital, Perseverance Asset Management, Picea Activities on 24 March
and future strategic planning,
Company Investment Management, New China Asset Management, China 2022 on
and answered investors'
Great Wall Asset Management, Shanghai Heju Investment http://www.cninfo.com.
questions
Management, Qian He Capital Management, Guotai Junan cn
Securities Asset Management, Tongben Investment, Shanghai
Panjing Investment, Shanghai Jiuge Investment Management,
Financial Holding Asset Management, Xizang Hezhong Yisheng
Investment Management, Yuancheng Investment Management,
87 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Dongkai Investment Management, Shanghai Million Tons Asset
Management, Taishi Investment Management, CQ Capital
Management, Shanghai Jingjing Investment Management, Royel
Investment Management, Shanghai Patio Investment
Management, Yuancheng Investment Management, Pinpoint
Asset Management, Shanghai Licheng Asset Management,
Wellspring Capital, Essence Securities, Chasing Securities,
Orient Securities, Donghai Securities, Shenwan Hongyuan
Securities, Sealand Securities, Haitong Securities, Jiantou
Investment Co., Ltd., Fujian Haixia Bank Co., Ltd., Yuanxin
(Zhuhai) Private Equity Fund Management Co., Ltd., Peking
University Founder Life Insurance Co., Ltd., King Tower Asset
Management Company Ltd., PICC Asset Management Co., Ltd.,
Sinatay Life Insurance Co., Ltd., Beijing Qijihechuang
Investment Co., Ltd., Wealth Success Assess Management, etc.
002611 Dongfang
Introduced the Company's
Precision-- Record on
operation, competitive
Conference Investor Relation
Pacific Assets, East Asia Qianhai Securities, Caida Securities, advantages, industry direction
25 March 2022 Room of the By phone Institution Activities on 25 March
etc. and future strategic planning,
Company 2022 on
and answered investors'
http://www.cninfo.com.
questions
cn
002611 Dongfang
Introduced the Company's
Precision-- Record on
operation, competitive
Conference Investor Relation
advantages, industry direction
15 August 2022 Room of the By phone Institution Jiantou Investment Co., Ltd. Activities on 15 August
and future strategic planning,
Company 2022 on
and answered investors'
http://www.cninfo.com.
questions
cn
88 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
002611 Dongfang
Introduced the Company's
Precision-- Record on
operation, competitive
Conference Investor Relation
advantages, industry direction
23 August 2022 Room of the By phone Institution Huarong Securities Activities on 23 August
and future strategic planning,
Company 2022 on
and answered investors'
http://www.cninfo.com.
questions
cn
002611 Dongfang
Introduced the Company's
Precision-- Record on
operation, competitive
Conference Investor Relation
10 November advantages, industry direction
Room of the By phone Institution Orient Securities Activities on 10
2022 and future strategic planning,
Company November 2022 on
and answered investors'
http://www.cninfo.com.
questions
cn
002611 Dongfang
Introduced the Company's
Precision-- Record on
operation, competitive
Conference Investor Relation
28 November advantages, industry direction
Room of the By phone Institution Orient Securities Asset Management Co., Ltd. Activities on 28
2022 and future strategic planning,
Company November 2022 on
and answered investors'
http://www.cninfo.com.
questions
cn
002611 Dongfang
Introduced the Company's
Precision-- Record on
operation, competitive
Conference Investor Relation
1 December advantages, industry direction
Room of the By phone Institution Tianfeng Securities Activities on 1
2022 and future strategic planning,
Company December 2022 on
and answered investors'
http://www.cninfo.com.
questions
cn
89 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
002611 Dongfang
Introduced the Company's
Precision-- Record on
operation, competitive
Conference Investor Relation
2 December One-on-one advantages, industry direction
Room of the Institution BOCOM Schroders, Northeast Securities, Essence Securities Activities on 2
2022 meeting and future strategic planning,
Company December 2022 on
and answered investors'
http://www.cninfo.com.
questions
cn
90 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Part IV Corporate Governance
I General Information of Corporate Governance
During the Reporting Period, the Company strictly abided by laws and regulations and rules and normative documents of
regulatory authorities, including the Company Law, the Securities Law, the Code of Corporate Governance for Listed Companies ,
the Rules for Stock Listing of Shenzhen Stock Exchange and the Shenzhen Stock Exchange Guideline No. 1 for the Self-regulation
of Listed Companies - Standardized Operation of Listed Companies on the Main Board, continued to improve the Company's
corporate governance structure, refine internal management and control policies, and further strengthen the Company's capability of
governance.
(I) Shareholders and general meeting
During the Reporting Period, the Company convened and held general meetings in a standard manner in strict accordance with
laws and regulations. The convening and holding procedures of general meetings, the qualifications of attendants to the meetings and
the voting procedures of the meetings met the provisions of the Company Law, Rules for the Share holders' Meetings of Listed
Companies, Articles of Associations and Rules of Procedure for General Meeting. Lawyers were engaged to witness the general
meetings of shareholders and issued legal opinions on their legitimacy to ensure fair treatment toward a nd fully execution of rights of
all shareholders, especially minority shareholders.
(II) The Company and controlling shareholders
During the Reporting Period, the Company properly handled the relationship between it and the controlling shareholders in
accordance with the Company Law, Securities Law, Articles of Association and relevant provisions of the securities regulatory
authority. The controlling shareholders of the Company acted in a normative manner, could exercise their rights and assume their
obligations according to law, did not directly or indirectly interfere with the decision-making and business activities of the Company
beyond the general meeting of shareholders. The Company was independent of the controlling shareholders in terms of business,
staffing, assets, organization and finance, and had an independent and complete business system and capability to operate
independently. The Board of Directors, Supervisory Committee and internal organs of the Company operated independently.
(III) Directors and the Board of Directors
During the Reporting Period, directors of the Company were elected in strict accordance with the director election procedure
specified in the Articles of Association. The Board of Directors of the Company was composed of seven directors, including three
independent directors, and the number of members and composition of it met legal and regulatory requirements. During the
Reporting Period, all directors of the Company actively and strictly complied with the Company Law, Articles of Association a nd
Rules of Procedure for the Board of Directors, earnestly attended meetings of the Board of Directors and general meetings of
shareholders, and took an active part in relevant training to improve their business skill, and were diligent and responsible . The
convening, holding and voting procedure and daily operation of the meetings of the Board of Directors of the Company complied
with relevant regulations.
(IV) Supervisors and the Supervisory Committee
During the Reporting Period, supervisors of the Company were elected in strict accordance with the supervisor election
procedure specified in the Articles of Association. The Supervisory Committee of the Company was composed of three supervisors,
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
including one supervising employee representative, and the number of members and composition of it met legal and regulatory
requirements. The supervisors conscientiously performed their duties and, in line with the attitude of being responsible to
shareholders, supervised the financial affairs of the Company as well as the legality and compliance of the performance of duties by
directors and senior managers of the Company, and safeguarded the legitimate rights and interests of the Company and shareholders.
The convening, holding and voting procedures of the meetings of the Supervisory Committee of the Company complied with the
Company Law, Articles of Association and Rules of Procedure for the Supervisory Committee.
(V) Independent directors and special committees of the Board of Directors
During the Reporting Period, independent directors of the Company honestly, diligently and independently performed their
duties in accordance with the Company Law and regulations, normative documents and implementation rules of other departments,
actively attended relevant meetings, earnestly deliberated the proposals of the Board of Directors, gave independent advice a bout the
major issues of the Company, effectively protected the interests of the Company and shareholders, especially small and medium
shareholders, and well played their role to supervise as independent directors. Special committees of the Board of Directors of the
Company also performed their duties in a standard manner according to their respective implementation rules.
(VI) Information disclosure and transparency
During the Reporting Period, the Company performed its obligation of information disclosure in strict accorda nce with laws and
regulations and the Management Measures for Information Disclosure, and disclosed information in a true, accurate, complete a nd
timely manner and made no false records, misleading statements or major omissions, by which it ensured that all investors and
stakeholders had equal opportunities to obtain the Company's information, increased the Company's information transparency, a nd
effectively played its role in protecting the right to know of small and medium investors.
Were there any significant differences between the actual situation of the corporate governance and the applicable laws and
regulations, as well as rules published by China Securities Regulatory Commission on the governance of listed companies?
□ Yes √ No
There were not significant differences between the actual situation of the corporate governance and the applicable laws and
regulations, as well as rules published by China Securities Regulatory Commission on the governance of listed companies.
II The Inde pendence of the Company from Controlling Shareholders and Actual Controller
on Assets, Personnel, Finance, Structure, and Business
Since establishment, the Company has been operating in strict accordance with the Company Law, Securities Law and Articles
of Association, and has established and improved its corporate governance structure. The Company is completely independent of its
controlling shareholders and actual controller in terms of business, staffing, assets, organization and finance, and has an independent
and complete business system and capability to operate independently in the market. All production operations and major issues of
the Company were discussed and determined by the Management, the Board of Directors and the general meetings of shareholders in
accordance with the Articles of Association and relevant policies, and none of them was controlled by any controlling shareholder or
the actual controller.
1. Asset independence
The Company was founded on the overall change of a limited liability company. All its assets and personnel before the share
restructuring joined the joint stock company. The Company has independent and complete operating assets. After the overall change,
the Company owns all the production and operational assets needed for production and operation, and there is no dispute over
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
property rights. The Company owns production systems, auxiliary production systems and supporting facilities related to its
production and operation, and has independent raw material procurement and product selling systems. Assets of the Company are
strictly separated from those of shareholders and the actual controller, and no assets of the Company are being occupied by
shareholders or the actual controller.
2. Personnel independence
The Company has completely independent labour, personnel and salary management systems and independent staff teams, and
has signed labour contracts with its employees in accordance with the Labour Law and the Company's policies on labour
management. Directors, supervisors and senior managers of the Company were elected in strict accordance with the Company Law
and Articles of Association, and senior managers, including general managers, deputy general managers, financial directors, and
secretaries to the Board of Directors are working full time in the Company and getting paid by the Company. Mr Tang Zhuolin, the
actual controller of the Company, is serving as the Chairman of the Board of Directors, and has been legally exercising its functions
and powers according to the Company Law and Articles of Association in engaging in the Company's management.
3. Finance independence
The Company has an independent financial department and full-time financial personnel, and has established an independent
and fine financial accounting system and standardized financial policies. It has implemented an effective financial supervision and
management system and an internal control system, and it is capable of making independent financial decisions, carrying out
independent accounting and assuming sole responsibility for its profits and losses according to the Articles of Association a nd its
own situation. The Company has an independent bank account and is not sharing any account of controlling shareholders or the
actual controller and, as an independent taxpayer, declares taxes and fulfils tax payment obligations independently according to law,
and has never paid taxes together with shareholders' companies.
4. Organization independence
The Company, in accordance with the Company Law and Articles of Association, has set up the General Meeting of
Shareholders as the highest authority, the Board of Directors as the decision-making body, and the Supervisory Committee as the
supervisory body, and has a complete corporate governance structure. The Company has a complete internal management system and
corresponding offices and operating departments. The functional departments work according to respective duties and cooperate with
each other, making the Company an organic and independent operating entity free from the intervention of controlling shareholders
and the actual controller.
5. Business independence
The Company has its business independent of controlling shareholders, has independent and complete supply, production and
sales systems, and is capable of independent decision-making on business policies and business plans, independent allocation and use
of personnel, money and materials, and successful organization and implementation of production and business activities. The
Company is completely independent in business and is not relying on the first majority shareholder and the actual controller. The
controlling shareholders are not conducting business of horizontal competit ion with that of the Company, and have undertaken not to
conduct any business that may be of horizontal competition with that of the Company.
III Horizontal Competition
□ Applicable √ Not applicable
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
IV Annual and Extraordinary General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Investor
Date of the
Meeting Type participati Disclosure date Resolution
meeting
on ratio
1. The Proposal on the 2022 Restricted
Share Incentive Plan (Draft) and Its
Summary was approved; 2. The
The First Proposal on the Appraisal Management
Extraordinary Extraordinary Methods for the 2022 Restricted Share
General General 33.10% 14 March 2022 15 March 2022 Incentive Plan was approved; 3. The
Meeting of Meeting Proposal on the Request for the General
2022 Meeting to Authorize the Board of
Directors to Handle Matters in Relation
to the 2022 Restricted Share Incentive
Plan was approved.
1. The Proposal on the 2021 Work
Report of the Board of Directors
(including the 2021 Work Report of
Independent Directors) was approved;
2. The Proposal on the 2021 Work
Report of the Supervisory Committee
was approved; 3. The Proposal on the
2021 Annual Report and Its Summary
was approved; 4. The Proposal on the
2021 Final Financial Accounts was
approved; 5. The Proposal on the 2022
The 2021 Budget was approved; 6. The Proposal
Annual Annual General on the 2021 Final Dividend Plan was
32.52% 8 April 2022 9 April 2022
General Meeting approved; 7. The Proposal on the 2021
Meeting Internal Control Assessment Report
was approved; 8. The Proposal on
Intention to Appoint the Independent
Auditor for 2022 was approved; 9. The
Proposal on the Use of Own Funds for
Entrusted Wealth Management in 2022
was approved; 10. The Proposal on the
Compliance with Applicable Laws and
Regulations of the Spin-off Listing of
the Subsidiary Suzhou Parsun Power
Machine Co., Ltd. on the ChiNext
Board was approved; 11. The Proposal
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
on the Plan for the Spin-off Listing of
the Subsidiary Suzhou Parsun Power
Machine Co., Ltd. on the ChiNext
Board was approved; 12. The Proposal
on the Preliminary Plan for the Spin-off
Listing of the Subsidiary Suzhou
Parsun Power Machine Co., Ltd. on the
ChiNext Board was approved; 13. The
Proposal on the Compliance with the
Spin-off Rules for Listed Companies
(Trial) of the Spin-off Listing of the
Subsidiary Suzhou Parsun Power
Machine Co., Ltd. on the ChiNext
Board was approved; 14. The Proposal
on the Benefit of the Spin-off Listing of
the Subsidiary Suzhou Parsun Power
Machine Co., Ltd. on the ChiNext
Board in Protecting the Legitimate
Interests of Shareholders and Creditors
was approved; 15. The Proposal on the
Company Maintaining Independence
and Going Concern Capability was
approved; 16. The Proposal on Suzhou
Parsun Power Machine Co., Ltd.
Possessing Due Capability of Operation
Compliance was approved; 17. The
Proposal on the Statement Regarding
the Completeness and Compliance of
the Statutory Procedures in the Spin-off
and the Validity of the Legal
Documents Filed was approved; 18.
The Proposal on the Purpose,
Commercial Rationality, Necessity and
Feasibility Analysis of the Spin-off was
approved; 19. The Proposal on the
Request for the General Meeting to
Authorize the Board of Directors and
Its Authorized Personnel to Handle
Matters in Relation to the Spin-off
Listing was approved.
The Second 1. The Proposal on the Conducting of
Extraordinary
Extraordinary Financial Derivatives Trading was
General 32.57% 6 May 2022 7 May 2022
General approved; 2. The Proposal on the
Meeting
Meeting of Revision of the Articles of Association
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
2022 was approved; 3. The Proposal on the
Revision of the Rules of Procedure for
General Meeting was approved; 4. The
Proposal on the Revision of the Rules
of Procedure for the Board of Directors
was approved; 5. The Proposal on the
Revision of the Rules of Procedure for
the Supervisory Committee was
approved; 6. The Proposal on the
Revision of the Management Rules for
Securities Investment was approved; 7.
The Proposal on the Formulation of the
Management Rules for Financial
Derivatives Trading was approved.
1. The Proposal on the Election of
Independent Directors for the Fourth
Board of Directors was approved by
cumulative voting; 2. The Proposal on
The Third
the Election of Non-Independent
Extraordinary Extraordinary
Directors for the Fourth Board of
General General 33.02% 12 August 2022 13 August 2022
Directors was approved by cumulative
Meeting of Meeting
voting; 3. The Proposal on the Write-off
2022
of Certain Repurchased Shares and
Reduction of Registered Capital and
Amendment of the Articles of
Association was approved.
2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed
Voting Rights
□ Applicable √ Not applicable
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
V Directors, Supervisors and Senior Management
1. General Information
Increase Other
Incum Opening Decrease in Closing Reason
in the increase
Name Office title bent/F Gender Age Start of tenure End of tenure shareholding the period shareholding for share
period /decreas
ormer (share) (share) (share) change
(share) e (share)
Tang Chairman of the Incum 22 September
Male 60 22 July 2010 270,737,568 270,737,568
Zhuolin Board bent 2023
Director and Incum 22 September
Qiu Yezhi Female 51 22 July 2010 23,382,388 23,382,388
General Manager bent 2023
Director and
Xie Incum 22 September
Deputy General Male 49 16 June 2016 1,000,000 1,000,000
Weiwei bent 2023
Manager
Incum
bent
Vice
Presid
Director, Board ent
Zhou and 29 January
Secretary and Male 50 26 July 2022 1,200,000 1,200,000
Wenhui former 2019
Vice President Direct
or and
Board
Secret
ary
Director and Incum 12 August 22 September
Feng Jia Female 37 0 700,000 700,000
Board Secretary bent 2022 2023
Chief Financial Incum
Shao Male 48 29 December 22 September 800,000 800,000
Officer and Vice bent
97 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Yongfeng President 2020 2023
Mai Independent Forme 12 August
Male 52 16 June 2016
Zhirong Director r 2022
Peng Independent Forme 12 August
Male 52 16 June 2016
Xiaowei Director r 2022
He Independent Forme 12 August
Male 62 16 June 2016
Weifeng Director r 2022
Independent Incum 12 August 22 September
Li Ketian Male 66
Director bent 2022 2023
Independent Incum 12 August 22 September
Liu Da Male 48
Director bent 2022 2023
Tu Independent Incum 12 August 22 September
Male 43
Haichuan Director bent 2022 2023
Chairman of the
Chen Incum 22 September
Supervisory Female 38 19 May 2017 480 480
Huiyi bent 2023
Committee
Zhao Employee Incum 22 September
Male 52 16 June 2016
Xiuhe Supervisor bent 2023
He Incum 22 September 22 September
Supervisor Male 41 614,088 614,088
Baohua bent 2020 2023
Total -- -- -- -- -- -- 297,734,524 700,000 0 0 298,434,524 --
98 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Indicate whether any director, supervisor or senior management resigned or was dismissed before the end of their tenure during the
Reporting Period.
□ Yes √ No
Changes of directors, supervisors and senior management:
√ Applicable □ Not applicable
Name Office title Type of change Date Reason
Due to internal adjustments, Mr. Zhou
Wenhui ceased to be Board Secretary of
Zhou Wenhui Board Secretary Removed 14 March 2022 the Company but continued to be
Director and Vice President of the
Company.
The Proposal on the Change of Board
Secretary was approved at the 14th
Meeting of the Fourth Board of
Feng Jia Board Secretary Appointed 14 March 2022
Directors on 14 March 2022. As such,
Ms. Feng Jia has been appointed as
Board Secretary of the Company.
Due to internal adjustments, Mr. Zhou
Wenhui ceased to be Director of the
Fourth Board of Directors of the
Zhou Wenhui Director Resigned 26 July 2022 Company but continued to be Vice
President of the Company. He is also
General Manager of the subsidiary
Yineng Investment.
The Proposal on the Election of Non-
independent Director for the Fourth
Board of Directors was approved at the
Third Extraordinary General Meeting in
Feng Jia Director Elected 12 August 2022
2022 on 12 August 2022. As such, Ms.
Feng Jia has elected as Non-
independent Director of the Fourth
Board of Directors of the Company.
Mr. Mai Zhirong resigned as
Resigned upon the
Independent Director of the Fourth
Mai Zhirong Independent Director expiry of his 12 August 2022
Board of Directors upon the expiry of
tenure
his tenure.
Mr. Peng Xiaowei resigned as
Resigned upon the
Independent Director of the Fourth
Peng Xiaowei Independent Director expiry of his 12 August 2022
Board of Directors upon the expiry of
tenure
his tenure.
Mr. He Weifeng resigned as
Resigned upon the
Independent Director of the Fourth
He Weifeng Independent Director expiry of his 12 August 2022
Board of Directors upon the expiry of
tenure
his tenure.
The Proposal on the Election of
Independent Directors for the Fourth
Board of Directors was approved at the
Third Extraordinary General Meeting in
Li Ketian Independent Director Elected 12 August 2022
2022 on 12 August 2022. As such, Mr.
Li Ketian has been elected as
Independent Director of the Fourth
Board of Directors of the Company.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
The Proposal on the Election of
Independent Directors for the Fourth
Board of Directors was approved at the
Third Extraordinary General Meeting in
Liu Da Independent Director Elected 12 August 2022
2022 on 12 August 2022. As such, Mr.
Liu Da has been elected as Independent
Director of the Fourth Board of
Directors of the Company.
The Proposal on the Election of
Independent Directors for the Fourth
Board of Directors was approved at the
Third Extraordinary General Meeting in
Tu Haichuan Independent Director Elected 12 August 2022
2022 on 12 August 2022. As such, Mr.
Tu Haichuan has been elected as
Independent Director of the Fourth
Board of Directors of the Company.
2. Biographical Information
Professional backgrounds, major work experience and current posts in the Company of the incumbent directors, supervisors and
senior management:
1. Members of the Board of Directors
Mr. Tang Zhuolin, born in August 1963, Chinese, has no right of permanent residence abroad. He is a member of the 12th People's
Political Consultative Conference of Nanhai District, Foshan City, Guangdong Province, Managing Director of the 9th Council of
China Packaging Federation, Managing Director of Guangdong Food and Packaging Machinery Association, Vice President of
Foshan Machinery Equipment Industry Association, Honorary President of Foshan Nanhai District Machinery Equipment Trade
Association, Vice President of Foshan High-tech Zone Chamber of Commerce, and Vice President of Foshan Nanhai District Listed
Company Association. He once was Head of Nanhai Guichengdong P lastic and Textile Factory No. 2, Head of Nanhai
Guichengdong Printing Machinery Factory No. 2, and Supervisor of Shenzhen Zhiquan Venture Capital Co., Ltd. He used to serve as
the Company's General Manager and Chief Engineer since 1996, and is currently Chairman of the Board of the Company. He is also
Director of Dong Fang Precision (HK) Limited, Director of Dong Fang Precision (Netherland) Cooperatief U.A., Chairman of the
Board of EDF Europe S.r.l., Director of Fosber S.p.A., Director of Guangdong Fosber Intelligent Equipment Co., Ltd., Executive
Director and General Manager of Suzhou Shunyi Investment Co., Ltd., Executive Director and General Manager of Hainan Yineng
Investment Co., Ltd., Supervisor of Dongfang Digicom Technology Co., Ltd., Supervisor of Dongfang Digicom Technology
(Guangdong) Co., Ltd., Executive Director and Manager of Dongfang Yineng International Holding Co., Ltd., Chairman of the Board
of Shenzhen Wonder Digital Technology Co., Ltd., Director of Fosber America, Inc., Director of Tirua Grupo Industrial, S.L.,
Director of Tirua S.L.U., Director of Parsun Power, Executive Director and General Manager of Shenzhen Xianglin Venture Capital
Co., Ltd., Supervisor of Shenzhen Shenghui Venture Capital Co., Ltd., etc.
Ms. Qiu Yezhi, born in July 1972, Chinese, has no right of permanent residence abroad, MBA, National Model Worker, Member of
the 12th People's Political Consultative Conference of Foshan City, Guangdong Province, and Deputy to the 17 th People’s Congress
of Nanhai District, Foshan City, Guangdong Province. Served successively as the Company's Director of the General Manager's
Office, General Manager of Operations and General Manager since 1996, and as the Company's General Manager and Board
Secretary from July 2010 to October 2013. She served as the General Manager and Director of Foshan Yinglian Digital Printing
Equipment Co., Ltd. from May 2017 to September 2020. Currently the Company's Director and General Manager, Executive
Director and General Manager of Dongfang Digicom Technology Co., Ltd., Supervisor of Hainan Yineng Investment Co., Ltd.,
100 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Chairman of the Board of Guangdong Fosber Intelligent Equipment Co., Ltd., Executive Director of Dongfang Digicom Technology
(Guangdong) Co., Ltd., Vice Chairman of the Board of Fosber S.p.A., Director of Fosber America, Inc., Director of Tirua Grupo
Industrial, S.L., Director of Tirua S.L.U., Director of QuantumCorrugated S.r.l., Director of EDF Europe S.r.l., Supervisor of
Dongfang Yineng International Holding Co., Ltd., Director of Tirua America inc., Director of Suzhou Parsun Power Machine Co.,
Ltd., Executive Director and General Manager of Shenzhen Shenghui Venture Capital Co., Ltd., and Supervisor of Shenzhen
Xianglin Venture Capital Co., Ltd., etc.
Mr. Xie Weiwei, Chinese, born in 1974, has no right of permanent residence abroad, MBA, Member of the 14th People's Political
Consultative Conference of Nanhai District, Foshan City, Guangdong Province, graduated from Huazhong University of Science and
Technology in 2008. Once served as the Standing Deputy General Manager of Foshan Multimodal Transport Corp., Chairman of the
Board of Foshan Donghuochang Railway Logistics Co., Ltd., Deputy Chief of the Reform and Development Division of Foshan
SASAC, and Deputy Head of the Investment Department and Head of the Asset Management Department of Foshan Financial
Investment Holdings Co., Ltd. Currently the Company's Director and Deputy General Manager, and Director of the joint-stock
company Guangdong Jaten Robot & Automation Co., Ltd.
Ms. Feng Jia, Chinese, born in 1986, has no right of permanent residence abroad. She is Doctor of Engineering of Zhejiang
University, Postdoctoral Fellow of Guangzhou Institute of Energy Conversion of Chinese Academy of Sciences, and Intermediate
Engineer. She used to work as Associate Researcher at Guangzhou Institute of Energy Conversion of Chinese Academy of Sciences
from 2014 to 2018, Senior Manager in the Research and Development Department of China Securities Co., Ltd. from 2018 to 2019,
and Assistant to President & Board Secretary of Tianjin LVYIN Landscape and Ecology Construction Co., Ltd. from 2019 to 2021.
Joining the Company in September 2021, she is now Director, Vice President and Board Secretary of the Company.
Mr. Li Ketian, Chinese, born in 1957, has no right of permanent residence abroad. Graduated from South China University of
Technology with a doctoral degree and a professional title of professor of mechanical engineering. Once served as a worker,
technician and engineer at the Wuhan Camera Factory from 1974 to 1989 and as a lecturer, associate professor and professor at
Guangdong University of Technology from 1992 to 2020. Currently the Leader of the China Technical Guidance Expert Group for
the Plastic Mold Engineering Project of the World Skills Competition, and the Independent Director of Dongfang Precision.
Mr. Liu Da, Chinese, born in 1975, has no right of permanent residence abroad. Graduated from University of International Busines s
and Economics with bachelor of economics. A certified public accountant. Once served as the Senior Audit Manager of
PricewaterhouseCoopers from 1998 to 2009, Chief Internal Auditor of Prudential Life Insurance Co., Ltd. from 2009 to 2010.
Currently the Director and General Manager of Guangzhou Kaihua Investment Consulting Co., Ltd. In the last five years, he has been
the Independent Director of Zensun Enterprises Limited (Stock Code: 185) and the Independent Director of Kimou Environmental
Holding Limited (Stock Code: 6805), both are listed companies on the main board of the Hong Kong Stock Exchange. He has also
been the Supervisor of Guangzhou Longyi Kaihua Enterprise Management Consulting Co., Ltd, Supervisor of One Tutor Education
Consulting (Guangzhou) Co., Ltd., and Independent Director of Dongfang Precision.
Mr. Tu Haichuan, Chinese, born in 1980, has no right of permanent residence abroad. Graduated from Shanghai University of
Finance and Economics with a major in asset evaluation and accounting. A certified public accountant. Once served as the Audit
Manager of Guangdong Dahua Delv Certified Public Accountants from 2004 to 2009, Investment Director of Guangxi Saifu
Investment Co., Ltd. in 2010, Financial Manager, Chief Financial Officer and Assistant to the Chairman of Guangdong Dongfang
Precision Science & Technology Co., Ltd. from December 2010 to September 2016. Currently the Executive Director and General
Manager of Shenzhen Changhe Capital Management Co., Ltd. In the last five years, he has been the Director of Guangzhou Shoulian
Environment Group Co., Ltd. and Shenzhen Aiwen Culture Development Co., Ltd., and Independent Director of Dongfang Precision.
2. Members of the Supervisory Committee
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Ms. Chen Huiyi, Chinese, born in 1985, with a university degree, has no right of permanent residence abroad. Once served as the
assistant of the Quality Control Department of Dongfang Plastic Products Co., Ltd. Joined Dongfang Precision in 2010, and cur rently
the Chairman of the Company's Supervisory Committee and Secretary to the Company's General Manager, as well as Supervisor of
the subsidiary Suzhou Parsun Power Machine Co., Ltd.
Mr. He Baohua, Chinese, born in 1982, with a university degree, has no right of permanent residence abroad. Joined Guangdong
Dongfang Precision Science & Technology Co., Ltd. in 2002, engaged in after-sales management and project management, currently
the Company's supervisor and Senior Project Manager of the Project Management Department.
Mr. Zhao Xiuhe, Chinese, born in 1971, with a technical secondary school degree, has no right of permanent residence abroad.
Joined Dongfang Precision in February 2006, currently the Company's Director of the Administration Department. Served a s the
Company's Employee Supervisor since June 2016.
3. Senior management
Ms. Qiu Yezhi, currently the Company's General Manager. Her resume is detailed in "1. Members of the Board of Directors".
Mr. Xie Weiwei, currently the Company's Deputy General Manager. His resume is detailed in "1. Members of the Board of
Directors".
Ms. Feng Jia, currently the Company’s Board Secretary. Her resume is detailed in "1. Members of the Board of Directors".
Mr. Shao Yongfeng, Chinese, born in 1975, has no right of permanent residence abroad. Graduated with a bachelor's degree from
Zhongnan University of Economics and Law, a PRC certified public accountant and PRC certified public assets estimator. Served as
Financial Manager and Financial Director of TCL Multimedia Technology Holdings Limited from 2001 to 2010, joined Haier
Europe in 2015 and served successively as the company's Financial Director and CFO of Europe, joined Shenzhen Smoore
Technology Limited and served as Financial Director from 2016 to 2017, served as Vice President Finance in Shenzhen CIMC
Tianda from 2017 to 2020, and joined Guangdong Dongfang Precision Science & Technology Co., Ltd. in April 2020 and currently
the Company's Chief Financial Officer and Vice President.
Offices held concurrently in shareholding entities:
□ Applicable √ Not applicable
Offices held concurrently in other entities:
√ Applicable □ Not applicable
Remuneration or
Office held in the
Name Other entity Start of tenure End of tenure allowance from the
entity
entity or not
Dongfang Precision
Tang Zhuolin Director 5 February 2013 No
(HK)
Dongfang Precision
Tang Zhuolin Director 29 October 2013 No
(Netherland)
Tang Zhuolin Fosber Italy Director 26 March 2014 Yes
Dongfang Precision Chairman of the
Tang Zhuolin 15 June 2016 Yes
(Europe) Board
Tang Zhuolin Fosber Asia Director 30 September 2014 Yes
Tang Zhuolin Parsun Power Director 24 May 2015 No
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Executive Director
Tang Zhuolin Shunyi Investment 2 July 2015 No
and General Manager
Executive Director
Tang Zhuolin Yineng Investment 10 October 2020 Yes
and General Manager
Tang Zhuolin Dongfang Digicom Supervisor 26 October 2020 Yes
Dongfang Digicom
Tang Zhuolin Supervisor 26 February 2021 No
(Guangdong)
Chairman of the
Tang Zhuolin Wonder Digital 7 June 2022 Yes
Board
Dongfang Yineng
Executive Director
Tang Zhuolin International Holding 15 February 2022 No
and Manager
Co., Ltd.
Shenzhen Xianglin
Executive Director
Tang Zhuolin Venture Capital Co., 26 May 2016 No
and General Manager
Ltd.
Shenzhen Shenghui
Tang Zhuolin Venture Capital Co., Supervisor 16 May 2016 No
Ltd.
Tang Zhuolin Fosber America Director 26 July 2022 Yes
Tang Zhuolin Tirua Group Director 3 August 2022 Yes
Tang Zhuolin Tirua S.L.U. Director 3 August 2022 No
Vice Chairman of the
Qiu Yezhi Fosber Italy 26 March 2014 Yes
Board
Qiu Yezhi Fosber America Director 26 July 2022 Yes
Qiu Yezhi Tirua Group Director 30 May 2019 Yes
Qiu Yezhi Tirua America Director 26 July 2022 Yes
Qiu Yezhi Tirua S.L.U. Director 30 May 2019 No
Qiu Yezhi QCorr Director 3 February 2020 Yes
Chairman of the
Qiu Yezhi Fosber Asia 15 July 2020 Yes
Board
Dongfang Precision
Qiu Yezhi Director 15 June 2016 Yes
(Europe)
Qiu Yezhi Parsun Power Director 24 May 2015 No
Qiu Yezhi Yineng Investment Supervisor 10 October 2020 No
Executive Director
Qiu Yezhi Dongfang Digicom 26 October 2020 No
and General Manager
Dongfang Digicom
Qiu Yezhi Executive Director 26 February 2021 No
(Guangdong)
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Dongfang Yineng
Qiu Yezhi International Holding Supervisor 15 February 2022 No
Co., Ltd.
Shenzhen Xianglin
Qiu Yezhi Venture Capital Co., Supervisor 26 May 2016 No
Ltd.
Shenzhen Shenghui
Executive Director
Qiu Yezhi Venture Capital Co., 18 May 2015 No
and General Manager
Ltd.
Xie Weiwei Shunyi Investment Supervisor 2 July 2015 No
Xie Weiwei Jaten Robot Director 23 March 2016 Yes
Foshan Nanhai
District Machinery
Xie Weiwei Branch Secretary 23 November 2020 Yes
Equipment Trade
Association
Guangzhou Kaihua
Director and General
Liu Da Investment April 2010 Yes
Manager
Consulting Co., Ltd.
Zensun Enterprises
Liu Da Independent Director 27 July 2015 Yes
Limited
Kimou
Liu Da Environmental Independent Director 1 March 2023 Yes
Holding Limited
Shenzhen Longriver
Tu Haichuan Capital Management Executive Director October 2016 Yes
Co., Ltd.
Shenzhen Ivan
Tu Haichuan Culture Development Director March 2018 No
Co., Ltd.
Chief Financial
Shao Yongfeng Dongfang Digicom 1 January 2021 Yes
Officer
Chief Financial
Shao Yongfeng Yineng Investment 1 January 2021 Yes
Officer
Chen Huiyi Parsun Power Supervisor 10 October 2022 No
Shenzhen Zhiquan
He Baohua Venture Capital Co., Supervisor 10 August 2021 No
Ltd.
Note Not applicable
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and senior
management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
3. Remuneration of Directors, Supervisors and Senior Management
Following the approval of the Remuneration and Appraisal Committee, the remunerations for directors, supervisors and senior
management are submitted to the Board of Directors and the Supervisory Committee for further approval. The remunerations of
directors and supervisors are subject to final approval by the general meeting, and those of senior management are subject to the
Board of Directors. The decision-making procedures are in compliance with the Company Law, the Company’s Art icles of
Association, and the Company’s Specific Implementation Rules for the Remuneration and Appraisal Committee under the Board of
Directors. In the Reporting Period, the actual payments of remuneration for directors, supervisors and senior management were
consistent with the resolutions of the general meeting and the Board of Directors.
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB'0,000
Total before-tax
Remuneration
remuneration
Name Office title Gender Age Incumbent/Former from any related
from the
party or not
Company
Chairman of the
Tang Zhuolin Male 60 Incumbent 393.06 Yes
Board
Director and
Qiu Yezhi Female 51 Incumbent 397.98 Yes
General Manager
Director and
Xie Weiwei Deputy General Male 49 Incumbent 79.33 Yes
Manager
Director, Board
Zhou Wenhui Secretary and Male 50 Former 50.89 No
Vice President
Director, Board
Feng Jia Secretary and Female 37 Incumbent 68.83 No
Vice President
Chief Financial
Shao Yongfeng Officer and Vice Male 48 Incumbent 130.76 No
President
Independent
Mai Zhirong Male 52 Former 13.98 No
Director
Independent
Peng Xiaowei Male 52 Former 13.98 No
Director
Independent
He Weifeng Male 62 Former 13.98 No
Director
Independent
Li Ketian Male 66 Incumbent 6.02 No
Director
105 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Independent
Liu Da Male 48 Incumbent 6.02 No
Director
Independent
Tu Haichuan Male 43 Incumbent 6.02 No
Director
Chairman of the
Chen Huiyi Supervisory Female 38 Incumbent 28.79 No
Committee
Employee
Zhao Xiuhe Male 52 Incumbent 22.64 No
Supervisor
He Baohua Supervisor Male 41 Incumbent 54.54 No
Total -- -- -- -- 1,286.82 --
VI Performance of Duty by Directors in the Reporting Period
1. Board Meetings Convened during the Reporting Period
Meeting Date of the meeting Disclosure date Resolution
1. The Proposal on the 2022 Restricted Share Incentive Plan
(Draft) and Its Summary was approved.
2. The Proposal on the Appraisal Management Methods for the
2022 Restricted Share Incentive Plan was approved.
The 13th
3. The Proposal on the Request for the General Meeting to
(Extraordinary) Authorize the Board of Directors to Handle Matters in Relation to
Meeting of the 25 February 2022 26 February 2022 the 2022 Restricted Share Incentive Plan was approved.
4th Board of 4. The Proposal on the Satisfaction of the Unlocking Conditions
for the First Unlocking Period for the Reserved Restricted Shares
Directors
under the 2020 Restricted Share Incentive Plan was approved.
5. The Proposal on the Satisfaction of the Unlocking Conditions
for the First Unlocking Period for the Reserved Restricted Shares
under the 2020 Restricted Share Incentive Plan was approved.
1. The Proposal on the 2021 Work Report of the Board of
Directors (including the 2021 Work Report of Independent
Directors) was approved.
2. The Proposal on the 2021 Work Report of the General
Manager was approved.
3. The Proposal on the 2021 Annual Report and Its Summary was
The 14th approved.
Meeting of the 4. The Proposal on the 2021 Final Financial Accounts was
14 March 2022 15 March 2022 approved.
4th Board of
5. The Proposal on the 2022 Budget was approved.
Directors
6. The Proposal on the 2021 Final Dividend Plan was approved.
7. The Proposal on the 2021 Internal Control Assessment Report
was approved.
8. The Proposal on the Summary Report of the Audit Committee
of the Board of Directors on the 2021 Audit Service Provided by
Ernst & Young Hua Ming LLP (Special General Partnership) and
the Renewal of Ernst & Young as the Company's 2022 Audit
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Institution was approved.
9. The Proposal on the Use of Own Funds for Entrusted Wealth
Management in 2022 was approved.
10. The Proposal on the Use of Own Funds for Investment
Securities in 2022 was approved.
11. The Proposal on the Application for Comprehensive Credit
Line from Banks in 2022 was approved.
12. The Proposal on the Trundling Revision of the 2018-2022
Five Year Strategic Plan was approved.
13. The Proposal on the Change of the Board Secretary was
approved.
14. The Proposal on the Convening of the 2021 Annual General
Meeting was approved.
15. The Proposal on the Compliance with Applicable Laws and
Regulations of the Spin-off Listing of the Subsidiary Suzhou
Parsun Power Machine Co., Ltd. on the ChiNext Board was
approved.
16. The Proposal on the Plan for the Spin-off Listing of the
Subsidiary Suzhou Parsun Power Machine Co., Ltd. on the
ChiNext Board was approved.
17. The Proposal on the Preliminary P lan for the Spin-off Listing
of the Subsidiary Suzhou Parsun Power Machine Co., Ltd. on the
ChiNext Board was approved.
18. The Proposal on the Compliance with the Spin-off Rules for
Listed Companies (Trial) of the Spin-off Listing of the Subsidiary
Suzhou Parsun Power Machine Co., Ltd. on the ChiNext Board
was approved.
19. The Proposal on the Benefit of the Spin-off Listing of the
Subsidiary Suzhou Parsun Power Machine Co., Ltd. on the
ChiNext Board in Protecting the Legitimate Interests of
Shareholders and Creditors was approved.
20. The Proposal on the Company Maintaining Independence and
Going Concern Capability was approved.
21. The Proposal on Suzhou Parsun Power Machine Co., Ltd.
Possessing Due Capability of Operation Compliance was
approved.
22. The Proposal on the Statement Regarding the Completeness
and Compliance of the Statutory Procedures in the Spin-off and
the Validity of the Legal Documents Filed was approved.
23. The Proposal on the Purpose, Commercial Rationality,
Necessity and Feasibility Analysis of the Spin-off was approved.
24. The Proposal on the Request for the General Meeting to
Authorize the Board of Directors and Its Authorized Personnel to
Handle Matters in Relation to the Spin-off Listing was approved.
The 15th
(Extraordinary) 1. The Proposal on the First Grant of Restricted Shares to
Meeting of the 21 March 2022 22 March 2022 Awardees under the 2022 Restricted Share Incentive Plan was
4th Board of approved.
Directors
The 16th 1. The Proposal on the 2021 First Quarter Report was approved.
(Extraordinary) 19 April 2022 20 April 2022 2. The Proposal on the Conducting of Financial Derivatives
Meeting of the Trading was approved.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
4th Board of 3. The Proposal on the Revision of the Articles of Association
was approved.
Directors
4. The Proposal on the Revision of the Rules of Procedure for
General Meeting was approved.
5. The Proposal on the Revision of the Rules of Procedure for the
Board of Directors was approved.
6. The Proposal on the Revision of the Work Rules for General
Manager was approved.
7. The Proposal on the Revision of the Management Rules for
Related Transactions was approved.
8. The Proposal on the Revision of the Management Rules for
External Guarantees was approved.
9. The Proposal on the Revision of the Management Systems for
Major Investments was approved.
10. The Proposal on the Revision of the Management Systems of
Securities Investments was approved.
11. The Proposal on the Formulation of the Management Systems
for Financial Derivatives Trading was approved.
12. The Proposal on the Convening of the Second Extraordinary
General Meeting for 2022 was approved.
The 17th
1. The Proposal on the Satisfaction of the Unlocking Conditions
(Extraordinary) for the Second Unlocking Period for the First Grant under the
Meeting of the 17 June 2022 18 June 2022 2020 Restricted Share Incentive Plan was approved (the related
4th Board of directors, Qiu Yezhi, Zhou Wenhui, and Xie Weiwei avoided
voting).
Directors
The 18th
(Extraordinary)
1. The Proposal on the Write-off of Certain Repurchased Shares
Meeting of the 18 July 2022 19 July 2022
and Reduction of Registered Capital was approved.
4th Board of
Directors
1. The Proposal on the 2021 Semi-Annual Report and Its
Summary was approved.
2. The Proposal on Re-election of Independent Directors and
The 19th
Nomination of Candidates for Independent Directors of the
Meeting of the Fourth Board of Directors was approved.
26 July 2022 27 July 2022
4th Board of 3. The Proposal on Re-election of Non-independent Directors and
Nomination of Candidates for Non-independent Directors of the
Directors
Fourth Board of Directors was approved.
4. The Proposal on the Convening of the Third Extraordinary
General Meeting for 2022 was approved.
The 20th
(Extraordinary) 1. The Proposal on the Further Determination of the Purpose of
24 September
Meeting of the 23 September 2022 Repurchased Shares and Write-off of Certain Repurchased Shares
2022 was approved.
