Annual Report 2021
Stock Code: 688007 Stock Short Name: Appotronics
Appotronics Corporation Limited
Annual Report 2021
本报告为深圳光峰科技股份有限公司自愿披露的《2021 年年度报告（英文版）》，
对本报告的中英文版本理解上发生歧义时，以中文版本为准。
Annual Report 2021 is voluntarily disclosed by Appotronics Corporation Limited, and if the
meaning of the translated version is different than the Chinese version, the Chinese version will
control.
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Annual Report 2021
Appotronics: Embarking on a New Journey
Dear Shareholders,
Appotronics, like many other companies, experienced an extremely challenging year in
2021. We achieved positive growth in operating incomes in this year, but at a slower growth
rate.
Despite the astonishing performance growth of Appotronics between 2016 and 2018,
especially in 2018 when our operating incomes increased by up to 72% year on year, the
growth rate of our performance slowed down after the Company get listed in 2019. After the
last three years of growing at a slow pace, we have moved to the 16th year from the
establishment of Appotronics, encountering another crossroad - it’s time for us to start a new
journey.
Personally, the year 2022 is a new starting point for me. Coming back to the forefront
as the CEO of the Company, I have more responsibilities on my shoulders and more courage
for fighting in my heart, as if I were in 2016. Looking back to 2016, Appotronics decided to
enter a strange field - cinema projection, and created the unique cinema SAAS mode relying
on our enthusiasm. Thanks to our strong technology advantages and the unique business
model, Appotronics moved forward with an overwhelming momentum on the cinema market
and achieved “explosive” growth with installations of our cinema projections solutions
increasing year by year.
The year 2022 is also a new start for Appotronics. To achieve another “explosive”
growth of Appotronics, we have established four major measures: 1. To enhance our product
capability by keeping sufficiently sensitive to market demands while striving for extreme
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cost reduction, hence creating more hot-selling products; 2. To continuously promote the
building of a hierarchical team with more young talents and transform the incentive
mechanism to help young outstanding management and professional staff distinguish
themselves, hence improving the competitiveness of the team; 3. To innovate the cooperation
mode for cooperating with leading customers in various fields for rapidly acquiring market;
and 4. To keep our keenness as a pioneer by sufficiently staying alerted to emerging market
opportunities in pursuit of rapid breakthrough.
Thanks to the great efforts made by the Company on the consumer market, we achieved
the growth by nearly 50% in 2021 year on year for our Formovie own-brand business,
accompanied with obvious increase in the gross margin. According to a report from IDC,
Formovie ranked third in 2021 in terms of shipments on the overall household market. In
addition, we are accelerating the pace of business layout in the field of vehicle-mounted
displays, and have entered into cooperation with several vehicle manufacturers and tier-1
suppliers. The IATF 16949 certification achieved by the Company recently indicates that we
have acquired the admission permit for entering the supply chain of global vehicle
manufacturers.
Standing in a world experiencing drastic changes, we encounter the fourth technological
revolution consisting of “new display technologies, artificial intelligence, 5G, etc.”, in which
laser display is one of the major “racetracks” in the fourth technological revolution.
Appotronics is at the front line of this investment hot spot, and therefore should act
immediately to seize the opportunities.
Naturally, we should also keep a clear vision of the current conditions. The year 2022
is extremely extraordinary - “black swan” events occurring one after the other, repeated
outbreak of the COVID-19 epidemic both in China and overseas, and the combat against the
epidemic turning into a “protracted war” - the rising uncertainties lead to in-depth changes
in the external environment. The hard external environment requires us to work more
diligently and constantly enhance our resilience to move forward. Luckily, being dedicated
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to original innovation since its establishment, Appotronics is always making its way into the
“unpopulated area” of technologies, and is never lack of the determination and confidence in
solve tough problems. The evolution of technologies is leading to more and more new
application scenarios, such as vehicle-mounted displays, aerospace projection display, and
augmented reality (AR), which will create a trillion-level market. We have taken the lead in
making layout for these fields.
In this year, we upgraded the regular CSR report to the ESG report for the first time,
which reflected our active efforts in fulfilling social responsibilities under the continuous
mission of being an accountable and responsible listed company. Lastly, I’d like to present
some of my personal opinions. The changes on the market have drawn much attention
recently; however, despite the many factors that may lead to the fluctuation in stock prices
within a short period of time, the true value of an enterprise eventually relies on the
fundamental aspect of the company in the long run. We may pay back to investors in a better
manner only by continuously focusing on the development of the Company, making every
effort to improve the operation of the Company, and enhancing the intrinsic value of the
Company.
Last but not least, I would like to thank all shareholders and friends who have been
caring for Appotronics!
Time tells everything!
LI Yi
April 2022
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Important Note
I. The Board of Directors, the Board of Supervisors, directors, supervisors and senior officers of
the Company hereby warrant that the information contained in this Annual Report is true,
accurate and complete and this Annual Report is free from any misrepresentation, misleading
statement or material omission, and agree to assume joint and several liability for this Annual
Report.
II. The Company did not make profits at the time of getting listed, and has not made profits by
now
□ Yes √ No
III. Alert of significant risks
The Company has described in detail the risks that may exist in the production and operation of the
Company. Refer to “Section III Discussion and Analysis of the Management- Risk factors” for the relevant
risks. We draw the attention of investors to such risks in making investments.
IV. All directors of the Company attended the meeting of the Board of Directors.
V. Pan-China Certified Public Accountants (Special General Partnership) issued a standard
unqualified auditor’s report to the Company.
VI. LI Yi, Principal of the Company, WANG Yingxia, Person in Charge of the Accounting Body,
and WANG Yingxia, Chief Accountant, hereby represent that the financial statements contained
in this Annual Report are true, accurate and complete.
VII.Profit distribution proposal or proposal for capitalization of capital reserve approved by the
Board of Directors during the reporting period
Upon consideration at the 11th meeting of the second Board of Directors of the Company, it is
approved to make profit distribution on the basis of the total shares on the record date of interest
distribution, deducted by shares in the special securities account for repurchase by the Company - the
Company proposed to distribute to all shareholders a cash dividend of RMB 1.05 (tax inclusive) for every
10 shares. As of April 25, 2022, the Company has a total of 452,756,901 shares and 0 shares in the special
securities account for repurchase, leading to the total cash dividend of RMB 47,539,474.61 (tax inclusive).
The cash dividends proposed by the Company for this year account for 20.37% of the net profits
attributable to the shareholders of the listed company in the current consolidated financial statements of
the Company.
In the event of any change in the total shares of the Company after deducting the shares in the special
securities account for repurchase by the Company due to relevant events prior to the record date of interest
distribution, the Company intends to keep the total amount of distribution unchanged while
correspondingly change the distribution proportion for each share.
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No capitalization of the capital reserve or bonus shares will be made or distributed in the profit
distribution. The preliminary plan for profit distribution is still subject to approval at the general meeting
of shareholders of the Company.
VIII. Is there any material event concerning any special arrangement of corporate governance?
□ Applicable √ N/A
IX. Risk statement regarding forward-looking statements
√ Applicable □ N/A
The forward-looking statements contained herein regarding the future plans, development strategies
or other matters of the Company do not constitute any substantive covenant made by the Company to the
investors. Investors and relevant personnel should have sufficient know about the risks in this aspect, and
understand the differences among plans, predictions, and promises. The investors should be aware of the
risk of investment.
X. Is there any non-operating occupation of funds by the controlling shareholder or its affiliates?
No
XI. Is there any external guarantee provided in contravention of the stipulated decision-making
procedure
No
XII.Are the majority of the directors unable to guarantee the truthfulness, accuracy and
completeness of the Annual Report disclosed by the Company?
No
XIII. Others
□ Applicable √ N/A
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Table of Contents
Section I Definitions .......................................................................................................................... 8
Section II Company Profile and Financial Highlights..................................................................... 9
Section III Discussion and Analysis of the Management ................................................................ 15
Section IV Corporate Governance ................................................................................................... 48
Section V Environment, Social Responsibility, and Other Corporate Governance ................... 82
Section VI Significant Matters .......................................................................................................... 93
Section VII Changes in Shares and Shareholders .......................................................................... 125
Section VIII Preferred Shares ............................................................................................................ 135
Section IX Corporate Bonds ........................................................................................................... 136
Section X Financial Report ............................................................................................................ 137
Financial Statements with seals and signatures of the Principal of the
Company, the Person in Charge of the Accounting Body, and Chief
Accountant
List of Documents Original Auditor’s Report with seals of the accounting firm and seals and
Available for Inspection signatures of the certified public accountants
All original documents and announcements of the Company publicly
disclosed in the websites designated by the Company as of the reporting
period
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Section I Definitions
I. Definitions
For purpose of this report, unless the context otherwise requires, the following terms shall have the
meanings indicated below:
Terms
Company or means Appotronics Corporation Limited
Appotronics
Appotronics Ltd. means Appotronics Corporation Ltd., the former name of the Company
CINEAPPO means CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd.
Formovie means Formovie (Chongqing) Innovative Technology Co., Ltd.
Appotronics HK means Appotronics Hong Kong Limited
Appotronics Daye means Shenzhen Appotronics Daye Investment Partnership (LP)
Appotronics Deye means Shenzhen Appotronics Deye Consulting Partnership (LP)
Appotronics means Shenzhen Appotronics Hongye Investment Partnership (LP)
Hongye
Blackpine means Blackpine Investment Corp. Ltd.
Jinleijing means Shenzhen Jinleijing Investment Limited Partnership (LP)
Appotronics means Shenzhen Appotronics Chengye Consulting Partnership (LP)
Chengye
XGIMI means Chengdu XGIMI Technology Co., Ltd.
Anker means Anker Innovations Technology Co., Ltd.
Zebao means Shenzhen Sunvalley Innovation Technology Company Limited
Dangbei means Hangzhou Dangbei Network Technology Co., Ltd.
Delta Electronics, means Delta Electronics, Inc.
Delta
CINIONIC means Cinionic Limited (previously known as Barco Cineappo Limited)
WeCast means WeCast Technology Corp.
GDC BVI means GDC Technology Limited (British Virgin Islands)
GDC Cayman means GDC Technology Limited (Cayman Islands)
DCI means Digital Cinema Initiatives of the United States
DLP means Digital Light Processing
PCT means Patent Cooperation Treaty
AR means Augmented Reality
IDC means International Data Corporation
AVC means All View Cloud
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Section II Company Profile and Financial Highlights
I. Company profile
Chinese name 深圳光峰科技股份有限公司
Short name in Chinese 光峰科技
English name Appotronics Corporation Limited
Short name in English Appotronics
Legal representative LI Yi
20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road, Yuehai
Registered address
Street, Nanshan District, Shenzhen
1. October 24, 2006, Room 10, 14/F, Fangda Building, Keji South
12th Road, South Area, High-tech Industrial Zone, Nanshan District,
Shenzhen
2. September 6, 2007, Room 03, 17/F, Overseas Chinese High-tech
Venture Building, South Area, High-tech Industrial Zone, Nanshan
District, Shenzhen
3. June 7, 2011, Area A, 1/F, Building 13, Xili Wenguang Industrial
Historical changes of the
Zone, Nanshan District, Shenzhen
Company’s registered address
4. October 24, 2012, 401 Shenzhen IC Design and Application
Industrial Park, South to Chaguang Road, Xili Township, Nanshan
District, Shenzhen
5. December 14, 2017, 21-22/F, Hi-tech Zone Union Tower, No. 63
Xuefu Road, Yuehai Street, Nanshan District, Shenzhen
6. August 1, 2018, 20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu
Road, Yuehai Street, Nanshan District, Shenzhen
20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road, Yuehai
Office address
Street, Nanshan District, Shenzhen
Postal code of office address 518052
Website http://www.appotronics.com
Email ir@appotronics.cn
II. Contact person and contact information
Board Secretary (Domestic Securities affairs representative
representative for information
disclosure)
Name YAN Li CHEN Yasha
20-22/F, Hi-tech Zone Union
20-22/F, Hi-tech Zone Union Tower,
Tower, No. 63 Xuefu Road,
Address No. 63 Xuefu Road, Yuehai Street,
Yuehai Street, Nanshan District,
Nanshan District, Shenzhen
Shenzhen
Telephone 0755-32950536 0755-32950536
Facsimile 0755-86186299 0755-86186299
Email ir@appotronics.cn ir@appotronics.cn
III. Media for information disclosure and place for keeping the annual reports
China Securities Journal (https://www.cs.com.cn)
Name and website of the media on which the Shanghai Securities News (https://www.cnstock.com)
Company discloses its annual report Securities Times (http://www.stcn.com)
Securities Daily (http://www.zqrb.cn)
Website of the securities exchange on which Shanghai Stock Exchange website
the Company discloses its annual report (http://www.sse.com.cn)
Place for keeping the annual reports Office of the Board of Directors
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IV. Stock and depository receipts of the Company
(I) Stock of the Company
√ Applicable □ N/A
Stock of the Company
Type of stock Stock exchange Stock short name Stock code Former stock short
and board name
Shanghai Stock
A-shares Exchange, STAR Appotronics 688007 N/A
Market
(II) Depository receipts of the Company
□ Applicable √ N/A
V. Other related information
Name Pan-China Certified Public Accountants (Special
General Partnership)
Domestic accounting firm Office address 6/F, No. 128 Xixi Road, Xihu District, Hangzhou,
appointed by the Company Zhejiang
Accountants signingWEI Biaowen, NIU Chunjun
the report
Name Huatai United Securities Co., Ltd.
Office address 5/F (01A, 02, 03 and 04), 17A, 18A, 24A, 25A
and 26A, Hong Kong China Travel Service
Sponsor performing the duty of Building, Central Plaza, Futian District, Shenzhen
continuous supervision within the Sponsor
reporting period representatives ZHANG Guanfeng, QIN Lin
signing the report
Period of continuous
From July 22, 2019 to December 31, 2022
supervision
VI. Main accounting data and financial highlights in the past three years
(I) Main accounting data
In RMB
% Change
Main accounting data 2021 2020 (2021 v 2019
2020)
Operating income 2,498,228,401.78 1,948,884,176.83 28.19 1,979,148,918.89
Net profit attributable 233,364,344.09 113,847,873.06 104.98 186,457,276.71
to shareholders of the
listed company
Net profit attributable 124,279,830.79 40,289,988.80 208.46 134,218,640.96
to shareholders of the
listed company after
deduction of non-
recurring profit or
loss
Net cash flow from 58,337,226.84 52,390,430.42 11.35 243,000,903.71
operating activities
% Change
December 31, 2021 December 31, 2020 (2021 v December 31, 2019
2020)
Net assets attributable 2,438,064,581.44 2,091,599,671.75 16.56 1,974,559,837.64
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to shareholders of the
listed company
Total assets 4,097,230,955.90 3,226,204,326.69 27.00 3,099,508,090.85
(II) Financial highlights
% Change (2021
Financial highlights 2021 2020 2019
v 2020)
Basic earnings per share 0.52 0.25 108.00 0.45
(RMB/share)
Diluted earnings per share 0.51 0.25 104.00 0.45
(RMB/share)
Basic earnings per share after 0.27 0.09 200.00 0.33
deduction of non-recurring profit or
loss (RMB/share)
Weighted average return on net 10.26 5.62 +4.64 percentage 14.84
assets (%) points
Weighted average return on net 5.46 1.99 +3.47 percentage 10.68
assets after deduction of non- points
recurring profit or loss (%)
Proportion of R&D investments to 9.47 10.49 -1.02 percentage 10.19
operating income (%) points
Explanation about the main accounting data and financial highlights in the past three years
√ Applicable □ N/A
During the reporting period, the net profit attributable to shareholders of the listed company and the
net profit attributable to shareholders of the listed company after deduction of non-recurring profit or loss
increased 104.98% and 208.46%, respectively; the basic earnings per share, diluted earnings per share,
and basic earnings per share after deduction of non-recurring profit or loss decreased by 108.00%,
104.00%, and 200.00%, primarily due to the following:
1. During the reporting period, the consolidated gross margin was improved due to the gradual
resumption of incomes from the cinema business with a higher gross margin, and the growth in incomes
from the core device business, household business, and large venue business.
2. During the reporting period, the non-recurring profit or loss increased year on year, primarily due
to the performance compensation recognized in the profit or loss for the current period in the amount of
RMB 37.9278 million, the government grants of RMB 87.7165 million recognized in the profit or loss for
the current period.
VII. Differences in accounting data under Chinese accounting standards and overseas accounting
standards
(I) Differences in net profit and net assets attributable to shareholders of the listed company
disclosed on the financial statements according to the international accounting standards and
the Chinese accounting standards
□ Applicable √ N/A
(II) Differences in net profit and net assets attributable to shareholders of the listed company
disclosed on the financial statements according to the overseas accounting standards and the
Chinese accounting standards
□ Applicable √ N/A
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(III) Explanation about the difference between overseas and Chinese accounting standards
□ Applicable √ N/A
VIII. Financial highlights in 2021 by quarter
In RMB
1st quarter 2nd quarter 3rd quarter 4th quarter
(Jan. - Mar.) (Apr. - Jun.) (Jul. - Sep.) (Oct. - Dec.)
Operating income 524,967,989.26 579,721,254.33 555,932,526.47 837,606,631.72
Net profit
attributable to
54,409,294.00 97,004,626.79 59,936,820.19 22,013,603.11
shareholders of the
listed company
Net profit
attributable to
shareholders of the
listed company after 36,659,661.66 30,302,274.42 41,093,330.65 16,224,564.06
deduction of non-
recurring profit or
loss
Net cash flow from
106,223,261.88 64,436,052.02 -191,576,197.71 79,254,110.65
operating activities
The high net profit attributable to shareholders of the listed company in the 2nd quarter are caused by
the performance compensation from GDC; the less net cash flow from operating activities in the 3rd quarter
was primarily due to stock building for preparation of peak sales period and payment for due notes; the
less net profit attributable to shareholders of the listed company in the 4th quarter was primarily due to the
change in the product portfolio, decrease in the gross margin, and the increase in marketing expenses and
personnel expenses.
Explanation about the difference between quarterly data and the data disclosed on regular reports
□ Applicable √ N/A
IX. Items and amounts of non-recurring profit or loss
√ Applicable □ N/A
In RMB
Item of non-recurring profit or Note (if
2021 2020 2019
loss applicable)
Gain or loss on disposal of non- 1,437,535.03 -1,112,121.13 -3,214,488.06
current assets
Government grants recognized in 87,716,471.20 40,750,823.51 25,782,112.48
profit or loss for the current
period (excluding government
grants that are closely related to
the business of the Company and
are provided in fixed amount or
quantity continuously according
to the applicable polices and
standards of the country)
Profit or loss on entrusted 9,776,977.44 18,624,853.96
investments or assets
management
Net profit or loss of subsidiaries 14,561,407.47 23,593,500.83 23,321,528.06
from the beginning of the period
up to the business combination
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date recognized as a result of
business combination of
enterprises involving enterprises
under common control
Profit or loss on changes in the 40,127,764.00 9,552,990.98
fair value of held-for-trading
financial assets, derivative
financial assets, held-for-trading
financial liabilities and derivative
financial liabilities and
investment income on disposal
of held-for-trading financial
assets, derivative financial assets,
held-for-trading financial
liabilities, derivative financial
liabilities and other debt
investments, other than those
used in the effective hedging
activities relating to normal
operating business
Reversal of impairment loss on 238,836.00
accounts receivable and contract
assets tested for impairment
individually
Other non-operating income and 865,330.69 2,429,083.25 2,981,778.07
expenses
Other gains or losses meeting the -9,823,212.01 323,003.17
definition of non-recurring profit
or loss
Less: Effect of income taxes 7,304,758.42 9,068,330.19 4,532,639.92
Effects attributable to 28,273,002.10 1,982,929.14 1,891,481.86
minority interests (after tax)
Total 109,084,513.30 73,557,884.26 52,238,635.75
Description of defining non-recurring profit or loss items illustrated in Information Disclosure and
Presentation Rules for Companies Making Public Offering of Securities No. 1－Non-recurring Profit or
Loss as recurring profit or loss items
□ Applicable √ N/A
X. Items at fair value
√ Applicable □ N/A
In RMB
Effect on profit for the
Item Opening balance Closing balance Change
current period
Held-for-trading 114,000,000.00 417,200,000.00 303,200,000.00 49,904,741.44
financial assets
Receivables financing 11,959,000.00 244,860.00 -11,714,140.00
Investment in other 11,975,419.38 7,075,419.38 -4,900,000.00
equity instruments
Total 137,934,419.38 424,520,279.38 286,585,860.00 49,904,741.44
XI. Explanation about performance indicators not under the Accounting Standards for Business
Enterprises
√ Applicable □ N/A
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The table below lists relevant indicators about the net profit excluding the effect of share-based
payment expenses:
In RMB
Item 2021 2020 Change
(%)
Net profit excluding the effect of share-based 276,503,475.36 107,381,419.72 157.50
payment expenses
Net profit attributable to shareholders of the 277,641,613.32 132,777,391.31 109.10
listed company excluding the effect of share-
based payment expenses
Net profit attributable to shareholders of the 164,481,340.03 59,219,507.05 177.75
listed company after deduction of non-recurring
profit or loss excluding the effect of share-based
payment expenses
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Section III Discussion and Analysis of the Management
I. Discussion and Analysis of Business Situations
Given the transformation of the Chinese economy from the stage of high growth to the stage of high-
quality development, promoting the development of high-technology industries have been improved to
the level of the national strategy, in which laser display is one of the national strategic emerging industries.
During the reporting period, closely following the guidelines of the national strategy and under the
strategic layout focusing on the main line of “core technologies + core devices + application scenarios”,
the Company actively cultivates new growth curves while optimizing the business structure, and achieved
stable growth in the operating performance to provide a strong momentum for the development of the
Company in the next 3 to 5 years.
1. Rapid growth of the own-brand household business to start a new era of laser smart projection
During the reporting period, the Company made great efforts for the To C business. The subsidiary
achieved the growth of 50% year on year for its own-brand business, which accounted for nearly 50% of
the total operating income of for the first time with obvious increase the in gross margin. Moreover,
enhanced market investment to actively expand offline channels. The first offline experience store was
opened in Chongqing in May 2021; and more experience stores opened in the year shortened the distance
between consumers and our products.
In terms of market shares, the Company is improving rapidly in the ranking for the household smart
projection market. According to the IDC report, the brand ranked third in terms of sales volume on the
overall household projection market of 2021.
The subsidiary achieved significant breakthrough in product R&D and brand marketing. During the
reporting period, launched R1 Nano, X1, and several other new household laser mini projector products,
and cooperated with a globally renowned audio brand Bowers & Wilkins to release T1, the first
panchromatic laser TV, which started a new era for laser projection. During the period of November 11,
achieved the gross merchandise value (GMV) of over RMB 200 million throughout China as the champion
for four consecutive years in both the online sales value and the sales volume of laser TVs.
2. Diversified innovative core device businesses to inject new power for continuous growth
2.1 Business of household core devices
During the reporting period, the Company achieved growth for the business of household core
devices, covering all leading domestic projector brands.
With respect to laser mini projectors, the Company cooperated with partners such as Dangbei and
Anker to integrated the upstream and downstream for jointly expanding the racetrack of laser mini
projectors. During the reporting period, the Company provided laser mini projectors to Dangbei; the long-
throw laser projection product X3 launched by Dangbei, positioned as a high-end flagship model,
continuously ranked the first among hot products sold in JD.com, hence becoming one of the hot-selling
projector products of the year in the industry with warm response from consumers.
With respect to laser TV light generators and complete equipment, the Company provides laser TVs
for partners such as XGIMI and Hewlett-Packard, provides laser TV complete equipment for Zebao,
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ViewSonic, Haier, and other partners, to assist partners in expanding the market space while accelerating
the rapid popularization of our core technologies in the household field. For the overseas market, the
Company has projects established for 4 targeted laser TV products with reference to customer demands,
so as to show our strength on the overseas market focusing on high-quality projects.
Meanwhile, the Company continuously expands the scope of partners along the ecology chain, hence
promoting the overall development of the entire ecology and the positive development of the industry by
making use of our core devices and technology advantages.
2.2 Business of innovative core devices
Relying on our technology advantages in the laser display field, the Company has been actively
exploring new application scenarios to create new performance growth points for the Company. During
the reporting period, the Company took the lead in making layout for vehicle-mounted display, aviation
display, cloud display, AR, and other innovative businesses.
(1) For vehicle display, the Company has taken intelligent cockpit as the main coverage scenario to
apply laser display in HUD, vehicle window projection, vehicle canopy by virtue of features such as small
size, high brightness, low energy consumption and low heat dissipation. During the reporting period, the
Company was included in the list of outstanding partners for Huawei Intelligent Automotive Solution, and
provided the vehicle-mounted canopy for the demo vehicle with the latest cockpit of Huawei, namely the
immersive projection on the vehicle roof. Moreover, the Company has entered into cooperation with
several domestic and foreign vehicle manufacturers and tier-1 suppliers to continuously expand the
customer base of vehicle-mounted display.
(2) For aviation display, the Company has signed a strategic cooperation agreement with Airbus to
explore various possibilities in aviation applications based on the laser light source technology and laser
display solutions. In Zhuhai Airshow held in September 2021, the Company exhibited the laser display
product prototype intended for civil aviation display applications, which is the first one launched on the
world and first one exhibited in China.
(3) In “book in the sky”, one of the innovative application projects of the Company, individual laser
devices may reach the ultra high brightness of 100,000 lumens; relying on the extra-long projection
technology, they can exceed the distance limit of 500 meters of conventional projection technologies, and
can achieve far-distance imaging in the air at the distance of up to 3,000 meters. In the future, this solution
may be used in dissemination projects of major events or government activities; we will continue to
explore diversified scenarios of laser lighting.
(4) AR display is one of the emerging display fields under active exploration by the Company. The
Company makes uses of its advantages in original core technologies and devote human and material
resources in the exploration for the AR display field, which have achieved stage-specific results. During
the reporting period, the Company completed the demonstration of ultra-light, high-efficiency, high-
definition AR modules. It’s expected to release the progress in the display effects and technology routs
for various AR modules step by step in 2022. Given the constant optimization of AR modules, it’s
expected that the DEMO modes and products of some AR modules may be launched by the end of 2022.
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3. Sound development of the fundamental business of the Company to make stable contributions for
performance
During the reporting period, the Company kept the overall sound development of its fundamental
businesses, i.e. the cinema projector business, the laser large venue business, and business education
business.
With respect to cinema projection, given the recovery of China from the COVID-19 epidemic in 2021,
we built high-brightness theaters to facilitate differentiated operation by cinemas, and provided content
video and audio ecological and other solutions. As a result, this business division achieved the operating
income of RMB 360 million, up by about 110% year on year. Relying on the nearly 5,000 new installations
of laser cinema light sources throughout China, we maintained the absolute leading position on the market.
With respect to laser large venue projectors, we released the T series products in 2021, the 33,000-
lumen laser large venue projector with the smallest size, lightest weight, best color, and lowest noise on
the market for domestic independently developed 3DLP solutions. The Company doubled the incomes
from the large venue projector business. According to the Market Survey Report on the Laser Project
Market of Chinese Mainland in 2021 of All View Cloud, Appotronics ranked second in terms of sales
value and third in terms of product shipment on the Chinese Mainland large venue laser projection market
in 2021.
With respect to business education, the continuous achievements of our own brands lead to effective
increase in both the market shares and gross margin of this business. According to the Market Survey
Report on the Laser Project Market of Chinese Mainland in 2021 of All View Cloud, Appotronics ranked
first in terms of shipment and held leading market shares on the education projector market in 2021.
II. Main business, business model, status of industry and R&D activities during the reporting
period
(I) Main business and main products or services
1. Main business
As a globally leading technology enterprise for laser display, the Company mainly engages in the
research, development, production and sales of laser display core devices and complete machines and
application of laser display technology to different scenarios based on ALPD laser display technology
and architecture. By now, our businesses have been implemented in the household display, cinema
projection, business education, large venue, and other application scenarios, and are expanding to the
aviation, vehicle-mounted display, AR, and other fields.
2. Main products
Our products may be classified into core laser display devices and complete laser display equipment.
The core devices can be further classified into laser light source (cinema light source and large venue light
source), laser mini projector, vehicle-mounted laser display devices and systems, laser TV light generator
and laser projection screen. Complete equipment can be further classified into laser mini projector, laser
TV, laser cinema projector, large venue laser projector, laser education projector, etc.
2.1 Products of core devices
Our core devices, including the laser light source and light generator, reflect various advantages and
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characteristics of ALPD technology, such as high brightness, wide color gamut, high contrast and
relatively low cost. The quality and performance of such products have received recognition of
downstream customers, which helps us establish our position as a core supplier on the industry chain of
laser display.
Figure 1: Laser light source and laser light generator
With respect to household mini projector, ALPD laser light sources, as the mainstream light source
for projection and display products, have the advantages of high energy efficiency, health, and
environment friendliness; they are better than mini projector products with conventional light sources in
terms of brightness, contrast ratio, product shape, etc., and have the comprehensive advantages of being
the brightest with the same size, and having the smallest size at the same brightness.
With respect to vehicle-mounted display, the vehicle-mounted laser display device we designed and
manufactured have the advantages of high brightness, small size, high stability, and compatibility with
long-throw and ultra short throw display. They can project display images on any surface without affecting
the permeability, hence creating mobile, large-screen, and immersive interactive experience in a vehicle.
2.2 Products of complete equipment
On the basis of laser light sources and light generator, we further developed complete equipment,
which has been successfully used in both the household and commercial fields.
2.2.1 Household field
In recent years, laser TV, smart mini projector and other household projector products have been
developing rapidly, due to the ever increasing acceptance of the new mode of movie watching by the
consumers, and rapid decrease of the costs and prices and better performance of products. With leading
market shares for household products and rapid growth of our own-brand household business, we will
create a new laser mini projector racetrack.
Figure 2: New products of : laser projector R1 Nano and X1
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Figure 3: New product of : Panchromatic Laser TV T1
2.2.2 Commercial market
In the field of cinema projection, we have created a product portfolio of laser cinema light sources
covering multiple ranges of lumens from 5,000 lumens to 55,000 lumens, which are compatible with all
projection equipment brands on the market for wide application in large-, medium- and small-sized
cinemas. Thanks to the low operating power, the laser cinema light source reduces electricity consumption
by 50% compared with the xenon lamp; moreover, since no bulb replacement is required, it helps cinemas
to minimize their operating costs. As of the disclosure date of this Report, the installations of our laser
cinema light sources have exceeded 26,000 sets in China.
In the large venue display field, Appotronics’ large venue projector series covers the range of 5,000-
60,000 lumens, hence suitable for outdoor lighting, cultural and tourism lighting, theme exhibition halls,
corporate exhibition rooms, theater performance, 4D dining hall, conference control, rail transit, and other
scenarios, which have the advantages of no damage to landscape, convenient installation and dismantling,
repeated use in multiple places, etc.
In the business education field, our serial products of laser business education projectors have
multiple projection throw segments including ultra short throw, short throw, and long throw, and the
brightness of 3,300-6,000 lumens; they may be used in multiple scenarios, such as education, commercial
exhibition, etc. The Company has developed a series of solutions for smart classrooms and commercial
presentation, including laser smart all-in-one teaching device, laser synchronous classroom solution, laser
interconnected dual-board solution, high-definition high-brightness conference system, etc.
3. Main services
3.1 Laser cinema projection services
CINEAPPO, a controlled subsidiary of the Company, provides laser cinema projection services to
downstream cinema customers (“laser as a service”), and charges service fees according to the length of
use of light source by the cinemas (the fees are charged by the hour or a certain period of time), while the
cinemas do not need to purchase light source equipment, thereby effectively easing their capital pressure
and reducing their labor and maintenance costs.
3.2 Smart large-screen ecology system Feng OS
, a controlled subsidiary of the Company, independently developed Feng OS - a smart large-screen
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ecology system, which is compatible with various household display products. The Feng OS system may
be used for broadcasting of large-scale events. It has completed a total of 25,000+ film and TV works and
25,000+ in-depth process of film characteristics, hence effectively supporting the effects of large-screen
presentation. At present, we are leading in the industry in terms of paid members.
(II) Main business model
The Company builds its core competitiveness closely around technology R&D and patent layout. We
have an independent and complete system of R&D, procurement, production, sales, and services to provide
customers with products or services of laser display core devices and complete equipment products.
1. R&D mode
We mainly adopt the independent R&D mode, and separate technology development from product
development in organization structure and development process.
Our technology development focuses on creating and mastering core technologies and key
technologies. When a kind of technology becomes relatively mature, it will be applied in product
development. We value user demands to assist product designing, and develop technologies
required for products in the next 1 to 5 years, so as to keep our core competitiveness in
technology and leading position in the industry.
Our product development is driven by product planning, and mainly divided into stages of
feasibility, EVT, DVT, PVT and MP. We set up product lines and product development teams
by market segment, and develop series products based on product platform, to rapidly respond
to market demands.
2. Procurement mode
Our Procurement Management Department is responsible for procurement, of which, the
Material Sourcing Branch is responsible for the selection of suppliers, determination of
purchasing prices, building of business system and supplier platform and other front-end
procurement affairs, while the Procurement Implementation Branch is responsible for preparing
and placing purchase orders, delivery, payment, and other back-end affairs.
3. Production mode
We mainly reply on own production, supplemented by OEM, mainly because of the different
production capacity required by different manufacturing processes and different products and
consideration of cost-effectiveness. Our core devices for light sources and light generators sold
or used to provide projection services are manufactured by us. Mini projectors, laser mini
projectors, and laser TVs in the To-C business are mainly produced in the OEM mode, while
other complete equipment products are produced by the Company.