4th Board of
Directors
The 21st No announcement
required
(Extraordinary) 25 October 2022 1. The Proposal on the 2022 Third Quarter Report was approved.
according to the
Meeting of the rules of the
108 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
4th Board of Shenzhen Stock
Exchange
Directors
2. Attendance of Directors at Board Meetings and General Meetings
Attendance of directors at board meetings and general meetings
The director
Total number Board
Board Board failed to
of board Board meetings
meetings meetings the attend two General
meetings the meetings attended by
Director attended director consecutive meetings
director was attended on way of
through a failed to board attended
eligible to site telecommuni
proxy attend meetings or
attend cation
not
Tang Zhuolin 9 2 7 0 0 Not 4
Qiu Yezhi 9 2 7 0 0 Not 4
Xie Weiwei 9 2 7 0 0 Not 4
Zhou Wenhui 7 2 5 0 0 Not 3
Mai Zhirong 7 2 5 0 0 Not 3
Peng
7 1 5 1 0 Not 3
Xiaowei
He Weifeng 7 2 5 0 0 Not 3
Feng Jia 2 0 2 0 0 Not 1
Li Ketian 2 0 2 0 0 Not 1
Liu Da 2 0 2 0 0 Not 1
Tu Haichuan 2 0 2 0 0 Not 1
Why any director failed to attend two consecutive board meetings: N/A
3. Objections Raised by Directors on Matters of the Company
Indicate whether any directors raised any objections on any matter of the Company.
□ Yes √ No
No such cases in the Reporting Period.
4. Other Information about the Performance of Duty by Directors
Indicate whether any suggestions from directors were adopted by the Company.
√ Yes □ No
Suggestions from directors adopted or not adopted by the Company:
During the Reporting Period, the directors and independent directors of the Company worked in strict accordance with the
109 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
requirements of the Company Law, the Securities Law, the Guidelines for the Standardized Operation of Listed Companies on the
Shenzhen Stock Exchange, the Articles of Association, the Rules of Procedure for the Board of Directors and other relevant laws and
regulations, earnestly attended the Board meetings and the General Meetings, and were diligent and responsible. They have made
relevant suggestions on the major governance and operation decisions of the Company. The independent directors actively got to
know the operation of the Company and delivered different opinions on major matters of the Company, giving better play to the ir
supervisory role and effectively maintaining the interests of the Company and its shareholders.
110 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
VII Performance of Duty by Special Committees under the Board in the Reporting Period
Number
Important
of Other Particulars
opinion
meeting Date of performan about
Committee Members Contents and
s meeting ce of objections
suggestion
convene duties (if any)
s
d
1. The Proposal on the 2022 Restricted Share Incentive Plan (Draft) and Its Summary
was approved.
2. The Proposal on the Management Methods for the Implementation and Appraisal of
the 2022 Restricted Share Incentive Plan was approved.
Remuneratio Peng
25 February 3. The Proposal on the Awardee List for the First Grant under the 2022 Restricted
n and Xiaowei, Qiu
1 Share Incentive Plan was approved. N/A N/A N/A
Appraisal Yezhi, and 2022
Committee He Weifeng 4. The Proposal on the 2020 Annual Performance Appraisal Results for the Awardees
of the 2020 Restricted Share Incentive Plan was approved.
5. The Proposal on the Satisfaction of the Unlocking Conditions for the First
Unlocking Period for the Reserved Shares under the 2020 Restricted Share Incentive
Plan was approved.
1. The Proposal on the 2021 Auditor’s Report of Guangdong Dongfang Precision
Science & Technology Co., Ltd. was approved.
Mai Zhirong,
2. The Proposal on the 2021 Internal Control Self-Assessment Report was approved.
Audit Qiu Yezhi, 11 March
1 3. The Proposal on the Summary Report of the Audit Committee of the Board of N/A N/A N/A
Committee and He 2022
Directors on the 2021 Annual Audit of Ernst & Young Hua Ming LLP was approved.
Weifeng
4. The Proposal on the Proposed Appointment of an Audit Institution for 2022 was
approved.
Peng
Nomination Xiaowei, Mai 11 March
1 1. The Proposal on the Nomination of Board Secretary Candidate was approved. N/A N/A N/A
Committee Zhirong, and 2022
Tang Zhuolin
Remuneratio Peng 1. The Proposal on the 2021 Annual Performance Appraisal Results for the Awardees
n and Xiaowei, Qiu 1 17 June 2022 of the First Grant under the 2020 Restricted Share Incentive Plan was approved. N/A N/A N/A
Appraisal Yezhi, and 2. The Proposal on the Satisfaction of the Unlocking Conditions for the Second
111 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Committee He Weifeng Unlocking Period for the First Grant under the 2020 Restricted Share Incentive Plan
was approved.
Peng 1. The Proposal on the Nomination of Non-independent Director Candidate for the
Nomination Xiaowei, Mai Fourth Board of Directors was approved.
1 22 July 2022 N/A N/A N/A
Committee Zhirong, and 2. The Proposal on the Nomination of Independent Director Candidate for the Fourth
Tang Zhuolin Board of Directors was approved.
112 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
VIII Performance of Duty by the Supervisory Committee
Indicate whether the Supervisory Committee found any risk to the Company during its supervision in the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.
IX Employees
1. Number, Functions and Educational Backgrounds of Employees
Number of in-service employees of the Company as the parent at
512
the period-end
Number of in-service employees of principal subsidiaries at the
1,599
period-end
Total number of in-service employees at the period-end 2,111
Total number of paid employees in the Reporting Period 2,446
Number of retirees to whom the Company as the parent or its
23
major subsidiaries need to pay retirement pensions
Functions
Function Employees
Production&Operation 1,163
Marketing 288
R&D and technical 327
Financial 81
Comprehensive 252
Total 2,111
Educational backgrounds
Educational background Employees
Below junior college 1,067
Junior college 541
Bachelor’s degree 421
Master’s degree and above 82
Total 2,111
2. Employee Remuneration Policy
Domestic business entities:
The remuneration policy in 2022 continued to be based on posts and performance and subject to total control.
113 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
A comprehensive remuneration system was established and further improved to retain and attract talents needed
for the Company's sustainable development.
1. Paid remuneration based on posts: The relative value of a post was determined based on its duties, and the
remuneration rage of the post was determined based on the relative value and according to the Company's value
orientation.
2. Paid remuneration based on performance: The Company determined the basic remuneration based on the
relative value of a post and personal competence, determined the performance bonus in an employee's
remuneration based on his/her performance, and adjusted the remuneration based on his/her personal competence
and overall performance.
3. Changed remuneration with the change in post: The remuneration was strictly fitted to the post, and if the
post changed, the remuneration changed, so that the remuneration system can support the career development of
employees.
4. Total control: The total amount of remuneration was controlled within the scope recognized by the
Company, and the growth rate of remuneration should be lower than that of sales revenue and profit. The
Company's affordability was taken into account so that the Company's business performance can support the
growth of the total labour cost.
5. The remuneration system of payment by piece is applied to first-line workers of domestic business entities,
so that they could be paid more by being more profession and working harder, so as to reflect an internally fair
remuneration policy based on differential skill scoring.
Overseas business entities:
The remuneration system for each overseas business entity is put in place in accordance with the local labor
law and other applicable laws.
3. Training Plan
1. Overall status: 192 training sessions were carried out at the Group headquarters and domestic branches and
subsidiaries in 2022. The number of training hours per capita was about 18.33 hours, totaling 6,575 training
attendees. There were eight leadership empowerment training sessions, 104 hours of teaching, covering 127
people; 155 professional competence training sessions, 678 hours of teaching, covering 5,382 people; 16 general
capability training sessions, 99 hours of teaching, covering 1,796 people; 2 main business training sessions,
covering 137 people; 11 training sessions for new recruits, 55 hours of teaching, covering 213 people. Online
training resources enable a total of 211 hours of empowerment across six major courses.
2. The Company actively introduced external online and offline training resources, implemented the training
more effectively and conveniently, empowered core employees and shared training resources in the Group.
3. The Company empowered the team of internal trainers, improved their curriculum development and
teaching skills, preparing instructors and curriculum database for internal training and talent team construction.
4. Initiate the implementation of training management integration rules to encourage knowledge learning and
knowledge contribution. Hold a seminar to promote the implementation of the "a wealth of talent" strategy to
clarify the main objectives and key initiatives of the Group's key talent cultivation and provide solid talent support
for the Group's high-quality development.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
4. Labor Outsourcing
√ Applicable □ Not applicable
Total hours of labor outsourced 54,352.5
Total payment for labor outsourcing (RMB yuan) 1,634,415
X Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)
The profit distribution policy for shareholders, especially the formulation, implementation and amendments to the cash divide nd
policy, in the Reporting Period:
√ Applicable □ Not applicable
Article 183 of the Articles of Association of Guangdong Dongfang Precision Science & Technology Co., Ltd. Has specified the
method of profit distribution and the conditions, schedule and proportion of cash dividend, as well as the procedures to decide and
adjust or change profit distribution, in order to fully protect the legitimate rights and interests of investors.
The profit distribution policy of the Company remained unchanged in the Reporting Period.
Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and
Yes
resolution of general meeting
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors faithfully performed their duties and
Yes
played their due role
Non-controlling shareholders are able to fully express their
opinion and desire and their legal rights and interests are fully Yes
protected
In case of adjusting or changing the cash dividend policy, the
conditions and procedures involved are in compliance with Not applicable
applicable regulations and transparent
Indicate whether the Company fails to put forward a cash dividend proposal for shareholders despite the facts that the Compan y has
made profits in the Reporting Period and the profits of the Company as the parent distributable to shareholders are positive.
□ Applicable √ Not applicable
Final dividend plan for the Reporting Period:
□ Applicable √ Not applicable
The Company planed not to distribute cash dividends, neither give away bonus shares, nor capitalize from public reserve
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
√ Applicable □ Not applicable
115 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
1. Equity Incentives
To refine its long-term incentive mechanism, boost the enthusiasm of management personnel and key employees of all levels,
effectively promote long-term development, and achieve the objective of “Promoting Team Stability and Morale, Attract Talent and
Improve Operating Performance”, the Company launched the 2020 Restricted Share Incentive Plan in the first quarter of 2020. The
plan was approved at the First Extraordinary General Meeting of 2020 on 27 March 2020. For details, see the Summary of the 2020
Restricted Share Incentive Plan disclosed by the Company on www.cninfo.com.cn dated 12 March 2020.
To further build and improve its long-term incentive mechanism, attract, and retain talent, fully motivate its key managerial,
technological, and business personnel, effectively align the Company’s and shareholders’ interests with the personal interests of the
core team, and make all the parties concerned to focus on the long-term development of the Company, the Company launched the
2022 Restricted Share Incentive Plan in the first quarter of 2022. The plan was approved at the First Extraordinary General Meeting
of 2022 on 14 March 2022. For details, see the 2022 Restricted Share Incentive Plan disclosed by the Company on
www.cninfo.com.cn dated 15 March 2022.
1. On 25 February 2022, the Proposal on the Satisfaction of the Unlocking Conditions for the First Unlocking Period for the
Reserved Restricted Shares under the 2020 Restricted Share Incentive Plan was approved at the 13th (Extraordinary) Meeting of the
4th Board of Directors and the 10th (Extraordinary) Meeting of the 4th Supervisory Committee. On 9 March 2022, 848,000 shares
held by 18 awardees were unlocked for public trading in the first unlocking period for the reserved restricted sha res under the 2020
Restricted Share Incentive Plan.
2. On 21 March 2022, the Proposal on the First Grant of Restricted Shares to Awardees under the 2022 Restricted Share
Incentive Plan was approved at the 15th (Extraordinary) Meeting of the 4th Board of Directors. The date for the first grant was 21
March 2022. In April 2022, the Company completed the ownership transfer of the 2.65 million restricted shares to 7 awardees a t
RMB1.00/share, the listing date of which is 28 April 2022. For details, see the Announcement on the Completion of the Ownership
Transfer of the First Grant under the 2022 Restricted Share Incentive Plan disclosed by the Company on www.cninfo.com.cn date d
29 April 2022.
3. On 17 June 2022, the Proposal on the Satisfaction of the Unlocking Conditions for the Second Unlocking Period for the First
Grant under the 2020 Restricted Share Incentive Plan was approved at the 17th (Extraordinary) Meeting of the 4th Board of Directors
and the 14th (Extraordinary) Meeting of the 4th Supervisory Committee. On 24 June 2022, 8,620,000 shares held by 37 awardees
were unlocked for public trading in the second unlocking period for the first grant under the 2020 Restricted Share Incentive Plan.
Equity incentives received by directors and senior management:
√ Applicable □ Not applicable
Unit: share
Share Exercis
Exercis Exerci Market Unloc Restri
option e price
able sed Clos price at Openi ked cted Grant Closin
Open s for
shares shares ing the ng shares shares price g
Offic ing exercis
newly shar
Name share in the in the period- restric in the newly (RMB restric
e title ed e
optio grante Reporti Repor ted Repor grante yuan/sh ted
optio end
ns d in shares
ng ting ns (RMB shares ting d in are) shares
the in the
Period Period yuan/sh Period the
Repor Reporti
116 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
ting ng are) Repor
Period
Period ting
(RMB Period
yuan/sh
are)
Direct
or
and
Qiu 7,200, 3,600, 3,600,
Gener 0 1
Yezhi 000 000 000
al
Mana
ger
Direct
or
and
Xie Deput
800,0 400,0 400,0
Weiw y 0 1
00 00 00
ei Gener
al
Mana
ger
Direct
or,
Board
Secret
Feng 700,0 700,0
ary 0 0 1
Jia 00 00
and
Vice
Presid
ent
Chief
Finan
cial
Shao
Offic 800,0 160,0 640,0
Yongf 0 1
er and 00 00 00
eng
Vice
Presid
ent
8,800, 4,160, 700,0 5,340,
Total -- -- -- --
000 000 00 000
Appraisal of and incentive for senior management:
The Company has established a sound performance appraisal and remuneration policy for senior managers, and determined key
performance indicators (KPIs) matching different posts, which linked the income of the Company's managers and employees at
117 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
different levels to their work performance. During the Reporting Period, the Company assessed and appraised the work ability, duty
performance and completion of responsibility goals of senior managers based on the KPIs, and closely linked their remuneratio n
levels with the Company's business performance.
2. Implementation of Employee Stock Ownership Plans
□ Applicable √ Not applicable
3. Other Incentive Measures for Employees
□ Applicable √ Not applicable
XII Formulation and Imple mentation of Internal Control System during the Reporting
Period
1. Internal Control Formulation and Implementation
In accordance with the provisions of the Basic Code for Internal Control of Enterprises and its supporting guidelines and other
regulatory requirements for internal control, the Company has set up a relatively complete corporate governance structure and
internal control management system in line with its actual operation, which is in line with the needs of the Company's operation and
management. The Company has established internal control over the businesses and matters included in the scope of evaluation for
effective implementation. The objective of internal control has been basically achieved with no material weakness.
The Board of Directors of the Company is responsible for establishing sound and effective internal controls and evaluating their
effectiveness in accordance with the provisions of the standard system for enterprise internal control. The Supervisory Committee
supervised the establishment and implementation of internal controls by the Board of Directors.
The Company would ensure legal compliance in operation and management, assets safety, truthfulness and integrity of financial
reports and related information through the sound and effective implementation of internal controls to improve operational efficiency
and effect, and promote the development strategy.
2. Significant Defects in Internal Control Identified during the Reporting Period
□ Yes √ No
XIII Subsidiary Management during the Reporting Period
Solution Subsequent
Subsidiary Management plan Progress Problems Solutions
progress plan
Following the completion of the The integration
Shenzhen acquisition, a complete integration plan has been
Wonder plan was established, covering largely completed
Currently Currently not Currently Currently not
Digital personnel, finance, organizational and the
not available available not available available
Technology structure, business integration, and corresponding
Co., Ltd. other aspects. Details are as follows: integration goals
1. Organizational structure and have been
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personnel adjustment: Dispatch four achieved.
members of Board of Directors
(including the Chairman) to Wonder
Digital, establish a Supervisory
Committee, and dispatch a financial
director from the Group.
2. Set up and issue authorization
forms for each position based on
business conditions.
3. Establish corresponding
management systems for each
functional department and improve
systematic management processes.
4. Improve the financial management
informationization and compliance
and establish a set of financial
accounting and settlement processes
and systems that meet the
requirements of listed companies.
5. Assist Wonder Digital to complete
the overall relocation of the plant
within the year, further expand
production capacity, and meet
development needs.
XIV Self-Assessment Report and Independent Auditor’s Report on Internal Control
1. Internal Control Self-Assessment Report
Date of disclosure of the
full internal control 28 March 2023
assessment report
Index to the full internal
control assessment Published on www.cninfo.com.cn
report disclosed
Ratio of the total assets
of the organizations
included in the
assessment to the total 100.00%
assets in the Company's
consolidated financial
report
Ratio of the revenue of 100.00%
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the organizations
included in the
assessment to the
revenue in the
Company's consolidated
financial report
Defect identification criteria
Category Financial report Non-financial report
The identification of defects in non-financial reports
is mainly based on the degree of impact of the
defects on the effectiveness of business procedures
and the possibility of their occurrence.
1) Significant defect
1) Indications of significant defects in financial If the possibility of the defect is high, it will
reports include: seriously reduce the work efficiency or
a. Fraudulent conduct by directors, supervisors and effectiveness, seriously increase the uncertainty of
senior management of the Company; b. Correction of the effectiveness, or make the work result seriously
a published financial report by the Company; c. deviate from the expected goal, the defect is a
Significant misstatement in the current financial significant defect. The following usually indicates a
report identified by a certified public account but not significant defect in the internal control of non-
identified during the Company's internal control financial reports:
audit; d. Invalid supervision of the Audit Committee a. Violation of national laws and regulations; b.
and audit department over the Company's external Outflow of managers or key technicians; c. Frequent
financial reports and internal control of financial negative news from media; d. Failure to correct the
reports. results, especially significant or important defects, in
2) Indications of important defects in financial reports internal control assessment; e. Lack of system
Qualitative criteria
included: control or systematic failure of system in important
a. Failure to select or apply accounting policies in business.
accordance with GAAP; b. Failure to implement anti- 2) Important defect
fraud procedures and take control measures; c. Lack If the possibility of the defect is relatively high, it
of corresponding control mechanism for accounting will significantly reduce the work efficiency or
treatment of unconventional or special transactions or effectiveness, significantly increase the uncertainty
lack of corresponding compensatory control; d. One of the effectiveness, or make the work result
or more defects in the control of the period-end significantly deviate from the expected goal, the
financial reporting process and failure to reasonably defect is an important defect. The following usually
ensure true and complete financial reports. indicates an important defect in the internal control
3) General defects refer to the control defects other of non-financial reports:
than significant and important defects mentioned a. Defects in important business policies or systems;
above. b. Important mistakes in the decision-making
process; c. Serious outflow of business personnel in
key posts; d. Failure to timely remedy the important
defects identified in internal supervision of internal
control; e. Other circumstances that have a negative
impact on the Company. 3) General defects referred
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
to the control defects other than significant and
important defects mentioned above.
The revenue and total assets were the measuring
indicators for the quantitative criteria. If the loss that
may result from or results from an internal control
defect is related to the profit report, it was measured
by the revenue indicator. If the amount of
misstatement in the financial report that may result
from the defect alone or it together with other
defects is less than 0.5% of the revenue, the defect
was determined as a general defect. If it exceeds
A quantitative judgment was made based on the
0.5% and is less than 1% of the revenue, it was
pretax profit of the Company. The misstatement
determined as an important defect. If it exceeds 1%
exceeding 5% of the total pretax profit was
of the revenue, it was determined as a significant
Quantitative criteria determined as a significant misstatement, that
defect.
exceeding 3% of the total pretax profit was
If the loss that may result from or results from an
determined as an important misstatement, and others
internal control defect is related to asset
were determined as general misstatements.
management, it was measured by the total asset
indicator. If the amount of misstatement in the
financial report that may result from the defect alone
or it together with other defects is less than 0.5% of
the total assets, the defect was determined as a
general defect. If it exceeds 0.5% and is less than 1%
of the total assets, it was determined as an important
defect. If it exceeds 1% of the total assets, it was
determined as a significant defect.
Number of significant
defects in financial 0
reports
Number of significant
defects in non-financial 0
reports
Number of important
defects in financial 0
reports
Number of important
defects in non-financial 0
reports
2. Independent Auditor’s Report on Internal Control
√ Applicable □ Not applicable
Opinion paragraph in the independent auditor’s report on internal control
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In the opinion of Ernst & Young Hua Ming LLP, Guangdong Dongfang Precision Science & Technology Co., Ltd. maintained, in
all material respects, effective internal control over financial reporting as at 31 December 2022, based on the Basic Rules on
Enterprise Internal Control and other applicable rules.
Independent auditor’s report on
Yes
internal control disclosed or not
Disclosure date 28 March 2023
Index to such report disclosed www.cninfo.com.cn
Type of the auditor’s opinion Unmodified unqualified opinion
Material weaknesses in internal
control not related to financial None
reporting
Indicate whether any modified opinion is expressed in the independent auditor’s report on the Company’s internal control.
□ Yes √ No
Indicate whether the independent auditor’s report on the Company’s internal control is consistent with the internal control self-
evaluation report issued by the Company’s Board of Directors.
√ Yes □ No
XV Rectifications of Proble ms Identified by Self-inspection in the Special Action for Listed
Company Governance
During the Reporting Period, the Company carried out special self-inspection activities on governance according to
the unified deployment of regulatory authorities, and the results of the self-inspection are as follows:
(I) Overview of corporate governance
In strict accordance with the requirements of the Company Law, the Securities Law, the Code of Corporate
Governance for Listed Companies, the Listing Rules of Shenzhen Stock Exchange and other relevant laws and
regulations, the Company has continuously improved its corporate governance structure, established and improved its
internal control system to standardize its operations and enhance information disclosure. It also actively developed
investor relations management, and complied with the requirements of laws and regulations in all aspects of corporate
governance.
(II) Problems in corporate governance and rectification
1. Due to other arrangements, there were circumstances where some directors or senior management did not attend
(preside) the General Meeting as required.
Rectification: The Company strengthened training, educated the requirements of relevant laws and regulations to
facilitate the participation of directors, supervisors and senior management in General Meetings via video, telephone
and Internet.
2. There were circumstances where independent directors were unable to attend the board meeting in person
Rectification: The Company strengthened training, educated the requirements of relevant laws and regulations to
facilitate the participation of independent directors in board meeting via video, telephone and Internet.
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Part V Environmental and Social Responsibilities
I Significant Environmental Issues
Whether the listed company and its subsidiaries fell into major pollutant-discharge enterprises and institutions published by national
environmental protection authorities.
□ Yes √ No
The Company and its subsidiaries did not fall into major pollutant-discharge enterprises and institutions published by national
environmental protection authorities, and the Company was not administratively punished for environmental issues in the Repor ting
Period. For other environmental information, please refer to “II Social Responsibilities” below.
Measures taken to reduce carbon emissions in the Reporting Period and the impact:
□ Applicable √ Not applicable
II Social Responsibilities
The Company attached importance to fulfil social responsibility in daily operations, intending to promote the harmony and co-
prosperity between it and parties related to its interests. The Company also took active measures in the protection of the rights and
interests of shareholders, creditors, employees, suppliers, customers and consumers, environmental protection, sustainable
development, public relations and social public welfare undertakings, and strived to maximize comprehensive social benefits
including the sustainable development of itself.
(1) Corporate governance: During the Reporting Period, the Company strictly abided by the Company Law, the Securities Law
and Code of Corporate Governance for Listed Companies, continued to refine the corporate governance structure, improve the
internal control system, formed the decision-making system comprising the Shareholders' General Meeting, the Board of Directors,
the Supervisory Committee and the Management, and timely fulfilled its obligation of informatio n disclosure according to laws and
regulations and effectively safeguarded the rights and interests of all shareholders.
(2) Rights and interests of employees: The Company provided employees with welfare and care by providing holiday gifts and
holding employee birthday parties, annual meetings and team building activities, improved employees' professional competence by
offering regular or irregular training to employees in the headquarters and domestic and foreign branches and subsidiaries, a nd
continued to improve the competitive comprehensive remuneration system to retain and attract talents needed for the Company's
sustainable development.
(3) Relationship with customers and suppliers: Long adhering to the principle of "honest business" and "mutual benefit and
win-win", the Company took the initiative to construct and develop strategic partnership with suppliers and customers and jointly
built a platform of trust and cooperation, and earnestly fulfilled its social responsibilities to suppliers, customers a nd consumers. The
Company has been well performing contracts with suppliers and customers and ensuring that the rights and interests of all par ties are
highly valued and duly protected.
(4) Production safety: The Company strictly abided by the Labour Law and the Labour Contract Law, adhered to the "people-
oriented" principle, attached importance to the needs of employees, strived to improve the working and living environments of
employees, and has set up a labour union to effectively protect the interests of employees. It also provided labour protection supplies
according to the risk factors of different posts, organized occupational health examinations for employees (before taking the post, on
the post and before leaving the post), and bought safety liability insurance for employees on highly risky posts. In 2020, Dongfang
Precision extended its Grade II Production Safety Standardization Certificate for Machinery Enterprises, and Parsun Power and
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Fosber Asia were granted the Grade III Production Safety Standardization Certificate for Machinery Enterprises.
(5) Environmental protection: First, Dongfang Precision was granted the National Pollutant Discharge Permit and met post-
licensing regulatory requirements as required. Second, Dongfang Precision commissioned the qualified third-party environmental
protection agencies to compile the Contingency Plans for Environmental Emergencies, and commission a third-party testing agency
to take samples every quarter to monitor and issue third-party test reports, and transfer hazardous waste in strict accordance with
national requirements. Third, the Company’s environmental protection facilities passed the qualification re -examination on
OHSAS18001:2007 Occupational Health and Safety Management Systems and ISO14001:2005 Environmental Management System.
Parsun Power, which is a subsidiary of the Company, is not in the heavy pollution industry, its production process has less impact on
the environment, and it has purchased complete environmental protection equipment, which are in normal operation and can meet the
daily pollutant treatment requirements, that leads no violation of environmental protection related laws and administrative regulations
and receive administrative penalties.
(6) Anti-fraud: The Group complied a thorough internal authorization manual that detailed pro visions on internal
authorization process of major matters to ensure appropriate internal control and reduce the risk of fraud. In order to create a fair, just,
honest and non-corrupt internal business environment and strengthen internal monitoring, the Company also established and
launched the anti-fraud reporting platform to encourage employees to report fraud findings.
(7) Social honour: Dongfang Precision won honorary titles including "Top 500 Private Manufacturing Enterprises in China",
"Leading Enterprises in Subdivided Industries in Foshan", and "Guangdong Provincial Industrial Design Center "; Fosber Asia won
honorary titles including "Guangdong Demonstration Enterprise of Intellectual Property". Parsun Power is a national "small giant"
enterprise, a national high-tech enterprise, an engineering technology research center for outboard engines in Jiangsu Province, an
enterprise technology centre recognized by Jiangsu Province, a leading enterprise in China's internal combustion engine indus try and
a director unit of the Small Gasoline Engine Branch of China Internal Combustion Engine Industry Association. The outboard engine
of BPS has also won many honors such as the certificate of industrialization demonstration project of national torch plan, in novative
product of China machinery industry, famous brand product of Jiangsu province and famous brand product of Suzhou city.
III Efforts in Poverty Alleviation and Rural Revitalization
The Company did not conduct activities related to targeted poverty alleviation in the Reporting Year, nor did it develop any
subsequent plan for targeted poverty alleviation.
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Part VI Significant Events
I Fulfillment of Undertakings
1. Undertakings of the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company Itself and other Entities Fulfilled
in the Reporting Period or Ongoing at the Period-end
√ Applicable □ Not applicable
Fulfilment
Cause of Parties of Types of Date of Term of
Contents of undertakings of
undertakings undertakings undertakings undertakings undertakings
undertakings
Undertakings
related to reform
of shareholder
structure
Undertakings
made in
acquisition
report of change
of equity report
Undertaking 1. I will conduct all related-party transactions, unavoidable or arising from a reasonable reason,
on horizontal between me and companies controlled by me and Dongfang Precision and its controlling subsidiaries in
Undertakings Tang Zhuolin, competition, a fair and reasonable manner and on an equal, mutually beneficial, equivalent and compensable basis in In normal
25 April Long-term
made in asset Tang related-party strict accordance with market principles. For all related-party transactions between me and companies progress of
2017 effective
reorganization Zhuomian transactions controlled by me and Dongfang Precision and its controlling subsidiaries, I will sign agreements and go fulfilment
and capital through procedures according to law and fulfil the obligation of information disclosure in accordance
occupation with relevant laws, regulations, normative documents, Articles of Association of Dongfang Precision
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Fulfilment
Cause of Parties of Types of Date of Term of
Contents of undertakings of
undertakings undertakings undertakings undertakings undertakings
undertakings
and other corporate governance provisions, and undertakes not to damage the legitimate rights or
interests of the listed company and small and medium shareholders. 2. When any related-party
transaction involving me and companies controlled by me is being deliberated by the authority of
Dongfang Precision, I will proactively perform the obligation of evading according to law and conduct
the transaction only with the approval of the competent authority. 3. I undertake not to obtain any
improper benefits or cause Dongfang Precision and its controlling subsidiaries to assume any improper
obligations through related-party transactions. In case of any losses to Dongfang Precision or its
controlling subsidiaries as a result of any breach of the above undertakings, I will be liable for such
losses.
When the Company is conducting major asset reorganization by acquiring 100% of Beijing Pride's
equity, former shareholders of Beijing Pride, namely Pulead, Qinghai Puren, BAIC Capital, Foton and
Pulead; BAIC
CATL, undertake that: 1. None of them has signed any agreement on concerted action as of the date of In normal
Capital; Other July 28, Long-term
signature of the Agreement to Purchase Assets by Issuing Shares and Paying Cash, nor will them do so progress of
Foton; CATL; undertakings 2016 effective
in the future, although BAIC Capital and Foton are subject to a concerted action relation and so as fulfilment
Qinghai Puren
Pulead and Qinghai Puren. 2. They will not attempt to change any member of the Board of Directors of
Dongfang Precision through a general meeting of shareholders.
1. The undertaker and companies controlled by it are not engaging in any business the same as, similar
to or competing with the business of the listed company and companies controlled by it, and they will
Undertaking
neither, in any way, engage in or assist others in engaging in any business that competes or may
on horizontal
compete with the business of the listed company and companies controlled by it, nor merge or
Tang Zhuolin, competition, 25 In normal
substantially invest in (or jointly hold), directly or indirectly, other companies engaging in any business Long-term
Tang related-party November progress of
that competes or may compete with the business of the listed company and companies controlled by it. effective
Zhuomian transactions 2019 fulfilment
2. If the listed company engages in a new business sector, the undertaker will not engage in any
and capital
business that competes with such a new business of the listed company, except with the prior written
occupation
consent of the listed company. 3. If any business opportunity obtained by the undertaker from any third
party completes or may compete with the business of the listed company and companies controlled by
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Fulfilment
Cause of Parties of Types of Date of Term of
Contents of undertakings of
undertakings undertakings undertakings undertakings undertakings
undertakings
it, the undertaker will immediately inform and make every effort to deliver the business opportunity to
the listed company. 4. The undertaker will not, in any way, use the information or other resources
obtained from the listed company to conduct any act that harms the interests of the listed company. 5.
In case of any losses to the listed company as a result of breach of these undertakings by the undertaker,
the undertaker will make thorough, timely and full compensation for all such losses and take active
measures to eliminate the adverse effects caused thereby.
1. The undertaker will refrain from any illegal occupation of the funds and assets of the listed company,
and will never require the listed company to provide any form of guarantee to it or companies
controlled by it under any circumstances. 2. The undertaker will, to the extent possible, avoid and
minimize related-party transactions with the listed company, and for all related-party transactions
Undertaking unavoidable or arising from a reasonable reason, it will conduct following the principle of voluntary,
on horizontal fair and reasonable market pricing and according to normal market trading conditions, sign agreements
Tang Zhuolin, competition, and go through procedures according to law, abide by relevant laws, regulations, normative documents 25 In normal
Long-term
Tang related-party and articles of association of the listed company, perform internal decision-making and approval November progress of
effective
Zhuomian transactions procedures according to law, and timely perform the obligation of information disclosure, so as to 2019 fulfilment
and capital ensure that the related-party transactions are fairly and reasonably priced and conducted under fair
occupation trading conditions and that it will not damage the legitimate rights or interests of the listed company
and its shareholders through related-party transactions. 3. In case of any losses to the listed company as
a result of breach of these undertakings by the undertaker, the undertaker will make thorough, timely
and full compensation for all such losses and take active measures to eliminate the adverse effects
caused thereby.
1. I will not overstep my authority to intervene in the operation and management of Dongfang
Tang Zhuolin, Precision, will not occupy the interests of Dongfang Precision, and will earnestly take corresponding 25 In normal
Other Long-term
Tang measures to fill up the diluted spot returns of Dongfang Precision. 2. After the CSRC and Shenzhen November progress of
undertakings effective
Zhuomian Stock Exchange otherwise release the measures to fill up diluted spot returns and opinions and 2019 fulfilment
implementation rules for its undertakings, if Dongfang Precision's corresponding policies and
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Fulfilment
Cause of Parties of Types of Date of Term of
Contents of undertakings of
undertakings undertakings undertakings undertakings undertakings
undertakings
undertakings fail to meet such provisions, I will immediately submit a supplementary undertaking to
the CSRC and Shenzhen Stock Exchange as required in order to be compliant. 3. I undertake to
earnestly take the corresponding measures formulated by the listed company to fill up diluted spot
returns and to earnestly fulfil my undertakings. If I violate such undertaking(s) and cause losses to the
Company or investors, I am willing to bear the corresponding liability for compensation according to
law.
1. After the relevant transaction, the undertaker will continue to maintain the independence of the listed
company in terms of staffing, asset, business, organization and finance in accordance with relevant
laws, regulations and normative documents, and will not conduct any act that affects such independence
or damages the interests of the listed company and other shareholders, and will effectively safeguard
Tang Zhuolin, 25 In normal
Other the independence of the listed company in terms of staffing, asset, business, organization and finance. Long-term
Tang November progress of
undertakings 2. This letter of undertaking shall be effective and irrevocable as of the date when it is officially signed effective
Zhuomian 2019 fulfilment
by the undertaker. The undertaker warrants to fulfil the undertaking(s) in good faith, and the listed
company has the right to supervise its fulfilment. Where the undertaker fails to fulfil the undertaking(s)
in good faith of undertaking and thus cause actual losses to the listed company, the undertaker shall
compensate the listed company for all director or indirect losses caused thereby.
I, as a director/senior executive of the Company, will faithfully and diligently perform my duties,
He Weifeng,
safeguard the legitimate rights and interests of the Company and all shareholders, and make the
Mai Zhirong,
following undertakings to ensure that the Company's measures to fill up returns will be effectively
Peng
implemented. 25 In normal
Xiaowei, Qiu Other Long-term
1. I will not transfer benefits to other organizations or individuals for free or under unfair conditions, November progress of
Yezhi, Tang undertakings effective
nor will I damage the interests of the Company in other ways. 2. I will constrain my consumption 2019 fulfilment
Zhuolin, Xie
behaviour on the position. 3. I will not use the Company's assets to engage in any investment or
Weiwei, Zhou
consumption activities unrelated to my performance of duties. 4. I will link the remuneration system
Wenhui
formulated by the Board of Directors or the Remuneration Committee to the implementation of the
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Fulfilment
Cause of Parties of Types of Date of Term of
Contents of undertakings of
undertakings undertakings undertakings undertakings undertakings
undertakings
Company's measures to fill up returns. 5. If the Company has an equity incentive program, I will link
the exercise conditions of the equity incentive program to be announced to the implementation of the
Company's measures to fill up returns. 6. After this undertaking is given, if the regulator puts forward
other requirements for the measures to fill up returns and the undertaking and the undertaking fails to
meet such requirements, I will give a supplementary undertaking according to the latest requirements of
the regulator. 7. I will effectively implement the Company's measures to fill up returns and fully fulfil
my corresponding undertakings, and I am willing to bear the corresponding liability for compensation
according to law if I violate such undertaking(s) and cause losses to the Company or investors.
Undertaking
Before the fact that I am (or the Company is) a major shareholder of the issuer is changed, I (or the
on horizontal
Company) will not, directly or indirectly, in any way (including but not limited to sole proprietorship,
Tang Zhuolin, competition, In normal
joint venture and holding stocks or interests in other companies or enterprises), engage in any business 18 August Long-term
Tang related-party progress of
or activity that competes or may compete with the business of the issuer. I (The Company) shall 2010 effective
Zhuomian transactions fulfilment
Undertakings compensate the issuer for any loss caused to it as a result of the failure to fulfil the undertaking to avoid
and capital
made in IPO or horizontal competition.
occupation
refinancing
If relevant government or judicial authorities decide that Dongfang Precision or Weike Dongmeng need
Tang Zhuolin, to make a supplementary payment for employees' public housing provision, or Dongfang Precision or In normal
Other 14 August Long-term
Tang Weike Dongmeng is subject to any late fee, fine or loses for failing to pay the public housing provision progress of
undertakings 2011 effective
Zhuomian for some employees, I will unconditionally and in full bear such supplementary payment, late fees and fulfilment
fines.
Undertakings
related to equity
incentives
Undertakings
made to
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Fulfilment
Cause of Parties of Types of Date of Term of
Contents of undertakings of
undertakings undertakings undertakings undertakings undertakings
undertakings
minority
shareholders of
the Company
Whether the
undertakings
Yes
were timely
performed
Where the
Company failed
to fulfill an
undertaking on
time, it shall
Not applicable
explain in detail
the reasons for
failing to do so
and the
subsequent plan
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2. Where there had been an earnings forecast for an asset or project and the Reporting Period was still
within the forecast period, explain why the forecast has been reached for the Reporting Period.
□ Applicable √ Not applicable
II Occupation of the Company’s Capital by the Controlling Shareholder or Its Related Parties
for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
III Irregularities in Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IV Explanations Given by the Board of Directors Regarding the Last “Modified Opinion” on
Financial Statements
□ Applicable √ Not applicable
V Explanations Given by the Board of Directors, the Supervisory Committee and the
Independent Directors (if any) Regarding the Independe nt Auditor's “Modified Opinion” on
the Financial Statements of the Reporting Period
□ Applicable √ Not applicable
VI YoY Changes to Accounting Policies and Estimates and Correction of Material
Accounting Errors
□ Applicable √ Not applicable
VII YoY Changes to the Scope of the Consolidated Financial Statements
√ Applicable □ Not applicable
In February 2022, the Company established Dongfang Yineng International Holding Co., Ltd. ("Yineng Inter national") with a
registered capital of RMB50 million and 100% ownership.
In February 2022, Yineng Investment, a subsidiary of the Company, established Changzhou Xinchen Venture Capital
Partnership (Limited Partnership) (“Changzhou Xinchen”) with a capital contribution of RMB48 million and a 94.86% ownership.
In February 2022, Parsun Power, a subsidiary of the Company, established Suzhou Baisheng International Trade Co., Ltd.
(“Baisheng International”) with a registered capital of RMB3 million and a 69.62% ownership.
In 2022, the Company acquired a 51% ownership in Shenzhen Wonder Digital Technology Co., Ltd. (formerly known as
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“Shenzhen Wonder Printing System Co., Ltd.”) at RMB173,800,000.00 in cash, including a capital increase of RMB50,000,000.00
and a consideration of RMB123,800,000 for equity acquisition. The Group completed the ownership change formalities with the
industrial and commercial administration in relation to the equity acquisition on 7 June 2022, with the date of acquisition o n 7 June
2022.
VIII Engagement and Disengagement of Independent Auditor
Current independent auditor:
Name of the domestic independent auditor Ernst & Young Hua Ming LLP
The Company’s payment to the domestic independent auditor RMB4.31 million
How many consecutive years the domestic independent auditor
3 years
has provided audit service for the Company
Names of the certified public accountants from the domestic
Feng Xingzhi and Hu Chuan
independent auditor writing signatures on the auditor’s report
How many consecutive years the certified public accountants
Feng Xingzhi: 3 years; Hu Chuan: 1 year
have provided audit service for the Company
Indicate whether the independent auditor was changed for the Reporting Period.
□ Yes √ No
Independent auditor, financial advisor or sponsor hired for the audit of internal control:
√ Applicable □ Not applicable
Ernst & Young Hua Ming LLP was appointed as the independent auditor of internal control for the Company for 2022.
IX Possibility of Delisting after the Disclosure of this Report
□ Applicable √ Not applicable
X Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XI Significant Legal Matters
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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XIII Credit Quality of the Company as well as Its Controlling Shareholder and Actual
Controller
□ Applicable √ Not applicable
XIV Significant Related-Party Transactions
1. Continuing Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Amounts Due to and from Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Transactions between the Company and Related Financial Companies
□ Applicable √ Not applicable
No such cases in the Reporting Period.
6. Transactions between Financial Companies Controlled by the Company and Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
7. Other Significant Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
XV Significant Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Significant Guarantees
√ Applicable □ Not applicable
Unit: RMB'0,000
Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries)
Disclosure
Counter Guarante
date of the
Actual Actual - Having e for a
guarantee Line of Type of Security (if Term of
Obligor occurrence guarantee guarant expired or related
line guarantee guarantee any) guarantee
date amount ees (if not party or
announcem
any) not
ent
Guarantees provided by the Company as the parent for its subsidiaries
Disclosure
Counter Guarante
date of the
Actual Actual - Having e for a
guarantee Line of Type of Security (if Term of
Obligor occurrence guarantee guarant expired or related
line guarantee guarantee any) guarantee
date amount ees (if not party or
announcem
any) not
ent
From the
Dongfang No more date when
30 Joint
Precision than 4 February Security the
December 18,260.33 liability; -- Yes No
(Netherland EUR24.6 2021 deposits guarantee
2020 Pledge
) million took
effect to
134 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
21 April
From the
date when
Dongfang No more the
Joint
Precision than 30 June Security guarantee
5 June 2020 24,866.72 liability; -- No No
(Netherland EUR35 2020 deposits took
Pledge
) million effect to
29 June
2023
Total approved line for Total actual amount of
such guarantees in the 0 such guarantees in the 0
Reporting Period (B1) Reporting Period (B2)
Total approved line for Total actual balance of
such guarantees at the No more than EUR35 such guarantees at the
24,866.72
end of the Reporting million end of the Reporting
Period (B3) Period (B4)
Guarantees provided between subsidiaries
Disclosure
Counter Guarante
date of the
Actual Actual - Having e for a
guarantee Line of Type of Security (if Term of
Obligor occurrence guarantee guarant expired or related
line guarantee guarantee any) guarantee
date amount ees (if not party or
announcem
any) not
ent
From the
date when
the
15 May EUR3 mill 30 April Joint guarantee
QCorr 909.79 - - No No
2020 ion 2020 liability took
effect to
30 June
2024
Total approved line for Total actual amount of
such guarantees in the 0 such guarantees in the 0
Reporting Period (C1) Reporting Period (C2)
Total approved line for Total actual balance of
such guarantees at the such guarantees at the
EUR3 million 909.79
end of the Reporting end of the Reporting
Period (C3) Period (C4)
Total guarantee amount (total of the three kinds of guarantees above)
Total guarantee line approved in Total actual guarantee
0 0
the Reporting Period amount in the Reporting
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
(A1+B1+C1) Period (A2+B2+C2)
Total actual guarantee
Total approved guarantee line at
No more than balance at the end of the
the end of the Reporting Period 25,776.51
EUR38 million Reporting Period
(A3+B3+C3)
(A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as % of the
6.34%
Company’s net assets
Of which:
Balance of guarantees provided for shareholders,
0
the actual controller and their related parties (D)
Balance of debt guarantees provided directly or
indirectly for obligors with an over 70% debt/asset 909.79
ratio (E)
Amount by which the total guarantee amount
0
exceeds 50% of the Company’s net assets (F)
Total of the three amounts above (D+E+F) 909.79
Joint liability possibly borne or already borne in
the Reporting Period for outstanding guarantees (if N/A
any)
Guarantees provided in breach of prescribed
N/A
procedures (if any)
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Overview of wealth management entrustments in the Reporting Period:
Unit: RMB’0,000
Impairment
Unrecovered provision for
Type Funding source Amount Undue amount
overdue amount unrecovered
overdue amount
Bank’s wealth
management Self-funded 67,200.00 9,600.00 0 0
product
Securities firm’s
wealth management Self-funded 60,000.00 44,000.00 0 0
product
Trust product Self-funded 662.07 0 358.62 286.90
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Total 127,862.07 53,600.00 358.62 286.90
High-risk wealth management transactions with a significant single amount or with low security and low liquidity:
□ Applicable √ Not applicable
Wealth management transactions where the principal is expectedly irrecoverable or an impairment may be incurred:
√ Applicable □ Not applicable
As of the end of the Reporting Period, the unrecovered amount of trust products was RMB3.5862 million, for which an impairment
allowance of RMB2.8690 million was established.
(2) Entrusted Loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Other Significant Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVI Other Significant Events
□ Applicable √ Not applicable
XVII Significant Events of Subsidiaries
□ Applicable √ Not applicable
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Part VII Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the period (+/-) After
Shares
Shares
as
as
divide
New dividend
Percenta nd Percenta
Shares issue converte Other Subtotal Shares
ge (%) conver ge (%)
s d from
ted
capital
from
reserves
profit
1. Restricted shares 241,176,130 18.10% 0 0 0 -7,993,597 -7,993,597 233,182,533 18.79%
1.1 Shares held by the
0 0.00% 0 0 0 0 0 0 0.00%
government
1.2 Shares held by state-
0 0.00% 0 0 0 0 0 0 0.00%
owned corporations
1.3 Shares held by other
239,736,130 17.99% 0 0 0 -7,393,597 -7,393,597 232,342,533 18.72%
domestic investors
Including: Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
domestic corporations
Shares held by domestic
239,736,130 17.99% 0 0 0 -7,393,597 -7,393,597 232,342,533 18.72%
individuals
1.4 Shares held by overseas
1,440,000 0.11% 0 0 0 -600,000 -600,000 840,000 0.07%
investors
Including: Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
overseas corporations
Shares held by overseas
1,440,000 0.11% 0 0 0 0 0 0 0.00%
individuals
2. Unrestricted shares 1,090,762,037 81.89% 0 0 0 -82,838,170 -82,838,170 1,007,923,867 81.21%
2.1 RMB-denominated
1,090,762,037 81.89% 0 0 0 -82,838,170 -82,838,170 1,007,923,867 81.21%
ordinary shares
2.2 Domestically listed
0 0.00% 0 0 0 0 0 0 0.00%
foreign shares
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
2.3 Overseas listed foreign
0 0.00% 0 0 0 0 0 0 0.00%
shares
2.4 Others 0 0.00% 0 0 0 0 0 0 0.00%
3. Total shares 1,331,938,167 100.00% 0 0 0 -90,831,767 -90,831,767 1,241,106,400 100.00%
Reasons for share changes:
√ Applicable □ Not applicable
1. Part of the shares held by Ms. Qiu Yezhi, the director, and CEO of the Company, was unlocked as allowed by the applicable
laws and regulations
In December 2021, Ms. Qiu Yezhi, the director, and CEO of the Company, completed a shareholding reduction. Upon the
reduction, she held 23,382,388 shares in the Company. In January 2022, 5,845,597 shares of hers were unlocked according to the
statutory quota of 25% transferable shares in the year.
2. Unlocking for public trading of shares in the first unlocking period for the reserved restricted shares under the Restricted
Share Incentive Plan
In March 2022, the shares were unlocked for public trading in the first unlocking period for the reserved restricted shares under
the 2020 Restricted Share Incentive Plan, which involved 848,000 shares held by 18 awardees.
3. Completion of the ownership transfer of the first grant under the 2022 Restricted Share Incentive Plan
In April 2022, the Company completed the ownership transfer of the 2.65 million restricted shares in the first grant under the
2022 Restricted Share Incentive Plan to 7 awardees.
4. Unlocking for public trading of shares in the second unlocking period for the first grant under the Restricted Share Incentive
Plan
In June 2022, the shares were unlocked for public trading in the second unlocking period for the first grant under the 2020
Restricted Share Incentive Plan, which involved 8,620,000 shares held by 37 awardees.
5. Retirement of part of the repurchased shares
The Company repurchased shares in 2018 to 2019 by way of centralized bidding, and the number of repurchased shares that
were not used for the designated purpose, 5,510,063 shares, was retired in July 2022 due to the expiry of the three-year period.
The Company launched the 2021 Share Repurchase Plan in September 2021, with 106,652,136 shares cumulatively repurchased
under the Plan. The number of repurchased shares to be retired to reduce the registered capital of the Company was 85,321,704
shares, representing 80% of the total number of shares repurchased, and the retirement of the aforesaid shares was completed in
October 2022.
6. Lockup of shares held by an outgoing director for six months
In July 2022, as Mr. Zhou Wenhui stepped down as director, his statutory quota of 25% of shares transferable for the year
(300,000 shares) was re-locked and cannot be transferred for six months.
Approval of share changes:
√ Applicable □ Not applicable
In the Reporting Period, with respect to share changes involved in the “unlocking for public trading of shares in the first
unlocking period for the reserved restricted shares under the 2020 Restricted Share Incentive Plan” , the “ownership transfer of the
first grant under the 2022 Restricted Share Incentive Plan” and the “unlocking for public trading of shares in the second unlocking
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
period for the first grant under the 2020 Restricted Share Incentive Plan”, the Company followed the applicable laws and regulations
and its Articles of Association, executed the approval procedures with the general meeting and the Board of Directors, and obtained
approval from the Shenzhen Stock Exchange.
Transfer of share ownership:
√ Applicable □ Not applicable
In the Reporting Period, with respect to the transfers of share ownership involved in the “ownership transfer of the first gra nt
under the 2022 Restricted Share Incentive Plan”, the Company completed the transfers with the Shenzhen branch of China Securities
Depository and Clearing Co., Ltd. after they were approved by the Shenzhen Stock Exchange.
Effects of share changes on the basic earnings per share, diluted earnings per share, equity per share attributable to the
Company’s ordinary shareholders and othe r financial indicators of the prior year and the prior accounting period,
respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
√ Applicable □ Not applicable
Unit: share
Increase in
Opening Closing
restricted Unlocked in the Reason for Date of
Shareholder restricted restricted
shares in the period restriction unlocking
shares shares
period
Participated in
the Restricted
Share Incentive
Plan of the
Qiu Yezhi 23,382,388 3,600,000 9,445,597 17,536,791 2022-1-4
Company/restri
cted shares of
senior
management
Participated in
the Restricted
Share Incentive
Plan of the
Xie Weiwei 800,000 350,000 400,000 750,000 2022-6-24
Company/restri
cted shares of
senior
management
Participated in
Zhou Wenhui 960,000 720,000 480,000 1,200,000 2022-6-24
the Restricted
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Share Incentive
Plan of the
Company/restri
cted shares of
senior
management
The other 34
awardees of the Participated in
first grant of the Restricted
the 2020 8,280,000 0 4,140,000 4,140,000 Share Incentive 2022-6-24
Restricted Plan of the
Share Incentive Company
Plan
Participated in
the Restricted
Feng Jia 0 700,000 0 700,000 Share Incentive 2023-4-28
Plan of the
Company
The other 6
Participated in
awardees of the
first grant of the Restricted
the 2022 0 1,950,000 0 1,950,000 Share Incentive 2023-4-28
Restricted Plan of the
Share Incentive
Company
Plan
Participated in
the Restricted
Shao Yongfeng 800,000 0 160,000 640,000 Share Incentive 2022-3-9
Plan of the
Company
The other 17
awardees of the Participated in
reserved grant the Restricted
of the 2020 3,440,000 0 688,000 2,752,000 Share Incentive 2022-3-9
Restricted Plan of the
Share Incentive Company
Plan
Total 37,662,388 7,320,000 15,313,597 29,668,791 -- --
II Issuance and Listing of Securities
1. Securities (Exclusive of Preference Shares) Issued in the Reporting Period
□ Applicable √ Not applicable
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
√ Applicable □ Not applicable
Following the repurchase and retirement of 90,831,767 public shares in the Reporting Period, the total share capital of the
Company decreased from 1,331,938,167 shares to 1,241,106,400 shares, which had no significant impact on the asset and liability
structure of the Company.
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
III Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
Number
of
ordinary
sharehol
Number Number of
ders at Number of preference
of preference
the shareholders with
ordinary shareholders
month- resumed voting rights at
sharehold 53,233 50,670 with resumed 0 0
end the month-end prior to
ers at the voting rights
prior to the disclosure of this
period- at the period-
the Report (if any)
end end (if any)
disclosu
re of
this
Report
5% or greater shareholders or top 10 shareholders
Shareho Increase/decre Shares in pledge,
Name of Total shares
Nature of lding ase in the Restricted Unrestricted marked or frozen
sharehold held at the
shareholder percenta Reporting shares held shares held
er period-end Status Shares
ge Period
Tang Domestic In
21.81% 270,737,568 0.00 203,053,176 67,684,392 135,360,000
Zhuolin individual pledge
Tang Domestic In
7.81% 96,885,134 0.00 0 96,885,134 10,000,000
Zhuomian individual pledge
Pulead
State-owned
Technolog 3.88% 48,149,787 -4,599,771 0 48,149,787
corporation
y Industry
142 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Co., Ltd.
Luzhou
Industrial
Developm
State-owned
ent 2.56% 31,770,010 0.00 0 31,770,010
corporation
Investmen
t Group
Co., Ltd.
Qinghai
Puren
Intelligent
Domestic
Technolog
non-state-
yR&D 2.15% 26,628,340 0.00 0 26,628,340
owned
Center
corporation
(Limited
Partnershi
p)
Domestic
Qiu Yezhi 1.88% 23,382,388 0.00 17,536,791 5,845,597
individual
Shengji
Equity
Investmen State-owned In
1.58% 19,607,843 0.00 0 19,607,843 6,700,000
t Fund corporation pledge
(Shanghai
) Co., Ltd.
JIC State-owned
Investmen 1.05% 12,984,216 0.00 0 12,984,216
t Co., Ltd. corporation
Beixin
Ruifeng
Fund－
SPD Bank
－Beijing
Internatio
nal Trust
－Beijing
TrustQin
gyan Other 0.87% 10,818,183 0.00 0 10,818,183
Fengshou
Wealth
Managem
ent
Collective
Capital
Trust Plan
No.
2015015
Hong Overseas 0.77% 9,516,214 -18,850,322 0 9,516,214
143 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Kong corporation
Securities
Clearing
Company
Limited
Strategic investor or
general corporation
becoming a top-10 None
shareholder in a rights
issue (if any)
Mr. Tang Zhuolin and Mr. Tang Zhuomian are brothers. On 18 August 2010, they signed the
Agreement on Acting in Concert. Pulead Technology Industry Co., Ltd. (Chinese name has changed
Related or acting-in- from “北大先行科技产业有限公司” to “东圣先行科技产业有限公司” during the reporting
concert parties among the period.) and Qinghai Puren Intelligent Technology R & D Center (Limited Partnership) are acting-in-
shareholders above concert parties.
Apart from that, the Company is not aware of any related or acting-in-concert parties among the
other shareholders above.
Above shareholders
entrusting or entrusted
None
with voting rights, or
waiving voting rights
As of the end of the Reporting Period, there were 21,330,432 shares in the Company’s specia l
Top 10 shareholders
account for repurchase, accounting for 1.72% of its total share capital. As per the Shenzhen Stock
including the special
Exchange Guideline No. 1 for the Self-regulation of Listed Companies—Business Handling, the
account of repurchased
existence of a special account of repurchased shares among the top 10 shareholders should be
shares (if any)
specifically stated but not included in the presentation of the top 10 shareholders.
Top 10 unrestricted shareholders
Unrestricted shares held at the period- Shares by type
Name of shareholder
end Type Shares
Tang Zhuomian 96,885,134 RMB-denominated ordinary stock 96,885,134
Tang Zhuolin 67,684,392 RMB-denominated ordinary stock 67,684,392
Pulead Technology
48,149,787 RMB-denominated ordinary stock 48,149,787
Industry Co., Ltd.
Luzhou Industrial
Development Investment 31,770,010 RMB-denominated ordinary stock 31,770,010
Group Co., Ltd.
Qinghai Puren Intelligent
Technology R & D Center 26,628,340 RMB-denominated ordinary stock 26,628,340
(Limited Partnership)
Shengji Equity
19,607,843 RMB-denominated ordinary stock 19,607,843
Investment Fund
144 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
(Shanghai) Co., Ltd.
JIC Investment Co., Ltd. 12,984,216 RMB-denominated ordinary stock 12,984,216
Beixin Ruifeng Fund－
SPD Bank－Beijing
International Trust－
Beijing TrustQingyan
10,818,183 RMB-denominated ordinary stock 10,818,183
Fengshou Wealth
Management Collective
Capital Trust Plan No.
2015015
Hong Kong Securities
Clearing Company 9,516,214 RMB-denominated ordinary stock 9,516,214
Limited
Liu Wucai 6,597,688 RMB-denominated ordinary stock 6,597,688
Related or acting-in-
Mr. Tang Zhuolin and Mr. Tang Zhuomian are brothers. On 18 August 2010, they signed the
concert parties among top
Agreement on Acting in Concert. Pulead Technology Industry Co., Ltd. (Chinese name changed
10 unrestricted ordinary
from “北大先行科技产业有限公司” to “东圣先行科技产业有限公司”, and English name
shareholders, as well as
unchanged) and Qinghai Puren Intelligent Technology R & D Center (Limited Partnership) are
between top 10
acting-in-concert parties.
unrestricted ordinary
Apart from that, the Company is not aware of any related or acting-in-concert parties among the
shareholders and top 10
other shareholders above.
ordinary shareholders
Indicate whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted
any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: controlled by an individual
Type of the controlling shareholder: individual
Name of the controlling shareholder Nationality Residency in other countries or regions or not
Tang Zhuolin Chinese Not
Main occupation and position Chairman of the Board of Dongfang Precision
Interests held in other domestically and
overseas listed companies in the Reporting Not applicable
Period
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
145 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
3. Actual Controller and Acting-in-Concert Parties
Nature of the actual controller: domestic individual
Type of the actual controller: individual
Relationship with the actual Residency in other countries or
Name of the actual controller Nationality
controller regions or not
Tang Zhuolin Actual controller himself Chinese Not
Acting-in-concert party
Tang Zhuomian (contractual, kinship-based, and Chinese Not
common control-based)
Mr. Tang Zhuolin serves as the Chairman of the Board of Dongfang Precision as his main
Main occupation and position
occupation.
Controlling interests in other
domestically and overseas listed Not applicable
companies in the past 10 years
Change of the actual controller in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Ownership and control relationship between the actual controller and the Company:
Tang Zhuolin Tang Zhuomian
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Indicate whether the actual controller controls the Company via trust or other ways of asset management.
□ Applicable √ Not applicable
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
4. Shares Cumulatively Put in Pledge by the Company’s Controlling Shareholder or Biggest Shareholder
and Its Acting-in-Concert Parties Accounting for 80% of Their Shareholdings in the Company
□ Applicable √ Not applicable
5. Other 10% or Greater Corporate Shareholders
□ Applicable √ Not applicable
6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,
Reorganizer and Other Commitment Makers
□ Applicable √ Not applicable
IV Share Repurchase in the Reporting Period
Progress on any share repurchase:
√ Applicable □ Not applicable
Shares
repurchased
Disclosure date Number of As % of Shares as % of total
Amount to be
of the shares to be total share Repurchase period Purpose repurchased shares under
used
repurchase plan repurchased capital (share) the equity
incentive plan
(if any)
Shares of not
lower than 80% of
the repurchased
number are to be
retired, which will
Not lower reduce the
than RMB500 Company’s
million registered capital
1 September 23 September 2021-
(inclusive) and accordingly; and 106,652,136 N/A
2021 22 September 2022
no more than shares of no more
RMB1 billion than 20% of the
(inclusive) repurchased
number are to be
used for equity
incentives or
employee stock
ownership plans.
Progress on reducing the repurchased shares by way of centralized bidding:
□ Applicable √ Not applicable
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Part VIII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Part IX Corporate Bonds
□ Applicable √ Not applicable
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
Part X Corporate Financial Statement
I. Auditor’s Report
Type of Audit Opinion Standard Unreserved opinion
Signing date of the Auditor’s Report 24 March 2023
Name of the Audit Institution Ernst & Young Hua Ming LLP
Document number of the Auditor’s report Ernst & Young Hua Ming (2023) Auditor’s Report No.
61276890_G01
Name of the Chinese Certified Public Accountant Feng Xingzhi, Hu Chuan
Auditor’s Report
Ernst & Young Hua Ming (2023) Auditor’s Report No. 61276890_G01
Guangdong Dongfang Precision Science & Technology Co., Ltd.
To the Shareholders of Guangdong Dongfang Precision Science & Technology Co., Ltd.:
I. Opinion
We have audited the financial statements of Guangdong Dongfang Precision Science & Technology Co., Ltd. (hereinafter referred to
as the “Company”), which comprise the consolidated and the Company’s balance sheets as at 31 December 2022, the consolidated
and the Company’s income statements, the consolidated and the Company’s statements of changes in equity and the consolidated and
the Company’s statements of cash flows for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and the Company’s
financial position as at 31 December 2022, and the consolidated and the Company ’s financial performance and cash flows for the
year then ended in accordance with Accounting Standards for Business Enterprises (“ASBEs”).
II. Basis for Opinion
We conducted our audit in accordance with China’s Standards on Auditing“CSAs”. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent
of the Company in accordance with China Code of Ethics for Certified Public Accountants(the “Code”), and we have fulfilled our
other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
III. Key Audit Matter
Key audit matter is the matter that, in our professional judgment, was of most signif icance in our audit of the financial statements of
the Current Period. This matter was addressed in the context of our audit of the financial statements as a whole, and in form ing our
opinion thereon, and we do not provide a separate opinion on this matter. For the matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled our responsibilities described in the Auditor ’s Responsibilities for the Audit of the Financial Statements section of
our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond
to our assessment of the risks of material misstatements of the financial statements. The results of our audit procedures, including
procedures performed to address the matter below, provide the basis for our opinion on the accompanying financial statements.
Key audit matter: How our audit addressed the key audit matter:
Impairment of goodwill
The carrying amount of goodwill amounted to RMB557,939,051.93 The procedures performed to address this matter are as
as at 31 December 2022 and the impairment allowance for goodwill follows:
was RMB127,022,203.19.
(1) Performing internal control workthrough and
The Group's management performs goodwill impairment testing at executing control tests on identified critical control points
the end of each year. The assessment of goodwill impairment testing (2) Assessing the identification of asset groups by the
151 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
was based on the recoverable amount of the relevant asset groups to Group's management and the goodwill allocated to the asset
which the goodwill is allocated, and the recoverable amount of groups;
such asset groups was determined by the present value of the asset (3) Obtaining reports on the assessment of goodwill
groups’ expected future cash flows. In a goodwill impairment test, impairment issued by the independent third-party asset
the forecasting of future cash flows involved significant judgments appraisal institution engaged by the management with
and estimates, including sales growth rate, gross margin and discount securities and futures-related business qualification;
rate. Because goodwill had a large carrying value and exerted a (4) Inviting a internal expert team to assess the rationality
significant impact on the financial statements, we identif ied goodwill of the major assumptions and assessment methods used by
impairment as a key audit matter. the Group's management when forecasting the recoverable
amount of asset groups, including the discount rate and long-
The accounting policies on and disclosures of goodwill were set out term growth rate by inviting a team of internal experts;
in Item 16 of Note III, Item 33 of Note III, and Item 20 of Note V to (5) Assessing the forecast sales revenue and operating
the financial statements. performance for future years and comparing them with
historical operating performance; and
(6) Checking the adequacy of the Group's disclosures in
the notes to the financial statements.
IV. Other Information
The management of the Company is responsible for the other information. The other information comprises all of the informatio n
included in the annual report, other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing s o, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
V. Responsibilities of Management and Those Charged with Governance for the Financial Statements
The management is responsible for the preparation and fair presentation of the financial statements in accordance with ASBEs, and
for designing, implementing and maintaining such internal control as the management determines is necessary to ensure the
preparation of financial statements to be free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless the
management either intends to liquidate or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
VI. Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from ma terial
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with CSAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and maintain professional skepticism throughout the
audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements , whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances.
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Guangdong Dongfang Precision Science & Technology Co., Ltd. Annual Report 2022
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in the financial statements or, and if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
As part of an audit in accordance with CSAs, we exercise profess ional judgment and maintain professional skepticism throughout the
audit. We also: (cont’d)
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Company to express an audit opinion on the financial statements. We are responsible for the direction, supervision and performance
of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards (if applicable).
From the matters communicated with those charged with governance, we determine the matter that was of most significance in the
audit of the financial statements of the Current Period and is therefore the key audit matter. We describe this matter in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expec ted
to outweigh the public interest benefits of such communication.
(End of the Report)
Ernst & Young Hua Ming LLP Chinese Certified Public Accountant: Feng Xingzhi
(Engagement Partner)
Chinese Certified Public Accountant: Hu Chuan
Beijing, China 24 March 2023
Important Notice
This auditor’s report is an English translation of the auditor’s report for the audit engagements which adopt CSAs.
In case the English version does not conform to the Chinese version, the Chinese version prevails.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Consolidated Balance Sheet (Cont’d)
As at 31 December 2022 Expressed in Renminbi Yuan
II. Financial Statements
Assets Note V 31 December 2022 31 December 2021
Current assets
Cash and bank balances 1 1,274,447,199.74 1,664,336,339.35
Financial assets held for trading 2 860,832,278.88 788,185,521.57
Notes receivable 3 24,566,100.12 13,272,025.04
Accounts receivable 4 837,305,757.46 741,135,648.09
Receivables financing 5 15,305,668.26 30,692,449.25
Prepayments 6 64,946,901.26 34,177,802.36
Other receivables 7 83,996,902.82 71,363,166.84
Inventories 8 1,092,981,884.51 867,280,013.47
Contract assets 9 65,089,851.21 24,414,117.64
Current portion of non-current assets 10 311,763,750.00 108,385,000.00
Other current assets 11 61,370,451.31 32,124,006.99
Total current assets 4,692,606,745.57 4,375,366,090.60
Non-current assets
Long-term receivables 12 1,294,299.00 143,750.00
Long-term equity investments 13 95,352,681.52 84,777,596.67
Other non-current financial assets 14 334,449,603.33 162,523,519.41
Fixed assets 15 570,200,113.79 544,180,159.09
Construction in progress 16 38,904,537.85 12,298,259.58
Right-of-use assets 17 86,448,978.02 80,386,832.91
Intangible assets 18 368,103,395.11 293,718,987.62
Research and development expenditures 19 3,702,229.76 -
Goodwill 20 430,916,848.74 306,969,147.76
Long-term prepaid expenses 21 16,735,552.98 11,962,127.07
Deferred tax assets 22 244,542,124.61 180,245,522.94
Other non-current assets 23 45,320,004.82 304,596,841.54
Total non-current assets 2,235,970,369.53 1,981,802,744.59
Total assets 6,928,577,115.10 6,357,168,835.19
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Consolidated Balance Sheet (Cont’d)
As at 31 December 2022 Expressed in Renminbi Yuan
Liabilities and equity Note V 31 December 2022 31 December 2021
Current liabilities
Short-term borrowings 24 41,815,129.24 228,312,880.73
Financial liabilities held for trading 25 57,022,555.58 110,746,939.04
Notes payable 26 149,918,253.31 149,191,690.00
Accounts payable 27 748,319,561.21 619,265,856.18
Contract liabilities 28 692,567,968.60 405,842,932.51
Employee benefits payable 29 123,695,328.31 103,809,783.58
Tax payable 30 24,111,703.70 60,701,346.24
Other payables 31 90,080,142.50 100,018,273.09
Current portion of non-current liabilities 32 315,767,431.26 38,495,724.83
Other current liabilities 33 5,988,879.29 12,836,473.00
Total current liabilities 2,249,286,953.00 1,829,221,899.20
Non-current liabilities
Long-term borrowings 34 57,884,494.89 325,026,188.49
Lease liabilities 35 68,989,111.33 65,213,555.87
Long-term employee benefits payable 36 13,179,944.17 16,083,170.32
Provisions 37 118,945,953.78 117,932,721.59
Deferred income 38 11,073,651.66 12,190,311.66
Deferred tax liabilities 22 6,825,450.77 1,747,137.95
Other non-current liabilities 39 136,396,292.55 136,178,304.44
Total non-current liabilities 413,294,899.15 674,371,390.32
Total liabilities 2,662,581,852.15 2,503,593,289.52
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Consolidated Balance Sheet (Cont’d)
As at 31 December 2022 Expressed in Renminbi Yuan
Liabilities and equity Note V 31 December 2022 31 December 2021
Equity
Share capital 40 1,241,106,400.00 1,331,938,167.00
Capital surplus 41 2,947,263,843.53 3,238,765,859.94
Less: Treasury stock 42 240,255,502.45 494,335,503.94
Other comprehensive income 43 26,512,917.07 (33,322,662.98
Special reserve 44 14,488,955.52 11,252,639.19
Surplus reserves 45 51,830,974.45 51,830,974.45
Retained earnings 46 23,018,722.11 (424,159,175.27 )
Total equity attributable to owners of the parent 4,063,966,310.23 3,681,970,298.39
Non-controlling interests 202,028,952.72 171,605,247.28
Total equity 4,265,995,262.95 3,853,575,545.67
Total liabilities and equity 6,928,577,115.10 6,357,168,835.19
The financial statements have been signed by:
Legal representative: Chief Financial Officer: Head of Accounting
Department:
The accompanying notes to the financial statements form an integral part of the financial statements.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Consolidated Income Statement
2022 Expressed in Renminbi Yuan
Note V 2022 2021
Operating revenue 47 3,892,708,509.64 3,524,734,783.94
Less: Cost of sales 47 2,833,305,748.54 2,555,072,059.79
Taxes and surcharges 48 11,956,289.95 11,496,506.72
Selling expenses 49 182,555,875.71 185,327,678.18
Administrative expenses 50 311,463,613.16 272,090,728.08
R&D expenses 51 97,954,453.40 99,557,565.46
Finance costs 52 (8,970,693.69 ) (5,996,474.46)
Including: Interest expenses 13,839,292.38 13,182,088.01
Interest income 19,042,851.72 24,674,196.61
Add: Other income 53 20,933,377.44 14,892,566.89
Investment income 54 19,131,077.82 98,673,106.02
Including: Share of profit of joint ventures and 1,851,796.60 3,880,256.70
associates
Gain/loss on changes in fair value 55 17,917,046.61 (21,357,785.81
Credit impairment loss 56 (5,109,974.87 ) (12,726,636.46)
Asset impairment loss 57 (12,796,323.56 ) (10,936,754.10)
Gain/loss on disposal of assets 58 (168,835.37 ) 424,968.29
Operating profit 504,349,590.64 476,156,185.00
Add: Non-operating income 59 2,459,567.33 5,750,547.04
Less: Non-operating expenses 60 880,845.25 1,462,018.81
Gross profit 505,928,312.72 480,444,713.23
Less: Income tax expenses 62 22,187,291.43 (11,946,472.42
Net profit 483,741,021.29 492,391,185.65
Net profit classified by continuing operations
Net profit from continuing operations 483,741,021.29 492,391,185.65
Net profit classified by attribution of ownership
Net profit attributable to owners of the parent 447,177,897.38 467,333,661.79
Net profit attributable to non-controlling 36,563,123.91 25,057,523.86
interests
The accompanying notes to the financial statements form an integral part of the financial statements.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Consolidated Income Statement (Cont’d)
2022 Expressed in Renminbi Yuan
Note V 2022 2021
Other comprehensive income, net of tax 56,936,768.65 (58,062,617.01 )
Other comprehensive income attributable to
43
owners of the parent, net of tax 59,835,580.05 (53,348,752.68 )
Other comprehensive income that will not be
reclassified to profit or loss 1,856,564.02 (368,435.04 )
Changes caused by remeasurements on defined
benefit schemes 1,856,564.02 (368,435.04 )
Other comprehensive income that will be
reclassified to profit or loss 57,979,016.03 (52,980,317.64)
Differences arising from the translation of
foreign currency-denominated financial
statements 57,979,016.03 (52,980,317.64)
Other comprehensive income attributable to non-
43
controlling interests, net of tax (2,898,811.40 ) (4,713,864.33 )
Total comprehensive income 540,677,789.94 434,328,568.64
Including:
Total comprehensive income attributable to
owners of the parent 507,013,477.43 413,984,909.11
Total comprehensive income attributable to
non-controlling interests 33,664,312.51 20,343,659.53
Earnings per share 63
Basic earnings per share 0.37 0.35
Diluted earnings per share 0.37 0.35
The accompanying notes to the financial statements form an integral part of the financial statements.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Consolidated Statements of Changes in Equity
2022 Expressed in Renminbi Yuan
2022
Equity attributable to owners of the parent Non-controlling Total equity
Less: Treasury Other S urplus
S hare capital Capital surplus comprehensive S pecial reserve Retained earnings S ubtotal interests
stock reserves
income
At 31 December 2021 1,331,938,167.00 3,238,765,859.94 494,335,503.94 (33,322,662.98) 11,252,639.19 51,830,974.45 (424,159,175.27 ) 3,681,970,298.39 171,605,247.28 3,853,575,545.67
I.
and 1 January 2022
II. Changes for the year
（I） Total comprehensive income - - - 59,835,580.05 - - 447,177,897.38 507,013,477.43 33,664,312.51 540,677,789.94
Owner’s contributions and - - - - - - - - - -
（II）
reduction in capital
Share-based payments - 29,628,076.98 - - - - - 29,628,076.98 - 29,628,076.98
1.
included in equity
2. Others (90,831,767.00) (321,130,093.39 ) (254,080,001.49 ) - - - - (157,881,858.90) (3,240,607.07 ) (161,122,465.97 )
（III） Special reserve - -
1. Provision in the period - - - - 6,161,824.10 - - 6,161,824.10 - 6,161,824.10
2. Utilisation in the period - - - - (2,925,507.77) - - (2,925,507.77) - (2,925,507.77 )
III.
At 31 December 2022
1,241,106,400.00 2,947,263,843.53 240,255,502.45 26,512,917.07 14,488,955.52 51,830,974.45 23,018,722.11 4,063,966,310.23 202,028,952.72 4,265,995,262.95
The accompanying notes to the financial statements form an integral part of the financial statements.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Consolidated Statements of Changes in Equity (Cont’d)
2022 Expressed in Renminbi Yuan
2021
Equity attributable to owners of the parent Non-controlling Total equity
Other
Less: Treasury S urplus
S hare capital Capital surplus stock comprehensive S pecial reserve reserves Retained earnings S ubtotal interests
income
At 31 December 2020 1,545,126,957.00 4,002,393,061.81 579,403,185.12 20,026,089.70 10,057,438.97 51,830,974.45 (891,492,837.06 ) 4,158,538,499.75 72,989,978.55 4,231,528,478.30
I.
and 1 January 2021
II. Changes for the year
（I） Total comprehensive income - - - (53,348,752.68) - - 467,333,661.79 413,984,909.11 20,343,659.53 434,328,568.64
Owner’s contributions and
（II）
reduction in capital
Share-based payments - 15,243,506.90 - - - - 15,243,506.90 - 15,243,506.90
1.
included in equity
2. Others (213,188,790.00) (778,870,708.77 ) (85,067,681.18 ) - - - - (906,991,817.59) 78,271,609.20 (828,720,208.39 )
（III） Special reserve
1. Provision in the period - - - - 4,513,399.49 - - 4,513,399.49 - 4,513,399.49
2. Utilisation in the period - - - - (3,318,199.27) - - (3,318,199.27) - (3,318,199.27 )
III. At 31 December 2021 1,331,938,167.00 3,238,765,859.94 494,335,503.94 (33,322,662.98) 11,252,639.19 51,830,974.45 (424,159,175.27 ) 3,681,970,298.39 171,605,247.28 3,853,575,545.67
The accompanying notes to the financial statements form an integral part of the financial statements.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Consolidated Statement of Cash Flows
2022 Expressed in Renminbi Yuan
Note V 2022 2021
I. Cash flows from operating activities
Proceeds from sale of goods and rendering of services 3,980,777,143.75 3,421,895,227.97
Receipts of taxes and surcharges refunds 65,415,784.48 45,064,378.48
Cash generated from other operating activities 64 37,413,422.25 39,334,554.11
Subtotal of cash generated from operating activities 4,083,606,350.48 3,506,294,160.56
Payments for goods and services 2,469,141,272.41 2,241,460,975.24
Cash payments to and on behalf of employees1 672,362,139.67 602,036,898.56
Payments of all types of taxes and surcharges 155,555,899.95 135,039,721.24
Cash used in other operating activities 64 280,252,577.50 221,097,289.50
Subtotal of cash used in operating activities 3,577,311,889.53 3,199,634,884.54
Net cash generated from/used in operating activities 65 506,294,460.95 306,659,276.02
II. Cash flows from investing activities
Proceeds from disinvestment 5,461,128,307.85 7,023,027,591.06
Investment income 19,977,080.02 93,945,208.58
Net proceeds from the disposal of fixed assets,
299,284.95 928,029.29
intangible assets and other long-lived assets
Cash generated from other investing activities 64 20,741,402.85 2,419,748.09
Subtotal of cash generated from investing activities 5,502,146,075.67 7,120,320,577.02
Payments for the acquisition of fixed assets,
intangible assets and other long-lived assets 217,707,161.02 66,321,945.54
Payments for investments 5,586,038,692.54 5,718,640,747.18
Net payments for the acquisition of subsidiaries and 65
other business units 115,932,016.05 30,000,000.00
Cash used in other investing activities 64 20,000,000.00 -
Subtotal of cash used in investing activities 5,939,677,869.61 5,814,962,692.72
Net cash generated from/used in investing activities (437,531,793.94 ) 1,305,357,884.30 )
The accompanying notes to the financial statements form an integral part of the financial statements.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Consolidated Statement of Cash Flows
2022 Expressed in Renminbi Yuan
Note V 2022 2021
III. Cash flows from financing activities
Cash proceeds from investments by others 2,600,000.00 -
Including: Cash receipts from minority investment 2,600,000.00 -
Borrowings raised 255,640,726.89 405,333,187.33
Cash generated from other financing activities 64 740,125,575.61 193,525,797.34
Subtotal of cash generated from financing activities 998,366,302.50 598,858,984.67
Repayment of borrowings 452,030,374.54 390,598,473.42
Interest and dividends paid 8,391,200.32 9,707,118.35
Cash used in other financing activities 64 673,378,550.06 1,357,057,613.48
Subtotal of cash used in financing activities 1,133,800,124.92 1,757,363,205.25
Net cash generated from/used in financing activities (135,433,822.42 ) (1,158,504,220.58 )
Effect of foreign exchange rates changes on cash
IV.
and cash equivalents 41,088,076.94 (54,810,400.78 )
V. Net increase/(decrease) in cash and cash equivalents (25,583,078.47 ) 398,702,538.96 )
Add: Cash and cash equivalents, beginning of the
period 1,259,303,775.74 860,601,236.78
VI. Cash and cash equivalents, end of the period 65 1,233,720,697.27 1,259,303,775.74
The accompanying notes to the financial statements form an integral part of the financial statements
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Company Balance Sheet
As at 31 December 2022 Expressed in Renminbi Yuan
Assets Note XV 31 December 2022 31 December 2021
Current assets
Cash and bank balances 150,462,307.50 526,602,901.98
Financial assets held for trading 544,644,172.35 652,931,497.75
Accounts receivable 1 252,845,901.89 154,703,065.67
Receivables financing 8,665,919.20 14,939,923.99
Prepayments 5,599,366.14 8,893,984.77
Other receivables 2 595,201,759.62 444,140,266.79
Inventories 144,657,557.06 145,283,359.74
Contract assets 28,301,152.72 17,681,315.64
Current portion of non-current assets 311,763,750.00 108,385,000.00
Other current assets 620,238.68 713,296.22
Total current assets 2,042,762,125.16 2,074,274,612.55
Non-current assets
Long-term receivables 1,294,299.00 143,750.00
Long-term equity investments 3 760,833,667.45 566,779,845.04
Other non-current financial assets 134,097,590.81 110,672,495.38
Fixed assets 311,637,453.98 316,780,357.65
Construction in progress 4,716.98 2,040,059.06
Right-of-use assets 8,298,157.57 17,226,122.41
Intangible assets 56,644,698.03 58,297,372.40
Long-term prepaid expenses 6,215,303.00 4,449,274.82
Deferred tax assets 173,968,753.31 109,447,418.03
Other non-current assets 34,520,000.00 300,150,000.00
Total non-current assets 1,487,514,640.13 1,485,986,694.79
Total assets 3,530,276,765.29 3,560,261,307.34
The accompanying notes to the financial statements form an integral part of the financial statements.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Company Balance Sheet (Cont’d)
As at 31 December 2022 Expressed in Renminbi Yuan
Liabilities and equity 31 December 2022 31 December 2021
Current liabilities
Trading financial liabilities 7,230,000.00 5,861,200.00
Notes payable 47,602,955.27 45,445,513.50
Accounts payable 46,036,442.22 61,109,554.88
Contract liabilities 29,803,024.37 21,697,782.14
Employee benefits payable 14,571,839.42 13,205,296.64
Tax payable 430,234.63 2,850,207.94
Other payables 125,142,268.32 195,636,226.94
Current portion of non-current
liabilities 1,703,312.89 4,875,266.03
Other current liabilities 1,481,251.36 1,275,327.99
Total current liabilities 274,001,328.48 351,956,376.06
Non-current liabilities
Lease liabilities 6,781,238.89 13,331,936.29
Provisions 1,283,500.00 1,635,363.75
Deferred income 11,073,651.66 12,190,311.66
Other non-current liabilities 470,437.92 12,262,010.40
Total non-current liabilities 19,608,828.47 39,419,622.10
Total liabilities 293,610,156.95 391,375,998.16
The accompanying notes to the financial statements form an integral part of the financial statements.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Company Balance Sheet (Cont’d)
As at 31 December 2022 Expressed in Renminbi Yuan
Liabilities and equity 31 December 2022 31 December 2021
Equity
Share capital 1,241,106,400.00 1,331,938,167.00
Capital surplus 2,820,661,243.26 3,162,960,902.13
Less: Treasury stock 240,255,502.45 494,335,503.94
Special reserve 7,200,502.88 5,067,104.62
Surplus reserves 51,830,974.45 51,830,974.45
Retained earnings (643,877,009.80 ) (888,576,335.08 )
Total Equity 3,236,666,608.34 3,168,885,309.18
Total liabilities and Equity 3,530,276,765.29 3,560,261,307.34
The accompanying notes to the financial statements form an integral part of the financial statements.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Company Income Statement
2022 Expressed in Renminbi Yuan
Note XV 2022 2021
Operating revenue 4 521,042,097.24 486,757,300.91
Less: Cost of sales 4 272,827,724.91 256,366,100.99
Taxes and surcharges 5,683,155.26 5,401,743.28
Selling expenses 17,209,290.59 19,942,732.31
Administrative expenses 97,805,978.92 84,898,110.60
R&D expenses 18,858,241.84 21,950,643.65
Finance costs (30,772,961.40) (11,086,061.90 )
Including: Interest expenses 2,212,567.00 2,969,649.37
Interest income 12,296,701.61 17,285,245.87
Add: Other income 6,635,795.27 4,618,346.17
Investment income 5 24,811,647.21 58,085,312.56
Including: Share of profit or loss of joint 3,143,695.45 3,880,256.70
ventures and associates
Gain on changes in fair value 8,365,325.57 34,139,842.44
Credit impairment loss 206,054.50 613,952.31
Asset impairment loss (1,117,287.51) 43,279.19
Gain/loss on disposal of assets 1,379,510.93 275,491.34
Operating profit 179,711,713.09 207,060,255.99
Add: Non-operating income 613,023.15 4,248,968.31
Less: Non-operating expenses 146,746.24 188,495.98
Gross profit 180,177,990.00 211,120,728.32
Less: Income tax expenses (64,521,335.28) (83,421,375.16 )
Net profit 244,699,325.28 294,542,103.48
Including: Net profit from continuing operations 244,699,325.28 294,542,103.48
Total comprehensive income 244,699,325.28 294,542,103.48
The accompanying notes to the financial statements form an integral part of the financial statements.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Consolidated Statements of Changes in Equity
2022 Expressed in Renminbi Yuan
2022
Share capital Capital surplus Less: Treasury Special reserve Surplus reserves Retained earnings Total equity
stock
At 31 December 2021 1,331,938,167.00 3,162,960,902.13 494,335,503.94 5,067,104.62 51,830,974.45 (888,576,335.08) 3,168,885,309.18
I.
and 1 January 2022
II. Changes for the year
（I） Total comprehensive income - - - - - 244,699,325.28 244,699,325.28
Owner’s contributions and
（II）
reduction in capital
Share-based payments - 27,945,791.19 - - - - 27,945,791.19
1.
included in equity
2. Others (90,831,767.00) (370,245,450.06 ) (254,080,001.49 ) - - - (206,997,215.57)
（III） Special reserve
1. Provision in the period - - - 2,326,893.29 - - 2,326,893.29
2. Amount utilised in the period - - - (193,495.03 ) - - (193,495.03)
III. At 31 December 2022 1,241,106,400.00 2,820,661,243.26 240,255,502.45 7,200,502.88 51,830,974.45 (643,877,009.80) 3,236,666,608.34
The accompanying notes to the financial statements form an integral part of the financial statements.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Consolidated Statements of Changes in Equity
2022 Expressed in Renminbi Yuan
2021
Share capital Capital surplus Less: Treasury Special reserve Surplus reserves Retained earnings Total equity
stock
At 31 December 2020 1,545,126,957.00 3,846,323,477.68 579,403,185.12 3,835,986.08 51,830,974.45 (1,183,118,438.56) 3,684,595,771.53
I.
and 1 January 2021
II. Changes for the year
（I） Total comprehensive income - - - - - 294,542,103.48 294,542,103.48
Owner’s contributions and
（II）
reduction in capital
Share-based payments - 14,068,075.26 - - - - 14,068,075.26
1.
included in equity
2. Others (213,188,790.00) (697,430,650.81 ) (85,067,681.18 ) - - - (825,551,759.63)
（III） Special reserve
1. Provision in the period - - - 1,615,641.49 - - 1,615,641.49
2. Amount utilised in the period - - - (384,522.95 ) - - (384,522.95)
III. At 31 December 2021 1,331,938,167.00 3,162,960,902.13 494,335,503.94 5,067,104.62 51,830,974.45 (888,576,335.08) 3,168,885,309.18
The accompanying notes to the financial statements form an integral part of the financial statements.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Company Statement of Cash Flows
2022 Expressed in Renminbi Yuan
2022 2021
I. Cash flows from operating activities
Proceeds from sale of goods and rendering of services 355,422,382.54 535,230,797.30
Receipts of taxes and surcharges refunds 20,405,793.81 13,605,552.69
Cash generated from other operating activities 33,411,792.89 31,866,204.03
Subtotal of cash generated from operating activities 409,239,969.24 580,702,554.02
Payments for goods and services 238,655,533.97 293,904,947.16
Cash payments to and on behalf of employees 90,655,013.90 84,307,393.88
Payments of all types of taxes and surcharges 9,877,155.70 11,302,053.75
Cash used in other operating activities 35,938,085.85 15,808,751.20
Subtotal of cash used in operating activities 375,125,789.42 405,323,145.99
Net cash generated from/used in operating activities 34,114,179.82 175,379,408.03
II. Cash flows from investing activities
Proceeds from disinvestment 2,957,634,482.77 2,866,282,671.15
Investment income 3,788,252.05 63,507,216.86
Net proceeds from the disposal of fixed assets,
intangible assets and other long-lived assets 23,000.00 449,580.00
Other cash receipts relating to investing activities 20,903,000.00 -
Subtotal of cash generated from investing activities 2,982,348,734.82 2,930,239,468.01
Payments for the acquisition of fixed assets, intangible
assets and other long-lived assets 47,508,537.31 6,558,484.63
Payments for investments 2,834,602,224.34 1,888,592,448.78
Net payments for the acquisition of subsidiaries and
other business units 173,800,000.00 120,000,001.00
Other cash payments relating to other investing
activities 20,000,000.00 -
Subtotal of cash used in investing activities 3,075,910,761.65 2,015,150,934.41
Net cash generated from/used in investing activities (93,562,026.83) 915,088,533.60
The accompanying notes to the financial statements form an integral part of the financial statements.