4. Sales mode
The Company has established a multi-level sales system integrating direct sales, distribution,
and commissioned sales for both online and offline sales.
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(III) Industry in which the Company operates
1. Development stage, basic characteristics and main technical barriers of the industry
(1) Development stage of the industry
As an emerging industry, laser display is at the stage of rapid development. The growth drivers mainly
come from four aspects: Firstly, the demand end, especially the household market and the innovative
application field. Secondly, new large-scale application scenarios generated on the basis of technology
advancement. At present, the laser display technology has been applied to vehicle-mounted display,
aviation display, and other fields, creating the new large-scale application scenarios. This is purely new
creation from zero with huge potential for market explosion. Thirdly, driver of innovation at the supply
end. Manufacturers in the industry constantly upgrade their technologies and products to accelerate the
penetration of laser display products. Fourthly, policy support. In 2021, being listed in priorities for the
14th Five-year Plan, such as the “New Display and Strategic Electronic Materials” of the Ministry of
Science and Technology, laser display has strong support from the state.
(2) Basic characteristics of the industry
In terms of technology, the ALPD technology created by Appotronics has become the mainstream
technology route. In principle, the ALPD laser display technology is compatible with various chip and
technology routes, and is suitable for the DLP, LCOS, and LCD technologies. In 2007, the ALPD
technology created by Appotronics’ R&D team made a breakthrough in the application of core devices
and imaging solutions of laser display, hence becoming the mainstream technical route for the laser
projector industry and widely used in household, cinema, large venue, commercial, and education fields.
In terms of market, the overall size of the laser display industry has been expanding continuously.
During the reporting period, laser display has been increasing in both shipment and market shares on the
household, large venue, business, and cinema markets.
(3) Main technical barriers
Laser display products involve several fields, including optics, electronics, materials, physics,
mechanical designing, precision manufacturing. The improvement in product performance relies on the
core device (light source and light generator), while the research, development, and iteration of core
devices are subject to high technical barriers and strong patent barriers.
In addition, in terms of specific applications, the technical barriers for To C market and innovative
application market are high efficiency, small size and high cost effectiveness, while the technical barriers
for To B market are continuous upgrading of performance in brightness, color, dynamic range, etc.
2. Analysis of the position of the Company in the industry and changes therein
The laser display technology has a broad prospect of application. As a new-general display
technology, thanks to the advantages of high brightness, small size, long service life, wide color gamut,
environment friendliness, the laser display technology has a broad space for market application. Besides
the conventional display field, it can be expanded to the aviation, vehicle-mounted, AR, and other fields.
The Laser display technology is becoming more and more important in the display field.
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As a leading in the laser display industry, Appotronics has created a strong patent moat around the
underlying technical architecture of laser phosphor display technologies, which is hard to be bypassed by
companies in the industry entering the route of laser phosphor technologies. In addition, since its
establishment, the Company spared no effort in R&D investment, which lead to a strong technology barrier.
We have been committed in the breakthroughs, innovations, expansion of application scenarios, and
industrialization of laser display technology, and created technology reserves and patent portfolios
covering the whole technology chain of laser display from key system architecture, core devices to key
algorithm. Relying on the core competitive advantages consisting of “patent moat + technical barriers”,
the Company has its voice at the upstream core device stage in the laser display industry, and has become
the first choice for many customers.
Appotronics is a pioneer of laser smart mini projectors. In 2021, the Company released the high-
lumen laser mini projector light generator and multiple laser smart mini projector products to start a new
era of laser projection in all aspects. Therefore, the year 2021 is referred to as the “first year of laser mini
projector” in the industry.
According to the Market Tracking Report of the Chinese Projector Market in 2021 Q4, , a controlled
subsidiary of the Company, ranked third in the industry in terms of shipment of household projectors in
China.
According to the Market Survey Report on the Laser Project Market of Chinese Mainland in 2021 of
All View Cloud, Appotronics ranked second in terms of sales value and third in terms of product shipment
on the Chinese mainland large venue laser projection market in 2021.
According to the Market Survey Report on the Laser Project Market of Chinese Mainland in 2021 of
All View Cloud, Appotronics ranked first in terms of shipment and second in terms of sales value on the
education projector market in 2021.
3. Development of new technologies, new industries, new types of operation and new modes
during the reporting period and future trend
(1) Accelerated technology upgrade of smart projection leads to new products
Given the technology advancement and diversified demands of various applications for diversified
displays, smart projection is in the trend of rapid development for more applications and more modes.
Smart projector devices have become the largest market segment for projector devices in China on the
basis of the rapid increase in sales thanks to their cost effectiveness and portability compared with large-
screen TVs, and are increasing in terms of market shares in the projector device field. While keeping the
rapid growth of laser TVs and smart mini projectors, we released the first portable laser smart mini
projector in 2021, which created a new mode of smart projection.
In the Guidelines for Myopia Prevention in Children and Adolescents during COVID-19 Epidemic
(Updated Version) released by the National Health Commission, projectors are recommended as the first
choice of devices for use during the teaching sessions. Compared with conventional liquid crystal screens,
some projectors equipped with advanced laser technologies can protect consumers during long-time online
work and study and reduce the harm due to eye fatigue. It’s possible that such products may replace tablet
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computers, and become a new terminal device for remote classroom, remote companion, and smart
tutoring. According to IDC, it is expected that the projector device market of China will grow at the
compound growth rate of 14% between 2020 and 2024.
Given the rapid development of new energy vehicles in the past years, there is a trend of vehicle
intellectualization for the future vehicle field, creating various display demands. Thanks to the advantages
of small size, high efficiency, and capability of transforming any surface into projected images, laser
display drew the attention of the vehicle industry after entering the vehicle-mounted display field. By
creating various intelligent and diversified innovative applications, projector devices will create a new
market.
In the future, on the basis of the development in fundamental hardware technologies such as light
sources, lighting technologies, and lens technologies, the optimization of overall device design, and the
development of software technologies such as smart sensing capabilities and image quality optimization
technologies, the smart projector market and vehicle-mounted display will further expand thanks to the
greatly improved display performance and use experience of projector devices, technical upgrade, and
reduced costs.
(2) Laser display is integrated with new technologies for expansion into new display fields
Given the compatibility between the laser display technology and cutting-edge technologies,
including human-machine interaction, smart recognition, Internet of Things, cloud platform, and big data,
the wide application of 5G mobile phones will create potential demands for supporting laser display
products. Therefore, it’s expected there will be huge market demands for supporting mobile products
featuring high efficiency, small size and low cost in the future. The development of intelligent vehicles
and smart cockpits lead to more demands for vehicle-mounted display. It’s expected that there will
objective market demands for laser display products meeting vehicle standard with features of high
brightness, small size, and high energy efficiency ratio, which can be installed in small spaces in a vehicle.
In the short term, the trend remains unchanged in the development priority of the current display market
will witness the development of laser display technology towards advantages in cost-performance ratio,
high portability, high dynamic range, wide color gamut, and high brightness for integration with ultra short
throw and anti-ambient light screen technologies.
(IV) Core technologies and progress in R&D of technologies
1. Core technologies and their advancement, and changes during the reporting period
We have been committed in the breakthroughs, innovations, expansion of application scenarios, and
industrialization of laser display technology, and created technology reserves and patent portfolios
covering the whole technology chain of laser display from key system architecture, core devices to key
algorithm. With the ALPD4.0 technology matured and the ALPD 5.0 and 6.0 technology under
development at the same time, we constantly maintain our leading advantages compared with followers
and competitors in the industry. As a Leader Level Member of the Laser Illuminated Projector Association
(LIPA), we have participated in the preparation of the international laser display standard.
The Company has devoted many R&D resources in the preparation and processing for the
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miniaturization of laser display systems, light source architecture, complete equipment structure, machine
perception, thin film material. The big data, algorithm and design solutions accumulated by us over the
years will enable us to rapidly develop products and solutions meeting the requirements of different
application scenarios, such as cinema projection, home entertainment, outdoor exhibition, ultra large-sized
display, and immersive display. We have achieved breakthrough in, and started the marketing of, ultra-
small portable laser light generators, vehicle-specification laser light generators, and light generators of
wide color gamut high dynamic range.
With respect to cutting-edge technology, ALPD 5.0 makes use of the characteristics of laser, and is
combined with content preparation to achieve display within a high dynamic range, so as to improve visual
experience. The prototype has been successfully developed. At present, we are performing more in-depth
optimization to bring this technology to the stage of product development. The ALPD 6.0 is planned to
make breakthrough in the existing display architecture to further reduce the cost of laser display systems,
hence laying the ground for industrialization. In the field of smart vehicle-mounted applications, we have
completed the assessment of the prototype in various application scenarios in a vehicle, and have started
the R&D efforts for mass production of vehicle-specification light generators. With respect to AR, we
have completed the reasoning of ultra-thin high-efficiency AR modules, and achieved preliminary results
in the prototype. It’s expected that the prototype may be released in 2022.
National scientific and technology awards
□ Applicable √ N/A
Qualification of national “little giant” enterprises in specialized, refinement, differential, and innovation,
and “leading enterprise” in the manufacturing industry
□ Applicable √ N/A
2. R&D achievements during the reporting period
During the reporting period, the Company made the following achievements in technology and
product innovation:
1. Core devices
During the reporting period, we completed the product development and released for mass production
for the full series of products based on the ALPD 4.0 technology, including the laser cinema light source
platform covering 10,000-50,000 lumen, and the laser TV light generator platform compatible with
trichromatic, dual colors, and single color, hence providing more abundant and more competitive solutions
of core devices for the cinema industry and the laser TV industry. Meanwhile, in the racetrack of smart
mini projectors, the Company developed laser mini projectors compatible with various product modes and
different performance parameters, which can greatly improve the brightness and energy efficiency while
improving color presentation. During the reporting period, the Company provided laser mini projector
core devices for several new customers, including Dangbei.
The Company achieved further innovative breakthrough in flexible laser display screens and
successfully developed multiple products: (1) ultra short throw diaphragms for speckle reduction used in
three-color laser projectors, achieving speckle reduction contrast below 10%, taking the lead in the
industry; (2) ultra short throw diaphragms with high contract, with an opacity of more than 95%, superior
to 85% of competitive products in the industry, which can greatly reduce the effect of ambient light; (3)
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high-gain direct projection anti-light screens with the smart mini projector, achieving the 2.5x high-gain
factor and the ambient light obscuring rate of 80%, which supports the projection effect of the projection
device to increase the brightness by 2.5 times, and achieves a viewing angle close to 180 degrees as
compared to projecting on a white wall; and (4) flexible foldable ultra short throw anti-ambient light screen,
and rising flexible ultra short throw anti-ambient light screen, which are more convenient for
transportation and installation.
In terms of innovative applications, the Company engaged in strategic cooperation with Airbus, and
jointly released the prototype for aviation laser display applications. In the future, the parties will engage
in cooperation in aviation laser display modules. In terms of smart vehicle-mounted devices, during the
reporting period, the Company start efforts for the vehicle-specification laser display modules required for
the development of smart cockpits, so as to develop vehicle-mounted laser display applications.
2. Complete equipment
We developed high-, medium-, and low-end laser TV products to cater for different user demands on
the household market. Having the highest brightness of 4,000 lumens, covering the REC.709, DCI, and
REC.2020 color gamuts, and with the maximum color gamut area of 158% NTSC, our products are at the
highest level in the industry. During the reporting period, as the subsidiary launched a new laser TV
product, Cinema 2, which has a 10% increase in screen brightness compared to the previous generation,
has a 4K resolution and can project 80-150 inches of super-large screens. also released the first
panchromatic Laser TV - T1, which adopted the ALPD RGB+ panchromatic laser display technology to
achieve Bt.2020 ultra-wide color gamut, 4K resolution; it is equipped with the Bowers & Wilkins
customized audio to greatly improve the sound and color effects.
During the reporting period, the Company developed multiple laser smart mini projector products.
(1) Series of portable ultra short throw smart mini projectors: R1 and R1 nano, which reduced the size of
ultra short throw smart mini projectors to the size of a mini projector product. While maintaining high-
brightness output, it has the size much smaller than a laser TV. This is a new mode of household smart
mini projector, which will create new application scenarios. (2) Series of ultra-portable laser smart mini
projectors: X1 and P1, which maintain the same brightness as a common LED mini projector product; it
has the size of a mobile phone, and is driven by a battery.
In the business field, the Company newly developed S4 product with less than 10cm of a slim body
and a light weight of less than 9.2kg, can produce 5,000-6,000 lumens of brightness and 4K resolution,
and also present high-quality projection images in bright environment and project 300 inches of super-
large screen at largest. This product is cost-effective. Based on the compact modular body of S4 platform
and in conjunction with the one-button automatic stacking system, this product can achieve more
brightness, larger screen and more free application.
During the reporting period, as the first Chinese enterprise independently researching and developing
3DLP high-lumen large venue projectors, during the reporting period, the Company launched the T series
of high-brightness large venue projectors adopting a high-efficiency liquid cooling system and 3DLP
imaging technology to achieve 33,000 lumens of high brightness. At present, this is the world’s smallest
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and lightest large venue projector with the same brightness range. The multi-picture splicing and fusion
system is embedded in it. In addition, it has 120Hz refresh rate to support constant brightness mode, can
be configured with more than 6 motorized lenses and support 360-degree installation, easy to use.
During the reporting period, the Company release the 100,000-lumen projector light, which adopted
the ALPD4.0 ultra high-brightness compact light source to achieve the lighting distance of over 3km. It is
used for the opening ceremony of the Winter Olympics and Lantern Festival activities, hence achieving
mass production and market-based application of high-brightness projector lights.
3. Software
We have completed 13 version iterations for the Feng OS system. At present, over 20 mass produced
household products are equipped with this system. We are leading in terms of paid members in the industry,
with the penetration rate up to 26%, which is greater than Xiaomi TV, iQiyi, etc. We have completed a
total of 25,000+ film and TV works and 25,000+ in-depth process of film characteristics, hence effectively
supporting the effects of large-screen presentation.
During the reporting period, the Company implemented an omnidirectional automatic correction
algorithm to provide customers with the intelligent auxiliary functions such as automatic obstacle
avoidance and screen alignment. The Feng OS system adds machine recommendation algorithms to more
pages, making it easier for users to discover their personalized preferences faster and more accurately. In
March 2022, the Feng OS system took the lead in releasing the function of screen matching for taking
pictures by a mobile phone, so that keystone correction may be performed by the camera in the mobile
phone instead of human eyes, hence providing more intelligent and more convenient functions for uses.
List of intellectual property rights acquired during the reporting period
Newly added in the current year Total
Applications (pcs) Granted (pcs) Applications (pcs) Granted (pcs)
Patent for
183 217 1,459 818
invention
Patent for utility
148 68 565 451
model
Patent for design 32 28 184 165
Software
25 30 113 111
copyright
Others 212 171 1047 825
Total 600 514 3,368 2,370
Note: 1. “Others” in the table above refer to trademarks of the Company; 2. during the reporting period,
the Company filed 211 PCT international patent applications.
3. R&D investments
In RMB
Current year Last year Change (%)
R&D investments expensed 236,702,224.29 204,443,369.10 15.78
R&D investments capitalized
Total R&D investments 236,702,224.29 204,443,369.10 15.78
Proportion of R&D investments 9.47 10.49 -1.02 percentage
to operating income (%) points
Proportion of R&D investments
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capitalized (%)
Reason for the material change in the total R&D investments compared with last year
□ Applicable √ N/A
Reasons of the great change in the proportion of R&D investments capitalized and explanation
about the rationality thereof
□ Applicable √ N/A
4. R&D staff
In RMB 0’000
Basic information
Amount of the current Previous period
period
Number of R&D staff (persons) 456 369
Proportion of R&D staff to total employees of 29.14 31.54
the Company (%)
Total compensation of R&D staff 14,761.07 12,090.48
Average compensation of R&D staff 32.37 32.77
Academic structure of the R&D staff
Academic category Person in the academic category
Master and above 131
Bachelor and below 325
Age structure of the R&D staff
Age category Person in the age category
Below 30 (exclusive) 175
30-40 (including 30, excluding 40) 210
40 and above 71
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Reason for material changes in the composition of the R&D staff, and impact on the future development of the Company
□ Applicable √ N/A
5. Other information
□ Applicable √ N/A
6. R&D projects
√ Applicable □ N/A
In RMB
Progress
Estimated Investment
Aggregate or Application
No. Item total in the current Goals Technological level
investment interim scenario
investment period
results
1 Trichromatic 102,840,000.00 45,085,590.93 69,620,698.27 Pilot test This project will research the industrialization This project will greatly This project will
Laser Display of the technology of RGB trichromatic laser promote the industrial establish a
Complete with phosphor to satisfy the market demands upgrading of trichromatic trichromatic laser
Equipment for RGB trichromatic laser display, build a laser display technology, display complete
Production mass production line for trichromatic laser and gain international equipment
Demonstration display complete equipment, acquire competitive edge for production
Line proprietary IP, and realize large-scale proprietary trichromatic demonstration
application of trichromatic laser display laser display technology. line.
products.
2 Laser TV 74,200,000.00 54,472,476.45 54,472,476.45 Mass Combined with the new-generation light Take the lead in the 4K household
production generator technology, equipped with the industry. laser TVs.
independently developed FengOS system and
screen, with obvious improvement in cost
effectiveness, color gamut, and ease of use.
3 Core device light 57,680,000.00 28,050,016.32 28,050,016.32 Mass The iterated light generator technology is Take the lead in the Upgrading of light
source and light production adopted to create a light source light generator industry; the cost source for small-
generator project with lower costs, higher color gamut, and effectiveness, color gamut, sized cinema
higher brightness; reduced costs and light effect, and other projectors,
improved performance on the basis of the first performance are greatly trichromatic laser
Fresnel flexible screen; developed products improved, to better satisfy TV, flexible
for innovative applications by taking the demands of customers. screen, vehicle-
advantage of the ALPD technology. mounted display,
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AR, and other
fields.
4 High-performance 50,910,000.00 19,115,838.56 19,115,838.56 Mass Provide laser mini projector products of high Take the lead in the House mini
mini projector production performance and high cost effectiveness. industry. projector market.
5 Laser cinema 48,140,000.00 42,462,156.47 42,462,156.47 Mass Develop a laser cinema projector featuring The proprietary DCI DCI compliant
projector production low cost, being DCI-compliant, and meeting compliant projector in small cinema
the requirements for use by high-end families. China to meet high-end projectors
family demands. intended for the
high-end
household market.
6 Other complete 48,250,000.00 15,574,702.96 15,574,702.96 Mass The automatic stacking scheme renders the Take the lead in the High-end large
equipment (large production linear superposition of brightness and cost to industry. venue projector,
venue + business achieve a leading technical advantage and business
education) cost-effective advantage on the market when education
the product is applied to high-lumen use projector and
scenes. other fields.
7 Key Enterprise 34,000,000.00 31,941,442.59 47,982,340.40 Mass Development of laser phosphor display The development of key Through
Laboratory for production optical engine, high-performance fluorescent laser display technology transformation of
Laser Display in materials and fluorescent components, and devices based on laser lab R&D results,
Guangdong portable laser display technology, and laser phosphor technology takes develop multiple
Province display technology with high contrast and the lead in the industry. laser display
high color reproduction. terminal products,
and promote the
development of
the entire display
industry chain.
Total / 416,020,000.00 236,702,224.28 277,278,229.43 / / / /
Remark
The Trichromatic Laser Display Complete Equipment Production Demonstration Line is under the “Strategic Advanced Electronic Materials” in the National
Key Research and Development Programs, for which Appotronics is the undertaking unit, while and CINEAPPO are the cooperating units. The expenditure budgets
planned by the three companies are RMB 95.18 million, RMB 4.22 million, and RMB 3.44 million, respectively.
III. Analysis of core competitiveness during the reporting period
(I) Analysis of core competitiveness
√ Applicable □ N/A
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1. Strong patent moat
Appotronics has created a strong patent moat around the underlying technical architecture of laser
display technologies, which is hard to be bypassed by companies in the industry entering the route of laser
phosphor technologies. By the end of 2021, Appotronics had a total of 2,419 patent applications and 1,434
granted patents worldwide. As the underlying key architecture technology, the ALPD technology
invented by the Company has been cited more than 600 times by industry giants such as Philips of the
Netherlands, Osram of Germany, Epson of Japan, and NEC etc.
2. Voice in the industry supported by core devices
Since its establishment, the Company spared no effort in R&D investment, which lead to a strong
technology barrier. We have been committed in the breakthroughs, innovations, expansion of application
scenarios, and industrialization of laser display technology, and created technology reserves and patent
portfolios covering the whole technology chain of laser display from key system architecture, core devices
to key algorithm. These efforts lead to the strong voice of the Company in the laser display industry,
making the Company the first choice for customers. Meanwhile, the stable base of major customers from
various industries also contribute to the continuously increasing market shares of Appotronics around the
world.
3. Forward-looking strategic layout and head start advantages
With reference to our advantages in core devices, the Company made forward-looking layout for new
application scenarios, such as vehicle-mounted display, aviation display, AR, etc., to promote innovation
application of core devices in new fields. Such forward-looking layout leads to the head start advantages
of the Company in the racetrack, hence injecting new power for the medium- and long-term development
of Appotronics and expanding more space for growth.
(II) Events occurred during the reporting period that have a material effect on the Company’s core
competitiveness, analysis of the effect and countermeasures
□ Applicable √ N/A
IV. Risk factors
(I) Risk of not making a profit
□ Applicable √ N/A
(II) Risk of significant decrease in operating performance or loss
□ Applicable √ N/A
(III) Risk related to core competitiveness
√ Applicable □ N/A
Risk of the technology R&D and innovation falling short of expectations
The core of our development is technical innovation. If we fail to effectively judge the direction of
technical innovations, or to make continuous technical innovations, or to make effective R&D investments
due to limited funds, or to successfully commercialize the technologies developed by us, our core
competitiveness in technical innovation may be impaired, and we may encounter technological risks in
future development.
(IV) Operating risk
√ Applicable □ N/A
30 / 337
Annual Report 2021
1. Risks of the COVID-19 epidemic
The repeated outbreak of the epidemic in China may cause planned product releases, customer visits,
on-site technology commissioning, etc. to be postponed or cancelled, delaying or preventing the Company
from participating in exhibitions as expected, and additional difficulties in order acquisition. With respect
to the supply chain, epidemic control measures lead to blocked logistics, increasing logistics costs,
prolonged period for purchase of raw materials, which intensified the difficulties in supply chain
management and smooth sales. The cinema projection service business of the Company may also be
affected to a certain extent due to closedown of some cinemas and postponed showing of films. Epidemic
prevention and control, if no improvement is achieved, may result in uncertainties for the production and
operation of the Company.
2. Risk related to the supply of important raw materials
Under the impact of tension in the supply chain, there are risks that core suppliers cannot supply parts
promptly at the expected quality and quantity. This may slow down the growth of the Company’s To C
business, and postponed shipment of some core devices or complete equipment products may result in
risks of failing to achieve the expected growth rate in operating performance of the Company.
(V) Financial risk
√ Applicable □ N/A
1. Risk of impairment of accounts receivable
As of the end of the reporting period, the carrying amount of our accounts receivable was RMB
403.1345 million, accounting for 9.84% of our total assets. Our products are generally delivered after
receiving the payment therefor. We give certain credit period to some major customers. In case of any
material adverse change in the business condition of our customers, we may be unable to recover certain
accounts receivable, which may have an adverse effect on our operating performance in the future.
2. Risk of impairment of inventories
As of the end of the reporting period, the carrying amount of our inventories was RMB 769.6211
million, accounting for 18.78% of our assets. Our inventories mainly comprise raw materials and goods
in stock. If any significant change in the competition pattern of the industry, material innovation in laser
display technology and products or the impact of COVID-19 results in a large quantity of unsalable
products, the recoverable amount of the inventories will be lower than their carrying amount. The
impairment of inventories will have a negative effect on our earnings.
3. Risks of impairment of fixed assets
As of the end of the reporting period, the carrying amount of our fixed asset was RMB 470.4105
million, accounting for 11.48% of our assets. Our fixed assets mainly consist of production equipment and
cinema projector light sources for lease, where the cinema projector light sources account for 78.17%. If
the COVID-19 epidemic results in prolonged closedown of cinemas, the cinema projector light sources
may be idle, causing risks of impairment of fixed assets and adverse effects to the operation of the
Company.
4. Risks related to government grants
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Annual Report 2021
During the reporting period, the Company received government grants in accordance with relevant
state policies, which are special funds or wards for R&D projects. The decrease in government grants to
be received by the Company in the future may result in adverse effects to the profitability and cash flow
of the Company.
(VI) Industrial risk
√ Applicable □ N/A
Risk of increasingly fierce market competition
Laser display is a new and thriving field in the display device industry. A lot of international and
domestic companies have entered the field, further heating up the market competition. If we cannot
maintain our competitive advantages in technology, product, cost, service and other areas, or the
competitors combine their advantages and resources through acquisition and merger, or the top technology
companies in the world increase their investment in the field of laser display, we may face the risks of
decrease in the profitability and market share.
(VII) Risk of macro-environment
√ Applicable □ N/A
The prolonged COVID-19 epidemic, constant trade friction between China and the US, and
increasing geopolitical risks lead to variability, uncertainty, complexity, and vagueness for the world. The
accelerated restructuring of the global economic pattern will cause constant adjustment in the industrial
chain. Although China basically maintained the stable fundamental aspects of the macro economy, this
cannot eliminate the potential risks that may be caused by the uncertainties in the macro economy to the
development of the Company.
(VIII) Risk related to depository receipts
□ Applicable √ N/A
(IX) Other significant risks
√ Applicable □ N/A
1. Risks in intellectual property rights
In consideration of the strategy of long-lasting development, the Company always emphasizes the
independent research and development of intellectual property rights, and has established a scientific R&D
system and an intellectual property protection system. However, this still cannot protect the Company
from malicious litigation initiated by competitors or third parties, which may hinder market expansion of
the Company; and cannot avoid the possibility of other intellectual property disputes between the
Company and competitors or third parties. Such disputes over intellectual property rights may cause
adverse effects to the normal operating activities of the Company.
2. Risks in implementing investment projects
Under the impact of force majeure, such as the COVID-19 epidemic, during the process of
implementing investment projects, the Company faces risks of slowing speed for production capacity
expansion, delayed construction of the head office building, etc. In March 2022, the Company made
postpone adjustment to investment projects according to the actual implementation conditions of
investment projects. Despite the efforts of the Company in implementing the investment projects and
32 / 337
Annual Report 2021
constantly monitoring the progress of such investment projects, in the actual implementation, this cannot
avoid situation like delayed construction compared with the plan, or adjustment to the implementation
plan or solution in response to industry and market development. Upon the occurrence of such
circumstances, the Company will make decisions in accordance with relevant provisions and promptly
fulfil its obligations for information disclosure.
3. Risk related to the management of cinema light source
In the business of laser cinema projection services, we enter into an agreement with a customer,
pursuant to which, we charge a service fee on the customer based on the duration of use of the light source,
while the customer uses the light source and pays fees therefor, and is responsible for the day-to-day
safekeeping and maintenance of the light source and damages thereto, but we do not collect any deposit
or other similar fees for the light source. The cinemas will use their best endeavors to maintain the light
source in good condition in order to ensure normal projection of films and continuity of their business
operation. However, we still face the risk of impairment of assets due to damage or loss of light source
caused by improper safekeeping on the part of the cinemas.
4. Risks in the arbitration with relevant parties of the participating company GDC BVI
At present, the Company is in the process of arbitration and counter arbitration with relevant parties
of GDC concerning the rights and interests of the parties. Because GDC Cayman, GDC BVI, Mr. ZHANG
Wanneng and his management team violated the provisions of the Shareholders’ Agreement and
Settlement Agreement, including but not limited to the appointment of directors in violation of corporate
governance regulations, violation of protective provisions for the Company, and failing to purchase the
minimum quantity of C5 projectors and core device parts by the end of 2021. As a result, the cooperation
on the purchase business for cinema hardware products between the Company and GDC BVI is subject to
uncertainty. The the trial of this case has not been started, the impact of such case on the profit or loss of
the Company cannot be determined at present; the eventual actual impact depends on the award of the
arbitration tribunal or the negotiation between the parties.
V. Main business activities during the reporting period
During the reporting period, our operating income was RMB 2.498 billion, increased by 28.19% year
on year; the net profits attributable to the shareholders of the listed company was RMB 233 million, up
104.98% year on year; The net profit attributable to shareholders of the listed company after deduction of
non-recurring profit or loss was RMB 124 million, up by 208.46% year on year. The total assets of the
Company as of the end of the reporting period was RMB 4.097 billion, up by 27.00% from the beginning
of the reporting period; and the net assets attributable to shareholders of the listed company was RMB
2.438 billion, up by 16.56% from the beginning of the reporting period.
(I) Analysis of main business
1. Analysis of changes in statement of income and statement of cash flows lines
In RMB
Item Amount of the current Amount of the prior % Change
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Annual Report 2021
period period
Operating income 2,498,228,401.78 1,948,884,176.83 28.19
Operating costs 1,651,089,557.25 1,393,075,043.93 18.52
Selling expenses 252,854,103.31 133,588,234.60 89.28
Administrative expenses 187,933,417.27 135,757,276.26 38.43
R&D expenses 236,702,224.29 204,443,369.10 15.78
Financial expenses 1,300,380.36 9,224,974.20 -85.90
Net cash flow from operating 52,390,430.42
58,337,226.84 11.35
activities
Net cash flows from investment 205,906,256.46
-444,906,406.98 -316.07
activities
Net cash flows from financing -99,126,552.86 N/A
295,570,009.05
activities
Description of reasons for changes in the operating income: primarily due to the increase in incomes from
the cinema service business, core devices, and sales of household and large venue products;
Description of reasons for changes in the operating costs: primarily due to the increase of operating costs
corresponding to the increase in operating incomes;
Description of reasons for changes in the selling expenses: primarily due to increased investments in own
brands of the Company, which resulted in the increase in selling expenses year on year; meanwhile, the
remunerations for the sales staff also increased;
Description of reasons for changes in the administrative expenses: primarily due to the equity incentive
plans launched by the Company, which resulted in great increase in the share-based payment expenses;
the management team expands along with the business growth of the Company, hence leading to
increasing employee benefits year on year;
Description of reasons for changes in the financial expenses: primarily due to the increase in incomes of
interests on the Company’s deposits, and the decrease in loan costs, which lead to the decrease in interest
expenses;
Description of reasons for changes in the R&D expenses: primarily due to increase in the investment of
R&D personnel;
Description of reasons for changes in the net cash flows from operating activities: primarily due to
collection of sales value and receipt of government grants;
Description of reasons for changes in the net cash flows from investment activities: primarily due to the
purchase of structural deposits in the reporting period and expenditures for the construction of the head
office building of the Company;
Description of reasons for changes in the net cash flow from financing activities: primarily due to
additional bank loans in the current period and receipt of strategic investment by subsidiaries.
Detailed description of major changes in the business types, profit composition or profit sources of the
Company
□ Applicable √ N/A
2. Analysis of revenue and costs
√ Applicable □ N/A
During the reporting period, our operating income was RMB 2.498 billion, increased by 28.19% year on
year.
(1). Main business by industry, product, region, and sales mode
In RMB 0’000
Main business by industry
Operating Gross margin % Change in % Change in % Change in
Industry Operating costs
income (%) operating operating cost gross margin
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Annual Report 2021
income
Laser display 249,822.84 165,108.96 33.91 28.19 18.52 +5.39
percentage
points
Main business by product
% Change in
Operating Gross margin % Change in % Change in
Product Operating costs operating
income (%) operating cost gross margin
income
1. Sales 211,933.18 149,589.02 29.42 21.51 16.74 +2.89
percentage
points
(1) Laser 28,881.33 14,420.24 50.07 42.48 76.87 -9.71
optical engine percentage
points
(2) Complete 170,804.20 125,709.18 26.40 16.57 9.14 +5.01
laser projector percentage
points
Laser cinema 6,252.91 3,426.83 45.20 110.57 123.03 -3.06
projector percentage
points
Laser TV 56,184.98 39,524.07 29.65 2.64 -0.84 +2.47
percentage
points
Laser business 29,435.19 19,985.49 32.10 9.56 3.71 +3.83
education percentage
projector points
Laser large 21,722.94 9,714.34 55.28 113.55 99.27 +3.21
venue percentage
projector points
Smart mini 57,208.18 53,058.45 7.25 10.51 6.90 +3.13
projector percentage
points
(3) Other 12,247.65 9,459.60 22.76 60.69 96.59 -14.11
products percentage
points
2. Cinema 36,062.20 14,312.88 60.31 109.99 32.83 +23.06
projection percentage
service points
3. Other 1,827.46 1,207.06 33.95 -44.67 210.49 -54.28
business percentage
points
Total 249,822.84 165,108.96 33.91 28.19 18.52 +5.39
percentage
points
Main business by region
% Change in
Operating Gross margin % Change in % Change in
Region Operating costs operating
income (%) operating cost gross margin
income
Domestic 231,854.75 155,390.51 32.98 24.95 14.59 +6.06
percentage
points
Overseas 17,968.09 9,718.45 45.91 92.66 162.53 -14.40
percentage
points
Total 249,822.84 165,108.96 33.91 28.19 18.52 +5.39
percentage
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Annual Report 2021
points
Main business by sales mode
% Change in
Operating Gross margin % Change in % Change in
Sales mode Operating costs operating
income (%) operating cost gross margin
income
Direct sales 154,237.61 112,202.50 27.25 7.70 5.54 +1.48
percentage
points
Distribution 58,085.08 37,324.45 35.74 71.60 72.46 -0.32
percentage
points
Commissioned 1,437.95 1,269.13 11.74 120.72 118.25 -1.00
sales percentage
points
Projection 36,062.20 14,312.88 60.31 109.99 32.83 +23.06
services percentage
points
Total 249,822.84 165,108.96 33.91 28.19 18.52 +5.39
percentage
points
Description of main business by sector, product, region, and sales mode:
1. Our laser display products have been used in cinema projection, household display, education
interaction, commercial application, cultural and tourism, security and surveillance, and other fields.