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Company Statement of Cash Flows
2022 Expressed in Renminbi Yuan
2022 2021
III. Cash flows from financing activities
Borrowings raised 33,431,500.00 129,418,000.00
Cash generated from other financing activities 585,791,128.23 254,961,825.36
Subtotal of cash generated from financing activities 619,222,628.23 384,379,825.36
Repayment of borrowings 33,431,500.00 129,418,000.00
Interest and dividends paid 1,438,732.23 2,005,101.64
Cash used in other financing activities 539,194,859.08 1,313,154,399.85
Subtotal of cash used in financing activities 574,065,091.31 1,444,577,501.49
Net cash generated from/used in financing activities 45,157,536.92 (1,060,197,676.13)
IV. Net increase/(decrease) in cash and cash equivalents (14,290,310.09) 30,270,265.50
Add: Cash and cash equivalents, beginning of the period 156,610,136.21 126,339,870.71
V. Cash and cash equivalents, end of the period 142,319,826.12 156,610,136.21
The accompanying notes to the financial statements form an integral part of the financial statements.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Corporate Background
Guangdong Dongfang Precision Science & Technology Co., Ltd. (the "Company"), a joint stock
company with limited liability registered in Guangdong Province of the People's Republic of China
and established on 9 December 1996, obtained a Business License for Enterprise Legal Person with
a registration number of 440682000040868.
In August 2011, upon the approval by the China Securities Regulatory Commission (CSRC) in the
Reply on Approving the Initial Public Offering of Shares by Guangdong Dongfang Precision
Science & Technology Co., Ltd. (ZH.J.X.K. [2011] No. 1237), the Company issued Renminbi-
denominated ordinary shares to the public, and was listed on the Shenzhen Stock Exchange in the
same month. The Company started to use the unified social credit code (914406002318313119) in
2016. The Company is headquartered in 2 Qiangshi Road, Shishan Town, Nanhai District, Foshan
City, Guangdong Province, China.
Business scope of the Company:
General items: Network and information security software development; manufacturing of special
printing equipment; computer system services; information system integration services; information
consulting services (excluding licensing information consulting services); manufacturing of
material handling equipment; manufacturing of special equipment for pulping and papermaking;
manufacturing of industrial robots; manufacturing of special-purpose equipment (excluding
manufacturing of special licensing equipment); manufacturing of industrial control computers and
systems; sales of intelligent material handling equipment; software sales; intelligent control system
integration; AI universal application system; domestic freight forwarding; information technology
consulting services; socio-economic consulting services; environmental protection consulting
services; technology intermediary services. (Except for items subject to approval according to law,
business activities shall be conducted independently in accordance with the business license)
Licensed items: import and export agency; import and export of goods; import and export of
technologies. (Business activities that require approval according to law shall be subject to the
approval by relevant authorities. Specific business items are indicated in the approval documents or
permit documents of relevant authorities.) The Company belongs to the special-purpose equipment
manufacturing industry.
The actual controllers of the Company are Tang Zhuolin and Tang Zhuomian.
These financial statements were authorized for issue by the Board of Directors of the Company on
24 March 2023.
The consolidation scope for consolidated financial statements is determined based on the concept of
control. For details of changes during the period, please refer to Note VI.
IV. Basis of Preparation of the Financial Statements
These financial statements have been prepared in accordance with China’s “Accounting Standards
for Business Enterprises — Basic Standards” promulgated by the Ministry of Finance and the
specific accounting standards, application guidance, interpretations and other relevant regulations
issued or amended thereafter (hereafter collectively referred to as “Accounting Standards for
Business Enterprises” or “CAS”).
The financial statements are prepared on a going concern basis.
In the preparation of the financial statements, all items are recorded by using historical cost as the
basis of measurement except for some financial instruments. Impairment allowance is made
according to relevant regulations if the assets are impaired.
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Principal Accounting Policies and Accounting Estimates
1. Statement of compliance
The financial statements present truly and completely the financial positions of the Group and the
Company as at 31 December 2021, and the financial performance and the cash flows for the year
then ended in accordance with Accounting Standards for Business Enterprises.
2. Accounting year
The accounting year of the Group is from 1 January to 31 December of each calendar year.
3. Functional currency
The Group’s functional currency and the currency used in preparing the financial statements were
Renminbi. The amounts in the financial statements were denominated in Renminbi yuan, unless
otherwise stated.
4. Business combination
Business combinations are classified into business combinations involving entities under common
control and business combinations not involving entities under common control.
Business combinations involving entities under common control
A business combination involving entities under common control is a business combination in
which all of the combining entities are ultimately controlled by the same party or parties both
before and after the business combination, and that control is not transitory. The acquirer is the
entity that obtains control of the other entities participating in the combination at the combination
date, and the other entities participating in the combination are the acquirees. The combination date
is the date on which the combining party effectively obtains control of the parties being combined.
Assets and liabilities obtained by combining party in the business combination involving entities
under common control (including goodwill arising from the acquisition of the merged party by the
ultimate controller) are recognized on the basis of their carrying amounts at the combination date
recorded on the financial statements of the ultimate controlling party. The difference between the
carrying amount of the consideration paid for the combination (or aggregate face values of the
shares issued) and the carrying amount of the net assets obtained is adjusted to capital surplus. If
the capital surplus are not sufficient to absorb the difference, any excess is adjusted to retained
earnings.
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
4. Business combination (cont’d)
Business combinations not involving entities under common control
A business combination not involving entities under common control is a business combination in
which all of the combining entities are not ultimately controlled by the same party or parties both
before and after the business combination. The acquirer is the entity that obtains control of the other
entities participating in the combination at the acquisition date, and the other entities participating
in the combination are the acquirees. The acquisition date is the date on which the acquirer
effectively obtains control of the acquiree.
The acquiree’s identifiable assets, liabilities and contingent liabilities are recognized at their fair
values at the acquisition date.
The excess of the sum of the consideration paid (or equities issued) for business combination and
equity interests in the acquiree held prior to the date of acquisition over the share of the attributable
net identifiable assets of the acquiree, measured at fair value, was recognized as goodwill, which is
subsequently measured at cost less cumulative impairment loss. In case the fair value of the sum of
the consideration paid (or equities issued) and equity interests in the acquire held prior to the date
of acquisition is less than the fair value of the share of the attributable net identifiable assets of the
acquiree, a review of the measurement of the fair values of the identifiable assets, liabilities and
contingent liabilities, the consideration paid for the combination (or equity issued) and the equity
interests in the acquiree held prior to the date of acquisition is conducted. If the review indicates
that the fair value of the sum of the consideration paid (or equities issued) and equity interests in
the acquiree held prior to the date of acquisition is indeed less than the fair value of the share of the
attributable net identifiable assets of the acquiree, the difference is recognized in profit or loss.
Where a business combination not involving entities under common control realized step by step
through multiple transactions, the long-term equity investments held by the acquiree prior to the
purchase date shall be remeasured at the fair value of the long-term equity investments on the
purchase date, and the difference between the fair value and their carrying value shall be recognized
in profit or loss. For other comprehensive income of the long-term equity investments under the
equity method held by the acquiree prior to the purchase date, accounting treatment shall be
performed on the same basis as the direct disposal of relevant assets or liabilities by the invested
entity, and other changes in equity than net profit and loss, other comprehensive income and the
distribution of profits shall be converted into current profits and losses on the purchase date. The
changes in the fair value of the equity instrument investments held by the acquiree prior to the
purchase date and accumulated in other comprehensive income prior to the purchase date shall be
transferred to retained profits and losses.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
5. Consolidated financial statements
The consolidation scope for consolidated financial statements is determined based on the concept of
control, including the Company and all subsidiaries’ financial statements. Subsidiaries are those
enterprises or entities which the Company has control over (including enterprises, separable
components of investee units and structured entities controlled by the Company).
The financial statements of the subsidiaries are prepared for the same reporting period as the
Company, using consistent accounting policies. Any inconsistent accounting policies have been
adjusted to become consistent with the Company’s accounting policies. All assets, liabilities,
equities, revenues, costs and cash flows arising from intercompany transactions are eliminated on
consolidation.
The excess of current loss attributable to non-controlling shareholders of a subsidiary over their
entitlements to the opening balance of equity shall be charged to non-controlling interests.
For subsidiaries obtained through a business combination not involving entities under common
control, the operating results and cash flows of the acquirees will be recognized in consolidated
financial statements from the date the Group effectively obtains the control until the date that
control is terminated. When consolidated financial statement is prepared, the subsidiaries’ financial
statements will be adjusted based on the fair values of the identifiable assets, liabilities and
contingent liabilities at the acquisition date.
For subsidiaries acquired through combination of entities under common control, the business
results and cash flows of the combined entities are included in the consolidated financial statements
from the beginning of the period in which the combination occurred. When preparing and
comparing the consolidated financial statements, the Group makes adjustments to relevant items of
the financial statements of the previous period, deeming the reporting entity formed through
combination as existing since initial implementation of control by the ultimate controlling party.
In the event of the change in one or more elements of control as a result of changes in relevant facts
and conditions, the Group reassesses whether it has control over the investee.
6. Cash and cash equivalents
Cash comprises cash on hand and deposits readily available for payments. Cash equivalents
represent short-term highly liquid investments which are readily convertible to known amounts of
cash, and subject to an insignificant risk of changes in value.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
7. Foreign currency translation
For foreign currency transactions, the Group translates the foreign currency into its functional
currency.
Upon initial recognition, foreign currency transactions are translated into the functional currency
using the spot exchange rate of the dates on which transactions occur. At the balance sheet date,
foreign currency monetary items are translated using the spot exchange rate at the balance sheet
date. The translation differences arising from the settlement and foreign currency monetary items
are recognized in profit or loss. Also at the balance sheet date, foreign currency non-monetary items
measured at historical cost continue to be translated using the spot exchange rate at the dates of the
transactions and it does not change its carrying amount in functional currency. Foreign currency
non-monetary items measured at fair value are translated using the spot exchange rate. The
differences arising from the above translations are recognized in current profit or loss or other
comprehensive income according to the nature of foreign currency non-monetary items.
The Group translates the functional currencies of foreign operations into Renminbi when preparing
the financial statements. Asset and liability items in the balance sheet are translated at the spot
exchange rate prevailing at the balance sheet date. Equity items, except for retained earnings, are
translated at the spot exchange rates at the date when such items arose. Revenue and expense items
in the income statement are translated using the average exchange rate for the periods when
transactions occur. Translation differences arising from the aforesaid translation of financial
statements denominated in foreign currency shall be recognized as other comprehensive income.
When foreign operations are disposed, other comprehensive income relating to the foreign
operation is transferred to current profit or loss. Partial disposal shall be recognized on a pro-rata
basis.
Cash flows denominated in foreign currencies and foreign subsidiaries’ cash flows are translated
using the average exchange rate for the period when cash flows occur. The impact on cash by the
fluctuation of exchange rates is presented as a separate line item of reconciliation in the statement
of cash flows.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
8. Financial instruments
Financial instruments refer to the contracts which give rise to a financial asset in one entity and a
financial liability or equity instrument in another entity.
Recognition and derecognition of financial instruments
The Group recognizes a financial asset or a financial liability when it becomes a party to the
contractual provisions of the financial instrument.
A financial asset (or part of it, or a part of a group of similar financial asset) is derecognized when
one of the following criteria is met, that is, when a financial asset is written off from its account and
balance sheet:
（1） The right of receiving the cash flow generated from the financial asset has expired;
（2） The right of receiving cash flow generated by the financial assets is transferred, or an
obligation of paying the full amount of cash flow received to third parties in a timely
manner has been undertaken under “pass-through” agreements, where (a) substantially all
risks and rewards of the ownership of such type of financial assets have been transferred,
or (b) control over such type of financial assets has not been retained even though
substantially all risks and rewards of the ownership of such type of financial assets have
been neither transferred nor retained.
If the obligation of financial liability has been fulfilled, cancelled or expired, the financial liability
is derecognized. If the present financial liability is substituted by the same debtee with another
liability differing in substance, or the terms of the present liability have been substantially
modified, this substitution or modification is treated as derecognition of a present liability and
recognition of a new liability with any arising differences recognized in profit or loss.
Conventional dealings in financial assets are recognized or derecognized under the trade day
accounting method. Conventional dealings refer to the receipt or delivery of financial assets within
periods stipulated by the law and according to usual practices. The trade day is the date on which
the Group undertakes to buy or sell a financial asset.
Classification and measurement of financial assets
At initial recognition, the Group classifies its financial assets into: financial assets at fair value
through profit or loss, financial assets at amortized cost, or financial assets at fair value through
other comprehensive income, according to the Group’s business model for managing financial
assets and the contract cash flow characteristics of the financial assets. When and only when the
Group changes its business model of managing financial assets, all relevant financial assets affected
will be re-classified.
Financial assets are measured at fair value on initial recognition, but if the accounts receivable or
notes receivable generated from the sales of goods or provision of services do not contain
significant financing components or do not consider financing components of no longer than one
year, the initial measurement will be based on the transaction price.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
8. Financial instruments (cont’d)
Classification and measurement of financial assets (cont’d)
For financial assets at fair value through profit or loss, the relevant transaction costs are directly
recognized in profit or loss; for other financial assets, the relevant transaction costs are recognized
in their initial recognition amount.
The subsequent measurement of financial assets is dependent on its classification:
Debt instruments measured at amortized cost
Financial assets fulfilling all of the following conditions are classified as financial assets at
amortized cost: the objective of the Group’s business management model in respect of such type of
financial assets is to generate contract cash flow; the contract terms of such type of financial assets
provide that cash flow generated on specific dates represents interest payment in relation to
principal amounts based on outstanding principal amounts only. Interest income from such type of
financial assets are recognized using the effective interest rate method, and any profit or loss arising
from derecognition, amendments or impairment shall be charged to current profit or loss.
Debt instruments at fair value through other comprehensive income
Financial assets fulfilling all of the following conditions are classified as financial assets at fair
value through other comprehensive income: the objective of the Group’s business management
model in respect of such type of financial assets is both to generate contract cash flow and to sell
such type of financial assets; the contract terms of such type of financial assets provide that cash
flow generated on specific dates represents interest payment in relation to principal amounts based
on outstanding principal amounts only. Interest income from this type of financial assets is
recognized using the effective interest rate method. Other than interest income, impairment loss and
exchange differences which shall be recognized as current profit or loss, other fair value changes
shall be included in other comprehensive income. Upon derecognition of the financial assets, the
cumulative gains or losses previously included in other comprehensive income shall be transferred
from other comprehensive income to current profit or loss.
Financial assets at fair value through profit or loss
Other than financial assets measured at amortized cost and financial assets at fair value through
other comprehensive income as aforementioned, all financial assets are classified as financial assets
at fair value through profit or loss, which are subsequently measured at fair value, any changes of
which are recognized in current profit or loss.
Classification and measurement of financial liabilities
The Group classifies its financial liabilities at initial recognition: financial liabilities at fair value
through profit or loss, and other financial liabilities. For financial liabilities at fair value through
profit or loss, the relevant transaction costs are directly recognized in profit or loss; for other
financial liabilities, the relevant transaction costs are recognized in their initial recognition amount.
The subsequent measurement of financial liabilities is dependent on its classification:
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
8. Financial instruments (cont’d)
Classification and measurement of financial liabilities (cont’d)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include mainly financial liabilities held for
trading(comprising derivatives classified as financial liabilities). Financial liabilities held for
trading (comprising derivatives classified as financial liabilities) are subsequently measured at fair
value and all changes are recognized in current profit or loss.
Other financial liabilities
Subsequent to initial recognition, these financial liabilities are carried at amortized cost using the
effective interest method.
Impairment of financial instruments
The Group performs impairment treatment on financial assets at amortized cost, debt instruments at
fair value through other comprehensive income and contract assets based on expected credit losses
(ECL) and recognizes allowances for losses.
For receivables and contract assets that do not contain significant financing components, the Group
adopts a simplified measurement method to measure allowances for losses based on an amount
equivalent to the lifetime expected credit losses.
Financial assets other than those measured with simplified valuation methods, the Group evaluates
at each balance sheet date whether its credit risk has significantly increased since initial
recognition. The period during which credit risk has not significantly increased since initial
recognition is considered the first stage, at which the Group shall measure loss allowance based on
the amount of expected credit loss for the next 12 months and shall compute interest income
according to the book balance and effective interest rate; the period during which credit risk has
significantly increased since initial recognition although no credit impairment has occurred is
considered the second stage, at which the Group shall measure loss allowance based on the amount
of expected credit loss for the entire valid period and shall compute interest income according to the
book balance and effective interest rate; The period during which credit impairment has occurred
after initial recognition is considered the third stage, at which the Group shall measure loss
allowance based on the amount of the lifetime expected credit loss and shall compute interest
income according to the amortized cost and effective interest rate.
The Group estimates the expected credit loss of financial instruments individually and on a group
basis. The Group considers the credit risk features of different customers and estimates the
expected credit losses of financial instruments based on aging portfolio.
For the Group’s criteria for judging whether credit risks have significantly increased, the definition
of assets subjected to credit impairment, and assumptions underlying the measurement of expected
credit losses, please refer to Note VIII.3.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
8. Financial instruments (cont’d)
Impairment of financial instruments (cont’d)
When the Group no longer reasonably expects to be able to fully or partially recover the contract
cash flow of financial assets, the Group directly writes down the book balance of such financial
assets.
Derivative financial instruments
The Group uses derivative financial instruments. Derivative financial instruments are initially
recognized at fair value on the date on which a derivative contract is entered into and are
subsequently re-measured at fair value. Derivatives are carried as assets when the fair value is
positive and as liabilities when the fair value is negative.
Gains or losses arising from changes in the fair value of derivative instruments shall be directly
recognized in current profit or loss.
Transfer of financial assets
If the Group has transferred substantially all the risks and rewards associated with the ownership of
a financial asset to the transferee, the asset should be derecognized. If the Group retains
substantially all the risks and rewards of ownership of a financial asset, the asset should not be
derecognized.
When the Group has neither transferred nor retained substantially all the risks and rewards of
ownership of the financial asset, it may either derecognize the financial asset and recognize any
associated assets and liabilities if control of the financial asset has not been retained; or recognizes
the financial asset to the extent of its continuing involvement in the transferred financial asset and
recognizes an associated liability if control has been retained.
Assets formed by the continuing involvement by way of the provision of financial guarantee in
respect of the transferred financial assets shall be recognized as the lower of the carrying value of
the financial asset and the amount of financial guarantee. The amount of financial guarantee means
the maximum amount among considerations received to be required for repayment.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
9. Inventories
Inventories include raw materials, work-in-progress, finished goods, product deliveries, semi-
finished goods, materials consigned for processing, etc.
Inventories are initially recorded at costs. Inventories’ costs include purchasing costs, processing
costs and other costs. Actual costs of product deliveries are recognized using the weighted average
method. Turnover materials include low-value consumables, packaging materials, etc., which are
expensed in full.
The Group adopts the perpetual inventory system.
Inventories on the balance sheet date are stated at the lower of cost or net realisable value.
Inventory valuation allowance is made and recognized in profit or loss when the net realisable
value is lower than cost. Net realizable value is determined based on the estimated selling price in
the ordinary course of business, less the estimated costs to completion and estimated costs
necessary to make the sale and related taxes. Valuation allowances for raw materials are established
by category, and those for finished goods by individual item. For inventories that relate to products
produced and sold in the same region, have the same or similar ultimate purpose, and are difficult
to separate in measurement, valuation allowances are established on a combined basis.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
10. Long-term equity investments
Long-term equity investments include equity investments in subsidiaries, joint ventures and
associates.
Long-term equity investments were recorded at initial investment cost on acquisition. For long-term
equity investments acquired through the business combination of entities under common control,
the initial investment cost shall be the share of carrying value of the equity of the merged party at
the date of combination as stated in the consolidated financial statements of the ultimate controlling
party. Any difference between the initial investment cost and the carrying value of the
consideration for the combination shall be dealt with by adjusting the capital surplus(if the capital
surplus are insufficient for setting off the difference, such difference shall be further set off against
retained earnings). Upon disposal of the investment, other comprehensive income prior to the date
of combination shall be dealt with on the same basis as if the relevant assets or liabilities were
disposed of directly by the investee. Equity recognized as a result of changes in equity other than
the set-off of profit and loss, other comprehensive income and profit allocation of the investee shall
be transferred to current profit and loss upon disposal of the investment. Items which remain long-
term equity investments after the disposal shall be accounted for on a pro-rata basis, while items
reclassified as financial instruments following the disposal shall be accounted for in full. For long-
term equity investments acquired through the business combination of entities not under common
control, the initial investment cost shall be the cost of combination (for business combinations of
entities not under common control achieved in stages through multiple transactions, the initial
investment cost shall be the sum of the carrying value of the equity investment in the acquired party
held at the date of acquisition and new investment cost incurred as at the date of acquisition). The
cost of combination shall be the sum of assets contributed by the acquiring party, liabilities incurred
or assumed by the acquiring party and the fair value of equity securities issued. Upon disposal of
the investment, other comprehensive income recognized under the equity method held prior to the
date of acquisition shall be dealt with on the same basis as if the relevant assets or liabilities were
disposed of directly by the investee. Equity recognized as a result of changes in equity other than
the set-off of profit and loss, other comprehensive income and profit allocation of the investee shall
be transferred to current profit and loss upon disposal of the investment. Items which remain long-
term equity investments after the disposal shall be accounted for on a pro-rata basis, while items
reclassified as financial instruments following the disposal shall be accounted for in full. The initial
investment cost of long-term equity investments other than those acquired through business
combination shall be recognized in accordance with the following: for those acquired by way of
cash payments, the initial investment cost shall be the consideration actually paid plus expenses, tax
amounts and other necessary outgoings directly related to the acquisition of the long-term equity
investments. For long-term equity investments acquired by way of debt restructuring, the initial
investment cost shall be determined in accordance with “CAS No. 12 — Debt Restructuring.”
In the financial statements of the Company, the cost method is used for long term equity
investments in investees over which the Company exercises control. Control is defined as the
power exercisable over the investee, the entitlement to variable return through involvement in the
activities of the investee and the ability to influence the amount of return using the power over the
investee.
When the cost method is used, long-term equity investments are measured at initial cost on
acquisition. When additional investments are made or investments are recouped, the cost of
longterm equity investments shall be adjusted. Cash dividend or profit distribution declared by the
investee shall be recognized as investment income for the period.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
10. Long-term equity investments (cont’d)
The equity method is used to account for long-term equity investments when the Group can jointly
control or has significant influence over the invested entity. Joint control is the contractually agreed
sharing of control of an arrangement, which exists only when decisions about the relevant activities
require the unanimous consent of the parties sharing control. Significant influence means having
the authority to take part in the decision over the financial and operational policies but not the
authority to control or jointly control with other parties the formulation of such policies.
Under the equity method, any excess of the initial investment cost over the Company’s share of the
net fair value of the investment’s identifiable assets and liabilities is included in the initial
investment cost of the long-term equity investment. When the carrying amount of the investment is
less than the Company’s share of the fair value of the investment’s identifiable net assets, the
difference is recognized in profit or loss of the current period and debited to long-term equity
investments.
Under the equity method, after the long-term equity investments are acquired, investment gains or
losses and other comprehensive income are recognized according to the entitled share of net profit
or loss and other comprehensive income of the investee and the carrying amount of the long-term
equity investment is adjusted accordingly. When recognising the Group’s share of the net profit or
loss of the invested entity, the Group makes adjustments based on fair values of the investees’
identifiable assets and liabilities at the acquisition date in accordance with the Group’s accounting
policy and accounting period to investee’s net profits, eliminating pro-rata profit or loss from
internal transactions with associates and joint ventures attributed to investor (except that loss from
inter-group transactions deemed as asset impairment loss shall be fully recognized), provided that
invested or sold assets constituting businesses shall be excluded. When the invested enterprise
declares profit distribution or cash dividends, the carrying amount of investment is adjusted down
by the Group’s share of the profit distribution and dividends. The Group shall derecognize its share
of the losses of the investee after the long-term equity investment together with any long-term
interests that in substance forms part of the Group’s net investment in the investee are reduced to
zero, except to the extent that the Group has incurred obligations to assume additional losses. The
Group also adjusts the carrying amount of long-term equity investments for other changes in
owner’s equity of the investees (other than the net-off of net profits or losses, other comprehensive
income and profit distribution of the investee), and includes the corresponding adjustment in equity.
On disposal of the long-term equity investments, the difference between carrying value and market
price is recognized in profit or loss for the current period. For long-term equity investments under
equity method, when the use of the equity method is discontinued, other comprehensive income
previously accounted for under the equity method shall be dealt with on the same basis as if the
relevant assets or liabilities were disposed of directly by the investee. Equity recognized as a result
of changes in equity other than the net-off of profit and loss, other comprehensive income and
profit distribution of the investee shall be transferred in full to current profit and loss. If the equity
method remains in use, other comprehensive income previously accounted for under the equity
method shall be dealt with on the same basis as if the relevant assets or liabilities were disposed of
directly by the investee and transferred to current profit and loss on a pro-rata basis. Equity
recognized as a result of changes in shareholders’ equity other than the net-off of profit and loss,
other comprehensive income and profit distribution of the investee shall be transferred to current
profit and loss on a pro-rata basis.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
11. Fixed assets
A fixed asset is recognized when, and only when, it is probable that future economic benefits that
are associated with the fixed asset will flow to the Group and the cost can be measured reliably.
Subsequent expenditures related to a fixed asset are recognized in the carrying amount of the fixed
asset if the above recognition criteria are met, and the carrying value of the replaced part is
derecognized; otherwise, those expenditures are recognized in profit or loss as incurred.
Fixed assets are initially recognized at cost. Cost of purchased fixed assets includes purchasing
price, relevant taxes, and any directly attributable expenditure for bringing the asset to working
conditions for its intended use.
Except for those incurred by using the accrued expenses for safety production, fixed assets are
depreciated on a straight-line basis, and the respective estimated useful lives, estimated residual
value ratios and annual depreciation rates are as follows:
Estimated residual Annual
Useful life
value ratio depreciation rate
Buildings and constructions 20-40 years 5.00% 2.38%-4.75%
Machinery 5-18 years 5.00% 5.28%-19.00%
Transportation equipment 5-10 years 5.00% 9.5%-19.00%
Electronic equipment 3-10 years 5.00% 9.5%-31.67%
Office equipment 3-10 years 5.00% 9.5%-31.67%
Other equipment 5-10 years 5.00% 9.5%-19.00%
The Group reviews, at least at each year end, useful lives, estimated residual values, and
depreciation methods of fixed assets and makes adjustments if necessary.
12. Construction in progress
Construction in progress is measured at the actual construction expenditures, including necessary
project work expenses incurred during the period while construction is in progress, and other
related fees.
Construction in progress is transferred into fixed assets when it is ready for its intended use.
13. Borrowing costs
The borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset are capitalized. The amounts of other borrowing costs incurred are recognised as an
expense in the period in which they are incurred. The Group has no borrowing costs eligible for
capitalization in the current year.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
14. Right-of-use assets
At the commencement date of the lease, the Group recognizes a right-of-use asset. The cost of the
right-of-use asset comprises: (1) the amount of the initial measurement of the lease liability; (2) any
lease payments made at or before the commencement date less any lease incentives received; (3)
any initial direct cost incurred; (4) an estimate of costs incurred by the lessee in dismantling and
removing the underlying asset, restoring the site on which it is located or restoring the underlying
asset to the condition required by the terms and conditions of the lease. The right-of-use assets are
depreciated on a straight-line basis subsequently by the Group. If ownership of the leased asset
transfers to the Group at the end of the lease term, depreciation is calculated using the estimated
useful life of the asset. Otherwise, the right-of-use assets are depreciated over the shorter of the
lease term and the estimated useful lives of the assets.
15. Intangible assets
Intangible assets are recognized only when it is probable that economic benefits relating to such
intangible assets would flow into the Group and that their cost can be reliably measured. Intangible
assets are initially measured at cost, provided that intangible assets which are acquired in a business
combination not under common control and whose fair value can be reliably measured shall be
separately recognized as intangible assets at fair value.
Useful life of an intangible asset is determined by the period over which it is expected to bring
economic benefits to the Group. For an intangible asset with no foreseeable limit to the period over
which it is expected to bring economic benefits to the Group, it is treated as an intangible asset with
indefinite useful life.
Useful life of respective intangible assets is as follows:
Useful life
Land use rights 40-50 years
Land ownership (overseas) Indefinite
Trademarks 5-10 years
Trademarks (overseas) Uncertain
Patents 5-10 years
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
15. Intangible assets (cont’d)
Property in land acquired by the Group is normally accounted for as intangible assets. Property in
land and buildings relating to plants constructed by the Group are accounted for as intangible assets
and fixed assets, respectively. The costs for acquiring land and buildings are apportioned between
the property in land and buildings, or accounted for as fixed assets if they cannot be apportioned.
The straight-line amortisation method is used during the useful life period for intangible assets with
definite useful lives. The Group reviews, at least at each year end, useful lives and amortization
method for intangible assets with definite lives and makes adjustment when necessary.
For intangible assets with indefinite useful life, impairment tests shall be conducted annually
regardless of whether there are indications of impairment. Such intangible assets shall not be
amortized and their useful life shall be reviewed during each accounting period. If there is evidence
suggesting that their useful life is limited, accounting treatment will be performed according to the
above policy on intangible assets with definite useful life.
The land ownership of Fosber S.p.A. ("Fosber Group"), a subsidiary of the Company, in Italy has a
permanent term, and the Company believes that the land ownership will be used and will bring
expected inflows of economic benefits to the Company in the foreseeable future, so its useful life is
regarded as indefinite. The trademarks registered by subsidiaries Fosber Group and Fosber
America, Inc. ("Fosber America") have a useful life in accordance with the law, but at the
expiration of the protection period, Fosber Group and Fosber America can apply for an extension at
low service charges, so the Company will benefit from the above trademarks in the long term.
Thus, the Company recognized the trademark use right as intangible assets with indefinite useful
life. The useful life of intangible assets with indefinite useful life will be reviewed at the end of
each year. After review, the useful life of the above intangible assets is still uncertain.
The Group classifies the expenses for internal research and development as research costs and
development costs. All research costs are charged to the current profit or loss as incurred.
Expenditure incurred on projects to develop new products is capitalized and deferred only when the
Group can demonstrate the technical feasibility of completing the intangible asset so that it will be
available for use or sale, its intention to complete and its ability to use or sell the asset, how the
asset will generate future economic benefits (including demonstration that the product derived from
the intangible asset or the intangible asset itself will be marketable or, in the case of internal use,
the usefulness of the intangible asset as such), the availability of technical and financial resources to
complete the project and procure the use or sale of the intangible asset, and the ability to measure
reliably the expenditure during the development. Development costs which do not meet these
criteria is recognized in profit or loss when incurred.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
16. Impairment
The Group assesses impairment of assets other than inventories, contract assets and assets related to
contract costs, deferred tax assets and financial assets, using the methods described below:
Impairment of assets (other than the impairment of inventories, contract assets and contract cost
assets, investment properties measured using the fair value model, deferred tax assets, and financial
assets ) is determined in the following way: the Group assesses at the balance sheet date whether
there is any indication that an asset may be impaired; if any indication exists that an asset may be
impaired, the Group estimates the recoverable amount of the asset and performs impairment
testing; goodwill arising from a business combination, intangible assets with indefinite useful lives
and intangible assets not yet available for use are tested for impairment at least at each year end,
irrespective of whether there is any indication that the asset may be impaired.
The recoverable amount is the higher of the asset’s fair value less costs to sell and its present value
of estimated future cash flows. The Group estimates recoverable value for individual assets. When
it is difficult to estimate individually, the recoverable value of the cash generating units which the
asset belongs to will be estimated. The definition of cash generating units is determined on the basis
of whether the cash generating units generate cash flows which are largely independent of those
from other cash generating units.
Where the carrying amount of an asset or a cash generating unit exceeds its recoverable amount, the
asset or cash generating unit is considered impaired and is written down to its recoverable amount.
The difference between the carrying amount and recoverable amount is recognized in profit or loss
and allowance for impairment is made accordingly.
In connection with impairment tests for goodwill, the carrying value of goodwill arising from
business combination is allocated to relevant cash generating units (“CGU”) from the date of
acquisition on a reasonable basis. If it is difficult to allocate such goodwill to a relevant CGU, it
should be allocated to a relevant CGU group. A relevant CGU or CGU group is defined as one
which can benefit from the synergies of the business combination and is not larger than the
reporting segments determined by the Group.
In connection with impairment tests for CGUs or CGU groups that comprise goodwill, where
indications of impairment exists in a CGU or CGU group related to goodwill, impairment tests
should be performed first on CGUs or CGU groups that do not comprise goodwill and recognize
impairment loss after estimating the recoverable amount. Then impairment tests on CGUs or CGU
groups that comprise goodwill should be performed and the carrying value and recoverable amount
should be compared. Where the recoverable amount is lower than the carrying value, the
impairment loss should first be offset against the carrying value of the goodwill allocated to CGUs
or CGU groups and then against assets in the CGUs or CGU groups other than goodwill in
proportion to the weighting of these assets.
Previously recognized impairment losses are not reversed in subsequent periods.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
17. Long-term prepaid expenses
Long-term prepaid expenses are amortized using the straight-line method, with the amortization
periods as follows:
Amortization period
Decoration expenditures 3-5 years
Amortization of moulds 3 years
Other expenditures 3-5 years
18. Employee benefits
Employee benefits include all kinds of rewards or compensation incurred by the Group in exchange
for service rendered by employees or in the termination of employment, other than share-based
payment. Employee benefits include short-term benefits, retirement benefits, dismission benefits
and other long-term employees’ benefits. Benefits provided by the Group to the spouses, children
and dependents of employees and families of deceased employees are also a part of employee
benefits.
Short-term benefits
For accounting periods during which services are rendered by employees, short-term benefits that
will incur is recognized as liability and included in profit and loss or related capital costs.
Retirement benefits (defined contribution schemes)
Employees of the Group participated in pension insurance and unemployment insurance schemes
managed by the local government. The contribution costs are charged as asset cost or to profit or
loss when incurred.
Retirement benefits (defined benefit schemes)
The Group operates a defined benefit pension scheme, which requires payments to an
independently operated fund. No funds have been injected into the scheme. The cost of benefits
provided under the defined benefit scheme is calculated using the expected benefit accrual unit
approach.
Remeasurement arising from defined benefit pension schemes, including actuarial gains or losses,
changes in the asset cap effect (deducting amounts included in net interest on net liabilities of the
defined benefit schemes) and return on scheme assets (deducting amounts included in net interest
on net liabilities of the defined benefit schemes) are instantly recognized in the balance sheet and
charged to equity through other comprehensive income for the period during which it is incurred. It
will not be reversed to profit and loss in subsequent periods.
Previous service costs are recognized as current expenses when: the defined benefit scheme is
revised, or relevant restructuring costs or dismission benefits are recognized by the Group,
whichever earlier.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
18. Employee benefits (cont’d)
Retirement benefits (defined benefit schemes) (cont’d)
recognizerecognize
Net interest is arrived at by multiplying net liabilities or net assets of defined benefits with a
discount rate. Changes in net obligations of defined benefits are recognized as cost of sales,
administrative expenses, R&D expenses, selling expenses and finance costs in the income
statement. Service costs included current services costs, past service costs and settlement of profit
or loss. Net interest included interest income from scheme assets, interest expenses for scheme
obligations and interest of the asset cap effect.
19. Lease liabilities
At the commencement date, the Group measures the lease liability at the present value of the lease
payments that are not paid at that date, except for short-term leases and low-value asset leases.
Lease payments include constant payments and the substantial constant payments net of lease
incentives, variable lease payments that depend on an index or ratio, the estimated payables of
guaranteed residual value, and also include the exercise price of the purchase option or the amount
to be paid upon vest of the termination option, provided that the Group is reasonably certain that
the option will be vested or that the lease term reflects that the Group will exercise the termination
option.
In calculating the present value of the lease payments, the Group uses the interest rate implicit in
the lease as the discount rate. If that rate cannot be readily determined, the Group uses the lessee’s
incremental borrowing rate. The Group calculates the interest expenses of the lease liability in each
period during the lease term using the constant periodic rate of interest, and recognizes such interest
expenses in profit or loss, except those that in the related asset costs as required. Variable lease
payments that are not included in the measurement of the lease assets are recognized in profit or
loss as incurred, except those that shall be included in the related asset costs as required.
After the commencement date, the Group increases the book value of the lease liability when
interest is recognized and decreases the book value of the lease liability when lease payments are
made. In the event of any change to the substantial constant payments, the estimated payables of
guaranteed residual value, the index or ratio used to determine lease payments, the assessment
results or actual vesting of the purchase option, the renewal option or the termination option, the
Group remeasures the lease liability at the present value of the modified lease payments.
20. Provisions
Other than contingent consideration and assumed contingent liabilities in a business combination
not involving entities under common control, the Group recognizes as provision an obligation that
is related to contingent matters when all of the following criteria are fulfilled:
（1） the obligation is a present obligation of the Group;
（2） the obligation would probably result in an outflow of economic benefits from the Group;
（3） the obligation could be reliably measured.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
20. Provisions (cont’d)
Provisions are initially measured according to the best estimate of expenses on fulfilling the current
liabilities, in connection with the risk, uncertainty and timing value of the currency. The carrying
value of the provisions would be reassessed on every balance sheet date. The carrying value will be
adjusted to the best estimated value if there is certain evidence that the current carrying value is not
the best estimate.
The contingent liabilities obtained from a business combination not involving entities under
common control shall be measured at fair value at the time of initial recognition. After the initial
recognition, according to the amount confirmed by provisions and the balance of the initial
recognition amount after deducting the accumulated amortization determined by the revenue
recognition principle, the higher of the two shall prevail for subsequent measurements.
21. Share-based payments
Share-based payments can be distinguished into equity-settled share-based payments and cash-
settled share-based payments. Equity-settled share-based payments are transactions of the Group
settled through the payment of shares or other equity instruments in consideration for receiving
services.
Equity-settled share-based payments made in exchange for services rendered by employees are
measured at the fair value of equity instruments granted to employees. Instruments which are
vested immediately upon the grant are charged to relevant costs or expenses at the fair value on the
date of grant and the capital surplus are credited accordingly. Instruments of which vesting is
conditional upon completion of services or fulfillment of performance conditions are measured by
recognising services rendered during the period in relevant costs or expenses and crediting the
capital surplus accordingly at the fair value on the date of grant according to the best estimates of
the number of exercisable equity instruments conducted by the Group at each balance sheet date
during the pending period. The fair value of equity instruments is determined using the closing
price of the Company’s stock on the date of grant.
No expenses are recognized for awards that do not ultimately vest due to non-fulfillment of
nonmarket conditions and/or vesting conditions. For the market or non-vesting condition under the
share-based payments agreement, it should be treated as vesting irrespective of whether or not the
market or non-vesting condition is satisfied, provided that other performance condition and/or
vesting conditions are satisfied.
22. Revenue generating from contracts with customers
The Group recognizes its revenue upon the fulfilment of contractual performance obligations under
a contract, namely, when the customer obtains control over the relevant products or services. The
acquisition control over relevant products or services shall mean the ability to direct the use of the
products or the provision of the services and receive substantially all economic benefits derived
therefrom.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
22. Revenue generating from contracts with customers (cont’d)
Contract for the sales of products
The product sales contract between the Group and its customers typically includes different
contractual performance obligations for the transfer of products and the rendering of services. With
respect to the sales of products, the Group typically recognizes its revenue at the time when the
customer takes control over the products, taking into account the following factors: the acquisition
of the current right to receive payments for the products, the transfer of major risks and rewards of
ownership, the transfer of the legal title of the products, the transfer of the physical assets of the
products, and customers’ acceptance of the products.
Contract for the rendering of installation services
The service contract between the Group and its customers includes contractual performance
obligations for installation services. As the customer is able to forthwith obtain and consume the
economic benefits brought by the Group’s contractual performance when the Group performs a
contract, the Group considers such contractual performance obligations to be obligations performed
over a period of time, and revenue shall be recognized on each balance sheet date according to the
progress of installation.
Significant financing component
Where a contract contains a significant financing component, the Group determines transaction
prices based on amounts payable assumed to be settled in cash by customers immediately upon the
acquisition of control over the products or services. The difference between such transaction price
and contract consideration is amortized over the contract period using the effective interest method
based on a ratio that discounts the nominal contractual consideration to the current selling price of
the products or services. The Group shall not give consideration to any significant financing
component in a contract if the gap between the customer’s acquisition of control over the products
or services and payment of consideration is expected to be less than 1 year.
Warranty clauses
The Group provides quality assurance for products sold in accordance with contract terms and laws
and regulations. The accounting treatment of quality assurance in the form of warranty assuring
customers products sold are in compliance with required standards is set out in Note III.20. Where
the Group provides a service warranty for a standalone service in addition to the assurance of
compliance of products with required standards, such warranty is treated as a standalone contractual
performance obligation, and a portion of the transaction price shall be allocated to the service
warranty based on a percentage of the standalone price for the provision of product and service
warranty. When assessing whether a warranty is rendering a standalone service in addition to
providing guarantee to customers that all sold goods are in compliance with required standards, the
Group will consider whether or not such warranty is a statutory requirement, the term of the
warranty and the nature of the Group’s undertaking to perform its obligations.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
22. Revenue generating from contracts with customers (cont’d)
Principal/agent
When the Group obtains control of trade goods or services from a third party and then transfers it to
a customer, or has the ability to direct the third party to provide the service to the customer on the
Group’s behalf, the Group is entitled to determine the transaction price of the goods or services by
itself, i.e., the Group controls the trade goods or services before they are transferred to the
customer. Thus, the Group is a principal and recognizes revenue in the gross amount of
consideration received or receivable. Otherwise, the Group is an agent and recognizes revenue in
the amount of any fee or commission to which it expects to be entitled from the customer. The
amount is the net amount of the gross consideration received or receivable after paying the other
party the consideration received in exchange for the goods or services to be provided by that party.
23. Contract assets and contract liabilities
The Group presents contract assets or contract liabilities on the balance sheet according to the
relationship between contractual performance obligations and customer payments.
Contract assets
Contract assets are the right to receive consideration following the transfer of products or services
to customers which is dependent on factors other than the passage of time.
For details of the Group’s determination and accounting treatment of expected credit losses from
contract assets, please refer to Note III.8.
Contract liabilities
Contract liabilities are the obligation to pass products or services to customers in connection with
customer consideration received or receivable, for example, amounts received prior to the transfer
of the promised products or services.
24. Assets relating to contract cost
The Group’s assets relating to contract costs include the contract acquisition costs and contract
performance costs. The costs are presented in inventory, other current assets or other non-current
assets based on liquidity of the assets.
Where the Group expects the incremental costs for acquiring a contract to be recoverable, such
contract acquisition costs are recognized as an asset (unless the amortisation period of the asset is
not more than 1 year).
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
24. Assets relating to contract cost (cont’d)
Costs incurred by the Group for the performance of a contract are recognized as an asset as contract
performance costs if they do not fall under the scope of the relevant standards for inventories, fixed
assets or intangible assets but meet all the following conditions:
（1） they are directly related to a current or anticipated contract, including direct labour, direct
materials, manufacturing expenses (or similar expenses), to be borne by customers as
specifically stipulated, and otherwise incurred solely in connection with the contract;
（2） they will increase the resources to be utilized in the Company’s future performance of its
contractual obligations;
（3） they are expected to be recoverable.
25 Government grants
Government grants are recognized when there is reasonable assurance that the grant will be
received and all attaching conditions will be complied with. The grant is measured as the amount
received or receivable where it takes the form of a cash asset, or at fair value where it is not a cash
asset. Where the fair value cannot be reliably obtained, it should be measured at the nominal value.
In accordance with the stipulations of the government instruments, government grants applied
towards acquisition or the formation of long-term assets in other manners are asset-related
government grants; the instruments unspecifically refer to the exercise of judgement based on the
basic conditions for receiving the asset-related grant applied towards or the formation of long-term
assets in other manners. All other grants are recognized as income-related government grants.
Government grants relating to income and applied to make up for related costs or losses in future
periods shall be recognized as deferred income, and shall be recognized in profit or loss of the
period for which related costs or loss are recognized. Government grants specifically applied for the
reimbursement of incurred related costs and expenses shall be directly recognized in profit or loss.
Government grants relating to assets shall offset the carrying amount of related assets, or be
recognized as deferred income and credited to profit or loss over the useful life of the asset
concerned by reasonable and systematic instalments (provided that government grants measured at
nominal value shall be directly recognized in profit or loss). Where the asset concerned is disposed
of, transferred, retired or damaged prior to the end of its useful life, the balance of the deferred
income yet to be allocated shall be transferred to “asset disposal” under current profit or loss.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
26. Deferred tax assets
The Group recognizes deferred tax assets and liabilities based on temporary differences using the
balance sheet liability method. Temporary differences are differences between the carrying amount
of assets or liabilities in the balance sheet and their tax base on the balance sheet date. Temporary
differences also include the differences between the carrying values and tax bases of items not
recognized as assets or liabilities where the tax base can be calculated according to the relevant tax
regulations.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
（1） where the taxable temporary difference arises from goodwill or the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss;
（2） in respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not
reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, carryforward of unused
tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, and the carryforward of unused tax credits and
unused tax losses can be utilized except:
（1） where the deductible temporary difference arises from transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss;
（2） deductible temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures are recognized when all following conditions are met: it is
probable that the temporary differences will reverse in the foreseeable future, it is probable
that taxable profit against the deductible temporary differences will be available.
As at balance sheet date, deferred tax assets and liabilities are measured in accordance with relevant
tax laws at the tax rates that are expected to apply to the period when the asset is realized or the
liability is settled, and reflects the tax consequences that would follow the manner in which the
Group expects, at the balance sheet date, to recover the assets or settle the carrying amount of its
assets and liabilities.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are
reassessed at the end of each reporting period and are recognized to the extent that it has become
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset
to be recovered.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
26. Deferred tax assets (cont’d)
Deferred tax assets and liabilities are offset and presented as a net amount if all of the following
conditions are met: the Group has the legal right to set off the current income tax assets and
liabilities and the deferred tax assets and liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or different taxable entities, provided that the
taxable entity concerned intends either to settle current income tax liabilities and assets on a net
basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which
significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
27. Leases
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A
contract is, or contains, a lease if the contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration.
As lessee
The Group recognizes leases as the right-of-use asset and lease liabilities, except for short-term
leases and leases of low-value assets. For general accounting practice, please see Items 14 and 19 of
Note III.
Short-term leases and leases of low-value assets
A short-term lease is a lease that, at the commencement date, has a lease term of 12 months or less,
and does not contains any purchase option. The Group does not recognize the right-of-use assets
and lease liabilities for buildings short-term leases. The Group recognizes lease payments on short-
term leases and leases of low-value assets in the related asset costs or profit or loss on a straight-
line basis over the lease term.
As a lessor
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental
to ownership of an underlying asset, except that a lease is classified as an operating lease at the
inception date.
As a lessor of operating leases
Rental income of operating leases is recognized in current profit or loss over the respective periods
during the lease term on a straight-line basis, while variable lease payment not included in lease
receipts is charged to profit or loss as and when incurred.
Initial direct costs are capitalised and recognised over the lease term on the same basis as rental
income, through profit or loss.
28. Share repurchase
The consideration and transaction costs paid to repurchase equity instruments are charged against
owner’s equity. Except for share-based payments, the issue (including refinancing), repurchase,
disposal or retirement of the Company’s own equity instruments are accounted for as changes in
equity.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
29. Profit distribution
The Company’s cash dividends are recognized as liabilities upon the approval by the general
meeting.
30. Expenses for safety production
The expenses for safety production set side as stipulated shall be included in the cost of relevant
products or current profits and losses, and included in the special reserve at the same time. When
such expenses are used, accounting treatment will be performed according to whether fixed assets
are formed. If identified as expense expenditures, the special reserve will be written down directly;
if fixed assets are formed, the expenses incurred will be collected, fixed assets will be recognized
when they reach a predetermined usable state, and the equivalent amount of special reserve will be
written down and the equivalent accumulated depreciation will be recognized.
31. Put option related to non-controlling interests
In the process of acquiring majority equity of subsidiaries, the Group grants to minority
shareholders the option to sell the shares of subsidiaries held by them to the Group (put option).
The Group recognizes the shares of subsidiaries held by minority shareholders as non-controlling
interests in its consolidated financial statements; for the put option, the Group undertakes the
obligation to redeem the shares of the subsidiaries held by minority shareholders in cash. The
Group removes the present value of the amount payable to redeem the put option from its equity
(excluding non-controlling interests) and classifies it as financial liability, which is remeasured in
subsequent periods at the present value of the the amount payable to redeem the put option and
recognized in profit or loss.
32. Fair value measurement
At each balance sheet date, the Group measures the fair value of derivative financial instruments
and equity instrument investments. Fair value means the price receivable from the disposal of an
asset or required to be paid for the transfer of a liability in an orderly transaction incurred by market
participants on the measurement date.
The fair value hierarchy to which an asset or liability measured or disclosed in the financial
statements at fair value will be determined on the basis of the lowest level of input which is
significant for the fair value measurement as a whole. Input at the first level represents unadjusted
quoted prices in an active market for the acquisition of the same asset or liability on the
measurement date. Input at the second level represents directly or indirectly observable assets or
liabilities apart from input at the first level. Input at the third level represents unobservable input for
the asset or liability.
At each balance sheet date, the Group reassesses assets and liabilities measured at fair value on an
ongoing basis recognized in the financial statements to determine whether the level of fair value
measurement should be changed.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
33. Significant accounting judgements and estimates
The preparation of financial statements requires judgement and estimation of the management.
Such judgement and estimation will affect the reported amounts of revenue, expenses, assets and
liabilities and the disclosure of contingent liabilities as at the balance sheet date. However, the
consequence arising from the uncertain nature of such estimation may result in significant
adjustment to the carrying value of the asset or liability affected in the future.
Judgement
In the process of applying the Group’s accounting policies, management has made the following
judgements, which have the most significant effect on the amounts recognized in the financial
statements:
Determination of standalone contractual performance obligations
The intelligent packaging equipment (printers and corrugators) business of the Group includes four
kinds of product or service commitments, i.e. the sale, installation, transportation and insurance
services of machinery. As the customer can benefit from the individual use of the four kinds of
products or services or their use together with other readily available resources and such product or
service commitments are distinctly separable from other products or service commitments, the
aforesaid product or service commitments constitute standalone contractual performance
obligations respectively.
Business model
The classification of financial assets at initial recognition is dependent on the Group’s business
model for managing the assets. Factors considered by the Group in judging the business model
include enterprise valuation, the method of reporting the results of financial assets to key
management members, risks affecting the results of financial assets and the method for managing
such risks, as well as the form of remuneration received by the management personnel of the
businesses concerned. In assessing whether the business model is aimed at receiving contract cash
flow, the Group is required to analyse and exercise judgment in respect of the reasons, timing,
frequency and values of any disposals prior to maturity.
Characteristics of contract cash flow
The classification of financial assets at initial recognition is dependent on the characteristics of the
contract cash flow of such type of financial assets. Judgement is required to determine whether the
contract cash flow represents interest payment in relation to principal amounts based on outstanding
principal amounts only, including judgement of whether it is significantly different from the
benchmark cash flow when assessing modifications to the time value of currencies, and judgement
of whether the fair value of early repayment features is minimal where the financial assets include
such early repayment features.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
33. Significant accounting judgements and estimates (cont’d)
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the
balance sheet date, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within subsequent financial years, are discussed below.
Impairment of financial instruments and contract assets
The Group has adopted the expected credit loss model to evaluate the impairment of financial
instruments and contract assets. The application of the expected credit loss model requires
significant judgement and estimates and the consideration of all reasonable and soundly based
information, including forward-looking information. In making such judgement and estimates, the
Group estimates the projected movements of the debtor’s credit risk according to past repayment
records, economic policies, macro-economic indicators and industry risks. Different estimates may
affect impairment allowances, and established impairment allowances may not equal the actual
impairment loss amount in the future.
Impairment of non-current assets other than financial assets (exclusive of goodwill)
The Group assesses at each balance sheet date whether there is an indication that a non-current
asset other than financial assets may be impaired. For an intangible asset with an indefinite useful
life, in addition to the annual impairment test, it is also tested when there is an indication that it may
be impaired. Non-current assets other than financial assets are tested for impairment when there is
an indication that the carrying amount is irrecoverable. Where the carrying amount of an asset or an
asset group exceeds its recoverable amount—the higher of the asset or asset group’s fair value less
costs to sell and its present value of estimated future cash flows, it is considered impaired. The net
amount of the fair value less costs to sell is determined based on the price of a similar asset’s sales
contract in a fair transaction or the observable market price less the incremental cost directly
attributable to the disposal of the asset. When estimating the present value of future cash flows, the
management must choose a proper discount rate.
Impairment of goodwill
Goodwill must be tested for impairment at least annually. It requires estimating the present value of
future cash flows of an asset group or asset group portfolio allocated with goodwill. When
estimating the present value of future cash flows, the Group needs to estimate future cash flows
generating from the asset group or asset group portfolio, and at the same time choose a proper
discount rate to determine the present value of future cash flows. For details, see Note V.20.
Fair value of unlisted equity investments
The unlisted equity investments have been valued based on the expected cash flows discounted at
current rates applicable for items with similar terms and risk characteristics. This valuation
requires the Group to make estimates about expected future cash flows, credit risk, volatility and
discount rates, and hence they are subject to uncertainty.
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
33. Significant accounting judgements and estimates (cont’d)
Estimation uncertainty (cont’d)
Deferred tax assets
Deferred tax assets are recognized for all unused tax losses, to the extent that it is likely that taxable
profit will be available to utilize these unused tax losses. Significant judgments are needed from
management to estimate the timing and amount of taxable profit in the future, with tax planning
strategies, to determine the amount of the deferred tax assets that should be recognized.
Lessee’s incremental borrowing rate
If the interest rate implicit in the lease cannot be readily determined, the Group measures the lease
liability at the present value of the lease payments that are not paid at that date. The Group
discounted the lease payments using the lessee’s incremental borrowing rate. The Group determines
the incremental borrowing rate based on the economic environment by reference to the observable
interest rate. Then the Group adjusts the reference interest rate based on its own circumstances,
underlying assets, lease terms and amounts of lease liabilities to determine the applicable
incremental borrowing rate.
Provisions
The Group estimates and makes corresponding provision for product quality guaranty according to
contract terms, existing knowledge and past experience. When such contingencies have formed a
present obligation and it is probable that an outflow of economic benefits from the Group will be
required to settle the obligation, the Group recognizes the contingencies as provisions based on the
best estimate of the expenditure required to settle the related present obligation. The recognition
and measurement of provisions largely depend on the judgment of management. In the process of
making judgment, the Group is required to assess the risks, uncertainties, time value of money and
other factors related to such contingencies.
The Group will undertake the provisions for post-sale quality maintenance provided to customers
for the sale, maintenance and renovation of the sold goods. The provisions have been made taking
into account the Group’s recent data of maintenance experience, and taking into account the risks,
uncertainties and other factors related to maintenance matters. Any increase or decrease in this
provision may affect the profit and loss in future years.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
VI. Taxation
1. Principal tax items and tax rates
Value-added tax (VAT) – The output tax of the taxable income is calculated at the rate of 13%
and 6% and VAT is levied according to the difference after
deducting the input tax which is allowed to be deducted in the
current period.
City maintenance
and construction tax – Levied at 7% of the turnover tax actually paid
Education surcharge – Levied at 3% of the turnover tax actually paid
Local education
Surcharge – Levied at 2% of the turnover tax actually paid
Corporate income tax – Corporate income tax of the Group’s subsidiaries located in
Mainland China shall be levied at 25% of the taxable income
(except for the preferential taxation as described in Note IV 2).
Subsidiaries located in Hong Kong shall calculate and pay the
corporate income tax at 16.5% of the taxable income, and
subsidiaries registered overseas shall apply the corporate income tax
rate as required by the local tax law. The details are as follows:
1. Principal tax items and tax rates (Cont’d)
Name of subsidiaries Income tax rate
Dong Fang Precision (Netherland) Cooperatief U.A.（“Dongfang
20%
Precision (Netherland)”）
Fosber S.p.A.（“Fosber Group”） 24%
Fosber America, Inc.（“Fosber America”） 21%
EDF Europe s.r.l.（“Italy EDF”） 24%
Tirua Group Industrial, S.L.（“Tirua Group”） 28%
Tirua America inc. (“Tirua America”) 21%
Quantum Corrugated S.r.l. (Italy QCorr) 24%
Tirua S.L.U. 28%
Tratatamientos Industriales Tirua S.A.U. 28%
Tirua France SARL 15%
SCI Candan 15%
Property tax – Ad valorem tax: levied at 1.2% of the remaining value after deducting 30%
from the original value of the property; Tax levied from rent: levied at 12% of the rental income.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
IV. Taxation (Cont’d)
2. Tax concessions
On 9 December 2020, the Company passed the high-tech enterprise review by the Department of
Science and Technology of Guangdong Province, Department of Finance of Guangdong Province,
Guangdong Provincial Tax Service of State Taxation Administration and Guangdong Provincial
Local Taxation Bureau and obtained a High-tech Enterprise Certificate (certificate no.:
GR202044007667) jointly issued by the above authorities, with a validity of three years, during
which the Company paid the corporate income tax at a reduced rate of 15%, so the preferential tax
rate of 15% was applicable to the Company's corporate income tax as at 31 December 2022.
Suzhou Parsun Power Machine Co., Ltd. ("Parsun Power"), a subsidiary of the Company, passed
the high-tech enterprise review by the Department of Science and Technology of Jiangsu Province,
Department of Finance of Jiangsu Province and Jiangsu Provincial Tax Service of State Taxation
Administration on 18 November 2022 and obtained a High-tech Enterprise Certificate (certificate
no.: GR201932000339) jointly issued by the above authorities, with a validity of three years, during
which the subsidiary paid the corporate income tax at a reduced rate of 15%, so the preferential tax
rate of 15% was applicable to the corporate income tax of Parsun Power as at 31 December 2022.
Guangdong Fosber Intelligent Equipment Co., Ltd. ("Fosber Asia"), a subsidiary of the Company,
passed the high-tech enterprise review by the Department of Science and Technology of
Guangdong Province, Department of Finance of Guangdong Province and Guangdong Provincial
Tax Service of State Taxation Administration on 20 December 2021 and obtained a High-tech
Enterprise Certificate (certificate no.: GR202144003984) jointly issued by the above authorities,
with a validity of three years, during which the subsidiary paid the corporate income tax at a
reduced rate of 15%, so the preferential tax rate of 15% was applicable to the corporate income tax
of Fosber Asia as at 31 December 2022.
Shenzhen Wonder Printing System Co.,Ltd. ("Wonder Printing"), a subsidiary of the Company,
passed the high-tech enterprise review by the Department of Science and Technology of
Guangdong Province, Department of Finance of Guangdong Province and Guangdong Provincial
Tax Service of State Taxation Administration on 19 December 2022 and obtained a High-tech
Enterprise Certificate (certificate no.: GR202244206125) jointly issued by the above authorities,
with a validity of three years, during which the subsidiary paid the corporate income tax at a
reduced rate of 15%, so the preferential tax rate of 15% was applicable to the corporate income tax
of Wonder Printing as at 31 December 2022.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
VII. Notes to the Consolidated Financial Statements
1. Cash and bank balances
2022 2021
Cash on hand 589,575.75 233,281.32
Cash at banks 1,011,562,524.44 999,389,151.51
Other cash balances 262,295,099.55 664,713,906.52
1,274,447,199.74 1,664,336,339.35
Of which: total restricted amount as
collateral, pledge or frozen 40,726,502.47 405,032,563.61
As at 31 December 2022, cash and bank balances of the Group amounting to
RMB752,430,975.78 (31 December 2021 ： RMB456,521,434.93) were deposited
outside Mainland China. The fund deposited abroad with restrictions on repatriation
was equivalent to RMB17,937,703.00 (31 December 2021: RMB16,374,076.37).
Current bank deposits earn interest income based on interest rates for current deposits.
2. Financial assets held for trading
2022 2021
Financial assets at fair value through profit or loss
Asset management plans 307,794,620.13 628,007,924.74
Investments in bank’s wealth management
products 351,182,315.74 140,609,523.19
Stocks and Funds 200,355,381.34 -
Investments in trust products 717,241.38 6,631,573.01
Derivative financial assets 782,720.29 12,936,500.63
860,832,278.88 788,185,521.57
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
3. Notes receivable
2022 2021
Bank acceptance notes 24,566,100.12 13,272,025.04
Notes receivable that were endorsed or discounted but undue at the balance sheet date
are as follows:
2022 2021
Derecognized Un- Derecognized Un-
derecognized derecognized
Bank acceptance
notes - 1,449,810.18 - 9,391,823.29
As at 31 December 2022, there’s no need to establish impairment allowances for notes
receivable in the management’s opinion.
4. Accounts receivable
Accounts receivable are interest-free. The aging of accounts receivable is analyzed as
follows:
2022 2021
Within 1 year 759,915,056.92 688,188,131.13
1-2 years 74,419,438.55 51,234,902.10
2-3 years 13,000,155.24 12,623,284.90
3-4 years 7,711,547.63 8,127,517.87
4-5 years 7,653,168.93 2,115,679.86
Over 5 years 7,018,540.90 5,074,242.03
869,717,908.17 767,363,757.89
Less: allowances for doubtful accounts
receivable 32,412,150.71 26,228,109.80
837,305,757.46 741,135,648.09
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
4. Accounts receivable (cont’d)
2022
Gross amount Allowance Carrying amount
Percenta Percenta
Amount Amount
ge ge
（%） （%）
Accounts receivable for
which allowances are 3,004,100.00 0.35 3,004,100.00 100.00 -
established individually
Accounts receivable for
which allowances are
established by group with
866,713,808.17 99.65 29,408,050.71 3.39 837,305,757.46
similar credit risk
characteristics
869,717,908.17 100.00 32,412,150.71 837,305,757.46
2021
Gross amount Allowance Carrying amount
Percenta Percenta
Amount Amount
ge ge
（%） （%）
Accounts receivable for
which allowances are 7,038,180.40 0.92 7,038,180.40 100.00 -
established individually
Accounts receivable for
which allowances are
established by group with
760,325,577.49 99.08 19,189,929.40 2.52 741,135,648.09
similar credit risk
characteristics
767,363,757.89 100.00 26,228,109.80 741,135,648.09
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
4. Accounts receivable (cont’d)
As at 31 December 2022, accounts receivable for which allowances are established
individually are as follows:
ECL
Gross amount Allowance Reason for allowance
（%）
Customer’s inability to
Customer 1 939,000.00 939,000.00 100.00
settle the amount due
Customer’s inability to
Customer 2 641,600.00 641,600.00 100.00
settle the amount due
Customer’s inability to
Customer 3 608,800.00 608,800.00 100.00
settle the amount due
Customer’s inability to
Customer 4 516,000.00 516,000.00 100.00
settle the amount due
Customer’s inability to
Customer 5 283,000.00 283,000.00 100.00
settle the amount due
Customer’s inability to
Customer 6 15,700.00 15,700.00 100.00
settle the amount due
3,004,100.00 3,004,100.00
As at 31 December 2021, accounts receivable for which allowances are established
individually are as follows:
ECL
Gross amount Allowance Reason for allowance
（%）
Customer’s inability to
Customer 14 4,027,086.20 4,027,086.20 100.00
settle the amount due
Customer’s inability to
Customer 1 939,000.00 939,000.00 100.00
settle the amount due
Customer’s inability to
Customer 2 641,600.00 641,600.00 100.00
settle the amount due
Customer’s inability to
Customer 3 608,800.00 608,800.00 100.00
settle the amount due
Customer’s inability to
Customer 4 515,595.00 515,595.00 100.00
settle the amount due
Customer’s inability to
Other companies 306,099.20 306,099.20 100.00
settle the amount due
7,038,180.40 7,038,180.40
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
4. Accounts receivable (cont’d)
Accounts receivable for which allowances are established by group with similar credit
risk characteristics are as follows:
2022 2021
Gross amount Gross amount
estimated to be in ECL (%) Lifetime ECL estimated to be in ECL (%) Lifetime ECL
default default
Within 1 year 759,915,056.92 1.09 8,301,269.30 688,188,131.13 1.02 7,024,121.70
1-2 years 74,419,438.55 4.62 3,436,770.55 51,234,902.10 3.93 2,011,112.67
2-3 years 13,000,155.24 9.17 1,191,919.75 8,596,198.70 4.90 421,019.36
3-4 years 7,711,547.63 74.72 5,762,337.52 8,127,517.87 69.96 5,686,380.04
4-5 years 7,653,168.93 87.56 6,701,312.69 661,084.86 80.10 529,552.80
Over 5 years 4,014,440.90 100.00 4,014,440.90 3,517,742.83 100.00 3,517,742.83
866,713,808.17 29,408,050.71 760,325,577.49 19,189,929.40
Movements in allowances for doubtful accounts receivable are as follows:
Changes
Established in Reversed in Written off Effect of resulting from
Opening balance exchange rate Closing balance
the period the period in the period entity
movements
consolidation
2022 26,228,109.80 8,768,582.83 (4,351,182.11 ) (828,752.82) 912,607.14 1,682,785.87 32,412,150.71
2021 23,792,330.92 10,210,960.55 (1,713,874.29 ) (5,062,385.81) (998,921.57 ) - 26,228,109.80
In 2022, provision for bad debts of RMB8,768,582.83 (2021: RMB10,210,960.55), and
write-off of bad debts of RMB828,752.82 (2021: RMB5,062,385.81). The reason for
the write-off was that the receivables were recognized as uncollectible.
Top 5 of accounts receivable are as follows:
As a % of the
closing balance
2022 Allowance
of total accounts
receivable
Customer 7 120,390,518.83 13.84 1,664,169.32
Customer 8 99,399,466.68 11.43 932,623.82
Customer 9 38,672,142.34 4.45 305,278.49
Customer 10 37,323,902.38 4.29 256,866.20
Customer 11 34,022,800.00 3.91 1,701,140.00
329,808,830.23 37.92 4,860,077.83
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
4. Accounts receivable (cont’d)
Top 5 of accounts receivable are as follows:
2021 As a % of the Allowance
closing balance
of total accounts
receivable
Customer 7 71,357,633.89 9.30 632,103.65
Customer 15 57,526,895.71 7.50 393,080.22
Customer 9 45,503,030.02 5.93 423,960.57
Customer 16 18,669,670.80 2.43 295,183.15
Customer 17 18,391,174.99 2.40 187,589.98
211,448,405.41 27.56 1,931,917.57
5. Receivables financing
2022 2021
Bank acceptance notes 15,305,668.26 30,692,449.25
Notes receivable that were endorsed or discounted but undue at the balance sheet date
are as follows:
2022 2021
Derecognized Un-derecognized Derecognized Un-derecognized
Bank acceptance notes 37,725,855.84 - 24,598,786.91 -
6. Prepayments
The aging of prepayments is analyzed as follows:
2022 2021
Percentage Carrying amoun Percentage
Carrying amount
(%) t (%)
Within 1 year 64,413,090.83 99.18 33,901,158.84 99.19
1-2 years 275,315.22 0.42 38,710.83 0.11
2-3 years 31,175.83 0.05 144,972.14 0.43
Over 3 years 227,319.38 0.35 92,960.55 0.27
64,946,901.26 100.00 34,177,802.36 100.00
V. Notes to the Consolidated Financial Statements (cont’d)
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Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
6 Prepayments (cont’d)
Top 5 of prepayments are as follows:
As a % of total
2022
prepayments
Supplier 1 5,315,462.75 8.18
Supplier 2 5,159,254.99 7.94
Supplier 3 5,112,443.69 7.87
Supplier 4 3,505,084.66 5.40
Supplier 5 3,497,331.75 5.38
22,589,577.84 34.77
As a % of total
2021
prepayments
Supplier 6 6,146,589.78 17.98
Supplier 7 5,383,577.05 15.75
Supplier 4 5,297,682.90 15.50
Supplier 1 3,702,992.69 10.83
Supplier 8 1,859,780.28 5.44
22,390,622.70 65.50
7. Other receivables
2022 2021
Other receivable 83,996,902.82 71,363,166.84
V. Notes to the Consolidated Financial Statements (cont’d)
7. Other receivables (cont’d)
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
Other receivables
The aging of other receivables is analyzed as follows:
2022 2021
Within 1 year 39,240,181.70 29,975,763.18
1-2 years 5,772,952.90 6,571,130.64
2-3 years 3,174,795.18 178,398.25
3-4 years 176,147.32 38,260,742.08
4-5 years 38,260,742.08 1,495,285.41
Over 5 years 1,260,558.08 168,531.88
87,885,377.26 76,649,851.44
Less: allowances for doubtful other
3,888,474.44 5,286,684.60
receivables
83,996,902.82 71,363,166.84
Other receivables are classified by nature as follows:
2022 2021
Amount for transfer of equity investments 39,461,356.50 37,903,425.00
Prepaid service charges 12,446,401.37 10,386,867.47
Security deposits 8,340,341.53 5,452,788.82
Export tax refunds 1,294,466.80 912,287.93
Employee loans and petty cash 3,388,217.50 4,537,207.00
Others 22,954,593.56 17,457,275.22
87,885,377.26 76,649,851.44
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
7 Other receivables (cont’d)
Movements in allowances for doubtful other receivables that are established based on
the 12-month ECL and the lifetime ECL are as follows:
2022
Stage 1 Stage 2 Stage 3 Total
Financial assets
with credit
12-month ECL Lifetime ECL
impairment
(lifetime ECL)
Opening balance 4,786,684.60 500,000.00 - 5,286,684.60
Established in the 2,542,321.14 - 2,542,321.14
period -
Reversed in the (1,860,447.99 ) - (1,860,447.99 )
period
Written off in the (2,301,163.14 ) - (2,301,163.14 )
period -
Changes resulting 91,820.12 - 91,820.12
from entity
consolidation
Other changes 129,259.71 - - 129,259.71
Closing balance 3,388,474.44 500,000.00 - 3,888,474.44
2021
Stage 1 Stage 2 Stage 3 Total
Financial assets
with credit
12-month ECL Lifetime ECL
impairment
(lifetime ECL)
Opening balance 2,861,774.13 500,000.00 - 3,361,774.13
Established in the
4,229,550.20 - - 4,229,550.20
period
Reversed in the
(1,969,247.27 ) - - (1,969,247.27 )
period
Other changes (335,392.46 ) - - (335,392.46
Closing balance 4,786,684.60 500,000.00 - 5,286,684.60
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
7 Other receivables (cont’d)
Movements in allowances for doubtful other receivables are as follows:
Effect of Changes
Decrease due to
Established in Reversed in exchange resulting from Closing
Opening balance disposal of
the period the period rate entity balance
subsidiaries
movements consolidation
2021 5,286,684.60 2,542,321.14 (1,860,447.99 ) (2,301,163.14 ) 129,259.71 91,820.12 3,888,474.44
2020 3,361,774.13 4,229,550.20 - (1,969,247.27 ) (335,392.46) - 5,286,684.60
In 2022, the Group accrued RMB2,542,321.14 of provision (2021: RMB4,229,550.20),
reversed RMB1,860,447.99 (2021: RMB0), wrote off RMB2,301,163.14 of provision
(2020: RMB1,969,247.27) because other receivables were confirmed uncollectable.
As at 31 December 2022, top 5 of other receivables are as follows:
As a % of
Closing
2022 total other Nature Age balance of
receivables allowance
Amount for
transfer of
Entity 1 39,461,356.50 44.90 4-5 years -
equity
investments
Within 1
Entity 2 4,908,932.81 5.59 Insurance -
year
Government Within 1
Entity 3 3,000,000.00 3.41 -
grants year
Prepaid
Within 1
Entity 4 1,743,064.05 1.98 service -
year
charges
Warranty dep
Entity 5 1,630,000.00 1.85 2-3 years -
osits
50,743,353.36 57.73 -
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
7 Other receivables (cont’d)
As at 31 December 2021, top 5 of other receivables are as follows:
As a % of
Closing
2021 total other Nature Age balance of
receivables allowance
Amount for
transfer of
Entity 1 37,903,425.00 49.45 3-4 years 1,899,115.81
equity
investments
1,630,000.00 2.13 Warranty
Entity 5 1-2 years -
deposits
1,500,000.00 1.96 Prepaidservice Within 1
Entity 6 -
charges year
1,000,020.00 1.30 Prepaidservice Within 1
Entity 7 -
charges year
Security Within 1
Entity 8 919,717.58 1.20 -
deposits year
42,953,162.58 56.04 1,899,115.81
As at December 31, 2022, the amounts due from government grants are as follows:
Expected collection time,
Program Amount Age
amount and basis
Digital Intelligent
Bureau of industry and 2023;2,000,000.00;
Manufacturing Workshop
information technology of 2,000,000.00 Within 1 year publicized in November
for Corrugated Paper
Foshan city 2022
Packaging Equipment
Industrial Design Center
Bureau of industry and 2023;2,000,000.00;
and Industrial Design
information technology of 1,000,000.00 Within 1 year publicized in November
Institute Construction
Foshan city 2022
Project
3,000,000.00
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
8. Inventories
2022
Gross amount Valuation allowance Carrying amount
Work-in-progress 368,570,631.39 19,879,129.16 348,691,502.23
Raw materials 582,372,253.76 18,010,104.87 564,362,148.89
Finished goods 108,150,704.87 4,681,895.11 103,468,809.76
Product deliveries 35,190,253.35 - 35,190,253.35
Semi-finished goods 28,847,199.70 787,613.38 28,059,586.32
Materials consigned for 13,209,583.96 - 13,209,583.96
processing
1,136,340,627.03 43,358,742.52 1,092,981,884.51
2021
Gross amount Valuation allowance Carrying amount
Work-in-progress 332,359,371.92 16,467,899.02 315,891,472.90
Raw materials 365,907,967.74 9,445,201.52 356,462,766.22
Finished goods 80,356,852.12 7,117,802.59 73,239,049.53
Product deliveries 48,592,282.34 - 48,592,282.34
Semi-finished goods 72,050,412.10 1,004,893.76 71,045,518.34
Materials consigned for 2,048,924.14 - 2,048,924.14
processing
901,315,810.36 34,035,796.89 867,280,013.47
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
8 Inventories (cont’d)
Movements in inventory valuation allowances are as follows:
2022
Established in Decrease in the period Closing
Opening balance
the period balance
Reversed or Others
written off
Raw materials 9,445,201.52 5,629,235.50 3,813,473.09 18,010,104.87
(877,805.24)
Work-in-progress 16,467,899.02 3,223,893.24 - 187,336.90 19,879,129.16
Finished goods 7,117,802.59 2,231,773.91 (4,667,681.39) - 4,681,895.11
Semi-finished goods 1,004,893.76 - (217,280.38) - 787,613.38
34,035,796.89 11,084,902.65 (5,762,767.01) 4,000,809.99 43,358,742.52
2021
Established in Decrease in the period
Opening balance Closing balance
the period
Reversed or Others
written off
Raw materials 8,477,773.27 4,613,526.07 (3,923,240.80) 277,142.98 9,445,201.52
27,512,393.21 467,938.75 (11,312,154.94) (200,278.00) 16,467,899.02
Work-in-progress
Finished goods 2,209,825.73 5,107,721.38 (199,744.52) - 7,117,802.59
114,428.27 1,004,893.76 (114,428.27) - 1,004,893.76
Semi-finished goods
38,314,420.48 11,194,079.96 (15,549,568.53) 76,864.98 34,035,796.89
31 Basis for determining the net Basis for provision for Reasons for reversal of provision
December realizable value write-down of for write-down of inventories in
2022 inventories the period
Market prices of raw materials Scrapped, defective an
d unpopular materials
Raw Market prices of related finishe Market prices of related Market prices of related finished
materials d goods finished goods declined goods rebounded
Work-in- Market prices of related finished Market prices of related Market prices of related finished
progress goods finished goods declined goods rebounded
Finished
goods Market price/contract price Market price declined Market price rebounded
As at 31 December 2022, the Group has no inventories with restricted ownership (31 December
2021: Nil).
V. Notes to the Consolidated Financial Statements (cont’d)
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
9. Contract assets
2022 2021
Impairment Carrying Impairment Carrying
Gross amount allowance amount Gross amount allowance amount
Contract
67,018,545.44 1,928,694.23 65,089,851.21 25,144,462.49 730,344.85 24,414,117.64
assets
When the Group hands over equipment to customers, the control over the equipment is
considered transferredand the final payment for the equipment is recorded in contract
assets.
Movements in impairment allowances for contract assets are as follows:
Established in Reversed Written off
Opening balance in the period Other decreases Closing balance
the period in the period
2022 730,344.85 1,928,694.23 - (715,474.33) (14,870.52) 1,928,694.23
2021 1,061,524.05 - (257,325.86) (73,853.34) 730,344.85
Contract assets for which impairment allowances are established by aging analysis are
as follows:
2022 2021
Gross amount Gross amount
estimated to be ECL (%) Lifetime ECL estimated to be ECL (%) Lifetime ECL
in default in default
Within 1 year 48,267,281.45 0.58 277,699.73 24,414,117.64 - -
1-2 years 18,751,263.99 8.80 1,650,994.50 730,344.85 100 730,344.85
67,018,545.44 1,928,694.23 25,144,462.49 730,344.85
10. Current portion of non-current assets
2022 2021
Current portion of long-term receivables 1,463,750.00 4,595,000.00
Current portion of security deposits for 310,300,000.00 -
loans
Current portion of large-amount deposit
- 103,790,000.00
certificates
311,763,750.00 108,385,000.00
As at 31 December 2022, there’s no need to establish impairment allowances for the
current portion of non-current assets in the management’s opinion.
V. Notes to the Consolidated Financial Statements (cont’d)
11. Other current assets
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
2022 2021
Overpaid value-added tax (VAT) 23,483,390.49 18,681,339.03
Input VAT to be deducted 15,469,529.33 3,358,040.70
Tax repayments 13,582,808.39 8,202,256.30
Others 8,834,723.10 1,882,370.96
61,370,451.31 32,124,006.99
12. Long-term receivables
2022 2021
Provision for Gross amoun Provision for Carrying
Gross amount Carrying amount
bad debts t bad debts amount
Amounts receivable by
1,305,000.00 (10,701.00 ) 1,294,299.00 143,750.00 - 143,750.00
installment for selling goods
2022
Gross amount Allowance Carrying amount
Amount Percentage Amount Percentage
（%） （%）
Long-term receivables for
which allowances are
established by group with 1,305,000.00 100.00 10,701.00 0.82 1,294,299.00
similar credit risk
characteristics
Movements in allowances for doubtful long-term receivables are as follows:
Opening Established in Reversed in Written off
Closing balance
balance the period the period in the period
2022 - 10,701.00 - - 10,701.00
V. Notes to the Consolidated Financial Statements (cont’d)
13. Long-term equity investments
2022
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
Opening Change in the period
balance Return on Closing balance
Additional investment under the Other equity
investment equity method changes
Associates
Jaten Robot 74,780,345.62 - 3,143,695.45 8,609,443.05 86,533,484.12
Talleres Tapre 1,593,382.09 - - 113,845.20 1,707,227.29
Profeta 8,403,868.96 - (1,291,898.85 ) - 7,111,970.11
84,777,596.67 - 1,851,796.60 8,723,288.25 95,352,681.52
2021
Opening Change in the period
balance Return on Closing
Additional investment under the Other equity balance
investment equity method changes
Associates
Jaten Robot 70,900,088.92 - 3,880,256.70 - 74,780,345.62
Talleres Tapre 1,771,115.81 - - (177,733.72) 1,593,382.09
Profeta (Note) - 8,403,868.96 - - 8,403,868.96
72,671,204.73 8,403,868.96 3,880,256.70 (177,733.72) 84,777,596.67
Note: The Group invested in Nanjing Profeta Intelligent Technology Co., Ltd.
(“Profeta”) in September 2021, and the Group has appointed one of the five members
in Profeta’s Board of Directors, and owned a substantive participation right of 20%,
having a significant impact on accounting as a joint venture.
As at 31 December 2022, there’s no need to establish impairment allowances for long-
term equity investments in the management’s opinion.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
14. Other non-current financial assets
2022 2021
Financial assets at fair value
through profit or loss 334,449,603.33 162,523,519.41
Other non-current financial assets mainly refer to the Group’s investment in equity
instrument investments, long-term wealth management product investments and long-
term derivative financial assets.
15. Fixed assets
2022
Transportation
Buildings and Machinery Other
Total
constructions equipment
facility
Gross amount
Opening balance 574,983,938.89 448,050,277.32 30,835,181.82 57,871,455.89 1,111,740,853.92
Purchases 4,438,680.16 14,741,893.02 5,395,971.41 8,253,872.61 32,830,417.20
Transfers from
7,900,064.51 19,746,680.51 - - 27,646,745.02
construction in progress
Business combinations
not involving entities - 4,131,189.29 1,307,079.90 66,669.99 5,504,939.18
under common control
Disposal or retirement (1,107,098.85) (1,372,524.49) (3,405,813.09) (1,811,094.46 ) (7,696,530.89)
Effect of exchange rate
9,551,580.06 10,644,185.12 1,049,356.32 1,059,404.93 22,304,526.43
movements
Closing balance 595,767,164.77 495,941,700.77 35,181,776.36 65,440,308.96 1,192,330,950.86
Accumulated depreciation
Opening balance 179,915,645.47 336,782,386.13 19,027,736.61 31,834,926.62 567,560,694.83
Provision 15,869,048.97 20,385,725.76 3,057,404.05 7,452,453.75 46,764,632.53
Disposal or retirement (83,595.00) (1,888,997.03) (2,703,431.52) (1,608,613.30 ) (6,284,636.85)、
Effect of exchange rate
4,121,091.13 9,043,490.37 914,044.79 11,520.27 14,090,146.56
movements
Closing balance 199,822,190.57 364,322,605.23 20,295,753.93 37,690,287.34 622,130,837.07
Carrying amount
Closing 395,944,974.20 131,619,095.54 14,886,022.43 27,750,021.62 570,200,113.79
Opening 395,068,293.42 111,267,891.19 11,807,445.21 26,036,529.27 544,180,159.09
As at 31 December 2022, the Group has no fixed assets subject to operating lease
As at 31 December 2022, the Group has no fixed assets without certificates of title.