Thanks to the high consumption demands on the domestic and overseas market and the temporary relieve
of the COVID-19 epidemic, the Company achieved the year-on-year growth of 28.19% in total operating
income in 2021.
2. The overall gross margin is 33.91% in 2021, up by 5.39 percentage points compared with 2020,
primarily due to the adjustment made by the Company in the product portfolio. Other business mainly
covers the patent license fees, development service fees, etc. received in this year.
3. With the business of the Company mainly deployed in the Chinese mainland, incomes from
domestic and overseas businesses account for 92.81% and 7.19%, respectively.
4. The Company classifies the business into product sales and projection services, where the product
sales are classified into direct sales, distribution, and commissioned sales.
(2). Analysis of output and sales volume
√ Applicable □ N/A
% Change
% Change % Change
Main products Unit Output Sales volume Stock in sales
in output in stock
volume
Optical engine Set 524,110.00 456,848.00 94,123.00 47.68 26.85 250.41
and complete
equipment
Total 524,110.00 456,848.00 94,123.00 47.68 26.85 250.41
Explanation about output and sales volume
We supplied part of laser light source produced under operating leases, used part of laser TV light
generators produced to manufacture laser TV products, and used part of laser mini projector light
generators for production laser mini projectors, which were not included in the production and sales
volume.
(3). Performance of significant procurement contracts and significant sales contracts
□ Applicable √ N/A
Performance by the end of the reporting period of significant sales contracts entered into by the Company
□ Applicable √ N/A
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Annual Report 2021
Performance by the end of the reporting period of significant procurement contracts entered into by the
Company
□ Applicable √ N/A
(4). Analysis of costs
In RMB 0’000
Costs by industry
Ratio in
Ratio in
total
total costs Amount of
Components Amount for the costs for % Change in Situation
Industry for the the prior
of cost current period the prior amount Description
current period
period
period (%)
(%)
Laser 165,108.96 100.00 139,307.50 100.00 18.52
display
Costs by product
Ratio in
Ratio in
total
total costs Amount of
Components Amount for the costs for % Change in Situation
Product for the the prior
of cost current period the prior amount Description
current period
period
period (%)
(%)
1. Sales Direct
134,461.73 89.89 114,782.91 89.57 17.14
materials
Direct labor 4,054.86 2.71 3,144.71 2.45 28.94
Indirect
11,072.43 7.40 10,215.82 7.98 8.39
expenses
Subtotal 149,589.02 100 128,143.44 100 16.74
2. Cinema Depreciation
projection of light 7,665.61 53.56 7,484.65 69.46 2.42
business source
Software
1,439.08 10.05 844.05 7.83 70.50
license fee
Technical
4,434.46 30.98 2,070.54 19.22 114.17
service fee
Labor cost 773.73 5.41 376.07 3.49 105.74
Subtotal 14,312.88 100.00 10,775.31 100.00 32.83
3. Other
1,207.06 100.00 388.75 100.00 210.50
business
Total 165,108.96 100.00 139,307.50 100.00 18.52
Explanation about cost analysis
1. Sales costs mainly comprise direct materials, direct labor and indirect expenses, of which, the costs
of direct materials account for 89.89%.
2. In the business of lease services, the increase in variable costs, such as technology service fees,
software use fees, and human costs, are primarily due to the increase in the duration of cinema projection;
depreciation of light sources is made by using the straight line method, which is irrelevant to whether they
are in use, hence experienced no material change year on year.
3. Costs of other businesses increased by 210.5% year on year, primarily due to the increase in
installation and transformation costs.
(5). Change in the scope of consolidation due to changes in equity interests held in major
subsidiaries during the reporting period
√ Applicable □ N/A
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Annual Report 2021
(Chongqing) Innovative Technology Co., Ltd. is a wholly-owned subsidiary established by the
Company on December 29, 2020; it was not included in the scope of consolidation in 2020 since it had no
substantial operating business. In this year, by equity transfer and receiving strategic investment,
(Chongqing) Innovative Technology Co., Ltd. is transferred into a subsidiary of the Company, in which
the Company holds 39.19% equity interests. The Company and Shenzhen Fengye Investment Consulting
Limited Partnership (Limited Partnership), a party acting in concert with the Company, hold a total of
53.6250% voting rights in (Chongqing) Innovative Technology Co., Ltd., for which the voting rights are
exercised according to the opinions of the Company. Since the voting rights are sufficient to exercise
significant influence on the resolution of the general meeting of (Chongqing) Innovative Technology Co.,
Ltd., the Company becomes the controlling shareholder of (Chongqing) Innovative Technology Co., Ltd.
(Chongqing) Innovative Technology Co., Ltd. was included in the scope of consolidation from 2021.
Limited was established on November 10, 2020 by Fengmi (Beijing) Technology Co., Ltd., a
controlled subsidiary of the Company; it was not included in the scope of consolidation in 2020 since it
had no substantial operating business. After the equity transfer in this year, it became a wholly-owned
subsidiary of (Chongqing) Innovative Technology Co., Ltd., and was included in the scope of
consolidation from 2021.
Chongqing Ewei Ecommerce Co., Ltd. is established on August 20, 2021 by (Chongqing) Innovative
Technology Co., Ltd., a controlled subsidiary of the Company, with the registered capital of RMB 10,000;
it is a wholly-owned subsidiary of (Chongqing) Innovative Technology Co., Ltd., and was included in the
scope of consolidation since its establishment.
Chongqing Guangbo Ecommerce Co., Ltd. is established on August 20, 2021 by (Chongqing)
Innovative Technology Co., Ltd., a controlled subsidiary of the Company, with the registered capital of
RMB 10,000; it is a wholly-owned subsidiary of (Chongqing) Innovative Technology Co., Ltd., and was
included in the scope of consolidation since its establishment.
Shenzhen Orange Juice Energy Technology Co., Ltd. is established on December 29, 2021 jointly by
(Chongqing) Innovative Technology Co., Ltd., a controlled subsidiary of the Company, and Shenzhen
Orange Juice Enterprise Management Co., Ltd. (Limited Partnership), with the registered capital of RMB
5.0000 million; with 85% equity interests held by (Chongqing) Innovative Technology Co., Ltd., it was
included in the scope of consolidation since its establishment.
Fabulus Technology Hong Kong Limited is a wholly-owned subsidiary established by Appotronics
Hong Kong Limited, a subsidiary of the Company; it was deregistered on July 30, 2021.
Fabulus Display (Beijing) Co., Ltd. is a controlled subsidiary jointly established by the Company and
Beijing SiShield Security Co., Ltd. with the registered capital of RMB 30.0000 million, and 90% equity
interests held by the Company. It was deregistered on November 25, 2021.
(6). Significant changes in or adjustments to the businesses, products, or services of the Company
during the reporting period
□ Applicable √ N/A
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Annual Report 2021
(7). Main customers and main suppliers
A. The Company’s major customers of the sales
The sales to top 5 customers were RMB 1,014.5155 million, representing 40.61% of the total annual sales,
of which the sales to related parties were RMB 625.1358 million, representing 25.02% of the total annual
sales.
Top 5 customers
√ Applicable □ N/A
In RMB 0’000
% of total annual Related to the listed
No. Customer Sales
sales company or not
1 Customer 1 59,277.41 23.73 Yes
2 Customer 2 13,048.28 5.22 No
3 Customer 3 10,764.07 4.31 No
4 Customer 4 9,551.75 3.82 No
5 Customer 5 8,810.04 3.53 No
Total / 101,451.55 40.61 /
Description of sales to a single customer accounting for over 50% of the total sales value, new
customer in the top 5 customers, or serious dependance on a small number of customers during the
reporting period
√ Applicable □ N/A
Customer 3 and customer 4 were newly counted in the top 5 customers.
B. Information on major suppliers of the Company
The purchases from top 5 suppliers were RMB 848.4775 million, representing 35.88% of the total annual
purchase cost, of which the purchases from related parties were RMB 244.8159 million, representing 10.35%
of the total annual purchase cost.
Top 5 suppliers
√ Applicable □ N/A
In RMB 0’000
% of total Related to the listed
Procurement
No. Supplier annual company or not
cost
purchase cost
1 Supplier 1 24,481.59 10.35 Yes
2 Supplier 2 18,365.59 7.77 No
3 Supplier 3 16,143.54 6.83 No
4 Supplier 4 16,133.96 6.82 No
5 Supplier 5 9,723.07 4.11 No
Total / 84,847.75 35.88 /
Description of purchase from a single supplier accounting for over 50% of the total sales value, new
supplier in the top 5 suppliers, or serious dependance on a small number of suppliers during the
reporting period
√ Applicable □ N/A
Supplier 3 was newly counted in the top 5 suppliers.
3. Expenses
√ Applicable □ N/A
Unit: In RMB
Amount of the prior
Item Amount of the current period % Change
period
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Annual Report 2021
Selling
252,854,103.31 133,588,234.60 89.28
expenses
Administrative
187,933,417.27 135,757,276.26 38.43
expenses
R&D expenses 236,702,224.29 204,443,369.10 15.78
Financial
1,300,380.36 9,224,974.20 -85.90
expenses
(1) The total selling expenses in 2021 were RMB 252.8541 million, up by 89.28% year on year,
primarily due to increased investments in own brands of the Company, which resulted in the increase in
selling expenses year on year; meanwhile, the remunerations for the sales staff also increased;
(2) The total administrative expenses in 2021 were RMB 187.9334 million, up by 38.43% year on
year, primarily due to the equity incentive plans launched by the Company, which resulted in great increase
in the share-based payment expenses; the management team expands along with the business growth of
the Company, hence leading to increasing employee benefits year on year;
(3) The total R&D expenses in 2021 were RMB 236.7022 million, up by 15.78% year on year,
primarily due to increase in the investment of R&D personnel;
(4) The total financial expenses in 2021 were RMB 1.3004 million, decreased by 85.90% year on
year, primarily due to the increase in incomes of interests on the Company’s deposits, and the decrease in
loan costs, which lead to the decrease in interest expenses.
4. Cash flow
√ Applicable □ N/A
Unit: In RMB
Item Amount of the current Amount of the prior
% Change
period period
Net cash flow from operating
58,337,226.84 52,390,430.42 11.35
activities
Net cash flows from investment
-444,906,406.98 205,906,256.46 -316.07
activities
Net cash flows from financing
295,570,009.05 -99,126,552.86 N/A
activities
Description of reasons for changes in the net cash flows from operating activities: The net cash flows
from operating activities were RMB 58.3372 million, increased by RMB 5.9468 million year on year,
primarily due to the increase in the sales revenue and government grants received.
Description of reasons for changes in the net cash flows from investment activities: The net cash
flows from investment activities were RMB -444.9064 million, decreased by RMB 650.8127 million year
on year, primarily due to the purchase of structural deposits in the reporting period and expenditures for
the construction of the head office building of the Company;
Description of reasons for changes in the net cash flow from financing activities: The net cash flows
from financing activities were RMB 295.5700 million, up by RMB 394.6966 million over the previous
year, primarily due to additional bank loans in the current period and receipt of strategic investment by
subsidiaries.
(II) Explanation about material change in profit due to non-main business
□ Applicable √ N/A
(III) Analysis of assets and liabilities
√ Applicable □ N/A
1. Status of assets and liabilities
In RMB
% of Balance as at % of total
Balance at the end % Change
Item total December 31, assets as Explanation
of the period in amount
assets at 2020 at
40 / 337
Annual Report 2021
the end December
of the 31, 2020
period
Held-for- 417,200,000.00 10.18 114,000,000.00 3.53 265.96 Primarily due to
trading the increase in
financial financial products
assets and equity
instrument
investments
Notes 5,256,603.03 0.13 3,726,328.91 0.12 41.07 Primarily due to
receivable the increase in
bank's acceptance
bills and
commercial
acceptance bills
received during
this period
Receivables 244,860.00 0.01 11,959,000.00 0.37 -97.95 Primarily due to
financing the collection of
matured bank
acceptance bills
Prepayments 98,116,970.83 2.39 47,447,601.43 1.47 106.79 Primarily due to
the increase in
advance
payments for
goods during the
reporting period
Other 30,875,345.66 0.75 12,534,062.15 0.39 146.33 Primarily due to
receivables dividends
receivable from
participating
companies and
performance
compensation
Inventories 769,621,133.00 18.78 418,812,140.80 12.98 83.76 Primarily due to
the increase in
risk-based stock,
raw materials,
and goods on
hand
Non-current 3,473,049.18 0.08 N/A Primarily due to
assets due the
within one reclassification of
year long-term
receivables due
within one year
Other 52,761,820.83 1.29 13,002,195.46 0.40 305.79 Primarily due to
current the increase in the
assets input VAT to be
deducted
Long-term 5,793,552.74 0.14 13,196,087.78 0.41 -56.10 Primarily due to
accounts the collection in
receivable the current period
and the
reclassification of
long-term
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Annual Report 2021
receivables due
within one year
Construction 148,620,511.35 3.63 51,576,850.72 1.60 188.15 Primarily due to
in progress the increase in the
investment for the
construction in
progress of the
headquarters
building during
the reporting
period
Right-of-use 26,803,910.76 0.65 N/A Primarily due to
assets the impact of
implementing the
New Lease
Standard
Other non- 10,998,641.77 0.27 6,299,781.06 0.20 74.59 Primarily due to
current the increase in
assets advance
payments for
fixed assets
Short-term 5,570,878.11 0.14 88,778,852.86 2.75 -93.72 Primarily due to
borrowings the repayment of
due short-term
borrowings
Accounts 419,966,567.27 10.25 226,494,815.90 7.02 85.42 Primarily due to
payable the increase in
amounts of goods
payable
corresponding to
increase in
purchase
Advance 130,288,312.62 3.18 153,258,189.88 4.75 -14.99 Primarily due to
from the decrease in
customers advance
payments of
recharge fees for
the business of
cinema projection
services
Contract 45,541,629.55 1.11 31,518,312.59 0.98 44.49 Primarily due to
liabilities the increase in
receipts in
advance under
contracts
Employee 64,119,087.51 1.56 46,105,566.15 1.43 39.07 Primarily due to
benefits the increase in
payable employee
benefits
Other 19,561,104.12 0.48 3,045,831.07 0.09 542.23 Primarily due to
current the increase in
liabilities amounts payable
for goods
returned
Long-term 368,635,614.64 9.00 64,845,281.53 2.01 468.48 Primarily due to
borrowings the increase in
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Annual Report 2021
long-term loans
due to the
adjustment of the
loan structure,
and the increase
in the special
loans for the head
office building
Leasing 10,789,352.69 0.26 N/A Primarily due to
liabilities the impact of
implementing the
New Lease
Standard
Deferred 10,266,982.08 0.25 16,723,257.15 0.52 -38.61 Primarily due to
income the transfer of
government
grants received in
previous periods
into the profit or
loss for the
current period
Other information
None
2. Overseas assets
√ Applicable □ N/A
(1) Size of assets
Where: The overseas assets were RMB 458.8494 million, representing 11.20% of the total assets.
(2) Explanation about the high proportion of overseas assets
□ Applicable √ N/A
3. Encumbrances on assets as of the end of the reporting period
√ Applicable □ N/A
Unit: In RMB
Item Amount Reason
Other monetary funds 26,131,913.19 Margins
Bank deposits 40,000,000.00 Term deposits
Bank deposits 402,750.00 Interests provided
Land use rights 292,056,499.86 Loan mortgage
4. Other information
□ Applicable √ N/A
(IV) Analysis of operation information of the industry
√ Applicable □ N/A
Please refer to the relevant content in “Section III Discussion and Analysis of the Management - II.
Main business, business model, status of industry and R&D activities during the reporting
period”.
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Annual Report 2021
(V) Analysis of investments
Overall analysis of external equity investments
√ Applicable □ N/A
As of the end of the reporting period, the balance of long-term equity investments was RMB
293,601,085.27, increased by 11.74% year on year.
1. Material equity investments
√ Applicable □ N/A
Name of investee Opening book Closing book value Shareholding ratio Accounting
value (RMB) (RMB) in the investee (%) account
Long-term equity
Cinionic Limited 131,406,424.64 126,924,427.39 20.00
investment
GDC Technology
Long-term equity
Limited (British Virgin 131,338,347.84 166,676,657.88 44.00
investment
Islands)
2. Material non-equity investments
□ Applicable √ N/A
3. Financial assets at fair value
√ Applicable □ N/A
For details, please refer to “Section II Company Profile and Financial Highlights - X. Items at fair value”.
4. Specific progress of material assets restructuring and integration during the reporting period
□ Applicable √ N/A
(VI) Sale of material assets and equities
□ Applicable √ N/A
(VII) Analysis of major investees
√ Applicable □ N/A
In RMB 0’000
Company Main business Registered Shareholding Total assets Net assets Operating Net profit
capital percentage income
Provision of cinema
laser light source lease
CINEAPPO 10,000.00 63.20% 96,972.25 43,094.08 47,700.20 9,383.34
service and sales of
projectors
R&D and sale of
Foremovie household display 7,017.54 39.19% 96,559.36 5,704.05 113,844.20 -8,138.38
products
Appotronics R&D and sale of laser
30,116.15 100.00% 45,067.75 36,098.19 10,004.44 4,399.21
HK light source
(VIII) Structured entities controlled by the Company
□ Applicable √ N/A
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Annual Report 2021
VI. Discussion and analysis of future development of the Company
(I) Structure and trend of the industry
√ Applicable □ N/A
1. Main racetrack: high demands in the household racetrack
Given the obvious trend of large screens on the household display market, smart projection is on the
rise for rapid growth. The IDC report shows that the shipment of household projectors in 2021 reached
3.48 million sets, up by 16%, leading to the sales value of over RMB 12.4 billion, up by 18.3%.
As one of the development priorities of China, and one of the mainstream display technologies for
the future, laser display is one of the fields with support from the state. In 2021, the Ministry of Industry
and Information Technology stated to enhance support for the laser display industry in accordance with
the 14th Five-year Plan. In addition, there are continuous policies favorable to the smart projection market
- the state encourages the “Intelligence+” consumption ecology, and encourages content supply, which
will promote the release of consumer’s demands.
In the short term, the year 2022 is a major year of sports - from the Beijing Winter Olympics to the
World Cup in Qatar, to the Asian Games in Hangzhou - abundant sports events will lead to high demands
of consumers for large-size screens. In the medium term, in the post-economic era featuring repeated
outbreaks, projectors are included as one of the products of online classes for study at home recommended
by Shenzhen Health Commission; moreover, the “home economy” is also drives the sales of household
film and entertainment devices, such as projectors. In the long term, young consumers, including, among
others, the Generation Z pursue personalization and immersive experience, and are willing to replace TVs
with projectors, or take projectors as one of the alternative options.
In addition, laser mini projectors, as a new product developed by the Company in 2021, has the
advantages in brightness and color. Given the continuous expansion of the racetrack, the continuous
improvement of the industrial chain, and rapid reduction in product costs, it’s expected to receive
explosive growth with a huge market space.
2. Racetrack for future growth:
(1) Promising future in the vehicle-mounted display racetrack
The extremely huge vehicle industry contains many trillion-level enterprises. According to the data
of China Association of Automobile Manufacturers, China has been ranking the first in the sales volume
of vehicles on the world for 13 consecutive years, and has made great progress in the transformation to
electric vehicles, Internet-connected vehicles, and intelligent vehicles.
Vehicle-mounted display is one of the core fields for smart cockpits. According to the survey data of
Huachuang Securities, it’s predicted that the size of the global vehicle-mounted display market will reach
USD 17.7 billion in 2022. Vehicle-mounted display includes vehicle widow projection, HUD, console,
and many other display application scenarios in vehicles. In vehicle-mounted applications, laser light
sources can output greater brightness at higher efficiency, low heat radiation, and low consumption with
a smaller size, hence it is more likely to develop into the mainstream technologies for vehicle-mounted
display. The application of laser projection display in vehicles is an emerging blue-sea market; the
Company has implemented cooperation for pre-shipment installations.
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Annual Report 2021
(2) Emerging large-sale innovative application scenarios
Given the compatibility between the laser display technology and cutting-edge technologies,
including human-machine interaction, smart recognition, Internet of Things, cloud platform, and big data,
the wide application of 5G mobile phones will create potential demands for supporting laser display
products. Therefore, it’s expected there will be huge market demands for supporting mobile products
featuring high efficiency, small size and low cost in the future. In the short term, the trend remains
unchanged in the development priority of the current display market will witness the development of laser
display technology towards advantages in cost-performance ratio, high portability, high dynamic range,
wide color gamut, and high brightness for integration with ultra short throw and anti-ambient light screen
technologies.
(II) Development strategy of the Company
√ Applicable □ N/A
Facing the future, Appotronics is dedicated to becoming a pioneer in the display industry; under the
mission of “New light, New Life”, the Company insists on the strategic direction of “core technologies +
core devices + application scenario” to continuously promote breakthrough innovation of laser display
technologies, accelerate the expansion of application scenarios, and enhance the in-depth industrialization
of laser display technologies. Focusing on the business of core devices, the Company will work with major
customers to expand and strengthen the ecology of the laser display industry.
(III) Business plan
√ Applicable □ N/A
In 2022, under the impact and challenge of repeated local outbreak of the epidemic, global inflation,
geopolitical tension, and shortage of chips in the industry, Mr. LI Yi, founder and Chairman of the
Company, returned to the first time to take the position of CEO. The Company will start the plan of dual-
engine growth - with the mini projector business and core device business as the core direction for
breakthrough in 2022, we can take opportunities of the industry and stimulate more growth energy for the
Company.
1. Expanding the new racetrack of laser mini projectors
Firstly, we will minimize costs to promote popularization of such products. Laser mini projectors
have the inherent advantages of “high brightness, wide color gamut, and large screen”; in the future, the
Company will reduce costs through technology iteration, through optimization of the supply chain, and
through scale effects, so as to reduce the retail prices of terminals, hence promoting the rapid expansion
in shipment and population of laser mini projector products.
Secondly, we will implement two strategies to improve the competitive of our own-brand products.
On one hand, we will implement the strategy of product matrix to release differentiated products intended
for various user demands, so as to explore the smart mini projector market. On the other hand, we will
implement the strategy of flagship products to actively build flagship products, take comprehensive
measures in product experience, staffing, brand marketing, and channel expansion, so as to achieve
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Annual Report 2021
substantial breakthrough in both the brand and sales volume.
2. Continuous expansion of the core device business
The Company has made obvious achievements in the field of household core devices. We have
established projects for several new products, have the reservation for high-quality projects intended for
overseas markets, and continuously expand the scope of partners along the ecology chain, so as to jointly
expand and strengthen the ecology of the laser display industry.
We insist on the route of working with leading customers to promote the early large-scale
implementation of the vehicle-mounted display business. In the future, we will work with leading
customers on the pre-shipment market and post-shipment market for our vehicle-mounted products, which
will be released stage by stage. Meanwhile, we will work for breakthrough in technology route to reduce
costs, hence promoting the popularization of vehicle-mounted display products.
We will constantly explore new application scenarios. Besides aviation projection and AR, we will
continue to explore new application scenarios to expand our core technologies and core device products
to more application fields, such as smart household, 3D industry, and other fields.
(IV) Others
□ Applicable √ N/A
VII. Information not disclosed according to the standard due to inapplicability of the standard,
involving State secrets or trade secrets or other reasons, and explanation about the relevant
reasons
□ Applicable √ N/A
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Annual Report 2021
Section IVCorporate Governance
I. Corporate governance
√ Applicable □ N/A
We have continuously improved our corporate governance structure and operated in accordance with
the requirement of the Company Law, the Securities Law, the Rules Governing the Listing of Stocks on
the Science and Technology Innovation Board of Shanghai Stock Exchange, the Articles of Association
(“AOA”), and relevant rules and regulations, taking into account our actual business situations, and
established a corporate governance structure comprising the general meeting of shareholders, the Board
of Directors, the Board of Supervisors and the management, and a mechanism in which the highest
authority, the decision-making body, the supervisory body and the management coordinate with and hold
up each other. We have established a sound corporate governance system, to effectively protect the
interests of investors.
(I) Shareholders and the general meeting of shareholders
The general meeting of shareholders is the highest authority of the Company. During the reporting
period, we have convened and held general meetings of shareholders in strict accordance with our AOA,
the Rules of Procedure of the General Meeting of Shareholders and other applicable laws and regulations.
The notices, convening, resolutions, voting, signing and information disclosures in respect of the general
meeting of shareholders comply with the relevant provisions of the Company Law, the Securities Law, the
CSRC and the SSE, and the resolutions of the general meeting of shareholders are legal and valid. We
have fully protected the rights of all shareholders, especially the minority shareholders, and ensured that
each shareholder can enjoy the right to know and participate in the affairs of the Company and exercise
his voting rights according to law.
(II) Directors and the Board of Directors
The Board of Directors is the standing decision-making and management body of the Company, and
has set up four committees, namely the Strategy Committee, the Compensation and Performance
Assessment Committee, the Nomination Committee and the Audit Committee. During the reporting period,
the Board of Directors has exercised its functions and powers in strict accordance with the requirements
of the applicable laws and regulations, the AOA, the Rules of Procedure of the Board of Directors, and
the Work Regulations for Independent Directors, and each director has been assiduous in his duties and
actively received the relevant training. In order to improve the objectivity and scientificity of the decisions
made by the Board of Directors, we have appointed the independent directors to participate in and
supervise the decision-making process of the Board of Directors. The independent directors have
performed their duties independently, actively safeguarded the interests of the Company and the
shareholders, and expressed their opinions on important and material matters of the Company. The
committees of the Board of Directors have fully exercised their relevant functions, to ensure that the Board
of Directors makes scientific and reasonable decisions for the Company.
(III) Supervisors and the Board of Supervisors
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Annual Report 2021
The Board of Supervisors is the supervisory body of the Company and comprises three supervisors.
The Board of Supervisors has exercised its functions and powers according to the procedures set forth in
the AOA and the Rules of Procedure of the Board of Supervisors, effectively supervised the legal and
regulatory compliance of the performance of duties by the financial staff, directors and senior officers of
the Company, and actively safeguarded the interests of the Company and the shareholders.
(IV) Management of information disclosures
During the reporting period, we have disclosed the relevant information truthfully, accurately,
promptly, fairly and completely, and duly performed our obligation of information disclosure in
accordance with the Rules Governing the Listing of Stocks on the Sci-tech Innovation Board of the
Shanghai Stock Exchange, the Administrative Measures for Information Disclosure by the Listed
Companies and other applicable laws and regulations, and our Information Disclosure Policy, to ensure
that all shareholders and other stakeholders have equal access to the information of the Company.
(V) Registration of insiders
During the reporting period, we have registered and filed the insiders in connection with the matters
disclosed in our regular reports in strict accordance with the applicable laws and regulations and our
Insider Management Policy.
During the reporting period, we have defined the respective responsibilities of the general meeting
of shareholders, the Board of Directors, the Board of Supervisors and the management. According to the
requirements of the Board of Directors, the management has continuously improved the management
cycle “led by mechanism, guaranteed by system, guided by culture and supported by capacity”. Our
management level and governance capability have been improved remarkably, providing further assurance
for our healthy and sustainable development. The directors, supervisors and senior officers have been
assiduous in their duties, and seriously exercised the rights and performed the obligations under the
Company Law and the AOA, to ensure the safe, steady and sustainable development of the Company and
safeguard the interests of the shareholders to the maximum extent practicable.
Is there major deviation in the corporate governance from laws, administrative regulations, and the
regulations of CSRC on the governance of listed companies; if yes, specify the reasons.
□ Applicable √ N/A
II. Give an explanation if the Company cannot guarantee its independence and ability to operate
independently due to its relationship with the controlling shareholder in business, personnel,
assets, organization, financial and other affairs.
□ Applicable √ N/A
Information about the business identical or similar to that of the Company operated by the controlling
shareholder, actual controller, and other units under their control, impact of horizontal competition or
major changes in horizontal competition on the Company, measures that have been taken, solution
progress, and subsequent solution plans.
□ Applicable √ N/A
Information about horizontal competition operated by the controlling shareholder, actual controller, and
other units under their control causing material adverse effects to the Company.
□ Applicable √ N/A
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Annual Report 2021
III. General meetings of shareholders held
Reference to
resolutions published Date of disclosure
Session Date of meeting Resolution
on the designated of resolutions
website
1st extraordinary All proposals have
general meeting of February 25, 2021 www.sse.com.cn February 26, 2021 been reviewed and
shareholders in 2021 passed.
2nd extraordinary All proposals have
general meeting of April 12, 2021 www.sse.com.cn April 13, 2021 been reviewed and
shareholders in 2021 passed.
Annual general All proposals have
meeting of May 14, 2021 www.sse.com.cn May 15, 2021 been reviewed and
shareholders in 2020 passed.
3rd extraordinary All proposals have
general meeting of August 3, 2021 www.sse.com.cn August 4, 2021 been reviewed and
shareholders in 2021 passed.
4th extraordinary All proposals have
general meeting of October 25, 2021 www.sse.com.cn October 26, 2021 been reviewed and
shareholders in 2021 passed.
5th extraordinary All proposals have
general meeting of November 22, 2021 www.sse.com.cn November 23, 2021 been reviewed and
shareholders in 2021 passed.
Extraordinary general meetings convened at the request of preferred shareholders with resumed voting
rights
□ Applicable √ N/A
Explanation about the general meetings of shareholders
□ Applicable √ N/A
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Annual Report 2021
IV. Implementation of and changes in arrangements of differentiated voting rights during the reporting period
□ Applicable √ N/A
V. Governance of red-chip structure companies
□ Applicable √ N/A
VI. Directors, supervisors, and senior officers
(I) Changes in shareholding and remunerations of current directors, supervisors, senior officers and key technical staff and the former directors,
supervisors, senior officers and key technical staff who left the Company during the reporting period
√ Applicable □ N/A
Unit: Share
Total Whether or
remuneration not receive
Number of (inclusive of any
Number of
Beginning shares held tax) received remuneration
Expiry date of shares held Change in Cause of
Name Title (Note) Gender Age date of term as at from the from any
term of office as at January shareholding change
of office December Company affiliate of the
1, 2020
31, 2020 during the Company
reporting period
(in RMB 0’000)
Acting as the
Chairman
Chairman, from July 18,
General 2018; as the August 2,
LI Yi Male 51 / / / / 306.84 No
Manager, key General 2024
technical staff Manager from
December 31,
2021
YU March 29, August 2,
Director Male 62 / / / / / No
Zhuoping 2022 2024
Director, Acting as the
ZHANG August 2,
Deputy Male 46 director from / / / / 23.14 No
Wei 2024
General August 3,
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Annual Report 2021
Manager 2021; as the
Deputy
General
Manager from
December 31,
2021
NING Independent August 2,
Male 56 July 18, 2018 / / / / 18.00 No
Xiangdong director 2024
TANG Independent August 2,
Male 59 July 18, 2018 / / / / 18.00 No
Guliang director 2024
CHEN Independent August 3, August 2,
Male 46 / / / / 7.43 No
Youchun director 2021 2024
Director, Personal
WANG August 3, August 2,
Financial Female 40 15,420 6,000 -9,420 reason (Note 34.66 No
Yingxia 2021 2024
Director 3)
Chairperson
GAO August 2,
of the Board Female 42 July 18, 2018 / / / / 83.10 No
Lijing 2024
of Supervisors
Personal
SUN August 3, August 2,
Supervisor Male 41 8,000 3,000 -5,000 reason (Note 32.62 No
Hongdeng 2021 2024
3)
WANG August 2,
Supervisor Female 45 July 18, 2018 / / / / 35.47 No
Yanyun 2024
Deputy
LIANG December 31, August 2,
General Male 42 / / / / 0.8 No
Guanning 2021 2024
Manager
Board August 2, /
YAN Li Female 38 May 19, 2020 15,000 15,000 / 69.20 No
Secretary 2024
Left the post
Acting as the
of Deputy
Key technical Deputy
General
HU Fei staff, Deputy Male 41 General 30,000 30,000 / / 135.01 No
Manager on
General Manager from
August 3,
Manager (left) July 18, 2018
2021
YU Xin Key technical Male 42 / / 15,000 15,000 / / 103.96 No
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Annual Report 2021
staff
WANG Key technical 15,000 15,000
Male 41 / / / / 90.99 No
Lin staff
Personal
WANG Key technical August 23,
Male 45 / 16,500 0 -16,500 reason (Note 48.27 No
Zeqin staff 2021
4)
GUO Key technical
Male 32 / / 0 / / / 75.37 No
Zuqiang staff
Retired from
General
Director
Manager on
(retired),
BO December 31,
General Male 59 July 18, 2018 30,000 30,000 / / 332.40 No
Lianming 2021; retired
Manager
from director
(retired)
on March 11,
2022
Director August 3,
YAN Yan Male 65 July 18, 2018 / / / / 8.86 No
(retired) 2021
Director August 3,
WU Bin Male 51 July 18, 2018 / / / / / No
(retired) 2021
LIANG Supervisor August 3,
Male 51 July 18, 2018 / / / / 26.21 No
Rong (retired) 2021
Deputy August 3,
General 2021
WU Bin Male 57 July 18, 2018 30,000 30,000 / / 58.33 No
Manager
(retired)
Deputy August 3,
General 2021
LI Lu Male 51 July 18, 2018 30,000 30,000 / / 60.68 No
Manager
(retired)
Financial August 3,
ZHAO Personal
Director Male 44 July 18, 2018 2021 15,000 30,050 +15,050 50.96 No
Ruijin reason
(retired)
WU Key technical August 23, Personal
Male 47 / 9,000 0 -9,000 39.75 No
Xiliang staff (retired) 2021 reason
53 / 337
Annual Report 2021
Total / / / / / 228,920 204,050 -24,870 / 1,660.05 /
Note: (1) The table above shows shares directly held by the directors, supervisors, senior officers, and key technical staff personally in the Company.