V. Notes to the Consolidated Financial Statements (cont’d)
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
15. Fixed assets (cont’d)
2021
Buildings and
Machinery Transportation Other
Total
facility equipment
constructions
Gross amount
Opening balance 589,751,776.97 450,190,483.35 29,625,946.16 54,535,783.13 1,124,103,989.61
Purchases 1,189,374.97 14,276,894.12 5,288,470.83 6,120,000.21 26,874,740.13
Transfers from
- 8,331,019.81 - - 8,331,019.81
construction in progress
Disposal or retirement (901,617.54) (2,788,942.24) (3,467,463.79) (2,680,584.25) (9,838,607.82)
Effect of exchange rate
(15,055,595.51) (21,959,177.72) (611,771.38) (103,743.20) (37,730,287.81)
movements
Closing balance 574,983,938.89 448,050,277.32 30,835,181.82 57,871,455.89 1,111,740,853.92
Accumulated depreciation
Opening balance 170,382,986.59 335,115,748.64 19,447,337.09 27,744,437.15 552,690,509.47
Provision 17,854,660.74 21,711,968.56 2,982,429.17 6,792,822.21 49,341,880.68
Disposal or retirement (901,613.73) (2,321,838.53) (3,216,478.16) (2,410,169.00) (8,850,099.42)
Effect of exchange rate
(7,420,388.13) (17,723,492.54) (185,551.49) (292,163.74) (25,621,595.90)
movements
Closing balance 179,915,645.47 336,782,386.13 19,027,736.61 31,834,926.62 567,560,694.83
Carrying amount
Closing 395,068,293.42 111,267,891.19 11,807,445.21 26,036,529.27 544,180,159.09
Opening 419,368,790.38 115,074,734.71 10,178,609.07 26,791,345.98 571,413,480.14
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
16. Construction in progress
2022 2021
Gross amoun Impairment Carrying Impairment allowanc Carrying
Gross amount
t allowance amount e amount
Plants and buildings 36,216,546.63 - 36,216,546.63 11,582,347.78 - 11,582,347.78
Equipment installation 2,687,991.22 - 2,687,991.22 715,911.80 - 715,911.80
38,904,537.85 - 38,904,537.85 12,298,259.58 - 12,298,259.58
Movements in substantial construction in progress in 2022 are as follows:
T ransferred to
Increase in Funding Input as a %
Budget Opening balance fixed assets in Other decrease Closing balance
the period source of budget
the period
Equipment installation
12,808,069.56 - 1,012,034.04 - - 1,012,034.04 Self-funded 94.50
of Fosber Group
Equipment installation of
54,800,000.00 1,504,855.28 19,717,299.66 19,546,197.76 - 1,675,957.18 Self-funded 38.73
Parsun Power
Dongfang Precision - Plant
7,759,142.53 2,035,342.08 5,864,722.43 7,900,064.51 - - Self-funded -
Construction Project
Yinglian - Plant
50,000,000.00 8,548,699.09 24,302,832.96 - - 32,851,532.05 Self-funded 65.70
Construction Project
Parsun Power - Plant
348,500,000.00 - 1,570,900.95 - - 1,570,900.95 Self-funded 0.45
Construction Project
Fosber Asian – Fosber
Songgang Plant 171,547,000.00 - 1,673,461.65 - - 1,673,461.65 Self-funded 0.98
Construction Project
Others - 209,363.13 115,935.00 200,482.75 4,163.40 120,651.98 Self-funded -
645,414,212.09 12,298,259.58 54,257,186.69 27,646,745.02 4,163.40 38,904,537.85
Movements in substantial construction in progress in 2021 are as follows:
T ransferred to
Increase in Input as a % of
Budget Opening balance fixed assets in Other decrease Closing balance Funding source
the period budget
the period
Equipment installation -
12,021,450.00 8,426,602.70 - 8,087,962.73 338,639.97 - Self-funded
of Fosber Group
Dongfang Precision - Plant 26.23
7,759,142.53 - 2,035,342.08 - - 2,035,342.08 Self-funded
Construction Project
Yinglian - Plant 17.10
50,000,000.00 - 8,548,699.09 - - 8,548,699.09 Self-funded
Construction Project
Others - 635,435.82 1,324,587.30 243,057.08 2,747.63 1,714,218.41 Self-funded -
-
69,780,592.53 9,062,038.52 11,908,628.47 8,331,019.81 341,387.60 12,298,259.58
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
17. Right-of-use assets
2022
Buildings Vehicles Total
Cost
Opening balance 86,255,355.01 10,568,691.42 96,824,046.43
Increase 31,633,928.78 5,362,634.47 36,996,563.25
Business combinations not
involving entities under 6,080,817.77 - 6,080,817.77
common control
Disposal (17,770,118.19 ) - (17,770,118.19)
Effect of exchange rate 1,681,942.65 297,458.08 1,979,400.73
movements
Closing balance 107,881,926.02 16,228,783.97 124,110,709.99
Accumulated depreciation
Opening balance 12,444,892.40 3,992,321.12 16,437,213.52
Provision 18,185,749.81 4,473,198.09 22,658,947.90
Disposal (1,737,505.11 ) - (1,737,505.11 )
Effect of exchange rate 190,710.93 112,364.73 303,075.66
movements
Closing balance 29,083,848.03 8,577,883.94 37,661,731.97
Carrying amount
Closing 78,798,077.99 7,650,900.03 86,448,978.02
Opening 73,810,462.61 6,576,370.30 80,386,832.91
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
17. Right-of-use assets (cont’d)
2021
Buildings Vehicles Total
Cost
Opening balance - - -
Change in accounting policy 92,921,046.07 5,765,803.21 98,686,849.28
Increase - 5,381,480.29 5,381,480.29
(6,665,691.06) (578,592.08) (7,244,283.14)
Effect of exchange rate
movements
Closing balance 86,255,355.01 10,568,691.42 96,824,046.43
Accumulated depreciation
Opening balance - - -
Provision 12,822,890.19 4,219,704.87 17,042,595.06
(377,997.79) (227,383.75) (605,381.54)
Effect of exchange rate
movements
Closing balance 12,444,892.40 3,992,321.12 16,437,213.52
Carrying amount
Closing 73,810,462.61 6,576,370.30 80,386,832.91
Opening - - -
Note: The Group has initially implemented the new lease standard since January 1, 2021.
V. Notes to the Consolidated Financial Statements (cont’d)
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
18. Intangible assets
2022
Land use Land Patented Trademarks
Total
rights ownership technologies and software
Gross amount
Opening balance 114,739,730.08 15,446,573.78 83,813,525.48 179,201,859.84 393,201,689.18
Purchases 63,043,498.41 - 4,266,553.14 3,335,452.73 70,645,504.28
Business
combination not
- - 21,858,600.00 - 21,858,600.00
involving entities
under common control
Effect of exchange
- 434,747.12 2,572,442.99 4,526,733.54 7,533,923.65
rate movements
Closing balance 177,783,228.49 15,881,320.90 112,511,121.6 187,064,046.11 493,239,717.11
1
Accumulated
depreciationbalance
Opening 22,218,954.91 - 52,413,720.96 24,850,025.69 99,482,701.56
Provision 2,539,310.94 - 12,018,177.53 8,373,997.32 22,931,485.79
Effect of exchange - - 1,989,032.28 733,102.37 2,722,134.65
rate movements
Closing balance 24,758,265.85 - 66,420,930.77 33,957,125.38 125,136,322.00
Carrying amount
Closing 153,024,962.64 15,881,320.90 46,090,190.84 153,106,920.73 368,103,395.11
Opening 92,520,775.17 15,446,573.78 31,399,804.52 154,351,834.15 293,718,987.62
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
18. Intangible assets (cont’d)
2021
Land use Land Patented Trademarks
Total
rights ownership technologies and software
Gross amount
Opening balance 114,739,730.08 17,169,515.99 94,087,773.87 188,146,579.45 414,143,599.39
Purchases - - 270,088.07 7,126,949.32 7,397,037.39
Effect of
exchange rate - (1,722,942.21 ) (10,544,336.46 ) (16,071,668.93 ) (28,338,947.60 )
movements
Closing balance 114,739,730.08 15,446,573.78 83,813,525.48 179,201,859.84 393,201,689.18
Accumulated
depreciation
Opening balance 19,772,711.70 - 44,892,936.80 17,090,768.20 81,756,416.70
Provision 2,446,243.21 - 12,676,060.37 8,714,845.76 23,837,149.34
Effect of
exchange rate - - (5,155,276.21) (955,588.27) (6,110,864.48)
movements
Closing balance 22,218,954.91 - 52,413,720.96 24,850,025.69 99,482,701.56
Carrying amount
Closing 92,520,775.17 15,446,573.78 31,399,804.52 154,351,834.15 293,718,987.62
Opening 94,967,018.38 17,169,515.99 49,194,837.07 171,055,811.25 332,387,182.69
As at 31 December 2022, intangible assets arising from internal R&D accounted for
3.07% of the carrying amount of total intangible assets (31 December 2021: 5.15%).
As at 31 December 2022, the Group has no intangible assets without certificates of
title.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
19. Research and development costs
2022
Increase in the period Decrease in the period
Opening Closing balance
balance Internal research an Recognition of
Current profit or loss
d development intangible assets
Data Platform Project - 108,069.78 - - 108,069.78
Business Platform Project - 2,874,316.59 - - 2,874,316.59
IoT Platform Project - 719,843.39 - - 719,843.39
- 3,702,229.76 - - 3,702,229.76
The Group uses the time when a product development project is established as the
starting point for capitalization, and the research and development projects are
progressing normally based on the milestones.
20. Goodwill
2022 2021
Gross amount of goodwill 557,939,051.93 432,207,416.82
Less: impairment allowances 127,022,203.19 125,238,269.06
430,916,848.74 306,969,147.76
2022
Increase in the perio Decrease in the perio
Opening balance Closing balance
d d
Exchange rate
Business acquisition
movements
Fosber Group 148,224,623.58 - 4,171,813.73 152,396,437.31
Parsun Power 208,031,946.10 - - 208,031,946.10
Italy EDF 63,383,214.71 - 1,783,934.13 65,167,148.84
Italy QCorr 12,567,632.43 - 353,718.69 12,921,351.12
Wonder Printing - 119,422,168.56 - 119,422,168.56
432,207,416.82 119,422,168.56 6,309,466.55 557,939,051.93
V. Notes to the Consolidated Financial Statements (cont’d)
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
19. Goodwill (cont’d)
2021
Increase in the perio
Opening balance Increase in the period Closing balance
d
Exchange rate
Business acquisition
movements
Fosber Group 164,757,896.55 - (16,533,272.97 ) 148,224,623.58
Parsun Power 208,031,946.10 - - 208,031,946.10
Italy EDF 70,453,107.20 - (7,069,892.49 ) 63,383,214.71
Italy QCorr 13,969,451.67 - (1,401,819.24 ) 12,567,632.43
457,212,401.52 - (25,004,984.70 ) 432,207,416.82
Movements in impairment allowances for goodwill are as follows:
2022
Opening balance Decrease in the period Closing balance
Exchange rate movements
Parsun Power 61,855,054.35 - 61,855,054.35
Italy EDF 63,383,214.71 1,783,934.13 65,167,148.84
125,238,269.06 1,783,934.13 127,022,203.19
2021
Opening balance Increase in the period Closing balance
Exchange rate movements
Parsun Power 61,855,054.35 - 61,855,054.35
Italy EDF 70,453,107.20 (7,069,892.49 ) 63,383,214.71
132,308,161.55 (7,069,892.49 ) 125,238,269.06
Goodwill acquired in business combinations is allocated to the following asset groups
or asset group portfolios for impairment testing:
Corrugator line business asset group of Fosber Group
Power machine business asset group of Parsun Power
Corrugator line business asset group of Italy QCorr
Corrugated carton printer business asset group of Italy EDF
Corrugated digital printer business asset group of Wonder Printing
According to the impairment test results of goodwill, the Group did not need to
establish impairment allowances for goodwill for the period under review.
V. Notes to the Consolidated Financial Statements (cont’d)
19. Goodwill (cont’d)
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
Corrugator line business asset group of Fosber Group
The corrugator line business asset group is an asset group owned by Fosber Group, consistent with
the asset group combination determined on the purchase date and during impairment tests of the
previous years. The carrying amount of the corrugator line business asset group was RMB 475.71
million. The recoverable amount is determined using the present value of the projected future cash
flows of the asset group combination according to the cash flow forecasting based on the financial
budget over a five-year period approved by the management. The perpetual cash flows are
determined at the level of the last year of the detailed forecast period and based on the industry
development trend and other factors. The discount rate used in cash flow forecasting was 19.85%
(17.68% in 2021).
Power machine business asset group of Parsun Power
The power machine business asset group is the asset group owned by Parsun Power, consistent with
the asset group combination determined on the purchase date and during impairment tests of the
previous years. The carrying amount of the power machine business asset group was RMB 303.42
million. The recoverable amount is determined using the present value of the projected future cash
flows of the asset group combination according to the cash flow forecasting based on the financial
budget over a five-year period approved by the management. The perpetual cash flows will be
determined at the level of the last year of the detailed forecast period and based on the industry
development trend and other factors. The discount rate used in cash flow forecasting was 12.22%
(14.35% in 2021).
Corrugator line business asset group of Italy QCorr
The corrugator line business asset group of Italy QCorr is the only asset group owned by Italy
QCorr, consistent with the asset group combination determined on the purchase date. The carrying
amount of the corrugator line asset group was RMB 66.44 million. The recoverable amount is
determined using the present value of the projected future cash flows of the asset group
combination according to the cash flow forecasting based on the financial budget over a five-year
period approved by the management. The perpetual cash flows will be determined at the level of
the last year of the detailed forecast period and based on the industry development trend and other
factors. The discount rate used in cash flow forecasting was 18.61% (17.02% in 2021).
Corrugated carton printer business asset group of Italy EDF
For the corrugated carton printer business asset group of Italy EDF, impairment allowances for
goodwill were established in full amount in 2019.
Corrugated digital printer business asset group of Wonder Printing
The digital printer business asset group is the only asset group owned by Wonder Printing,
consistent with the asset group combination determined on the purchase date. The carrying amount
of the digital printer business asset group was RMB 268.05 million. The recoverable amount is
determined using the present value of the projected future cash flows of the asset group
combination according to the cash flow forecasting based on the financial budget over a five-year
period approved by the management and the industry development trend and other factors. The
discount rate used in cash flow forecasting was 13.27%.
The following describes the key assumptions made by the management in determining cash flow
forecasting for goodwill impairment testing:
V. Notes to the Consolidated Financial Statements (cont’d)
19. Goodwill (cont’d)
Budget gross margin — Developed based on the average gross margin of historical
operating results and expectations for market development.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
Discount rate — The discount rate used is the pre-tax discount rate that reflects the
specific risks of the relevant asset group or asset group
combination.
The amount of the key assumptions allocated to the above asset group or asset group portfolio is
consistent with the Group's historical experience and external information.
21. Long-term prepaid expenses
2022
Amortization
Opening Increase in Other Closing
in the perio
balance the period decreases balance
d
Plant decoration
3,070,959.67 1,803,202.54 1,487,022.48 - 3,387,139.73
expenditures
Office decoration
2,463,148.78 3,460,523.61 598,398.01 497.90 5,324,776.48
expenditures
Amortization of
4,213,276.71 1,406,425.56 3,314,658.92 - 2,305,043.35
moulds
Amortization of lease
57,918.55 2,114,285.71 - - 2,172,204.26
assets
Internet access for
968,696.77 18,584.91 176,067.54 - 811,214.14
offices
CE certification fee 94,009.22 651,518.90 127,965.83 - 617,562.29
Expenditures on
supporting 1,094,117.37 1,311,602.19 288,106.83 - 2,117,612.73
engineering for plants
11,962,127.07 10,766,143.42 5,992,219.61 497.90 16,735,552.98
2021
Amortization
Opening Increase in Other Closing
in the perio
balance the period decreases balance
d
Plant decoration
3,502,191.47 1,304,963.59 (546,189.53 ) 3,070,959.67
expenditures (1,190,005.86)
Office decoration
2,796,808.88 28,712.87 (359,199.20) (3,173.77 ) 2,463,148.78
expenditures
Amortization of
5,513,088.39 2,733,991.28 - 4,213,276.71
moulds (4,033,802.96)
Amortization of lease
144,783.00 17,326.73 (104,191.18) - 57,918.55
assets
Internet access for
73,997.11 1,153,953.03 (259,253.37) - 968,696.77
offices
CE certification fee 66,112.93 88,453.76 (60,557.47) - 94,009.22
Expenditures on
supporting - 1,291,609.07 (197,491.70) - 1,094,117.37
engineering for plants
12,096,981.78 6,619,010.33 (6,204,501.74) (549,363.30 ) 11,962,127.07
V. Notes to the Consolidated Financial Statements (cont’d)
22. Deferred tax assets/liabilities
Deferred tax assets and liabilities before offsetting:
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
2022 2021
Deductible Deductible
temporary Deferred temporary Deferred
differences tax assets differences tax assets
Deferred tax assets
Deductible loss 1,115,356,405.03 170,790,680.98 487,263,663.55 110,651,029.11
Provisions—after-sales maintenance
110,904,039.46 27,965,656.80 110,759,543.46 27,917,753.88
service charges
Deferred income 63,619,447.75 14,092,864.85 50,391,274.95 10,996,777.94
Accrued expenses 29,263,236.96 4,659,406.75 25,860,319.66 3,911,857.71
Asset impairment allowances 39,530,769.25 7,299,859.61 27,487,561.72 6,769,391.56
Equity incentive expenses 59,507,278.84 9,165,630.00 40,413,913.40 5,628,337.80
Credit impairment loss 38,382,165.54 8,119,663.58 29,574,977.76 7,004,793.92
Internal unrealized profit 29,017,229.54 6,964,135.09 11,859,951.60 2,846,388.38
Others 121,057,339.07 22,623,110.51 85,830,557.42 26,021,520.06
1,606,637,911.44 271,681,008.17 869,441,763.52 201,747,850.36
2022 2021
Deductible Deductible
temporary Deferred temporary Deferred
differences tax liabilities differences tax liabilities
Deferred tax liabilities
Financial assets at fair value through 21,098,870.19 3,750,525.42 35,395,813.71 5,204,143.87
profit or loss
Increase in value in asset valuation 49,738,790.86 8,867,879.18 31,042,086.34 6,347,331.46
Depreciation difference of fixed 26,455,083.92 5,468,413.09 14,439,128.26 3,888,612.02
assets
Others 79,681,187.34 15,877,516.64 46,011,729.25 7,809,378.02
176,973,932.31 33,964,334.33 126,888,757.56 23,249,465.37
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
21. Deferred tax assets/liabilities (cont’d)
Deferred tax assets and liabilities are offset and presented as a net amount:
2022
Offset amount Offset balance
Deferred tax assets 27,138,883.56 244,542,124.61
Deferred tax liabilities 27,138,883.56 6,825,450.77
Deductible temporary differences and deductible losses not recognized as deferred tax
assets are as follows:
2022 2021
Deductible temporary differences 9,196,588.97 8,615,142.53
Deductible losses 90,723,784.03 869,889,774.71
99,920,373.00 878,504,917.24
Deductible temporary differences and tax losses not recognized as deferred tax assets
will expire as follows:
2022 2021
2022 - 8,615,142.53
2023 11,447,032.87 -
2024 493,437.20 834,076,473.87
2025 13,984,168.64 -
2026 12,841,957.31 35,813,300.84
2027 61,153,776.98 -
99,920,373.00 878,504,917.24
The Company has accrued deferred tax assets of RMB164,436,231.16 (2021 :
RMB103,248,656.87) for the accumulated deductible losses of RMB1,096,241,541.07 based
on the forecast of its profits in the next five years.
V. Notes to the Consolidated Financial Statements (cont’d)
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
23. Other non-current assets
2022 2021
Security deposits for loans - 300,150,000.00
Prepayment for acquisition of long-term assets 45,320,004.82 -
Others - 4,446,841.54
45,320,004.82 304,596,841.54
24. Short-term borrowings
2022 2021
Guaranteed loan 2,800,000.00 176,738,256.00
Credit loan 39,015,129.24 51,574,624.73
41,815,129.24 228,312,880.73
As at 31 December 2022, the annual interest rates of the above borrowings ranged
from 1.4% to 4.4% (31 December 2021: 0.4%-3.61%).
As at 31 December 2022 and 31 December 2021, the Group has no borrowings
overdue.
25. Financial liabilities held for trading
2021 2020
Financial liabilities at fair value through
profit or loss
Non-controlling interests put options 57,022,555.58 110,746,939.04
Non-controlling interests put options related to the non-controlling interests of Fosber
Asia. As at 31 December 2022, the Group recognized derivative financial liabilities of
RMB 57,022,555.58 (31 December 2021: RMB 110,746,939.04) according to the
assessment results.
V. Notes to the Consolidated Financial Statements (cont’d)
26. Notes payable
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
2022 2021
Bank acceptance notes 149,918,253.31 149,191,690.00
As at 31 December 2022, outstanding notes payable upon maturity were nil (31
December 2020: nil).
27. Accounts payable
Accounts payable are interest-free.
2022 2021
Purchases of inventories 747,704,598.49 618,943,392.87
Others 614,962.72 322,463.31
748,319,561.21 619,265,856.18
As at 31 December 2022, substantial accounts payable with aging over 1 year were nil.
28. Contract liabilities
2022 2021
Contract liabilities 692,567,968.60 405,842,932.51
Information about contractual performance obligations is as follows:
Corrugator line, corrugated case printing and packaging equipment and outboard engine sales
Fulfill the contractual performance obligations when relevant products are delivered to the
customers and the control over the equipment is transferred . For all customers, the contract
price usually expires within 30 to 180 days after relevant products are delivered and the contro l
over the equipment is transferred.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
29. Employee benefits payable
2022
Increase in Decrease in
Opening balance Closing balance
the period the period
Short-term benefits 96,387,794.91 613,794,118.96 596,048,452.85 114,133,461.02
Retirement benefits (defined 7,421,988.67 80,183,112.26 78,043,233.64 9,561,867.29
contribution schemes)
103,809,783.58 693,977,231.22 674,091,686.49 123,695,328.31
2021
Increase in Decrease in
Opening balance Closing balance
the period the period
Short-term benefits 84,647,882.17 547,373,917.72 535,634,004.98 96,387,794.91
Retirement benefits (defined 7,975,680.76 65,849,201.49 66,402,893.58 7,421,988.67
contribution schemes)
92,623,562.93 613,223,119.21 602,036,898.56 103,809,783.58
Short-term benefits are as follows:
2022
Opening Increase in Decrease in Closing
balance the period the period balance
Salaries, bonuses, allowances and 90,585,519.60 546,530,403.53 528,701,548.72 108,414,374.41
subsidies
Employee welfare 4,599,852.75 27,514,806.27 27,398,155.77 4,716,503.25
Social security contributions 587,926.96 34,487,623.95 34,521,450.20 554,100.71
Including: Medical insurance 576,923.13 23,145,982.96 23,193,746.22 529,159.87
Work injury insurance 10,914.73 10,709,608.71 10,697,258.60 23,264.84
Maternity insurance 89.10 632,032.28 630,445.38 1,676.00
Housing funds 15,749.64 4,338,208.55 4,331,610.19 22,348.00
Labour union funds and employee 598,745.96 923,076.66 1,095,687.97 426,134.65
education funds
96,387,794.91 613,794,118.96 596,048,452.85 114,133,461.02
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
29. Employee benefits payable (cont’d)
2021
Opening Increase in Decrease in Closing
balance the period the period balance
Salaries, bonuses, allowances
and 79,573,190.90 489,454,279.60 478,441,950.90 90,585,519.60
subsidies
Employee welfare 4,218,192.78 24,650,214.29 24,268,554.32 4,599,852.75
Social security contributions 112,446.62 29,193,688.77 28,718,208.43 587,926.96
Including: medical insurance 120,597.45 19,562,582.16 19,106,256.48 576,923.13
Work injury insurance (8,150.83) 9,051,922.98 9,032,857.42 10,914.73
Maternity insurance - 579,183.63 579,094.53 89.10
Housing funds - 3,209,806.66 3,194,057.02 15,749.64
Labour union funds and
employee 744,051.87 865,928.40 1,011,234.31 598,745.96
education funds
84,647,882.17 547,373,917.72 535,634,004.98 96,387,794.91
Defined contribution schemes are as follows:
2022
Increase in Decrease in Closing
Opening balance
the period the period balance
Basic endowment 7,421,853.15 79,758,414.33 77,627,039.00 9,553,228.48
insurance
Unemployment insurance 135.52 424,697.93 416,194.64 8,638.81
7,421,988.67 80,183,112.26 78,043,233.64 9,561,867.29
2021
Increase in Decrease in Closing
Opening balance the period the period balance
Basic endowment 7,975,680.76 65,468,209.37 66,022,036.98 7,421,853.15
insurance
Unemployment insurance - 380,992.12 380,856.60 135.52
7,975,680.76 65,849,201.49 66,402,893.58 7,421,988.67
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
30. Tax payable
2022 2021
Value-added tax 2,794,718.85 25,459,136.69
Corporate income tax 9,990,213.17 22,054,501.83
Individual income tax 9,978,972.79 11,666,453.95
City maintenance and construction tax 552,631.31 691,680.71
Education surcharge 411,264.85 494,057.61
Property tax 218,184.92 239,225.19
Stamp duties 109,070.84 55,317.40
Land use tax 47,325.67 34,530.60
Others 9,321.30 6,442.26
24,111,703.70 60,701,346.24
31. Other payables
2022 2021
Other payables 90,080,142.50 100,018,273.09
Other payables
2022 2021
Accrued expenses 36,647,193.30 47,435,654.91
Repurchase obligation of restricted shares 28,440,000.00 25,790,000.00
Payables for settled lawsuit 3,127,963.30 3,440,221.96
Security deposits 4,807,183.50 3,583,099.39
Others 17,057,802.40 19,769,296.83
90,080,142.50 100,018,273.09
As at 31 December 2022, substantial other payables with aging over 1 year were nil.
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
32. Current portion of non-current liabilities
2022 2021
Current portion of long-term borrowings 295,113,556.27 21,342,646.25
Of which: Pledge loan 254,610.59 240,946.37
Mortgate loan 7,100,000.00 -
Guaranteed loan 263,030,910.73 10,273,279.33
Credit loan 24,728,034.95 10,828,420.55
Current portion of lease liabilities 20,653,874.99 17,153,078.58
315,767,431.26 38,495,724.83
33. Other current liabilities
2022 2021
Endorsed notes receivable 1,449,810.18 9,391,823.29
Output tax to be written off 4,539,069.11 3,429,923.76
Others - 14,725.95
5,988,879.29 12,836,473.00
34. Long-term borrowings
2022 2021
Guaranteed loan 296,130,679.37 298,477,313.32
Credit loan 47,504,838.39 45,450,825.31
Pledge loan 2,262,533.40 2,440,696.11
Mortgage loan 7,100,000.00 -
352,998,051.16 346,368,834.74
Of which: Current portion of long-term
(295,113,556.27) (21,342,646.25)
borrowings
57,884,494.89 325,026,188.49
As at 31 December 2022, the annual interest rates of the above borrowings ranged
from 0.0% to 4.55% (31 December 2021: 0.0%-2.4%). The mortgage loans for the
period have been fully repaid in advance.
As at 31 December 2022 and 31 December 2021, the Group has no loans overdue.
V. Notes to the Consolidated Financial Statements (cont’d)
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
35. Lease liabilities
2022 2021
Lease payments 89,642,986.32 82,366,634.45
Less: Current portion of non-current liabilities 20,653,874.99 17,153,078.58
68,989,111.33 65,213,555.87
36. Long-term employee benefits payable
2022 2021
Net liabilities of defined benefit schemes 13,179,944.17 16,083,170.32
Defined benefit schemes refer to retirement compensation (Trattamento di Fine
Rapporto, for short, “TFR”) of the Group according to Italian regulations. The latest
actuarial valuation of the scheme assets and the present value of the obligation
associated with the defined benefit scheme were determi ned as at 31 December 2022
by Italian actuarial institution Managers & Partners – Actuarial Services S.p.A. using
the expected accumulated benefit unit method.
Key actuarial assumptions used as at the balance sheet date are as follows:
2022 2021
Separation rate 2.50% 2.50%
Inflation rate 2.30% 1.75%
Discount rate 3.63% 0.44%
The quantitative sensitivity analysis of key assumptions used is as follows:
2022
Increase/(decrease Increase/(decrease)
Increase ) in obligations of Decrease in obligations of
% defined benefit % defined benefit
scheme scheme
Separation rate 1.00% 73,125.51 1.00% (2,644.11)
Inflation rate 0.25% 120,180.83 0.25% (44,483.29)
Discount rate 0.25% (91,077.57) 0.25% 169,657.13
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Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
36. Long-term employee benefits payable (cont’d)
2021
Increase/(decrease Increase/(decrease)
Increase ) in obligations of Decrease in obligations of
% defined benefit % defined benefit
scheme scheme
Separation rate 1.00% (94,653.95) 1.00% 106,274.92
Inflation rate 0.25% 118,117.68 0.25% (115,757.71)
Discount rate 0.25% (187,124.73) 0.25% 194,398.22
The above sensitivity analysis is based on an inference of the impact of key
assumptions on the defined benefit scheme obligation at a reasonable change on the
balance sheet date. Sensitivity analysis is made according to the changes in major
assumptions on the premise that other assumptions remain unchanged. Since the
changes in assumptions are often not isolated from one another, sensitivity analysis
may not represent an actual change in the defined benefit obligation.
37. Provisions
2022
Increase in Decrease in
Opening balance Closing balance
the period the period
Product quality 111,207,164.86 57,278,241.47 60,079,251.50 108,406,154.83
warranty
Others 6,725,556.73 8,680,224.46 4,865,982.24 10,539,798.95
117,932,721.59 65,958,465.93 64,945,233.74 118,945,953.78
2021
Increase in Decrease in
Opening balance Closing balance
the period the period
Product quality 104,845,110.36 50,180,309.14 43,818,254.64 111,207,164.86
warranty
Others 605,147.27 6,544,276.17 423,866.71 6,725,556.73
105,450,257.63 56,724,585.31 44,242,121.35 117,932,721.59
237 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
38. Deferred income
2022
Increase in Decrease in
Opening balance Closing balance
the period the period
Government grants 12,190,311.66 - 1,116,660.00 11,073,651.66
2021
Increase in Decrease in
Opening balance Closing balance
the period the period
Government grants 16,861,488.27 - 4,671,176.61 12,190,311.66
As at 31 December 2022, liabilities in relation to government grants are as follows:
Recognized in
other income
Asset/income-
Opening balance of non-operating Closing balance
related
income in the
period
Industrial revitalization and technological renovation
funds (4 Mitsubishi machining centers and 3
12,190,311.66 1,116,660.00 11,073,651.66 Asset-related
vertical machining centers)
12,190,311.66 1,116,660.00 11,073,651.66
As at 31 December 2021, liabilities in relation to government grants are as follows:
Recognized in
other income
Asset/income-
Opening balance of non-operating Closing balance
related
income in the
period
Compensation for demolition of old plant at Jinfeng
3,554,516.61 3,554,516.61 - Asset-related
Road
Industrial revitalization and technological renovation
funds (4 Mitsubishi machining centers and 3
13,306,971.66 1,116,660.00 12,190,311.66 Asset-related
vertical machining centers)
16,861,488.27 4,671,176.61 12,190,311.66
238 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
39. Other non-current liabilities
2022 2021
Non-controlling interests put options 132,077,339.29 136,178,304.44
Other 4,318,953.26 -
136,396,292.55 136,178,304.44
Non-controlling interests put options related to non-controlling interests in Italy QCorr
and Parsun Power. As at 31 December 2022, the Group recognized other non-current
liabilities of RMB 132,077,339.29 according to the assessment results (31 December
2021: RMB 136,178,304.44).
40. Share capital
2022
Opening balance Decrease in the perio Closing balance
d
Total share capital 1,331,938,167.00 90,831,767.00 1,241,106,400.00
For the current year, the total number of shares cancelled by the Company was
90,831,767 shares, and the total number of shares of the Company changed from
1,331,938,167 shares to 1,241,106,400 shares after the cancellation.
2021
Opening balance Decrease in the perio Closing balance
d
Total share capital 1,545,126,957.00 213,188,790.00 1,331,938,167.00
239 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
41. Capital surplus
2022
Increase in Decrease in
Opening balance the period the period Closing balance
(Note 1) (Note 2)
Share
3,198,064,392.09 29,628,076.98 378,854,893.11 2,848,837,575.96
premium
Others 40,701,467.85 57,724,799.72 - 98,426,267.57
3,238,765,859.94 87,352,876.70 378,854,893.11 2,947,263,843.53
2021
Increase in Decrease in
Opening balance Closing balance
the period the period
(Note 1) (Note 2)
Share
3,976,935,100.86 17,140,596.95 796,011,305.72 3,198,064,392.09
premium
Others 25,457,960.95 15,243,506.90 - 40,701,467.85
4,002,393,061.81 32,384,103.85 796,011,305.72 3,238,765,859.94
Notes:
Note 1: Increases of capital surplus in the period are as follows:
(1) The Company’s share-based payments in the period were included in
shareholder’s equity and increased other capital surplus by RMB
29,628,076.98.
(2) The Company acquired 30% non-controlling interests of its subsidiary Tiruna
in the period, increasing other capital surplus by RMB 49,115,356.67.
(3) Other equity of the Company’s associated enterprises changed,
increasing other capital surplus by RMB 8,609,443.05.
Note 2: Decreases of capital surplus in the period are as follows:
(1) The Company retired a total of 90,831,767 shares in the period (as
described in Item 40 of Note V), reducing other capital surplus by RMB
378,811,780.27.
(2) The Company repurchsed shares in the period, which resulted in
payment of related commissions and charges, reducing other capital surplus
by RMB 43,112.84.
240 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
42. Treasury shares
2022
Increase in Decrease in
Opening balance the period the period Closing balance
(Note) (Note)
Share repurchase 494,335,503.94 215,563,545.78 469,643,547.27 240,255,502.45
2021
Increase in Decrease in
Opening balance Closing balance
the period the period
Share repurchase 579,403,185.12 825,386,681.52 910,454,362.70 494,335,503.94
Note: Changes in the period are as follows:
The increase in treasury shares was driven by the Company’s repurchase of shares in
the period, and the decrease in treasury shares was mainly driven by the Company’s
retirement of shares in the period (as described in Item 40 of Note V).
43. Other comprehensive income
Cumulative balance of other comprehensive income attributable to shareholders of the
Company in the consolidated balance sheet:
2022
1 January 2022 Change 31 December 2022
Changes due to remeasurement of (647,558.19 ) 1,856,564.02 1,209,005.83
defined benefit schemes
Differences arising from the translation (32,631,132.72 ) 57,979,016.03 25,347,883.31
of foreign currency-denominated
financial statements
Others (43,972.07) - (43,972.07)
(33,322,662.98 ) 59,835,580.05 26,512,917.07
241 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
43. Other comprehensive income (cont’d)
Cumulative balance of other comprehensive income attributable to shareholders of the
Company in the consolidated balance sheet: (cont’d)
2021
1 January 2021 Change 31 December 2021
Changes due to remeasurement of (279,123.15 ) (368,435.04 ) (647,558.19 )
defined benefit schemes
Differences arising from the translation 20,349,184.92 (52,980,317.64) (32,631,132.72 )
of foreign currency-denominated
financial statements
Others (43,972.07) - (43,972.07)
20,026,089.70 (53,348,752.68) (33,322,662.98 )
Other comprehensive income:
2022
Before tax Less: Income tax Attributable to Attributable to non-
owners of the parent controlling interests
Other comprehensive
income that will not
be reclassified to
profit or loss
Changes caused by
remeasurements on
1,856,564.02 - 1,856,564.02 -
defined benefit
schemes
Other comprehensive
income that will be
reclassified to profit
or loss
Differences arising
from the translation
of foreign
55,080,204.63 - 57,979,016.03 (2,898,811.40)
currency-
denominated
financial statements
56,936,768.65 - 59,835,580.05 (2,898,811.40)
242 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
43. Other comprehensive income (cont’d)
2021
Before tax Less: Income tax Attributable to Attributable to non-
owners of the parent controlling interests
Other comprehensive
income that will not be
reclassified to profit or
loss
Changes caused by
remeasurements on
(368,435.04 ) - (368,435.04) -
defined benefit
schemes
Other comprehensive
income that will be
reclassified to profit or
loss
Differences arising from
the translation of
foreign currency- (57,694,181.97 ) - (52,980,317.64) (4,713,864.33)
denominated financial
statements
(58,062,617.01 ) - (53,348,752.68) (4,713,864.33)
44. Special reserve
2022
Opening Provision in Ultilisation in
Closing balance
balance the period the period
Expenses for Safety Production 11,252,639.19 6,161,824.10 (2,925,507.77 ) 14,488,955.52
2021
Opening Provision in Ultilisation in
Closing balance
balance the period the period
Expenses for Safety Production 10,057,438.97 4,513,399.49 (3,318,199.27) 11,252,639.19
243 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
45. Surplus reserves
2022
Opening and
closing balance
Statutory surplus reserves 51,830,974.45
2021
Opening and
closing balance
Statutory surplus reserves 51,830,974.45
Pursuant to the Company Law, when the Company allocates after-tax profits of the
year, the Company shall set aside 10% net profit after making up losses in previous
years as its statutory surplus reserves. When the Company’s statutory reserves are not
enough to make up losses in previous years, the Company shall first make up the losses
with profits in the year before it withdraws statutory surplus reserves according to the
above-mentioned regutlation. As there is still losses that can be made up in the
Company’s account, statutory surplus reserves are not made in the current year.
46. Retained earnings
2022 2021
Opening retained earnings (424,159,175.27 ) (891,492,837.06)
Net profit attributable to owners of the parent 447,177,897.38 467,333,661.79
Closing retained earnings 23,018,722.11 (424,159,175.27)
244 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
47. Operating revenue and costs
2022 2021
Revenue Costs Revenue Costs
Principal operations 3,861,267,826.14 2,811,064,346.64 3,471,892,485.62 2,522,244,108.28
Other operations 31,440,683.50 22,241,401.90 52,842,298.32 32,827,951.51
3,892,708,509.64 2,833,305,748.54 3,524,734,783.94 2,555,072,059.79
Operating revenue is as follows:
2022 2021
Revenue arising from contracts with customers 3,891,406,986.70 3,523,514,431.39
Others 1,301,522.94 1,220,352.55
3,892,708,509.64 3,524,734,783.94
Breakdown of operating revenue arising from contracts with customers is as follows:
2022
Total
Principal operating segment
Mainland China 441,664,388.05
Other regions 3,449,742,598.65
3,891,406,986.70
Principal product type
Goods 3,530,766,862.10
Services 360,640,124.60
3,891,406,986.70
By revenue recognition time
Revenue recognition at a point of time
Sale of goods 3,530,766,862.10
Revenue recognition for a period of time
Rendering of services 360,640,124.60
3,891,406,986.70
V. Notes to the Consolidated Financial Statements (cont’d)
245 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
47. Operating revenue and costs (cont’d)
Breakdown of operating revenue arising from contracts with customers is as follows:
(cont’d)
2021
Total
Principal operating segment
Mainland China 528,007,403.05
Other regions 2,995,507,028.34
3,523,514,431.39
Principal product type
Goods 3,224,038,841.57
Services 299,475,589.82
Others
3,523,514,431.39
By revenue recognition time
Revenue recognition at a point of time
Sale of goods 3,224,038,841.57
Revenue recognition for a period of time
Rendering of services 299,475,589.82
3,523,514,431.39
Revenue recognized that was included in contract liabilities at the beginning of the
year:
2022 2021
Sales payment in advance 334,296,679.75 312,794,330.81
246 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
47. Operating revenue and costs (cont’d)
Information about contractual performance obligations is as follows:
Sale of goods
Contractual performance obligations are fulfilled when delivering manufactured goods
to customers, and normally the payment in advance for some customers are needed.
Rendering of services
Contractual performance obligations are fulfilled during the rendering of services.