(2) As of the end of the reporting period, indirect shareholding is as follows: LI Yi holds shares as described in “Section VII - IV(II) Actual controller”; YAN
Yan holds 1,771,894 shares in the Company indirectly through Light Zone, decreased by 590,606 shares compared the opening quantity; BO Lianming holds shares
in the Company by directly and indirectly holding shares in Appotronics Daye; WU Bin holds shares in the Company indirectly through Appotronics Hongye, Liansong
Capital, and Jinleijing; HU Fei, GAO Lijing, LIANG Rong, WANG Yanyun, WU Xiliang, and WANG Yingxia hold shares in the Company through Appotronics
Hongye and by indirectly holding shares in Appotronics Daye; ZHAO Ruijin holds shares in the Company by indirectly holding shares in Appotronics Daye; YU Xin
and GUO Zuqiang hold shares in the Company indirectly through Appotronics Daye; WANG Lin holds shares in the Company indirectly through Appotronics Hongye.
except for Light Zone, which experienced changes in its shareholding during the reporting period, no change occurred to the indirect shareholding above during the
reporting period.
(3) The Company held the 3rd extraordinary general meeting of 2021 on August 3, 2021, at which Mr. SUN Hongdeng was elected as a supervisor of the Company;
the Company held an employee representative meeting on July 15, 2021, at which Ms. WANG Yingxia was elected as the employee director; moreover, at the 1st
meeting of the second Board of Directors held on August 3, 2021, Ms. WANG Yingxia was engaged as the Financial Director. According to the self inspection, Mr.
SUN Hongdeng and Ms. WANG Yingxia traded shares of the Company prior to their appointment; therefore, their acts are in compliance with laws without trading
by making use of insider information.
(4) On August 23, 2021, in consideration of the leadership, participation, past posts held, acquisition of patents for invention, and other factors, under the approval
of the Chairman, the Company identified Mr. WANG Zeqin as a key technical personnel of the Company. According to the self inspection, Mr. WANG Zeqqin traded
shares of the Company prior to his appointment; therefore, his acts are in compliance with laws without trading by making use of insider information.
(5) Newly engaged and retired directors, supervisors, senior officers, and key technical staff during the reporting period, disclosure of the remunerations acquired
during their term of office.
Name Main work experience
Mr. LI Yi holds a bachelor’s degree from Tsinghua University, and a master’s degree and a doctor’s degree from the University of Rochester. He
LI Yi founded the Company in October 2006 and has served as Chairman of the Company since December 2010. From 2020 to 2021, Mr. LI Yi was granted
the “2020 Shenzhen Mayor Award of Science and Technology”, “2021 Leader in Quality Development”, and other honors.
YU Zhuoping Mr. YU Zhuoping holds a bachelor’s degree and a master’s degree in Mechanical Engineering from Tongji University, and a doctor’s degree in
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Annual Report 2021
Vehicle Engineering from Tsinghua University. He is currently holding various positions, including Director of the Collaborative Innovation Center
of Intelligent New Energy Vehicle at Tongji University; Vice President of China Society of Automotive Engineers; Deputy President and Director of
the expert commission of China Hydrogen Alliance; Chairman of Tongji Automotive Design and Research Institute Co., Ltd.; Chairman of Nanchang
Jiling New Energy Technology Co., Ltd.; Chairman of Shanghai Motor Vehicle Inspection Certification & Tech Innovation Center Co., Ltd.; director
of Beijing Guoqing Zhonglian Hydrogen Energy Technology Research Institute Co., Ltd.; Chairman and General manager of Shanghai AI NEV
Innovative Platform Co., Ltd.; non-executive director of Huazhong In-Vehicle Holdings Co., Ltd.; independent director of Shanghai Highly (Group)
Co., Ltd., Weichai Power Co., Ltd., Ningbo Shenglong Automotive Powertrain System Co., Ltd., and Huayu Automotive Systems Co., Ltd. He has
been a Director of the Company since March 2022.
Mr. ZHANG Wei holds a doctor’s degree from Indiana University and a lawyer certificate in New York, the USA. He was previously Legal Director
of Legend Holdings Corporation, General Manager of the Legal Affairs Department of China Vanke Co., Ltd., and Vice President of Qifei
International Development Co., Ltd. Before joining the Company, Mr. ZHANG Wei was the Vice President of 360 Group. He was an independent
ZHANG Wei
director from July 2018 to August 2021; and has been a non-independent director of the Company since August 2021. Based on his confidence in the
future development of the Company, he joined the management of the Company in December 2021, acting as the Deputy General Manager of the
Company.
Ms. WANG Yingxia holds a bachelor’s degree. She was the financial head and financial manager at Shenzhen YLX Technology Development Co.,
WANG
Ltd. from January 2007 to April 2017, and acted as the Vice Financial Director of the Company from April 2017 to August 2021. She has been a
Yingxia
director and Financial Director of the Company since August 2021.
Mr. NING Xiangdong holds a doctor’s degree from Tsinghua University. He previously served as teaching assistant, lecturer and associate professor
NING at Tsinghua University and Executive Deputy Director of National Center for Economic Research, Tsinghua University, and currently is a professor
Xiangdong and doctoral tutor of Tsinghua University, School of Economic and Management. He has been an independent director of the Company since July
2018.
Mr. TANG Guliang holds a doctor’s degree from Chinese Academy of Fiscal Sciences. He previously served as Dean and professor of Beijing
Technology and Business University, School of Accounting (formerly known as Beijing College of Commerce), and currently is a professor and
TANG Guliang
doctoral tutor of the Business School, University of International Business and Economics. He has been an independent director of the Company since
July 2018.
Mr. CHEN Youchun holds a bachelor’s degree from Southwest University of Political Science and Law and University of Northumbria in the UK, a
CHEN master’s degree from Wuhan University, and a doctor’s degree from Southwest University of Political Science and Law. He is currently holding
Youchun various positions, including Partner of Beijing Junzejun (Shenzhen) Law Firm, and independent director of Nuode Investment Co., Ltd., Xinrongmao
Group Co., Ltd., and Shenzhen ValueHD Technology Co., Ltd. He has been an independent director of the Company since August 2021.
Ms. GAO Lijing is a master candidate at the Chinese University of Hong Kong, and has acquired the Legal Professional Qualification Certificate after
passing the National Judicial Examination. She previously worked at Southern China IP Office of Foxconn Technology Group, and Center for IP and
GAO Lijing Legal Affairs of Netac Technology Co., Ltd. She has served as a supervisor of Netac Technology Co., Ltd. from 2008 to 2020, and joined the Company
in 2013. She is current the Deputy General Manager at the Legal Affairs Center of the Company, and has been the chairperson of the Board of
Supervisors since July 2018.
SUN Hongdeng Mr. SUN Hongdeng is a master candidate at the Open University of Hong Kong. He worked at Huawei Technologies Co., Ltd. from January 2006 to
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June 2018, and joined the Company in November 2018. He is the Director of the Audit Department at present, and has been a supervisor of the
Company since August 2021.
WANG Ms. WANG Yanyun holds a bachelor’s degree. She has been a senior manager of the Company since July 2013, and a Supervisor of the Company
Yanyun since July 2018.
Mr. LIANG Guanning holds a bachelor’s degree in the Science of Management from Sun Yat-sen University; he is also a senior member of the
Association of Chartered Certified Accountants. He workded at KPMG Accounting Firm in China and Singapore as the audit manager from 2002 to
LIANG
2008, and hold senior management posts at GCL-Poly Energy Holdings and Weibo. He was the Financial Director and Board Secretary of Yangtze
Guanning
Optical Fibre and Cable Co., Ltd. from February 2017 to October 2021. Mr. LIANG joined the Company in October 2021, and has been acting as the
Deputy General Manager of the Company since December 2021.
Ms. YAN Li holds a master’s degree. She previously worked as the securities affairs representative at Midea Appliances (000527) and Midea Group
YAN Li (000333), and board secretary at Yinghe Technology (300457). She joined Appotronics in May 2017, and has been working as the Board Secretary
since May 2020.
Mr. HU Fei holds a bachelor’s degree and a master’s degree from Tsinghua University and a master’s degree from Rensselaer Polytechnic Institute.
He was previously a software engineer at Optical Research Associates, and Deputy President, R&D of Shenzhen YLX Technology Development Co.,
HU Fei
Ltd. and Appotronics Ltd. He has served as CTO of the Company since February 2018, and Deputy General Manager of the Company since July
2018.
Mr. YU Xin holds a doctor’s degree from Tsinghua University. He was previously a senior software engineer at Schlumberger Ltd. and senior
researcher at Shenzhen Lighting Institute. He joined the Company in February 2018, and used to hold posts as the Senior Researcher, General Manager
YU Xin
of the Cinema Solution Business Division, General Manager of the Innovation Center and Cinema Business Division; he is currently a Vice President
of the Company.
Mr. WANG Lin holds a bachelor’s degree from University of Science and Technology of China, a master’s degree from Tsinghua University, and a
WANG Lin doctor’s degree from Universidad Politécnica de Madrid. He was previously a senior optical engineer at Shanghai Phillips Lighting (China) Investment
Co., Ltd. He has been a senior optical research of the Company since February 2017.
Mr. WANG Zeqin holds a bachelor’s degree in Optoelectronics Technology from Jilin University. From November 2002 to August 2013, he worked
at O-net Communications (Shenzhen) Co., Ltd. as the research and development engineer, research and development export, etc. He worked at
WANG Zeqin Shenzhen YLX Technology Development Co., Ltd. from September 2013 to April 2017, and used to be a research at the Company’s research and
development center from May 2017. At present, he is the R&D Director of the Company, responsible for the core device R&D center and complete
equipment development center of the Company.
Mr. GUO Zuqiang holds a master’s degree from Tsinghua University. He was previously an optical engineer at Shenzhen YLX Technology
GUO Zuqiang
Development Co., Ltd. He used to be the R&D manager from March 2017; currently he is the responsible person of the core device R&D center.
Mr. BO Lianming holds a doctor’s degree from Xi’an Jiaotong University. He was previously Chief Accountant of Shenzhen Airlines Co., Ltd.,
President and CEO of Shenzhen Chinastar Optoelectronic Co., Limited, Director and President of TCL Technology Group Corporation and Chairman
BO Lianming
and CEO of TCL Multimedia Technology Holdings Limited. He joined the Company in March 2018, responsible for the management and operation
of the Company. He has been the General Manager of the Company since July 2018, and a director of the Company from July 2018 to March 2022.
YAN Yan Mr. YAN Yan holds a master’s degree from Princeton University. He was previously Economist of Washington Headquarter of the World Bank,
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Annual Report 2021
researcher of American Thinker Hudson Institute, Director of Strategic Planning and Business Development of Sprint International Corporation in
Asia Pacific, Managing Director of Emerging Markets Partnership in the Management Company of AIG Asian Infrastructure Investment Fund and
Director of Hong Kong Office. He has served as Founding Managing Partner of SAIF Partners since October 2001. He was a director of the Company
from December 2016 to August 2021.
Mr. WUBIN holds a master’s degree from Stanford University. He was previously Global Associate Director of McKinsey & Company and Chief
WUBIN Inspector of Legend Holdings Corporation. He has served as Managing Director of CITIC Private Equity Funds since 2010. He was a director of the
Company from December 2016 to August 2021.
Mr. LIANG Rong holds a master’s degree from Shanghai University of Finance and Economics. He joined the Company in 2013, and served as
LIANG Rong Assistant to Chairman of Appotronics Ltd. He has been Director of Public Affairs of the Company since March 2018, He was a Supervisor of the
Company from November 2017 to August 2021.
Mr. WU Bin holds amaster’s degree from Party School of the CPC. He was previously a non-executive director of Shenzhen Gotonly Investment Ltd.
WU Bin
and Vice President of Shenzhen Lighting Institute. He was a Deputy General Manager of the Company from October 2018 to August 2021.
Mr. LI Lu holds amaster’s degree from Cheung Kong Graduate School of Business. He was previously Deputy President of TCL Multimedia
LI Lu Technology Holdings Limited., General Manager of TCL (China) Sales Company, and General Manager of White Goods Business Division of TCL
Technology Group Corporation. He was a Deputy General Manager of the Company from October 2018 to August 2021.
Mr. ZHAO Ruijin holds a master’s degree from Peking University. He was previously Financial Manager of ZTE Corporation, Financial Director
ZHAO Ruijin and Assistant to General Manager of Shenzhen ZNV Technology Co., Ltd. He joined the Company in February 2018 as Director of the Department
of Financial Management, He was the Financial Director of the Company from July 2018 to August 2021.
Mr. WU Xiliang holds a bachelor’s degree from Huazhong University of Science and Technology. He served as R&D Manager and Technology
WU Xiliang
Director of the Company between 2007 and 2016, and has been Deputy General Manager of Fengmi since 2016.
Other information
□ Applicable √ N/A
(II) Posts held by current directors, supervisors and senior officers and the former directors, supervisors and senior officers who left the Company during
the reporting period
1. Posts held at corporate shareholders of the Company
√ Applicable □ N/A
Posts held at corporate Beginning date of term Expiry date of term
Name Corporate shareholder
shareholder of office of office
LI Yi Shenzhen Appotronics Holdings Limited Executive Director & General January 2014 /
Manager
LI Yi Shenzhen Appotronics Daye Investment Partnership (LP) Representative of Managing October 2016 /
Partner
LI Yi Shenzhen Appotronics Hongye Investment Partnership (LP) Representative of Managing December 2015 /
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Partner
LI Yi Shenzhen Jinleijing Investment Limited Partnership (LP) Representative of Managing October 2016 /
Partner
LI Yi Shenzhen Yuanshi Laser Industrial Investment Consulting Representative of Managing June 2016 /
Partnership (LP) Partner
LI Yi Shenzhen Appotronics Chengye Consulting Partnership (LP) Representative of Managing July 2017 /
Partner
LI Yi Blackpine Investment Corp. Limited Director September 2018 /
YAN Yan (Former SAIF IV Hong Kong (China Investments) Limited Director August 2013 /
director)
YAN Yan (Former Light Zone Limited Director March 2017 /
director)
WUBIN (Former Beijing Panmao Consulting Co., Ltd. Managing Director January 2010 /
director)
Explanation about the None
posts held at
corporate
shareholders of the
Company
2. Posts held at other entities
√ Applicable □ N/A
Beginning date of Expiry date of term
Name Other entity Posts held at other entity
term of office of office
Shenzhen Appotronics Deye Consulting Partnership Representative of Managing
LI Yi May 2018
(LP) Partner
LI Yi CINIONIC Director November 2018
Executive Director & General
LI Yi Shenzhen Appotronics Technical Consulting Co., Ltd. October 2017
Manager
LI Yi Jiangsu Yisheng Technology Co., Ltd. Chairman September 2017 January 2021
LI Yi Shenzhen YLX Technology Development Co., Ltd. Chairman January 2007
Shenzhen Qingda Yifeng Equity Investment Fund General Manager & Executive
LI Yi January 2017
Management Enterprise (LP) Director
Shenzhen Qingda Yifeng Investment Consulting
LI Yi Managing Partner October 2016
Partnership (LP)
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LI Yi APEX Fund Managed Limited Director November 2013
LI Yi Atria Light Ltd. Director April 2018
LI Yi Atria Light Hong Kong Limited Director April 2018
LI Yi Long Pine Investment Ltd. Director September 2016
LI Yi Longpines Financial Investment Ltd. Director May 2018
LI Yi YLX (Hong Kong) Limited Director June 2008
LI Yi WeCast Technology Corp. Executive Director August 2020
Tongji Automotive Design and Research Institute Co., Legal representative, General
YU Zhuoping December 2017
Ltd. Manager
Legal Representative &
YU Zhuoping Shanghai AI NEV Innovative Platform Co., Ltd. March 2018
Chairman
YU Zhuoping Weichai Power Co., Ltd. Independent director July 2020
Legal Representative &
YU Zhuoping Nanchang Jiling New Energy Technology Co., Ltd. August 2020
Chairman
YU Zhuoping Shanghai Highly (Group) Co., Ltd. Independent director September 2020
Ningbo Shenglong Automotive Powertrain System Co.,
YU Zhuoping Independent director October 2020
Ltd.