The expected time for recognizing in revenue the total transaction price allocated to
outstanding contractual performance obligations as at the period-end is as follows:
2022 2021
Within 1 year 692,567,968.60 405,842,932.51
48. Taxes and surcharges
2022 2021
Property tax 4,472,175.71 4,612,247.54
City maintenance and construction tax 3,556,299.02 2,928,855.08
Education surcharge 1,354,323.03 1,664,857.56
Stamp tax 836,666.85 780,312.71
Local education surcharge 892,159.78 734,432.96
Land use tax 518,958.69 548,091.99
Vehicle and vessel tax 11,064.76 19,943.53
Environmental protection tax 16,321.08 5,852.88
Others 298,321.03 201,912.47
11,956,289.95 11,496,506.72
247 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
49. Selling expenses
2022 2021
Commissions and agency fees 47,370,007.70 59,870,536.49
Employee benefits 56,966,000.14 48,815,734.92
Product quality warranties 42,349,630.26 42,420,792.60
Advertising and exhibition expenses 7,889,277.47 8,916,532.18
Travel expenses 11,572,146.49 8,279,440.26
Office expenses 2,216,107.13 1,816,870.39
Depreciation and amortization expenses 1,327,867.77 1,170,873.85
Other expenses 12,864,838.75 14,036,897.49
182,555,875.71 185,327,678.18
50. Administrative expenses
2022 2021
Employee benefits 151,890,144.23 137,770,894.42
Depreciation and amortization expenses 30,683,414.09 33,075,924.90
Intermediary expenses 32,748,743.44 26,331,269.13
Equity incentives 28,245,389.68 15,243,506.90
Office expenses 15,241,253.59 14,704,181.88
Travel and reception expenses 9,797,492.56 9,799,959.60
Conference expenses 11,037,605.97 4,146,471.59
Property management expenses 3,168,050.31 2,789,669.82
Maintenance expenses 1,060,687.27 1,405,398.19
Car expenses 814,131.46 1,232,050.28
Materials consumption 1,857,128.89 722,185.83
Rental expenses 4,952,760.91 544,034.30
Other expenses 19,966,810.76 24,325,181.24
311,463,613.16 272,090,728.08
248 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
51. R&D expenses
2022 2021
Employee benefits 63,368,875.04 51,438,135.36
Depreciation and amortization expenses 12,327,999.54 17,208,658.35
Material expenses 11,111,028.94 22,383,588.65
Utilities 1,708,605.10 1,269,392.10
Assembly testing and debugging expenses 176,934.19 87,859.47
Other expenses 9,261,010.59 7,169,931.53
97,954,453.40 99,557,565.46
52. Finance costs
2022 2021
Interest expenses 13,839,292.38 13,182,088.01
Less: Interest income 19,042,851.72 24,674,196.61
Exchange losses (6,540,524.94 ) 2,528,095.79
Discounted interest - 7,238.89
Others 2,773,390.59 2,960,299.46
(8,970,693.69) (5,996,474.46 )
249 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
53. Other income
2022 2021
Government grants related to routine activities 20,754,916.28 14,700,007.84
Refund of handling charges for individual income 178,461.16 192,559.05
tax withheld
20,933,377.44 14,892,566.89
Government grants related to routine activities are as follows:
Asset/income-
2022 2021
related
Immediate VAT refund for embedded software Income-related
7,234,133.62
Foreign government subsidies Income-related
2,727,199.95
Support fund for the development of digital intelligent transformation of
Income-related
manufacturing industry 2,000,000.00
4 Mitsubishi gantry processing centres and 3 fixed-beam-type gantry
1,116,660.00 Asset-related
processing centres 1,116,660.00
Special awards for high-tech design 1,000,000.00 Income-related
Special awards for Big Enterprise Income-related
1,000,000.00
The second batch of project funding for the first major technical
Income-related
equipment Support Plan in 2022 790,000.00
Support fund for development of Science and technology in Suzhou Income-related
700,000.00
Subsidies for gazelle companies in 2020 Income-related
681,148.49
The research and development subsidies can be deducted for
Income-related
Manufacturing Champion in 2020 500,000.00
One-time training subsidies Income-related
303,425.00
Manufacturing Champion in 2021
300,000.00 Income-related
The 22nd batch of science and technology development Plan
Income-related
appropriated by Suzhou in 2022 300,000.00
One-time training subsidies awarded by Administration of Social
Income-related
Insurance Fund of Guangdong Province 239,715.00
Pro-employment fund Income-related
232,103.09
Special fund for business development in 2022 Income-related
202,900.00
Special fund of Nanhai Administration Bureau of Foshan High tech
Income-related
Industrial Development Zone 200,000.00
Special Fund of Suzhou National New & Hi-Tech Industrial
Income-related
Development Zone 200,000.00
Social security insurance refunds Income-related
136,370.00
Funds of Market Supervision Administration of High-tech Zone Income-related
120,000.00
The second batch of R&D incentive Bonuses for science and technology
Income-related
Enterprises in 2021 (Results Section) 100,000.00
Special funds for business development of Suzhou Bureau of Commerce Income-related
95,900.00
Support funds for 2020 exhibition Income-related
90,000.00
Subsidy funds after R&D expenses for high-tech enterprises in 2022
72,267.00 Income-related
Support funds for Manufacturing Champion policies in 2021 Income-related
60,000.33
2022 enterprise rewards for highly skilled leading talent Income-related
50,000.00
2022 annual bank loan premium subsidy for small and micro enterprises Income-related
50,000.00
250 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
Pro-employment fund in 2021 from Foshan Social Insurance Fund
Income-related
Management Bureau 48,215.23
R&D expenses for high-tech enterprises of Foshan Science and
Income-related
Technology Bureau 45,732.00
Special fund for science and technology plan in 2022 33,000.00 Income-related
Special funds for export credit insurance of Nanhai District Economic
Income-related
Promotion Bureau in 2021 29,741.94
Annual research and development expense award in 2022 of Science and
Income-related
Technology Innovation Bureau 23,600.00
Special funds for business development of Suzhou High-tech Zone
Income-related
Bureau of Commerce 20,300.00
Special funds for business development 20,000.00 Income-related
Special funds for export credit insurance of Foshan Bureau of
Income-related
Commerce 10,000.00
Award for trademark registration of “Branded Project” of
Administration in high-tech zone in 2022 5,000.00 Income-related
Disinfection subsidies for manufacturing enterprises 5,000.00 Income-related
Employment subsidies for key enterprises in Suzhou High-tech Zone 5,000.00 Income-related
Job subsidies 4,500.00 Income-related
Social security subsidies for small, low-profit manufacturing enterprises 1,504.63 Income-related
Award for trademark registration of “Branded Project” of
Income-related
Administration for Market Regulation 1,500.00
Compensation for demolition of the old plant in Jinfeng Road 3,554,516.61 Asset-related
Foreign government subsidies 2,902,405.18 Income-related
Immediate VAT refund for embedded software 1,526,488.01 Income-related
Project subsidy funds for overseas R&D institutions in 2020 1,000,000.00 Income-related
Special funds for promoting foreign economic cooperation in Foshan
Income-related
City in 2021 1,000,000.00
Municipal technology innovation award for key industries in 2017/2018
Income-related
from the Scientific and Technological Innovation Bureau 400,000.00
Award for stabilizing employment positions and benefiting enterprises
Income-related
from High-tech Zone Economic and Development Commission 300,000.00
Manufacturing Champion in 2020 awarded by Nanhai Park
Income-related
Administration 300,000.00
Subsidy funds after R&D expenses for high-tech enterprises 259,500.00 Income-related
Subsidies for gazelle companies 250,000.00 Income-related
Special awards for high-tech enterprises in 2020 200,000.00 Income-related
Funds for quality improvement of industrial products in Foshan City in
Income-related
2021 200,000.00
Subsidies for National and Provincial Intellectual Property
Income-related
Demonstration Enterprise 200,000.00
Special funds for business development of Suzhou High-tech Zone
Income-related
Bureau of Commerce 182,600.00
Special funds for leading enterprises in 2020 150,000.00 Income-related
Subsidies for leading enterprises identification in Foshan High -tech
Income-related
Zone 150,000.00
Subsidies from Suzhou High-tech Zone Bureau of Commerce in 2019 111,958.59 Income-related
Subsidies for high-tech enterprises identification in Foshan City in
Income-related
2020 100,000.00
Subsidies for economic development from High-tech Zone Economic
Income-related
Development Committee 100,000.00
Intellectual property thematic funds of 2019 patent subsidies of Nanhai
Income-related
District Administration for Market Regulation 100,000.00
R&D expenses for high-tech enterprises of Foshan Science and
Income-related
Technology Bureau 74,700.00
Award for R&D of enterprises from Technology and Innovation Bureau 55,000.00 Income-related
2020 enterprise rewards for highly skilled leading talent 50,000.00 Income-related
2021 enterprise rewards for highly skilled leading talent 50,000.00 Income-related
Patent subsidies for foreign invention of Administration for Market
Income-related
Regulation 50,000.00
Subsidies for work-based training of Suzhou Labor and Employment
Income-related
Management Service Center 45,518.59
Government subsidies for the projects with excellent technology staying
in Suzhou 39,300.00 Income-related
Special funds for environmental protection support and reward of
Nanhai Branch of Foshan Ecological Environment Bureau in 2020 37,633.00 Income-related
Funds for invention patent annual fee of Foshan Administration for
Market Regulation 35,630.00 Income-related
Special funds for intellectual property in 2020 31,626.00 Income-related
Special funds for export credit insurance in Nanhai District, Foshan City
in 2021 of Nanhai District Economic Promotion Bureau, Foshan City 23,992.00 Income-related
Funds for invention patents in China of Foshan “Fuchitong” 21,000.00 Income-related
Special funds for business development 20,103.00 Income-related
Special funds for business development of Suzhou High-tech Zone
Bureau of Commerce 20,000.00 Income-related
251 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
Provincial promotion of high-quality economic development in 2020 of
Nanhai District Economic Promotion Bureau, Foshan City
Special funds for development, for the purposes of foreign economic
and trade development and the development of modern service industry 16,363.24 Asset-related
Subsidies for stabilizing employment positions of Foshan Social
Insurance Fund Administration in 2020 14,274.14 Income-related
Subsidies for work-based training 4,000.00 Income-related
252 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
53. Other income (cont’d)
Funds for invention patents in China of Administration for Market
Regulation 3,000.00 Income-related
Subsidies for stabilizing employment positions 1,739.48 Income-related
Award for trademark registration of “Branded Project” of
Administration for Market Regulation of Nanhai District, Foshan City 1,000.00 Income-related
Pandemic-related subsidies 1,000.00 Income-related
20,745,916.28 14,700,007.84
54. Investment income
2022 2021
Income from financial assets held for trading 17,279,281.22 94,792,849.32
Income from long-term equity investments
1,851,796.60 3,880,256.70
measured at equity method
19,131,077.82 98,673,106.02
55. Gains and losses on changes in fair value
2022 2021
Changes in fair value of non-controlling
5,337,601.98 (50,864,345.69)
interests call/put options
Financial assets at fair value through
13,423,921.51 29,506,559.88
profit or loss
Financial liability at fair value through
(844,476.88) -
profit or loss
17,917,046.61 (21,357,785.81 )
56. Credit impairment loss
2022 2021
Loss on doubtful accounts receivable 4,417,400.72 8,497,086.26
Allowances losses for other receivables 681,873.15 4,229,550.20
Impairment loss on contract assets 10,701.00 -
5,109,974.87 12,726,636.46
253 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
57. Asset impairment loss
2022 2021
Inventory valuation loss 10,867,629.33 11,194,079.96
Reversed impairment loss on contract assets 1,928,694.23 (257,325.86 )
12,796,323.56 10,936,754.10
58. Gains and losses on disposal of assets
2022 2021
Gain/(loss) on disposal of fixed assets (168,835.37 ) 424,968.29
59. Non-operating income
2022 2021 Recognized in
exceptional gains
and losses of 2022
Compensation fee 283,274.15 - 283,274.15
Others 2,176,293.18 5,750,547.04 2,176,293.18
2,459,567.33 5,750,547.04 2,459,567.33
60. Non-operating expenses
2022 2021 Recognized in
exceptional gains and
losses of 2022
Donations 224,849.92 83,988.03 224,849.92
Loss on disposal of non-current
assets
182,551.41 501,064.13 182,551.41
Others 473,443.92 876,966.65 473,443.92
880,845.25 1,462,018.81 880,845.25
254 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
61. Expenses by nature
Supplementary information of the Group’s cost of sales, selling expenses,
administrative expenses, and R&D expenses by nature is as follows:
2022 2021
Raw materials consumed 1,985,363,537.36 1,859,784,815.80
Employee benefits 684,582,240.74 613,223,119.21
Transportation expenses and
miscellaneous expenses associated with 191,131,032.36 125,384,252.47
import and export
Depreciation and amortization expenses 96,227,980.90 96,426,126.81
Commissions and agency fees 47,370,007.70 59,870,536.49
Product quality warranties 42,622,459.66 42,420,792.60
Intermediary expenses 35,907,474.82 26,331,269.13
Utilities 26,280,501.27 18,322,758.67
Equity incentives 29,628,076.94 15,243,506.90
Travel and business reception expenses 113,117,355.40 85,673,533.80
Technology licensing expenses 9,543,670.88 9,350,533.75
Advertising and exhibition expenses 8,706,020.81 8,916,532.18
Rental expenses 2,758,021.35 544,034.30
Office and other expenses 152,041,310.62 150,556,219.40
3,425,279,690.81 3,112,048,031.51
255 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
62. Income tax expenses
2022 2021
Current income tax expenses 83,948,000.57 88,328,101.49
Deferred tax expenses (61,760,709.14) (100,274,573.91)
22,187,291.43 (11,946,472.42 )
Reconciliation between income tax expenses and gross profit is as follows:
2022 2021
Gross profit 505,928,312.72 480,444,713.23
Income tax calculated at applicable tax rates (Note) 75,889,246.91 72,066,706.98
Different tax rates for specific provinces or enacted
18,881,060.06 38,186,704.25
by local authority
Adjustment to current income tax in previous
(775,371.61) (8,715,965.71)
periods
Income not subject to tax (471,554.32) (13,811,012.93)
Over-deduction for R&D (9,884,156.68 (5,813,981.03)
Expenses not deductible for tax 5,666,686.60 995,625.70
Utilization and recognition of deductible losses of
(82,173,231.29) (100,238,844.22 )
previous periods
Effect of unrecognized deductible temporary
15,054,611.76 5,384,294.54
differences and deductible losses
Income tax expenses 22,187,291.43 (11,946,472.42 )
Note: The provision for income tax of the Group was recognized based on the
estimated taxable income to be derived from mainland China and applicable tax rate.
Taxable income derived from other jurisdictions shall be taxed based on applicable tax
rate in accordance with the current laws, interpretations and conventions in the
country/jurisdiction where the Group operates.
256 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
63. Earnings per share
2022 2021
RMB/share RMB/share
Basic earnings per share
Continuing operations 0.37 0.35
Diluted earnings per share
Continuing operations 0.37 0.35
Basic earnings per share is computed by dividing the net profit attributable to ordinary
shareholders of the Company for the period by the weighted average number of
ordinary shares in issue.
In the calculation of diluted earnings per share, the numerator shall be determined
based on the net profit attributable to ordinary shareholders of the Company for the
period after adjusting the following factors: (1) the interest of diluted potential ordinary
shares that have been recognized as expenses in the period; (2) gains or expenses that
will be incurred when the diluted potential ordinary shares are converted; and (3) the
income tax impact related to the above adjustments.
In the calculation of diluted earnings per share, the denominator shall be the sum of:
(1) weighted average number of ordinary shares of the Company in issue adopted in
the calculation of basic earnings per share; and (2) weighted average number of
ordinary shares created assuming conversion of potentially dilutive ordinary shares
into ordinary shares.
In calculating the weighted average number of ordinary shares created upon conversion
of potentially dilutive ordinary shares into ordinary shares, potentially dilutive ordinary
shares issued in previous periods are assumed to have been converted at the beginning
of the current period, whereas potentially dilutive ordinary shares issued in the current
period are assumed to have been converted on the date of issue.
257 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
63. Earnings per share(cont’d)
Calculations of basic and diluted earnings per share are as follows:
2022 2021
Earnings
Net profit attributable to ordinary shareholders of
the Company for the period 447,177,897.38 467,333,661.79
Shares
Weighted average number of ordinary shares in
issue of the Company 1,214,301,810.17 1,327,715,640.50
Shares
Weighted average number of ordinary shares in
1,214,301,810.17 1,327,715,640.50
issue of the Company
Diluting effect——weighted average number of
ordinary shares
Restricted shares 8,044,635.29 12,915,588.73
Adjusted weighted average number of ordinary
shares in issue of the Company 1,222,346,445.46 1,340,631,229.23
258 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
64. Notes to cash flow statement line items
2022 2021
Cash generated from other operating activities
Government grants 19,804,538.17 10,221,390.28
Interest income 9,167,093.01 24,674,196.61
Current accounts and others 8,441,791.07 4,438,967.22
37,413,422.25 39,334,554.11
Cash used in other operating activities
Selling expenses in cash 130,038,891.90 105,107,763.31
Administrative expenses in cash 105,291,187.76 74,613,114.65
R&D expenses in cash 13,993,627.09 17,901,111.33
Security deposits 2,187,739.39 187,068.49
Letter of guarantee paid 695,566.59 2,171,914.25
Current accounts and others 28,045,564.77 21,116,317.47
280,252,577.50 221,097,289.50
Cash generated from other investing activities
Performance compensation 741,402.85 2,419,748.09
Investment deposit 20,000,000.00 -
20,741,402.85 2,419,748.09
Cash used in other investing activities
Investment deposit 20,000,000.00 -
259 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
64. Notes to cash flow statement line items (cont’d)
2022 2021
Cash generated from other financing activities
Disposal of equity to non-controlling interests - 100,000,000.00
Security deposits for bank acceptance notes 177,363,575.61 93,525,797.34
Security deposits recovered for internal
420,000,000.00 -
guarantees for external loans
Security deposits for loan 140,000,000.00 -
Share subscription 2,762,000.00 -
740,125,575.61 193,525,797.34
Cash used in other financing activities
Share repurchase 215,606,658.62 828,741,759.63
Security deposits paid for loans 210,000,000.00 355,075,000.00
Security deposits for bank acceptance notes 170,580,626.43 120,056,676.70
Purchase of non-controlling interests 50,866,860.00 36,121,968.12
Lease and interest payments 26,324,405.01 17,062,209.03
673,378,550.06 1,357,057,613.48
260 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
65. Supplemental information on statement of cash flows
(1) Supplemental information on statement of cash flows
Reconciliation of net profit to net cash generated from/used in operating activities:
2022 2021
Net profit 483,741,021.29 492,391,185.65
Add: Asset impairment allowances 12,796,323.56 10,936,754.10
Depreciation of fixed assets 46,764,632.53 49,341,880.68
Depreciation of right-of-use assets 22,658,947.90 17,042,595.06
Amortization of intangible assets 22,931,485.79 23,837,149.34
Credit impairment loss 5,109,974.87 12,726,636.46
Amortization of long-term prepaid expenses 5,992,219.61 6,204,501.74
Loss and gain on disposal of fixed assets, 168,835.37 (424,968.29 )
intangible assets and other long-lived assets
Loss on retirement of fixed assets 182,551.41 490,962.41
Loss and gain on changes in fair value (17,917,046.61 ) 21,357,785.81
Finance costs 3,689,292.38 13,182,088.01
Investment income (19,131,077.82 ) (98,673,106.02 )
Increase in deferred tax assets (63,715,107.07 ) (81,298,463.69 )
Decrease/(increase) in deferred tax liabilities 1,377,055.21 (17,549,248.21 )
Increase in inventories (181,404,611.30 ) (128,880,794.62 )
Increase/(decrease) in operating receivables (237,029,947.97 ) (397,793,709.49 )
Increase in operating payables 385,587,050.58 374,249,103.02
Others 34,492,861.22 9,518,924.06
Net cash generated from/used in operating activities 506,294,460.95 306,659,276.02
261 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
65. Supplemental information on statement of cash flows (cont’d)
(1) Supplemental information on statement of cash flows (cont’d)
Substantial investing and financing activities not involving cash:
2022 2021
Transfer of endorsed bank acceptance notes received for 91,221,566.30 53,118,728.50
selling goods and rendering services
Acquisition of right-of-use assets by assuming lease 36,996,563.25 80,386,832.91
liabilities
128,218,129.55 133,505,561.41
Net change in cash and cash equivalents:
2022 2021
Closing balance of cash 1,233,720,697.27 1,259,303,775.74
Less: Opening balance of cash 1,259,303,775.74 860,601,236.78
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase/(decrease) in cash and cash equivalents (25,583,078.47 ) 398,702,538.96
(2) Information on subsidiaries and other business units acquired or disposed of
Information on subsidiaries and other business units acquired
2022 2021
Prices for acquiring subsidiaries and other business
148,300,000.00 30,000,000.00
units
Cash and cash equivalents paid to acquire
173,800,000.00 30,000,000.00
subsidiaries and other business units
Less: cash and cash equivalents held by subsidiaries
and other business units acquired 57,867,983.95 -
Net payments for the acquisition of subsidiaries and
other business units 115,932,016.05 30,000,000.00
(3) Cash and cash equivalents
2022 2021
Cash 1,233,720,697.27 1,259,303,775.74
Including: cash on hand 587,935.98 233,281.32
999,389,151.51
Bank deposits readily available
1,011,564,164.21
Other cash and bank balances readily available 221,568,597.08 259,681,342.91
Cash equivalents - -
Closing balance of cash and cash equivalents 1,233,720,697.27 1,259,303,775.74
V. Notes to the Consolidated Financial Statements (cont’d)
262 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
66. Assets with restricted ownership or right of use
2022 2021
Cash and bank balances 40,726,502.47 405,032,563.61 Note 1
Fixed assets 4,409,110.42 4,533,314.25 Note 2
Other non-current assets - 300,150,000.00 Note 3
Current portion of non-current 310,300,000.00 -
Note 3
assets
355,435,612.89 709,715,877.86
Note 1: As at 31 December 2022, cash and bank balances in the carrying amount
of RMB40,726,502.47 were used as security deposits for bank acceptance notes
and letter of guarantee and the like (31 December 2021: RMB405,032,563.61).
Note 2: As at 31 December 2022, the fixed assets in the carrying amount of
RMB4,409,110.42 (31 December 2020: RMB4,533,314.25) was used as
collateral for obtaining bank borrowings for subsidiaries, with the term expiring
on 2023
Note 4: As at 31 December 2022, security deposits in the carrying amount of
RMB 310,300,000.00 (31 December 2020: RMB 300,150,000.00) were used
for loans of subsidiaries. As the subsidiary's loan will expire on June 2023, the
amount was transferred from other noncurrent assets to current portion of non-
current assets.
263 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
V. Notes to the Consolidated Financial Statements (cont’d)
67. Monetary items in foreign currencies
2022 2021
Original Original Exchange
Exchange rate RMB equivalent RMB equivalent
currency currency rate
Cash and bank balances 837,901,528.55 685,152,963.98
Including: USD 51,568,121.01 6.9646 359,151,335.60 56,147,869.58 6.3757 357,981,972.08
EUR 63,332,369.86 7.4229 470,109,848.24 45,306,958.43 7.2197 327,102,647.78
HKD 70,837.93 0.8933 63,279.52 83,591.14 0.8176 68,344.12
GBP 1,021,796.88 8.3941 8,577,065.19 - 8.6081 -
Accounts receivable 781,623,990.32 714,281,331.38
Including: USD 6,224,516.08 6.9646 43,351,264.69 8,067,507.42 6.3757 51,436,007.06
99,458,799.88 7.4229 738,272,725.63 91,810,646.47 7.2197 662,845,324.32
EUR
Contract assets 25,889,024.27 19,971,462.55
Including: USD 2,627,445.80 6.9646 18,299,109.02 2,773,235.20 6.3757 17,681,315.66
1,022,500.00 7.4229 7,589,915.25 317,208.04 7.2197 2,290,146.89
EUR
Other receivables 64,322,223.29 210,931,472.20
Including: USD - 6.9646 - 8,856,610.50 6.3757 56,467,091.56
8,665,376.51 7.4229 64,322,223.29 21,394,847.52 7.2197 154,464,380.64
EUR
Accounts payable 579,166,380.90 580,255,405.04
Including: USD 17,933.26 6.9646 124,897.96 20,811,908.90 6.3757 132,690,487.57
EUR 78,007,447.62 7.4229 579,041,482.94 61,992,176.61 7.2197 447,564,917.47
Short-term borrowings 39,015,129.24 228,312,880.73
Including: EUR 5,256,049.42 7.4229 39,015,129.24 31,623,596.65 7.2197 228,312,880.73
Current portion of non- 287,544,266.74 32,455,649.04
current liabilities
Including: EUR 38,737,456.62 7.4229 287,544,266.74 4,495,429.04 7.2197 32,455,649.04
Long-term borrowings 57,884,494.89 325,026,188.49
Including: EUR 7,798,097.09 7.4229 57,884,494.89 45,019,348.24 7.2197 325,026,188.49
Lease liabilities 47,237,141.39 49,459,973.23
Including: EUR 6,363,704.40 7.4229 47,237,141.39 6,850,696.46 7.2197 49,459,973.23
Other payables 18,360,654.60 18,820,269.40
Including: USD 419,190.02 6.9646 2,919,490.81 397,040.50 6.3757 2,531,411.12
EUR 2,080,206.36 7.4229 15,441,163.79 2,256,168.30 7.2197 16,288,858.28
The principal places of business overseas, the functional currencies and their
determination basis of the major overseas business entities included in the consolidated
financial statements are as follows:
Major overseas Principal place Functional
Determination basis
business entities of business currency
Settlement currency for local
Fosber Group Italy EUR
business activities
Settlement currency for local
Fosber America America USD
business activities
Settlement currency for local
Italy EDF Italy EUR
business activities
Settlement currency for local
Tirua Group Spain EUR
business activities
264 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
VIII. Changes to the Scope of Consolidation
1. Business combinations not involving entities under common control
Within the current period, the Company acquired a 50% stake in Shenzhen Wonder
Printing System Co.,Ltd at RMB173,800,000.00 in cash, including a capital increase of
RMB50,000,000.00 and a equity transfer payment of RMB123,800,000. The date of
acquisition is determined as 7 June 2022 based on the completion of the business
change registration procedures and completion of shareholding rights transfer on 7
June 2022.
The fair value and carrying amounts of the identifiable assets and liabilities of Foshan
Yinglian Digital Printing Equipment Co., Ltd. as at the date of acquisition are as
follows:
7 Jun. 2022 7 Jun. 2022
Fair Value Book Value
Cash and bank balances 22,867,983.95 22,867,983.95
Notes receivable 740,481.63 740,481.63
Accounts receivable 12,147,478.25 12,147,478.25
Prepaid expense 2,411,228.55 2,411,228.55
Other receivables 2,072,194.20 2,072,194.20
Inventories 44,297,259.74 42,548,955.95
Other current assets 37,841.92 37,841.92
Fixed assets 5,504,939.18 4,492,581.48
Intangible assets 21,858,600.00 -
Deferred tax assets 581,494.60 581,494.60
Right-of-use assets 6,080,817.77 6,080,817.77
Short-term borrowings 4,200,000.00 4,200,000.00
Accounts payable 10,200,334.69 10,200,334.69
Contracts liabilities 6,448,103.80 6,448,103.80
Employee benefit payable 2,729,488.28 2,729,488.28
Tax payable 4,962,681.84 4,962,681.84
Other payable 15,034,104.80 15,034,104.80
Current portion of non-current liabilities 4,204,477.63 4,204,477.63
Current liabilities 709,454.49 709,454.49
Long-term borrowings 6,600,000.00 6,600,000.00
Derferred tax liabilities 3,701,257.61 8,368.38
Lease liabilities 3,187,217.75 3,187,217.75
56,623,198.90 35,696,826.64
Minority stockholder’s interest (27,745,367.46) (17,491,445.05)
Total 28,877,831.44 18,205,381.59
Goodwill arising from the acquisition 119,422,168.56
148,300,000.00 Note
Note: The merger consideration consisted of (1) a cash payment of RMB123,800,000.00 for
the equity transfer and (2) RMB24,500,000.00 for the portion of the capital increase
attributable to the minority shareholders in proportion to their shareholdings.
265 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
VI. Changes to the Scope of Consolidation (cont’d)
1. Business combinations not involving entities under common control
(cont’d)
The operating results and cash flows of Shenzhen Wonder Printing System Co.,Ltd for the
period from the date of acquisition to the period-end are as follows:
7 June.-31 Dec. 2022
Operating revenue 81,875,354.35
Net profit 18,633,830.83
Net cash flow 19,674,096.45
2. Changes to the scope of consolidation for other reasons
Information about the newly established subsidiary:
In February 2022, the Company established Dongfang Yineng International Holdings Co., Ltd
(hereinafter referred to as “Yineng International”) with a registered capital of RMB50
million and a shareholding ratio of 100%.
In February 2022, Hainan Yineng, a subsidiary of the Company, established Changzhou
Xinchen Investment Partnership (Limited Partnership) (hereinafter referred to as “Changzhou
Xinchen”), with a subscribed capital contribution of RMB48 million and a shareholding ratio
of 94.86%.
In February 2022, Parsun Power, a subsidiary of the Company, established Suzhou
Baisheng International Trade Co., Ltd (hereinafter referred to as “Baisheng
International”) with a registered capital of RMB3 million and a shareholding ratio of
69.62%.
266 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
IX. Interests in Other Entities
1. Interests in subsidiaries
Particulars of the subsidiaries of the Company are as follows:
Principal place Place of Business Registered The Company’s
of business registration nature capital interest（%）
Indirect
Direct
Subsidiaries acquired
by way of
incorporation or
investment
Dongfang Precision
HK HK Trading USD300,000 100.00 -
(HK)
Dongfang Precision
Netherland Netherland Trading EUR40,000 90.00 10.00
(Netherland)
Foshan, Guangdong, Foshan, Guangdong, Manufactur
Fosber Asia EUR4 million 89.20 -
China China ing
Manufacturing
Italy QCorr Italy Italy EUR375,000 - 60.00
Suzhou High-Tech
Zone Jinquan
Business Suzhou, Jiangsu, Suzhou, Jiangsu,
Investment RMB9.65 million - 1.27
Management China China
Partnership (Limited
Partnership)*
Parsun Power Suzhou, Jiangsu. Suzhou, Jiangsu. Manufacturing RMB10 million - 69.62
Technology China China
Baisheng International Suzhou, Jiangsu. Suzhou, Jiangsu. Trading RMB3 million 69.62
China China
Haikou, Hainan, Haikou, Hainan, Industrial
Dongfang Digicom RMB100 million 100.00 -
China China Internet
Dongfang Digicom Foshan, Guangdong, Foshan, Guangdong, Industrial
RMB8 million 100.00
(Guangdong) China China Internet
Haikou, Hainan, Haikou, Hainan,
Hainan Yineng Investment RMB100 million 100.00 -
China China
Foshan, Foshan,
Yineng International Investment RMB50 million 100.00 -
Guangdong,China Guangdong,China
Tianjin Hangchuang Tianjin, China Tianjin, China Investment RMB21 million 95.24 -
Changzhou, Jiangsu. Changzhou, Jiangsu.
Changzhou Xinchen Investment RMB50.6 millin - 94.86
China China
Subsidiaries acquired
in business
combinations not
under common
control
Manufactur
Fosber Group Italy Italy EUR1.56 million - 100.00
ing
Manufactur
Fosber America America America USD1.10 million - 100.00
ing
Manufactur
Fosber Tianjin Tianjin, China Tianjin, China USD500,000 - 100.00
ing
Suzhou, Jiangsu, Suzhou, Jiangsu, Manufactur
Parsun Power RMB85.3 million 7.83 61.79
China China ing
Suzhou, Jiangsu, Suzhou, Jiangsu,
Shunyi Investment Investment RMB10 million 100.00 -
China China
Manufactur
Italy EDF Italy Italy EUR100,000 - 100.00
ing
Manufactur
Tirua Group Spain Spain EUR10 million - 70.00
ing
Manufactur
Tirua S.L.U. Spain Spain EUR1.44 million - 70.00
ing
Tratatamientos
Manufactur
Industriales Tirua Spain Spain EUR270,000 - 70.00
ing
S.A.U.
Manufactur
Tirua France SARL France France EUR100,000 - 70.00
ing
267 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
Manufactur
SCI Candan France France EUR10,000 - 70.00
ing
Manufactur
Tirua America America America USD3 million - 85.00
ing
Foshan, Guangdong, Foshan, Guangdong, Manufactur
Tirua Guangdong EUR21 million - 66.3
China China
Foshan, Guangdong, Foshan, Guangdong, Manufactur
Yinglian Digital RMB50 million 100.00 -
China China ing
Shenzhen, Shenzhen, RMB117.19 milli
Wonder Printing Manufacturing 51 -
Guangdong, China Guangdong, China on
Dongguan, Dongguan, Mandufacturin
Wonder Digital RMB1 million - 51
Guangdong, China Guangdong, China g
*According to the partnership agreement, the general partner of the partnership shall
execute partnership affairs, and other partners shall not execute partnership affairs. As
the sole general partner, the Company forms control over the partnership, which is
included in the scope of consolidation of the Group.
2. Interests in associates
Principal place Place of Business Registered The Company’s Account ing
of business registration nature capital interest (%) method
Direct Indirect
Associates
Guangdong Jaten Robot Equity
Foshan Foshan manufacturing RMB31.759 million 19.84 -
& Automation Co., Ltd. method
Equity
Talleres Tapre,S.L. Spain Spain manufacturing - 14.00
EUR37,563 method
Equity
Nanjing Profeta (Note) Nanjing manufacturing - 6.66
Nanjing RMB3.8613 million method
Note: The board of directors of Nanjing Profeta Intelligent Technology Co., Ltd. has 5
members. The Group has appointed one of the directors, and he accordingly enjoys 20% of the
substantive participation rights, forming a significant influence.
The table below presents the aggregate financial information of associates insignificant
to the Group:
2021 2020
Associates
Total carrying amount of investments 9,997,251.05 84,777,596.67
Total amounts based on the Company’s interests:
Net loss 1,851,796.60 3,880,256.70
Total comprehensive loss 1,851,796.60 3,880,256.70
268 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
X. Risks Associated with Financial Instruments
1. Classification of financial instruments
The carrying amounts of various financial instruments as at the balance sheet date are
as follows:
2022
Financial assets
At fair value
At fair value thro At amortized cos through other
Total
ugh profit or loss t comprehensive
income
As required by As required by
standard standard
Cash and bank balances - 1,274,447,199.74 - 1,274,447,199.74
Financial assets held for trading 860,832,278.88 - - 860,832,278.88
Notes receivable - 24,566,100.12 - 24,566,100.12
Accounts receivable - 837,305,757.46 - 837,305,757.46
Receivables financing - - 15,305,668.26 15,305,668.26
Other receivables - 80,996,902.82 - 80,996,902.82
Current portion of non-current
assets - 311,763,750.00 - 311,763,750.00
Long-term receivables - 1,294,299.00 - 1,294,299.00
Other non-current financial assets 334,449,603.33 - - 334,449,603.33
1,195,281,882.21 2,530,374,009.14 15,305,668.26 3,740,961,559.61
Financial liabilities
At fair value throug
At amortized cost Total
h profit or loss
As required by standard
Short-term borrowings - 41,815,129.24 41,815,129.24
Financial liabilities held for trading 57,022,555.58 - 57,022,555.58
Notes payable - 149,918,253.31 149,918,253.31
Accounts payable - 748,319,561.21 748,319,561.21
Other payables - 90,080,142.50 90,080,142.50
Current portion of non-current 315,767,431.26
liabilities - 315,767,431.26
Long-term borrowings - 57,884,494.89 57,884,494.89
Lease liabilities - 68,989,111.33 68,989,111.33
Other current liabilities - 1,449,810.18 1,449,810.18
Other non-current liabilities 26,142,283.35 110,254,009.20 136,396,292.55
83,164,838.93 1,584,477,943.12 1,667,642,782.05
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
VIII. Risks Associated with Financial Instruments (cont’d)
1. Classification of financial instruments (cont’d)
The carrying amounts of various financial instruments as at the balance sheet date are
as follows: (cont’d)
2021
Financial assets
At fair value
At fair value thro At amortized through other
Total
ugh profit or loss cost comprehensive
income
As required by As required by
standard standard
Cash and bank balances - 1,664,336,339.35 - 1,664,336,339.35
Financial assets held for 788,185,521.57
trading - - 788,185,521.57
Notes receivable - 13,272,025.04 - 13,272,025.04
Accounts receivable - 741,135,648.09 - 741,135,648.09
Receivables financing - - 30,692,449.25 30,692,449.25
Other receivables - 70,220,378.02 - 70,220,378.02
Current portion of non- -
current assets 108,385,000.00 - 108,385,000.00
Long-term receivables - 143,750.00 - 143,750.00
Other non-current financial 162,523,519.41
assets - - 162,523,519.41
Other non-current assets - 300,150,000.00 - 300,150,000.00
950,709,040.98 2,897,643,140.50 30,692,449.25 3,879,044,630.73
Financial liabilities
At fair value throug
At amortized cost Total
h profit or loss
As required by standard
Short-term borrowings - 228,312,880.73 228,312,880.73
Financial liabilities held for trading 110,746,939.04 - 110,746,939.04
Notes payable - 149,191,690.00 149,191,690.00
Accounts payable - 619,265,856.18 619,265,856.18
Other payables - 100,018,273.09 100,018,273.09
Current portion of non-current
liabilities - 38,495,724.83 38,495,724.83
Long-term borrowings - 325,026,188.49 325,026,188.49
Lease liability - 65,213,555.87 65,213,555.87
Other current liabilities - 9,391,823.29 9,391,823.29
Other non-current liabilities 29,074,219.95 107,104,084.49 136,178,304.44
139,821,158.99 1,642,020,076.97 1,781,841,235.96
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
VIII. Risks Associated with Financial Instruments (cont’d)
2. Transfer of financial assets
Financial assets already transferred but not wholly derecognized
On 31 December 2022, the carrying value of the bank acceptance notes (BAs)
endorsed by the Group to suppliers for the settlement of accounts payable was
RMB1,449,810.18 (31 December 2021: RMB9,391,823.29). The Group believed that
the Group retained almost all their risks and rewards, including the risk of default
associated therewith, so the Group continued to confirm them and the settled accounts
payable associated therewith in full amount. After the endorsement, the Group will no
longer reserve the right to use them, including the right to sell, transfer, or pledge
them to other third parties. On 31 December 2022, the carrying value of the accounts
payable settled with them totaled RMB1,449,810.18 (31 December 2021:
RMB9,391,823.29).
Transferred financial assets that have been wholly derecognized but continue to be
involved
On 31 December 2022, the carrying value of the BAs endorsed by the Group to
suppliers for the settlement of accounts payable was RMB23,495,743.47 (31
December 2021: RMB23,598,786.91). On 31 December 2022, their maturity date
varied from one to 12 months. As stipulated in the Negotiable Instruments Law, if the
accepting bank
refuses to pay, their holders have the right to recourse from the Group ("continue to be
involved"). The Group believed that the Group had transferred almost all their risks
and rewards, so the Group derecognized the carrying value of them and the settled
accounts payable associated therewith. The maximum loss and undiscounted cash
flows from continuing involvement and repurchase were equal to their carrying value.
The Group believed that it was insignificant to continue to involve in fair value.
In 2022, the Group did not confirm the gains or losses on the transfer day. The Group
had no income or expenses recognized in the current year and cumulatively due to
continued involvement in derecognized financial assets. Endorsements occurred
roughly evenly during the year.
3. Financial instrument risks
The Group is faced with various financial instrument risks in its routine activities, mainly
including credit risk, liquidity risk and market risk (including exchange rate risk and interest rate
risk). The Group mainly has the following instruments: cash and bank balances, equity
investment, borrowings, notes receivable, accounts receivable, notes payable and accounts
payable. The risk management strategies adopted by the Group to lower risks associated with
these financial instruments are described below.
VIII. Risks Associated with Financial Instruments (cont’d)
271 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
3. Financial instrument risks (cont’d)
The Group's Board of Directors is fully responsible for the determination of risk management
objectives and policies and assumes ultimate responsibility for such risk management objectives
and policies, but the Board of Directors has authorized the Chief Executive's Office of the Group
to design and implement procedures to ensure the effective execution of risks management
objectives and policies. The Board of Directors reviews the effectiveness of the executed
procedures and the rationality of the risk management objectives and policies through the monthly
reports submitted by the treasury supervisor. The internal auditors of the Group will also audit the
risk management policies and procedures and will report relevant findings to the Audit Committee.
The Group's overall goals for risk management are to develop risk management policies to
minimize risks without unduly affecting the competitiveness and strain capacity of the Group.
Credit Risk
The Group transacts only with recognized and reputable third parties. According to the Group's
policies, credit checks are needed for all customers that require transactions should be conducted
by means of credit. Additionally, the Group performs continuous monitoring of the balance of
accounts receivable to ensure that the Group will not face major bad debt risk. For transactions not
settled in the accounting standard currency of the relevant business unit, unless specifically
approved by the credit control department of the Group, the Group will not provide credit
transaction conditions.
Since the counterparties of cash and bank balances and notes receivable are banks with a good
reputation and high credit rating, the credit risk of such financial instruments is low.
Other financial assets of the Group mainly include accounts receivable, other receivables and
contract assets, the credit risk of which arises from counterparty default, and the maximum risk
exposure is equal to the carrying value of these instruments.
The Group transacts only with recognized and reputable third parties, so no collateral is required.
Credit risk concentration is managed by customer/counterparty, geographic region and industry.
Because the customer base of accounts receivable of the Group is widely dispersed in different
departments and industries, there is no major credit risk concentration within the Group. The
Group does not hold any collateral or other credit enhancement on the balance of accounts
receivable.
Criteria for judging significant increases in credit risk
The Company assesses whether or not the credit risk of the relevant financial instruments has
increased significantly since the initial recognition at each balance sheet date. While determining
whether the credit risk has significantly increased since initial recognition or not, the Company
takes into account the reasonable and substantiated information that is accessible without exerting
undue extra cost or effort, including qualitative and quantitative analysis based on the historical
data of the Company, external credit risk rating, and forward-looking information. Based on the
single financial instrument or the combination of financial instruments with similar characteristics
of credit risk, the Company compares the risk of default of financial instruments on the balance
sheet date with that on the initial recognition date in order to determine changes in the risk of
default during the expected lifetime of financial instruments.
272 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
VIII. Risks Associated with Financial Instruments (cont’d)
3. Financial instrument risks (cont’d)
Credit risk (cont’d)
Definition of credit-impaired financial assets
The standard adopted by the Group to determine whether a credit impairment occurs is consistent
with the internal credit risk management objectives of the relevant financial instrument, taking
into account quantitative and qualitative criteria. When the Group assesses whether the credit
impairment of debtor occurred, the principal factors considered are as follows:
（1） Significant financial difficulty of the issuer or debtor;
（2） Debtors’ breach of contract, such as defaulting or becoming overdue on interest or
principal payments;
（3） The creditor of the debtor, for economic or contractual reasons relating to the debtor’s
financial difficulty, having granted to the debtor a concession that the creditor would not
otherwise consider;
（4） It is becoming probable that the debtor will enter bankruptcy or other financial
restructuring;
（5） The disappearance of an active market for that financial asset because of financial
difficulties of the issuer or debtor;
（6） The purchase or origination of a financial asset at a deep discount that reflects the
incurrence of credit losses.
The credit impairment on a financial asset may be caused by the combined effect of multiple
events and may not be necessarily due to a single event.
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
VIII. Risks Associated with Financial Instruments (cont’d)
3. Financial instrument risks (cont’d)
Liquidity risk
The Group monitors its risk to the shortage of funds using a recurring liquidity
planning tool. This tool considers the maturity profile of its financial instruments and
projected cash flows from operations.
The maturity profile of financial liabilities based on undiscounted contractual cash
flow is summarized as follows:
2022
Within 1 month 1-3 months 3 months-1 year 1-5 years Over 5 years Total
Short-term borrowings 10,109,326.19 13,053,856.47 18,592,633.64 - - 41,755,816.30
Financial liabilities held - -
for trading 57,022,555.58 - - 57,022,555.58
Notes payable - - 149,918,253.31 - - 149,918,253.31
Accounts payable - - 748,319,561.21 - - 748,319,561.21
Other payables - - 90,080,142.50 - - 90,080,142.50
Current portion of 769,865.02 2,725,256.25
non-current liabilities 302,043,449.86 - - 305,538,571.13
Long-term borrowings - - - 58,982,718.09 1,075,526.84 60,058,244.93
Lease liabilities - - - 68,989,111.33 - 68,989,111.33
Other current liabilities - - 1,449,810.18 - - 1,449,810.18
Other non-current - -
liabilities - 26,142,283.35 - 26,142,283.35
10,879,191.21 15,779,112.72 1,367,426,406.28 154,114,112.77 1,075,526.84 1,549,274,349.82
2021
Within 1 month 1-3 months 3 months-1 year 1-5 years Over 5 years Total
Short-term borrowings 190,705,475.51 30,521,787.76 7,394,911.43 - - 228,622,174.70
Financial liabilities held
for trading - - 110,746,939.04 - - 110,746,939.04
Notes payable - - 149,191,690.00 - - 149,191,690.00
Accounts payable - - 619,265,856.18 - - 619,265,856.18
Other payables - - 100,018,273.09 - - 100,018,273.09
Current portion of
non-current liabilities 1,430,597.18 2,498,486.89 37,889,311.44 - - 41,818,395.51
Long-term borrowings - - - 325,847,350.33 3,602,076.70 329,449,427.03
Lease liabilities - - - 65,213,555.87 - 65,213,555.87
Other current liabilities - - 9,391,823.29 - - 9,391,823.29
Other non-current
liabilities - - - 136,178,304.44 - 136,178,304.44
192,136,072.69 33,020,274.65 1,033,898,804.47 527,239,210.64 3,602,076.70 1,789,896,439.15
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
VIII. Risks Associated with Financial Instruments (cont’d)
3. Financial instrument risks (cont’d)
Market Risk
Interest rate risk
The Group’s exposure to risk of changes in market interest rates relates primarily to
the Group’s long-term liabilities with floating interest rates.
The sensitivity analysis of interest rate risks is set out in the following table, reflecting
the impact of reasonable and probable change in interest rates on net profit or loss
(through the impact on floating rate loans) and other comprehensive income (net of
tax) assuming that other variables remain constant.
2022
Increase/
Increase/ (decrease) in
Increase/ Increase/
(decrease) in net other
(decrease) in (decrease) in
comprehensive
basis points total equity
profit or loss income net of
tax
Loans 0.5 (1,458,187.97 ) - (1,458,187.97 )
Loans (0.5) 1,458,187.97 - 1,458,187.97
2021
Increase/
(decrease) in
Increase/ Increase/ Increase/
other
(decrease) in (decrease) in net (decrease) in
comprehensive
basis points profit or loss total equity
income net of
tax
Loans 0.5 (1,361,068.13 ) - (1,361,068.13)
Loans (0.5) 1,361,068.13 - 1,361,068.13
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
VIII. Risks Associated with Financial Instruments (cont’d)
3. Financial instrument risks (cont’d)
Market Risk
Exchange rate risk
The Group is exposed to trading exchange rate risks. Such exposures arise from sales
or purchases by business units in currencies other than the units’ functional
currencies. Approximately 87% (2021：85%) of the Group’s sales are priced in
currencies other than the functional currencies of the business units that incur the
sales, and approximately 13% (2021：15%) of costs are priced in the functional
currencies of the business units.
The sensitivity analysis of exchange rate risks is set out in the following table,
reflecting the impact of reasonable and probable change in the exchange rates of EUR
and USD on net profit or loss and other comprehensive income (net of tax) assuming
that other variables remain constant.
2022
Increase/
Increase/
Increase/ (decrease) in
(decrease) in Increase/
(decrease) in other
exchange rate (decrease) in
net profit or loss comprehensive
(%) total equity
income net of
tax
Stronger RMB against EUR 2 (8,836,102.40 ) - (8,836,102.40 )
Weaker RMB against EUR (2 ) 8,836,102.40 - 8,836,102.40
Stronger RMB against USD 2 (6,699,491.41 ) - (6,699,491.41 )
Weaker RMB against USD (2 ) 6,699,491.41 - 6,699,491.41
2021
Increase/
Increase/
Increase/ (decrease) in
(decrease) in Increase/
(decrease) in other
exchange rate (decrease) in
net profit or loss comprehensive
(%) total equity
income net of
tax
Stronger RMB against EUR 2 (1,228,442.79) - (1,228,442.79)
Weaker RMB against EUR (2 ) 1,228,442.79 - 1,228,442.79
Stronger RMB against USD 2 (5,522,074.97) - (5,522,074.97)
Weaker RMB against USD (2 ) 5,522,074.97 - 5,522,074.97
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
VIII. Risks Associated with Financial Instruments (cont’d)
4. Capital management
The primary objective of the Group’s capital management is to safeguard the Group’s
ability to continue as a going concern and to maintain healthy capital ratios in order to
support its business and maximize shareholders’ value.
The Group manages its capital structure and makes adjustments in the light of changes
in economic conditions and in the risk profiles of relevant assets. To maintain or
adjust the capital structure, the Group may adjust the dividend payment to
shareholders, return capital to shareholders or issue new shares. The Group is not
subject to any externally imposed capital requirements. No changes were made in the
objectives, policies or processes for managing capital during 2022 and 2021.
XI.Disclosure of Fair Values
1. Assets and liabilities measured at fair value
2022
Input applied in the measurement of fair value
Significant
Quoted prices Significant
unobservable Total
in active markets observable inputs
inputs
（Level 1） （Level 2） （Level 3）
Continuous measurement of
fair value
Financial assets held for
trading 860,832,278.88 - - 860,832,278.88
Receivables financing - 15,305,668.26 - 15,305,668.26
Other non-current financial
assets 28,708,356.60 99,633,064.36 206,108,182.37 334,449,603.33
889,540,635.48 114,938,732.62 206,108,182.37 1,210,587,550.47
Input applied in the measurement of fair value
Significant
Quoted prices Significant
unobservable Total
in active markets observable inputs
inputs
（Level 1） （Level 2） （Level 3）
Continuous measurement of
fair value
Financial liabilities held for
trading - - 57,022,555.58 57,022,555.58
Other non-current liabilities - 1,298,626.48 135,097,666.07 136,396,292.55
- 1,298,626.48 192,120,221.65 193,418,848.13
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
IX. Disclosure of Fair Values (cont’d)
1. Assets and liabilities measured at fair value (cont’d)
2021
Input applied in the measurement of fair value
Significant Significant
Quoted prices
observable unobservable Total
in active markets
inputs inputs
（Level 1） （Level 2） （Level 3）
Continuous measurement of fair
value
Financial assets held for trading 775,249,020.94 - 12,936,500.63 788,185,521.57
Receivables financing - 30,692,449.25 - 30,692,449.25
Other non-current financial assets 5,640,775.44 - 156,882,743.97 162,523,519.41
780,889,796.38 30,692,449.25 169,819,244.60 981, 401,490.23
Input applied in the measurement of fair value
Quoted prices Significant Significant
in active observable unobservable Total
markets inputs inputs
（Level 1） （Level 2） （Level 3）
Continuous measurement of fair
value
Financial liabilities held for trading - - 110, 746,939.04 110, 746,939.04
Other non-current liabilities - - 136,178,304.44 136,178,304.44
- - 246,925,243.48 246,925,243.48
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
IX. Disclosure of Fair Values (cont’d)
2 Assets and liabilities disclosed at fair value
2022
Input applied in the measurement of fair value
Significant
Quoted prices Significant
in active observable Total
unobservable
markets inputs
inputs
（Level 1） （Level 2） （Level 3）
Long-term receivables - - 1,305,000.00 1,305,000.00
Long-term borrowings - 57,884,494.89 - 57,884,494.89
Current portion of non-current assets - - 1,463,750.00 1,463,750.00
Current portion of non-current
liabilities - 315,767,431.26 - 315,767,431.26
- 373,651,926.154 2,768,750.00 376,420,676.15
2021
Input applied in the measurement of fair value
Quoted prices Significant Significant
in active observable unobservable Total
markets inputs inputs
（Level 1） （Level 2） （Level 3）
Long-term receivables - - 143,750.00 143,750.00
Long-term borrowings - 325,026,188.49 - 325,026,188.49
Current portion of non-current assets 4,595,000.00 4,595,000.00
Current portion of non-current
liabilities 21,342,646.25 - 21,342,646.25
- 346,368,834.74 4,738,750.00 351,107,584.74
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
IX. Disclosure of Fair Values (cont’d)
3. Estimation of fair value
Fair value of financial instruments
The management has assessed cash and bank balances, notes receivable, accounts
receivable, notes payable and accounts payable, and because the remaining maturity is
not long, their fair value is similar to their carrying value.
In a fair transaction, the fair value of financial assets and financial liabilities is
determined by the amount of voluntary asset exchange or debt redemption between
the parties to the transaction, rather than the amount in the case of force sale or
liquidation. The following methods and assumptions are used to estimate the fair
value.
The fair value of long-term receivables and long- and short-term borrowings is
determined by the discounted future cash flow method, where the market yield of
other financial instruments with similar contract terms, credit risks and remaining
maturity serves as the discount rate. On 31 December 2022, the result of the self-
default risk assessment of long- and short-term borrowings was not significant.
The fair values of unlisted equity investments have been estimated using a market-
based valuation technique based on assumptions that are not supported by observable
market prices or rates. The valuation requires the Group to determine comparable
listed companies based on industry, size, leverage and strategy, and to calculate an
appropriate price multiple for each comparable company identified. They are
adjusted for considerations such as illiquidity and size differences between the
comparable companies based on company-specific facts and circumstances. The
Group believes that the estimated fair values resulting from the valuation technique
and the related changes in fair values are reasonable, and that they were the most
appropriate values at the balance sheet date.
4. Unobservable inputs
Below is a summary of the significant unobservable inputs to the fair value
measurement of Level 3:
Closing Valuation Unobservable
Range
fair value technique inputs
Other non-current Option pricing
17,530,308.16 Volatility 39.12%-44.63%
financial assets model
Other non-current Comparison Liquidity
188,577,874.21 10.00%-20.00%
financial assets approach discount
Financial liabilities Discounted cash Weighted
57,022,555.58 4.48%
held for trading flow method average cost
Other non-current Discounted cash Weighted
135,097,666.07 4.76%-14.10%
liabilities flow method average cost
280 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
IX. Disclosure of Fair Values (cont’d)
5. Reconciliation in fair value measurement
Reconciliation of continuous fair value measurements categorized within Level 3 of
the fair value hierarchy:
2022
Transfer out of Purchase Disposal Settlement Closing Change in
unrealized gai
ns
Opening
and losses for
the period of
Total current gains and losses assets
Level 3 ThroughThrough other balance held at end of
profit or loss comprehensive period through
balance
income profit or loss
Financial
assets
held for
trading 12,936,500.63 - (8,292,000.00) - - - (4,644,500.63) - -
Other non-
current
financial
assets 156,882,743.97 (94,496,262.63) 45,117,740.43 378,960.60 98,225,000.00 - - 206,108,182.37 45,117,740.43
-
169,819,244.60 (94,496,262.63) 36,825,740.43 378,960.60 98,225,000.00 (4,644,500.63) 206,108,182.37 45,117,740.43
Change in
unrealized gains
Opening Total current gains and losses Purchase Disposal Settlement Closing and losses for the
period of
liabilities
held at end of
Through Through other period through
balance comprehensive balance
profit or loss profit or loss
income
Financial
liabilities
held for
trading 110,746,939.04 (164,544.82) - - - (53,559,838.64) 57,022,555.58 (164,544.82)
Other non-
current l
iabilities 136,178,304.44 (4,118,251.52) 437,613.15 2,600,000.00 - - 135,097,666.07 (4,118,251.52)
246,925,243.48 (4,282,796.34) 437,613.15 2,600,000.00 - (53,559,838.64) 192,120,221.65 (4,282,796.34)
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
IX. Disclosure of Fair Values (cont’d)
5. Reconciliation in fair value measurement (cont’d)
Reconciliation of continuous fair value measurements categorized within Level 3 of
the fair value hierarchy: (cont’d)
2021
Change in
unrealized gains
Opening Total current gains and losses Purchase Closing
and losses for the period of
Disposal
assets
Through other held at end of
Through period through
balance comprehensive Balance
profit or loss profit or loss
income
Financial
liabilities
- - -
held for
traing 13,181,681.67 (245,181.04) 12,936,500.63 13,181,681.67
Other non-
current
financial - -
liabilities 25,029,844.93 (559,232.00) 132,412,131.04 156,882,743.97 25,029,844.93
38,211,526.60 (804,413.04) 132,412,131.04 - 169,819,244.60 38,211,526.60
Change in
unrealized gains
Opening Total current gains and losses Purchase Disposal Settlement Closing and losses for the
period of
liabilities
held at end of
Through other
balance Through comprehensive balance period through
profit or loss profit or loss
income
Financial
liabilities
held for
trading 41,408,109.80 95,161,739.92 (3,73 9,957.81) - (36,121,968.12) 14,039,015.25 110,746,939.04 95,161,739.92
Other non-
current l
iabilities 68,737,415.25 (18,949,558.78) (4,342,115.80) 104,771,579.02 - (14,039,015.25) 136,178,304.44 (18,949,558.78)
110,145,525.05 76,212,181.14 (8,082,073.61) 104,771,579.02 (36,121,968.12) - 246,925,243.48 76,212,181.14
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
IX. Disclosure of Fair Values (cont’d)
5. Reconciliation in fair value measurement (cont’d)
In the continuous fair value measurement at Level 3, gains and losses through profit
or loss relating to financial assets and non-financial assets is analyzed as follows:
2022
Gains and losses Gains and losses
relating to financial relating to non-
assets financial assets
Total gains and losses through profit or loss 36,825,740.43 -
Change in unrealized gains and losses for the period
of assets held at end of period through profit or loss 45,117,740.43 -
2021
Gains and losses Gains and losses
relating to financial relating to non-
assets financial assets
Total gains and losses through profit or loss 38,211,526.60 -
Change in unrealized gains and losses for the period
of assets held at end of period through profit or loss 38,211,526.60 -
In the continuous fair value measurement at Level 3, gains and losses through profit
or loss relating to financial assets and non-financial assets is analyzed as follows:
2022
Gains and losses Gains and losses
relating to financial relating to non-
liabilities financial liabilities
Total gains and losses through profit or loss (4,282,796.34)
Change in unrealized gains and losses for the period
of assets held at end of period through profit or loss (4,282,796.34)
2021
Gains and losses Gains and losses
relating to financial relating to non-
liabilities financial liabilities
Total gains and losses through profit or loss 76,212,181.14
Change in unrealized gains and losses for the period
of assets held at end of period through profit or loss 76,212,181.14
6. Transfers between levels of fair value measurement
In 2022, due to the recent financing, the fair value measurement of the trading
financial assets held by the Group is transfer from the third level to the second level,
and the conversion amount is RMB 94,496,262.63. There are no other material
transfer during the year. (2021: No such transfers in the Reporting Period.)
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XII. Relationships and Transactions with Related Parties
1. Controlling Shareholder
Interest in the
Relationship with the Company
Company (%)
Tang Zhuolin One of the Company’s controlling shareholders and
21.81
(individual) actual controllers
Tang Zhuomian One of the Company’s controlling shareholders and
7.81
(individual) actual controllers
The ultimate controllers of the Company are Tang Zhuolin and Tang Zhuomian.
2. Subsidiaries
See Note VII.1.
3. Associates
See Note VII.2.
4. Other related parties
Relationship with the Company
Qiu Yezhi Director and General Manager
Xie Weiwei Director and Deputy General Manager
Mai Zhirong Independent Director (left on August 12, 2022)
Peng Xiaowei Independent Director (left on August 12, 2022)
He Weifeng Independent Director (left on August 12, 2022)
Chen Huiyi Chairman of the Supervisory Committee
Zhao Xiuhe Supervisor
He Baohua Supervisor
Zhou Wenhui Director and Board Secretary (left on July 26, 2022)
Shao Yongfeng Chief Financial Officer and Vice President
Li Ketian Independent Director (Started on August 12, 2022)
Liu Da Independent Director (Started on August 12, 2022)
Tu Haichuan Independent Director (Started on August 12, 2022)
Feng Jia Director and Board Secretary (Started on July 26, 2022)
5. Major transactions between the Group and related parties
（1） Salary of key management
2022 2021
Salary of key management 12,448,768.93 13,521,226.06
284 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XIII. Share-based Payments
1. Overview
2022 2021
Total equity instruments granted 29,490,000.00 26,840,000.00
2022 2021
Total employee services exchanged with share-based
payments 70,041,990.38 40,413,913.40
Equity-settled share-based payments are as follows:
2022 2021
Cumulative amount of equity-settled share-based
payments recognized in capital surplus 70,041,990.38 40,413,913.40
Total costs of equity-settled share-based payments 29,628,076.98 15,243,506.90
The fair value of equity instruments at the date of grant was determined at that date.
The fair value of the first grant of restricted shares in 27 March 2020 was RMB
4.38/share (RMB 60.07 million). The fair value of the reserved restricted shares in 29
December 2020 was RMB 4.44/share (RMB 14.59 million) and the fair value of the
restricted shares in 21 March 2022 was RMB 4.57/share (RMB9.91 million). The
number of exercisable equity instruments at each balance sheet date during the vesting
period is determined taking into account the separation rate, the company
performance requirements and the individual performance requirements.
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XI. Share-based Payments (cont’d)
2. Share-based payment plan
On 27 March 2020, the Company convened the 44th (Extraordinary) Meeting of the
Third Board of Directors, where the Proposal on Granting Restricted Shares to
Awardees was approved, and the Board of Directors agreed to grant 22.85 million
restricted shares to 42 awardees. The grant date for the first grant of restricted shares
was 27 March 2020. On 8 June 2020, the Company approved the Proposal on
Adjusting Matters Related to the 2020 Restricted Share Incentive Plan, the number of
awardees was adjusted to 40, and the number of granted restricted shares was adjusted
to 22.6 million. The exercise price of this restricted share grant was RMB1. As at 31
December 2020, the accumulated amount of subscription funds received by the
Company for the first grant of restricted shares under this incentive plan totaled
RMB22,600,000.00.
As authorized by the first Extraordinary Meeting of the Third Board of Directors in
2020, on 29 December 2020, the Company convened the 4th (Extraordinary) Meeting
of the Fourth Board of Directors, where the Proposal on Granting Reserved Restricted
Shares to Awardees was approved, and the Board of Directors agreed to grant 4.24
million restricted shares to 18 awardees. The grant date was 29 December 2020. As at
31 December 2021, the accumulated amount of subscription funds received by the
Company for the reserved restricted shares under this incentive plan totaled
RMB4,240,000.00.
The maximum number of unexercised share options currently available under the plan
is equal to 10% of the shares issued by the Company. According to the plan, the
maximum number of shares in the share options granted to each eligible grantee
during any period spanning 12 months is 1% of the shares issued by the Company at
any time. Any grant of share options above this limit shall be subject to the approval
of the General Meeting.
The arrangements for unlocking the restricted shares under the restricted share
incentive plan are as follows:
Unlocking Percentage of
Time of unlocking
arrangements unlocking
From the first trading day 12 months after the date of listing of the
1st unlocking first grant of/reserved restricted shares to the day of the last trading
20%
period day within 24 months after the date of listing of the first grant of
restricted shares
From the first trading day 24 months after the date of listing of the
2nd unlocking first grant of/reserved restricted shares to the day of the last trading
40%
period day within 36 months from the date of listing of the first grant of
restricted shares
From the first trading day 36 months after the date of listing of the
3rd unlocking first grant of/reserved restricted shares to the day of the last trading
40%
period day within 48 months from the date of listing of the first grant of
restricted shares
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XI. Share-based Payments (cont’d)
2. Share-based payment plan (cont’d)
The unlocking conditions of the restricted share incentive plan are as follows:
In addition to meeting the relevant requirements for granting, awardees must also
meet the following unlocking conditions on the sale of granted restricted shares:
Performance appraisal requirements at the company level:
Unlocking period Performance appraisal objectives
The adjusted average net profit for 2018 and 2019 is used
1st unlocking period as the base of the performance appraisal, and the growth
rate of net profit in 2020 shall not be less than 20%
The adjusted average net profit for 2018 and 2019 is used
2nd unlocking period as the base of the performance appraisal, and the growth
rate of net profit in 2021 shall not be less than 35%
The adjusted average net profit for 2018 and 2019 is used
3rd unlocking period as the base of the performance appraisal, and the growth
rate of net profit in 2022 shall not be less than 55%
The net profit during the appraisal period from 2020 to 2022 mentioned above refers
to the audited consolidated statement of net profit attributable to the shareholders of
the Company excluding the impact of share-based payments under this and other
equity incentive plans. The base of performance appraisal is the average net profit (the
net profit attributable to shareholders of the listed company in consolidated
statements) of the Company for 2018 and 2019 after deducting the relevant financial
impacts of Beijing Pride New Energy Battery Technology Co., Ltd.
Performance appraisal requirements at the personal level:
The performance appraisal results of the awardees are divided into Levels A, B, C and
D. The non-resalable restricted shares of those awardees with appraisal results of
Level D will be repurchased and retired by the Company, and the repurchase price is
the grant price.
As authorized by the first Extraordinary Meeting of the Fourth Board of Directors in
2022, on 21 March 2022, the Company convened the 15th (Extraordinary) Meeting of
the Fourth Board of Directors, where the Proposal on Granting Restricted Shares to
Awardees was approved, and the Board of Directors agreed to grant 2.65 million
restricted shares to 7 awardees. The grant date was 21 March 2022. As at 31
December 2022, the accumulated amount of subscription funds received by the
Company for the reserved restricted shares under this incentive plan totaled
RMB2,650,000.00.
287 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XI. Share-based Payments (cont’d)
2. Share-based payment plan (cont’d)
The arrangements for unlocking the restricted shares under the restricted share
incentive plan are as follows:
Unlocking Percentage of
Time of unlocking
arrangements unlocking
From the first trading day 12 months after the date of listing of the
1st unlocking first grant of restricted shares to the day of the last trading day
20%
period within 24 months after the date of listing of the first grant of
restricted shares
From the first trading day 24 months after the date of listing of the
2nd unlocking first grant of restricted shares to the day of the last trading day
40%
period within 36 months from the date of listing of the first grant of
restricted shares
From the first trading day 36 months after the date of listing of the
3rd unlocking first grant of restricted shares to the day of the last trading day
40%
period within 48 months from the date of listing of the first grant of
restricted shares
The unlocking conditions of the restricted share incentive plan are as follows:
In addition to meeting the relevant requirements for granting, awardees must also
meet the following unlocking conditions on the sale of granted restricted shares:
Performance appraisal requirements at the company level:
Unlocking period Performance appraisal objectives
The average net profit for 2020 and 2021 is used as the
1st unlocking period base, and the growth rate of net profit in 2022 shall not
be less than 10%
The average net profit for 2020 and 2021 is used as the
2nd unlocking period base, and the growth rate of net profit in 2023 shall not
be less than 20%
The average net profit for 2020 and 2021 is used as the
3rd unlocking period base, and the growth rate of net profit in 2024 shall not
be less than 30%
The above assessment annual net profit index refers to the net profit attributable to the
shareholders of the Company in the audited consolidated statements and excluding the
impact of the share payment expenses of this and other equity incentive plans as the
calculation basis.
Performance appraisal requirements at the personal level:
The performance appraisal results of the awardees are divided into Levels A, B, C and
D. The non-resalable restricted shares of those awardees with appraisal results of
Level D will be repurchased and retired by the Company, and the repurchase price is
the grant price.
XIV. Commitments and Contingent Events
288 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
1. Significant commitments
As at the balance sheet date, the Group had no commitments which were required to
be disclosed.
2. Contingent Events
As at the balance sheet date, the Group had no contingent events which were required
to be disclosed.
XV. Events after the Balance Sheet Date
As at the balance sheet date, the Group had no events after the balance sheet date
which were required to be disclosed.
XVI. Other Significant Matters
1. Segment reporting
Operating segment
For management purposes, the Group divides its business in to two operating
segments—domestic and overseas. Operating segment
2022
Item Domestic entities Overseas entities Offset Total
Operating revenue 1,581,783,109.71 2,756,556,385.95 (445,630,986.02) 3,892,708,509.64
Cost of sales 1,081,978,416.13 2,141,063,654.54 (389,736,322.13) 2,833,305,748.54
Total assets 5,407,121,469.14 2,914,415,535.60 (1,392,959,889.64) 6,928,577,115.10
Total liabilities 1,489,530,074.02 1,952,540,777.80 (779,488,999.67) 2,662,581,852.15
2021
Item Domestic entities Overseas entities Offset Total
Operating revenue 1,432,489,346.39 2,404,840,482.92 (312,595,045.37) 3,524,734,783.94
Cost of sales 963,221,707.93 1,820,431,964.95 (228,581,613.09) 2,555,072,059.79
Total assets 5,013,665,276.72 2,480,339,949.36 (1,136,836,390.89) 6,357,168,835.19
Total liabilities 1,385,366,306.26 1,778,520,920.31 (660,293,937.05) 2,503,593,289.52
289 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XIV. Other Significant Matters (cont’d)
2. Leases
(1) As lessee
2022
Interest expense on lease liabilities 2,474,602.57
Short term lease expense through profit or loss adopting
simplified approach 1,205,273.76
Total cash outflows related to lease 29,438,261.70
Assets leased by the Group include houses and buildings, and transportation equipment used
in the course of business,the lease term of houses,buildings and machinery is usually 8 years,
and the lease term of transportation equipment is usually 3 years.
Significant operating leases
According to the lease contracts signed with the lessors, minimum lease payments
under irrevocable operating leases falling due are as follows:
2022
Within 1 year (inclusive) 25,598,122.85
1-2 years (inclusive of 2 years) 23,464,449.78
2-3 years (inclusive of 3 years) 20,701,964.22
Over 3 years 37,161,132.39
106,925,669.24
Other information on lease
For the right-of-use assets, see Note V.17; for the simplified approach on short-term leases
and leases of assets of low value, see Note III.27; for lease liabilities, see Note V.31&34.
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XVII. Notes to Major Items in the Company Financial Statements
1. Account Receivable
Accounts receivable are interest-free. The aging of accounts receivable is analyzed as
follows:
2022 2021
Within 1 year 212,140,018.11 114,456,911.82
1-2 years 39,011,159.02 38,918,748.38
2-3 years 1,456,776.00 2,987,247.70
3-4 years 1,688,672.44 -
4-5 years - 1,454,595.00
Over 5 years 3,004,100.00 1,556,499.20
257,300,725.57 159,374,002.10
Less: allowances for doubtful accounts
receivable 4,454,823.68 4,670,936.43
252,845,901.89 154,703,065.67
2022
Gross amount Allowance Carrying amount
Amount Percentage Amount Percentage
（%） （%）
Accounts receivable for
which allowances are
established individually 3,004,100.00 1.17 3,004,100.00 100 -
Accounts receivable for
which allowances are
established by group with
similar credit risk
characteristics 254,296,625.57 98.83 1,450,723.68 0.57 252,845,901.89
257,300,725.57 100.00 4,454,823.68 252,845,901.89
2021
Carrying
Gross amount Allowance amount
Amount Percentage Amount Percentage
（%） （%）
Accounts receivable for
which allowances are
established individually 3,011,094.20 1.89 3,011,094.20 100 -
Accounts receivable for
which allowances are
established by group
with similar credit risk
characteristics 156,362,907.90 98.11 1,659,842.23 1.06 154,703,065.67
159,374,002.10 100.00 4,670,936.43 154,703,065.67
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XV. Notes to Major Items in the Company Financial Statements (cont’d)
1. Accounts receivable (cont’d)
As at 31 December 2022, accounts receivable for which allowances are established
individually are as follows:
ECL
Gross amount Allowance Reason for allowance
（%）
Customer’s inability to
Customer 1 939,000.00 939,000.00 100.00
settle the amount due
Customer’s inability to
Customer 2 641,600.00 641,600.00 100.00
settle the amount due
Customer’s inability to
Customer 3 608,800.00 608,800.00 100.00
settle the amount due
Customer’s inability to
Customer 4 516,000.00 516,000.00 100.00
settle the amount due
Customer’s inability to
Customer 5 283,000.00 283,000.00 100.00
settle the amount due
Customer’s inability to
15,700.00 15,700.00 100.00
Customer 6 settle the amount due
3,004,100.00 3,004,100.00
As at 31 December 2021, accounts receivable for which allowances are established
individually are as follows:
ECL
Gross amount Allowance Reason for allowance
（%）
Customer’s inability to
Customer 1
939,000.00 939,000.00 100.00 settle the amount due
Customer’s inability to
Customer 2
641,600.00 641,600.00 100.00 settle the amount due
Customer’s inability to
Customer 3
608,800.00 608,800.00 100.00 settle the amount due
Customer’s inability to
Customer 4
515,595.00 515,595.00 100.00 settle the amount due
Customer’s inability to
Customer 5
283,000.00 283,000.00 100.00 settle the amount due
Customer’s inability to
Other Companies
23,099.20 23,099.20 100.00 settle the amount due
3,011,094.20 3,011,094.20
Accounts receivable for provision for bad debts according to the combination of credit risk
characteristics:
2022 2021
Estimated book ECL(%) Expected credit Estimated book ECL(%) Expected credit
balance of losses within the balance of default losses within
default exsisting period the exsisting
period
Within 1 year 212,140,018.11 0.11 240,789.05 114,456,911.82 0.34 390,298.12
1-2 years 39,011,159.02 0.11 42,024.92 38,918,748.38 0.94 365,205.21
2-3 years 3,145,448.44 37.13 1,167,909.71 2,987,247.70 30.27 904,338.90
254,296,625.57 1,450,723.68 156,362,907.90 1,659,842.23
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XV. Notes to Major Items in the Company Financial Statements (cont’d)
1. Accounts receivable (cont’d)
Movements in allowances for doubtful accounts receivable are as follows:
Opening Established in the Written off in the Reversed in the
Closing balance
balance period period period
2022 4,670,936.43 - - (216,112.75) 4,454,823.68
2021 6,654,009.15 84,975.11 (1,369,120.41) (698,927.42) 4,670,936.43
Top 5 of accounts receivable are as follows:
2022 As a % of the Allowance
closing balance of
total accounts
receivable
Dongfang Precision (HK) 125,873,821.40 48.92 -
Dongfang Precision (Netherland) 86,838,377.31 33.75 -
EDF 11,999,541.34 4.66 -
Customer 12 9,074,479.80 3.53 74,410.73
Customer 13 5,630,879.10 2.19 46,173.21
239,417,098.95 93.05 120,583.94
2021 As a % of the Allowance
closing balance of
total accounts
receivable
Dongfang Precision (HK) 77,716,283.13 48.76 -
Dongfang Precision (Netherland) 33,917,508.35 21.28 -
Customer 18 7,126,000.00 4.47 145,370.40
Customer 19 4,558,625.50 2.86 92,995.96
Customer 20 2,730,000.00 1.71 55,692.00
126,048,416.98 79.08 294,058.36
293 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XV. Notes to Major Items in the Company Financial Statements (cont’d)
2. Other receivables
2022 2021
Other receivables 577,361,759.62 444,140,266.79
Dividends receivable 17,840,000.00 -
595,201,759.62 444,140,266.79
The aging of other receivables is analyzed as follows:
2022 2021
Within 1 year 139,336,039.54 442,798,058.31
1-2 years 437,233,397.22 548,952.82
2-3 years 117,761.18 52,186.57
3-4 years 24,092.04 288,333.00
4-5 years 217,983.00 1,495,285.41
Over 5 years 1,587,511.18 112,475.22
578,516,784.16 445,295,291.33
Less: allowances for doubtful other
receivables 1,155,024.54 1,155,024.54
577,361,759.62 444,140,266.79
Other receivables are classified by nature as follows:
2022 2021
Internal transactions with related parties 562,762,515.20 438,222,987.97
Prepaid service charges 2,772,188.53 3,277,042.22
Security deposits 2,089,429.81 1,427,885.96
Employee loans and petty cash 1,806,931.45 1,722,721.94
Performance compensation 500,000.00 500,000.00
Others 8,585,719.17 144,653.24
578,516,784.16 445,295,291.33
294 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XV. Notes to Major Items in the Company Financial Statements (cont’d)
2. Other receivables (cont’d)
Movements in allowances for doubtful other receivables that are established based on
the 12-month ECL and the lifetime ECL are as follows:
2022
Stage 1 Stage 2 Stage 3 Total
Financial assets
with credit
12-month ECL Lifetime ECL
impairment
(lifetme ECL)
Opening and 655,024.54 500,000.00 1,155,024.54
-
closing balance
2021
Stage 1 Stage 2 Stage 3 Total
Financial assets
with credit
12-month ECL Lifetime ECL
impairment
(lifetime ECL)
Closing balance 655,024.54 500,000.00 - 1,155,024.54
Movements in allowances for doubtful other receivables are as follows:
Established in Reversed in
Opening balance Closing balance
the period the period
2022 1,155,024.54 - - 1,155,024.54
2021 1,155,024.54 - - 1,155,024.54
XV. Notes to Major Items in the Company Financial Statements (cont’d)
295 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
2. Other receivables (cont’d)
As at 31 December 2022, top 5 of other receivables are as follows:
As a % of
Closing
2022 total other Nature Age balance of
receivables allowance
Within 1
Current
year;1-2 -
account
Hainan Yineng 466,903,350.55 80.71 years
Within 1
Current
year;1-2 -
account
Yinglian Digital 52,856,671.23 9.14 years
Within 1
Current
Dongfang Digicom year;1-2 -
account
(Guangdong) 25,031,945.37 4.33 years
Within 1
Current
Dongfang Precision year;1-2 -
account
(Netherland) 6,608,152.98 1.14 years
Within 1
Current
year;1-2 -
account
Dongfang Digicom 6,424,864.39 1.11 years
557,824,984.52 96.43 -
As at 31 December 2021, top 5 of other receivables are as follows:
As a % o
f
Closing
total other
2021 Nature Age balance of
receivable
allowance
s
Current Within 1
-
Hainan Yineng 412,234,185.81 92.58 account year
Current Within 1
-
Yinglian Digital 15,156,527.09 3.40 account year
Dongfang Digicom Current Within 1
-
(Guangdong) 4,704,601.17 1.06 account year
Current Within 1
-
Dongfang Digicom 3,065,170.33 0.69 account year
Current Within 1
Shunyi Investment 1,698,000.00 0.38 account year -
436,858,484.40 98.11 -
296 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XV. Notes to Major Items in the Company Financial Statements (cont’d)
3. Long-term equity investments
2022
Opening Change in the period Period-end
Opening Reduction Write-off impairm Closing
impairment Additional in Change in other e ent Closing impairment
balance allowance investment investment quity balance allowance
Subsidiaries
Dong Fang Precision (HK) Limited 1,856,010.00 - - - - 1,856,010.00 -
Dongfang Precision (Netherland) 307,666.80 - - - 660,101.01 - 967,767.81 -
Guangdong Fosber Intelligent Equipment
Co., Ltd. 54,242,190.72 - - - 1,033,279.72 - 55,275,470.44 -
Suzhou Shunyi Investment Co., Ltd. 305,584,828.17 - - - - - 305,584,828.17 -
Suzhou Parsun Power Machine Co., Ltd. 28,720,378.11 (45,303,485.99) - - 2,836,047.20 - 31,556,425.31 (45,303,485.99)
Foshan Yinglian Digital Printing
Equipment Co., Ltd. 21,903,462.34 - - - - - 21,903,462.34 -
Dongfang Digicom Data Technology Co.,
Ltd. 3,710,751.60 - - - 1,708,976.31 - 5,419,727.91 -
Dongfang Digicom Data Technology
(Guangdong) Co., Ltd. 1.00 - - - 470,212.33 - 470,213.33 -
Hainan Yineng Investment Co., Ltd. 100,000,000.00 - - - 1,572,033.67 - 101,572,033.67 -
Italy EDF 977,696.67 - - - 220,033.67 - 1,197,730.34 -
Tianjin Hangchuang 20,000,000.00 - - - - - 20,000,000.00 -
Shenzhen Wonder Printing System Co.,Ltd - - 173,800,000.00 - - - 173,800,000.00 -
-
537,302,985.41 (45,303,485.99) 173,800,000.00 - 8,500,683.91 - 719,603,669.32 (45,303,485.99)
Opening Change in the period Period-end
Opening
impairment Investment income Closing Closing
balance allowance under equity method Other investment change balance impairment allowance
Associates/joint ventures
Guangdong Jaten Robot & Automation
Co., Ltd. 74,780,345.62 - 3,143,695.45 8,609,443.05 86,533,484.12 -
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XV. Notes to Major Items in the Company Financial Statements (cont’d)
3. Long-term equity investments (cont’d)
2021
Opening Change in the period Period-end
Opening Additional Reduction Impairment Closing Closing
balance impairment allowance investment in investment allowance balance impairment allowance
Subsidiaries
Dong Fang Precision (HK) Limited 1,856,010.00 - - - - 1,856,010.00 -
Dongfang Precision (Netherland) 307,666.80 - - - - 307,666.80 -
Guangdong Fosber Intelligent Equipment Co., Ltd. 16,738,279.20 - 36,121,968.12 - - 54,242,190.72 -
Suzhou Shunyi Investment Co., Ltd. 305,584,828.17 - - - - 305,584,828.17 -
Suzhou Parsun Power Machine Co., Ltd. 106,359,575.73 (61,855,054.35) - (81,305,560.15) 16,551,568.36 28,720,378.11 (45,303,485.99)
Foshan Yinglian Digital Printing Equipment Co., - - 21,903,462.34 -
Ltd. 21,903,462.34 - -
Dongfang Digicom Data Technology Co., Ltd. 3,000,000.00 - - - - 3,710,751.60 -
Dongfang Digicom Data Technology (Guangdong) - - 1.00 -
Co., Ltd. - - 1.00
Hainan Yineng Investment Co., Ltd. - - 100,000,000.00 - - 100,000,000.00 -
Italy EDF - - - - - 977,696.67 -
Tianjin Hangchuang - - 20,000,000.00 - - 20,000,000.00 -
-
455,749,822.24 (61,855,054.35) 156,121,969.12 (81,305,560.15) 16,551,568.36 537,302,985.41 (45,303,485.99)
Opening Change in the period Period-end
Opening
impairment Investment income Closing Closing
balance allowance under equity method balance impairment allowance
Associates/joint ventures
Guangdong Jaten Robot & Automation
Co., Ltd. 70,900,088.92 - 3,880,256.70 74,780,345.62 -
298 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XV. Notes to Major Items in the Company Financial Statements (cont’d)
4. Operating revenue and costs
2022 2021
Revenue Costs Revenue Costs
Principal operations 451,368,550.29 269,503,960.08 384,635,560.97 244,033,927.30
Other operations 69,673,546.95 3,323,764.83 102,121,739.94 12,332,173.69
521,042,097.24 272,827,724.91 486,757,300.91 256,366,100.99
Operating revenue is as follows:
2022 2021
Revenue arising from contracts with
customers 518,957,952.12 482,430,794.95
Lease revenue 2,084,145.12 4,326,505.96
521,042,097.24 486,757,300.91
Breakdown of operating revenue arising from contracts with customers is as follows:
2022
Reporting segments Total
Principal place of business
Mainland China 152,236,401.33
Other regions 366,721,550.79
518,957,952.12
Principal product type
Goods 450,366,148.27
Services 26,023,502.28
Interest income 38,612,370.94
Others 3,955,930.63
518,957,952.12
By revenue recognition time
Revenue recognition at a point of time
Sale of goods 450,366,148.27
Others 3,955,930.63
454,322,078.90
Revenue recognition for a period of time
Rendering of services 26,023,502.28
Interest income 38,612,370.94
64,635,873.22
518,957,952.12
299 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XV. Notes to Major Items in the Company Financial Statements (cont’d)
4. Operating revenue and costs (cont’d)
Revenue recognized in the period included in the book value of contractual liabilities at the
beginning of year is as follows:
2022
Advances on sales 18,352,946.11
The Company’s information about contractual performance obligations is as follows:
Sale of manufactured goods
Contractual performance obligations are fulfilled when delivering manufactured
goods to customers, and normally the payment in advance for some customers are
needed.
Rendering of services
Contractual performance obligations are fulfilled during the rendering of services.
The expected time for recognizing in revenue the total transaction price allocated to
outstanding (or partly outstanding) contractual performance obligations as at the
period-end is as follows:
2022 2021
Within 1 year 29,803,024.37 21,697,782.14
5. Investment income
2022 2021
Dividends under cost method 17,840,000.00 18,992,000.00
Income from disposal of long-term equity - 21,681,323.17
investments
Income from financial assets held for trading 3,827,951.76 13,531,732.69
Income from long-term equity investments
measured at equity method 3,143,695.45 3,880,256.70
24,811,647.21 58,085,312.56
300 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XV. Notes to Major Items in the Company Financial Statements (cont’d)
6. Major transactions between the Company and related parties
(1) Transaction of goods and services with related parties
Purchases of goods and services from related parties
2022 2021
Fosber Group Purchases of goods - 4,134.82
Italy EDF Purchases of goods 2,868,721.41 1,423,463.44
2,868,721.41 1,427,598.26
Sales of goods and services to related parties
Nature of transaction 2022 2021
Sales of goods
Dongfang Precision (HK) Sales of goods 171,028,352.25 104,120,103.27
Dongfang Precision (Netherland) Sales of goods 56,133,478.23 34,585,113.86
Fosber ASIA Sales of goods 4,950,006.92 7,016,887.07
Italy EDF Sales of goods 12,834,213.72 8,028,881.97
244,946,051.12 153,750,986.17
Rendering of services
Hainan Yineng Rendering of services 18,273,836.24 45,999,823.31
Fosber ASIA Rendering of leasing 2,064,483.40 4,297,934.53
Italy EDF Rendering of services - 631,728.39
Fosber ASIA Rendering of services 1,628,341.84 246,169.29
Yinglian Digital Rendering of services 153,842.22 105,216.14
Dongfang Digicom Rendering of services - 54,665.21
Dongfang Digicom (Guangdong) Rendering of services 246,417.10 9,312.91
22,366,920.80 51,344,849.78
301 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XV. Notes to Major Items in the Company Financial Statements (cont’d)
6. Major transactions between the Company and related parties (cont’d)
(2) Interest income of related parties
Nature of transaction 2022 2021
Hainan Yineng Interest income 34,878,049.06 30,593,754.97
Yinglian Digital Interest income 2,686,891.68 227,996.66
Dongfang Digicom Interest income 494,726.27 56,624.19
Dongfang Digicom (Guangdong) Interest income 1,247,087.29 76,672.53
39,306,754.30 30,955,048.35
(3) Interest expenses of related parties
Nature of transaction 2022 2021
Dongfang Precision (Netherland) Interest expenses - 605,927.88
(4) Lending to and borrowing from related parties
Lending to related parties
2022
Borrowing Start date End date
Note amount
Dongfang Digicom 19,000,000.00 2022/1/14-2022/12/19 2027/1/13-2027/12/18
(Guangdong) a
Hainan Yineng 50,000,000.00 2022/11/24 2022/11/24
Dongfang Precision 6,594,298.45 2022/3/22 2027/3/22
(Netherland)
Dongfang Digicom b 3,000,000.00 2022/5/13-2022/10/14 2027/5/12-2027/10/13
Yinglian Digital 35,007,925.89 2022/1/23-2022/12/19 2024/1/22-2024/12/18
c
113,602,224.34
Note:
a. Dongfang Digicom (Guangdong) borrowed RMB 19,000,000.00 from the Group at an
annual interest rate of 9.8% in 2022. (2021: RMB 4,500,000.00, an annual interest rate of
9.8%).
b. Dongfang Digicom borrowed RMB 3,000,000.00 from the Group at an annual interest
rate of 9.8% in 2022. (2021: RMB 2,950,000.00, an annual interest rate of 9.8%).
c. Yinglian Digital borrowed RMB 35,007,925.89 from the Group at an annual interest rate
of 9.8% in 2022. (2021: RMB 10,994,480.66, an annual interest rate of 9.8%).
302 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XV. Notes to Major Items in the Company Financial Statements (cont’d)
6. Major transactions between the Company and related parties (cont’d)
(5) Guarantees for related parties
Provision of guarantees for related parties
2022
Having
Amount of Start End
expired or
guarantee date date
not
Dongfang Precision
(Netherland) 241,859,950.00 2020/6/29 2023/6/29 No
2021
Having
Amount of Start End
expired or
guarantee date date
not
Dongfang Precision
(Netherland) 241,859,950.00 2020/6/29 2023/6/29 No
Dongfang Precision
(Netherland) 177,604,620.00 2021/2/3 2022/2/3 No
7. Balances of amounts due from related parties
(1) Accounts receivable
2022 2021
Gross amount Allowance Gross amount Allowance
Dongfang Precision (HK) 125,873,821.40 - 77,716,283.13 -
Dongfang Precision (Netherland) 86,838,377.31 - 33,917,508.35 -
Italy EDF 11,999,515.22 - 2,666,531.33 -
Fosber ASIA 2,033,754.02 - 1,934,399.54 -
Yinglian Digital 941,966.99 - 778,894.24 -
227,687,434.94 - 117,013,616.59 -
303 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XV. Notes to Major Items in the Company Financial Statements (cont’d)
7. Balances of amounts due from related parties (cont’d)
(2) Other Receivables
2022 2021
Gross amount Allowance Gross amount Allowance
Hainan Yineng 466,903,350.55 - 412,234,185.81 -
Yinglian Digital 53,013,045.29 - 15,156,527.09 -
Dongfang Digicom
(Guangdong) 25,031,945.37 - 4,704,601.17
Dongfang Digicom 6,424,864.39 - 3,065,170.33 -
Shunyi Investment 1,698,000.00 - 1,698,000.00 -
Suzhou High-Tech Zone 903,000.00
Jinquan Business - - -
Management Partnership
(Limited Partnership)
Fosber ASIA 1,280,118.38 - 447,649.04 -
Dongfang Precision 6,608,152.98 - 13,854.53 -
(Netherland)
Yining International 1,000.00 - - -
-
560,960,476.96 - 438,222,987.97 -
Except the borrowings receivable from related parties, all receivables from related parties are
non-interest bearing, unsecured, and have no fixed repayment period.
304 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XV. Notes to Major Items in the Company Financial Statements (cont’d)
8. Balances of amounts due to related parties
(1) Accounts payable
2022 2021
Italy EDF 177,681.12 88,980.71
Dongfang Precision (Netherland) 51,212.19 46,755.18
Dongfang Precision (HK) 6,155.19 5,852.89
Yinglian Digital 205,124.43 -
Dongfang Digicom (Guangdong) 1,130,000.00 -
Fosber Group 1,899.00 -
1,572,071.93 141,588.78
(2) Other payables
2022 2021
Dongfang Precision (Netherland) 331,099.71 91,664,646.54
Hainan Yineng 68,000,000.00 50,000,000.00
Fosber ASIA 1,015,465.78 1,138,167.89
Yinglian Digital 171,706.39 11,020.46
Italy EDF 56,189.26 -
69,574,461.14 142,813,834.89
Except the borrowings receivable from related parties, all payables to related parties are non-
interest bearing, unsecured, and have no fixed repayment period.
305 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
XVIII. Supplementary information
1. Schedule of exceptional gains and losses
2022
Gain or loss on disposal of non-current assets (inclusive of impairment (351,386.78 )
allowance write-offs)
Government grants through profit or loss 20,933,377.44
Gain or loss on fair-value changes on held-for-trading and derivative financial
assets and liabilities & income from disposal of held-for-trading and 35,196,327.83
derivative financial assets and liabilities and other debt investments
Non-operating income and expenses other than the above 1,761,273.49
Subtotal of non-recurring gain or loss 57,539,591.98
Income tax effects (7,277,576.78)
Subtotal of non-recurring gain or loss, net of tax 50,262,015.20
Non-controlling interests effects (net of tax) (1,460,765.90)
48,801,249.30
306 / 307
Guangdong Dongfang Precision Science & Technology Co., Ltd.
Notes to the Financial Statements
2022 Expressed in Renminbi Yuan
2. Return on equity (ROE) and earnings per share (EPS)
2022
Weighted average ROE (%) EPS
Basic Diluted
Net profit attributable to ordinary
shareholders of the Company 11.72 0.37 0.37
Net profit attributable to ordinary
shareholders of the Company before
exceptional gains and losses 10.44 0.33 0.33
2021
Weighted average ROE (%) EPS
Basic Diluted
Net profit attributable to ordinary
shareholders of the Company 11.72 0.35 0.35
Net profit attributable to ordinary
shareholders of the Company before
exceptional gains and losses 9.55 0.29 0.28
307 / 307