Beijing Guoqing Zhonglian Hydrogen Energy
YU Zhuoping Director October 2020
Technology Research Institute Co., Ltd.
Shanghai Motor Vehicle Inspection Certification &
YU Zhuoping Director April 2021
Tech Innovation Center Co., Ltd.
YU Zhuoping Huayu Automotive Systems Co., Ltd. Independent director July 2021
YU Zhuoping Jiangling Motors Corporation Limited Independent director October 2021
YU Zhuoping Huazhong In-Vehicle Holdings Co., Ltd. Non-executive Director August 2019
ZHANG Wei Qifei International Development Co. Limited Vice President February 2019 September 2021
ZHANG Wei 360 Group Vice President February 2019 September 2021
ZHANG Wei AVIC Vanke Co., Ltd. Director January 2018
Hengqin Vanke Cloudland Commercial Services Co.,
ZHANG Wei Director & General Manager May 2017
Ltd.
ZHANG Wei Shenzhen Wanhu Management Consulting Co., Ltd. Supervisor November 2017
Shenzhen Wanhu Quanyuan Management Consulting
ZHANG Wei Supervisor November 2017
Co., Ltd.
Shenzhen Wanshuzhimiao Management Consulting
ZHANG Wei Supervisor November 2017
Co., Ltd.
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ZHANG Wei Shenzhen Wanqing Management Consulting Co., Ltd. Supervisor November 2017
Shenzhen Wanmazhengxian Management Consulting
ZHANG Wei Supervisor November 2017
Co., Ltd.
ZHANG Wei Dongguan Vanke City Development Co., Ltd. Supervisor May 2018
ZHANG Wei Dongguan Vanke Real Estate Co., Ltd. Supervisor October 2015
ZHANG Wei Yangshuo Banyan Tree Hotel Co., Ltd. Director September 2018
ZHANG Wei Lijiang Banyan Tree Property Services Co., Ltd. Director May 2018
ZHANG Wei Lijiang Banyan Tree Hotel Co., Ltd. Director March 2018
Lijiang Banyan Tree International Travel Agency Co.,
ZHANG Wei Director March 2018
Ltd.
ZHANG Wei Lijiang Angsana Real Estate Development Co., Ltd. Director July 2018
Huangshan Banyan Tree Property Management Co.,
ZHANG Wei Director September 2018
Ltd.
Huangshan Banyan Tree Tourism Development Co.,
ZHANG Wei Director September 2018
Ltd.
ZHANG Wei Chengdu Banyan Tree No. 1 Real Estate Co., Ltd. Director June 2018
ZHANG Wei Chengdu Banyan Tree No. 3 Real Estate Co., Ltd. Director June 2018
ZHANG Wei Chengdu Banyan Tree No. 4 Real Estate Co., Ltd. Director June 2018
ZHANG Wei 360 Security Technology Inc. Vice President February 2019 September 2021
ZHANG Wei 360 Technology Group Co., Ltd. Director January 2021
ZHANG Wei Tianjin 360 Technology Development Co., Ltd. Director February 2021
ZHANG Wei Hangzhou Qifei Huachuang Technology Co., Ltd. Director January 2021
Executive Director & Manager
ZHANG Wei Shanghai Jiehu Network Technology Co., Ltd. January 2021
& Legal Representative
ZHANG Wei Shenzhen Zhuoying Technology Co., Ltd. Director June 2020
ZHANG Wei Zhenro Services Group Co., Ltd. Director June 2020
Lida Lianma (Zhuhai) Equity Investment Management
ZHANG Wei Director July 2020 August 2021
Co., Ltd.
ZHANG Wei Tian’an Xincheng Development (Hengqin) Co., Ltd. Director July 2017 September 2021
Director & Legal
ZHANG Wei Shanghai 360 Changfeng Technology Co., Ltd. November 2020 December 2021
Representative
NING Xiangdong Tsinghua University Professor & Doctoral Tutor 1990
NING Xiangdong Sinopec Sales Co., Ltd. Independent director December 2018
NING Xiangdong China Life Asset Management Co., Ltd. Independent director March 2018
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NING Xiangdong Sinochem Energy Co., Ltd. Independent director August 2018
NING Xiangdong MH Robot & Automation Co., Ltd. Independent director December 2021
NING Xiangdong Xiamen Bank Co., Ltd. Director July 2017
NING Xiangdong Shandong Heavy Industry Group Co., Ltd. Director January 2018
TANG Guliang University of International Business and Economics Professor March 2006
TANG Guliang China JIC Leasing Co., Ltd. Independent director April 2017
TANG Guliang Three Gorges Capital Holdings Co., Ltd. Independent director February 2018
TANG Guliang Shanghai Fosun Pharmaceutical (Group) Co., Ltd. Independent director March 2019
TANG Guliang Jointown Pharmaceutical Group Co., Ltd. Independent director November 2020
CHEN Youchun Beijing Junzejun (Shenzhen) Law Firm Partner July 2004
CHEN Youchun Nuode Investment Co., Ltd. Independent director February 2018
CHEN Youchun Xinrongmao Group Co., Ltd. Independent director February 2018
CHEN Youchun Shenzhen ValueHD Technology Co., Ltd. Independent director July 2020
WANG Yingxia Shenzhen Yixingzhijia Trade Co., Ltd. Supervisor January 2018
LIANG Guanning Sichuan Lefei Optoelectric Technology Co., Ltd. Director June 2017
Zhejiang Lianfei Optical Fiber & Optical Cable Co.,
LIANG Guanning Director May 2019 April 2022
Ltd.
LIANG Guanning Changfei (Wuhan) Optical System Co., Ltd. Director March 2021
LIANG Guanning AVIC Baosheng Ocean Engineering Cable Co., Ltd. Director December 2018
LIANG Guanning Baosheng YOFC Marine Engineering Co., Ltd. Director December 2018
Vice Chairman
LIANG Guanning Wuhan Fenjin Smart Machine Co., Ltd. September 2019
LIANG Guanning Wuhan Changfei Capital Management Co., Ltd. Manager October 2018 April 2022
LIANG Guanning Yangtze Optical Fiber and Cable (Shanghai) Co., Ltd. Supervisor May 2019
LIANG Guanning EverPro (Wuhan) Technology Co., Ltd. Supervisor November 2020 February 2022
BO Lianming
(Former director,
GDC Technology Limited (British Virgin Islands) Director March 2021
and former General
Manager)
YAN Yan (Former SAIF Investment Management Consulting (Shanghai)
General Manager June 2002
director) Co., Ltd.
YAN Yan (Former
SAIF Partners Founding Managing Partner October 2001
director)
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Annual Report 2021
YAN Yan (Former
Atria Light Ltd. Director May 2018
director)
YAN Yan (Former Beijing Daotong Changjing Investment Management Representative of Managing
July 2011
director) Center (LP) Partner
YAN Yan (Former Representative of Managing
Beijing SAIF Chuangyuan Investment Center (LP) August 2010
director) Partner
YAN Yan (Former Representative of Managing
Beijing SAIF Hongyuan Investment Center (LP) October 2010
director) Partner
YAN Yan (Former Representative of Managing
Beijing SAIF Xiangrui Investment Center (LP) April 2010
director) Partner
YAN Yan (Former Changzhou SAIF High-Tech Venture Capital Center Representative of Managing
December 2009
director) (LP) Partner
Guangzhou SAIF Guangdong Fortune Radio and
YAN Yan (Former Representative of Managing
Television Network Investment Limited Partnership December 2011
director) Partner
(LP)
YAN Yan (Former Representative of Managing
Hefei SAIF Heyuan Venture Capital Center (LP) January 2011
director) Partner
YAN Yan (Former Qingdao Haier-Saifu Intelligent Family Venture Capital Representative of Managing
October 2014
director) Center (LP) Partner
YAN Yan (Former SAIF Songyuan (Shanghai) Equity Investment Fund Representative of Managing
September 2012
director) Partnership (LP) Partner
YAN Yan (Former Representative of Managing
Xiamen SAIF Equity Investment Partnership (LP) August 2012
director) Partner
YAN Yan (Former Xiamen SAIF Keyuan Equity Investment Partnership Representative of Managing
August 2012
director) (LP) Partner
YAN Yan (Former Representative of Managing
Tianjin SAIF Venture Capital Fund (LP) July 2008
director) Partner
YAN Yan (Former Representative of Managing
Tianjin SAIF Composite Equity Investment Center (LP) May 2010
director) Partner
YAN Yan (Former Tianjin SAIF Hanyuan Equity Investment Partnership Representative of Managing
June 2010
director) (LP) Partner
YAN Yan (Former Tianjin SAIF Shengyuan Investment Management Representative of Managing
July 2008
director) Center (LP) Partner
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Annual Report 2021
Legal Representative &
YAN Yan (Former
Hefei SAIF Venture Capital Management Co., Ltd. Executive Director & General November 2010
director)
Manager
YAN Yan (Former Representative of Managing
Nanjing SAIF Hengzhun Venture Capital Fund (LP) July 2017
director) Partner
YAN Yan (Former Independent Non-executive
China Resources Land Limited July 2006
director) Director
Legal Representative &
YAN Yan (Former Shanghai SAIF Yanyuan Equity Fund Management Co.
Executive Director & General January 2013
director) Ltd.
Manager
YAN Yan (Former Legal Representative &
Tianjin Himalaya Investment Consulting Co. Ltd. June 2008
director) Executive Director & Manager
YAN Yan (Former Legal Representative &
Qingdao SAIF Investment Management Co. Ltd. September 2014
director) Chairman & General Manager
YAN Yan (Former Changzhou SAIF High-Tech Venture Capital Legal Representative &
October 2009
director) Management Co. Ltd. Chairman
YAN Yan (Former Legal Representative &
Tianjin SAIF Zhongyuan Investment Advisory Co. Ltd. July 2008
director) Chairman
YAN Yan (Former Shenzhen SAIF Qianyuan Equity Investment Fund Legal Representative &
August 2013
director) Management Co. Ltd. Chairman
YAN Yan (Former
Beijing Softbank SAIF Investment Advisory Co., Ltd. Chairman February 2001
director)
YAN Yan (Former
Huangshan SAIF Fund Management Co., Ltd. Chairman November 2016
director)
YAN Yan (Former
Youth Happy (Beijing) Business Management Co., Ltd. Chairman July 2012
director)
YAN Yan (Former
Shanghai TopxGun Robotics Co., Ltd. Chairman September 2015
director)
YAN Yan (Former
CYPA (Beijing) Investment Management Co., Ltd. Chairman June 2012
director)
YAN Yan (Former
Xi’an Maike Metal International Group Co., Ltd. Vice Chairman April 2014
director)
YAN Yan (Former
SAIF IV Mauritius (China Investment) Ltd. Director July 2010
director)
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YAN Yan (Former Anqing SAIF Huanxin Enterprise Management
Director November 2014
director) Consultant Co., Ltd.
YAN Yan (Former
Beijing Hanyuan Capital Management Co., Ltd. Director December 2015
director)
YAN Yan (Former
Beijing Xiaodu Entertainment Technology Co., Ltd. Director January 2018
director)
YAN Yan (Former
Guangdong Cable Co., Ltd. Director February 2017
director)
YAN Yan (Former
Guangzhou SAIF Heyin Asset Management Co., Ltd. Director August 2013
director)
YAN Yan (Former Heilongjiang Dazheng Derun Investment Management
Director February 2017
director) Co., Ltd.
YAN Yan (Former Heilongjiang Dazheng SAIF Investment Management
Director November 2009
director) Co., Ltd.
YAN Yan (Former
Pacoo (Beijing) Technology Co., Ltd. Director September 2016
director)
YAN Yan (Former
Xiamen SAIF Venture Capital Management Co., Ltd. Director February 2012
director)
YAN Yan (Former
Shanghai Wenxi Enterprise Management Co., Ltd. Director June 2017
director)
YAN Yan (Former Xinyong Computing Information Technology
Director September 2017
director) (Shanghai) Co., Ltd.
YAN Yan (Former
Shenzhen Shuwei Big Data Technology Co., Ltd. Director October 2018
director)
YAN Yan (Former
ATA Creativity Global Director March 2005
director)
YAN Yan (Former
Yinda International Holding Company Limited Director August 2014
director)
YAN Yan (Former
Wisers Information Holdings Company Limited Director May 2016
director)
YAN Yan (Former
360 Finance Inc. Independent director July 2019
director)
YAN Yan (Former Jiaxing Tengyuan Investment Partnership (Limited
Entrusted representative January 2021
director) Partnership)
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Annual Report 2021
YAN Yan (Former
Xi’an Zhigui Internet Technology Co., Ltd. Director August 2020
director)
YAN Yan (Former Independent Non-executive
China Southern Airlines Company Limited April 2021
director) Director
YAN Yan (Former
Shanghai Jinhui Information Technology Co., Ltd. Chairman December 2021
director)
WUBIN (Former Shaanxi Xifeng 15-Year and 6-Year Liquor Marketing
Director 2013 April 2021
director) Co., Ltd.
WUBIN (Former
Yunnan Green A Biological Project Co., Ltd. Director July 2018
director)
WUBIN (Former
Hangzhou BroadLink Electronic Technology Co., Ltd. Director December 2020
director)
WUBIN (Former
Pine Medical Limited Director 2019
director)
WUBIN (Former
Hong Kong Excellence Limited Director 2019
director)
WU Bin (Former
Shenzhen Shangzuo Charity Foundation Deputy Director November 2015
senior officer)
WU Bin (Former
Shenzhen Lighting Institute Director November 2016
senior officer)
Explanation about
the posts held at None
other entities
(III) Remunerations of directors, supervisors, senior officers and key technical staff
√ Applicable □ N/A
In RMB 0’000
Decision-making procedure regarding the Pursuant to the Company’s Articles of Association, the Compensation and Performance Assessment Committee
remunerations of directors, supervisors and senior consider and review the compensation policy and proposal for directors and senior officers; the compensation
officers proposal for senior officers is implemented after being approved by the Board of Directors; the compensation
proposal for directors is implemented after being adopted by the Board of Directors and then approved by the
general meeting of shareholders; and the compensation proposal for supervisors is implemented after being adopted
by the Board of Supervisors and then approved by the general meeting of shareholders.
Basis for determining the remunerations of The Company’s directors and supervisors who hold posts in the Company shall receive remunerations for such
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Annual Report 2021
directors, supervisors and senior officers posts pursuant to the relevant provisions of the Company, but will not receive remunerations in their capacity as
director or supervisor. Each independent director will receive a fixed amount of director’s emoluments. Non-
independent directors not holding posts in the Company will receive director’s emoluments pursuant to the
compensation proposal approved by the general meeting of shareholders. Remunerations paid to senior officers
comprise salaries and bonuses, where the salaries are paid on a monthly basis according to the ranks and duties of
the senior officers, and the bonuses are paid according to the operating results of the Company and their
performance in the given year.
Remunerations actually paid to directors, During the reporting period, the remunerations actually paid to directors, supervisors and senior officers are
supervisors and senior officers consistent with the relevant information disclosed by the Company.
Total remunerations paid to directors, supervisors 1,234.62
and senior officers as of the end of the reporting
period
Total remunerations paid to key technical staff as of 800.19
the end of the reporting period
Note: Dr. LI Yi, Chairman of the Company, and Dr. HU Fei, former Deputy General Manager of the Company, are key technical staff of the Company, and the
remunerations actually paid to key technical staff as of the end of the reporting period contain their remunerations.
(IV) Changes in directors, supervisors, senior officers and key technical staff
√ Applicable □ N/A
Name Position Change Cause of change
ZHANG Wei Director Elected Elected at the general meeting
CHEN Youchun Independent director Elected Elected at the general meeting
Elected Elected at the employee representative
WANG Yingxia Employee representative director
meeting
SUN Hongdeng Supervisor Elected Elected at the general meeting
LI Yi General Manager Recruited Engaged by the Board of Directors
ZHANG Wei Deputy General Manager Recruited Engaged by the Board of Directors
LIANG Guanning Deputy General Manager Recruited Engaged by the Board of Directors
WANG Yingxia Financial Director Recruited Engaged by the Board of Directors
Recruited Adjusted according to the specific
WANG Zeqin Key technical staff
standards for key technical personnel
YAN Yan Former director Left the Company Expiry of the term of office
WUBIN Former director Left the Company Expiry of the term of office
LIANG Rong Former supervisor Left the Company Expiry of the term of office
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Annual Report 2021
BO Lianming Former General Manager Left the Company Personal reason
WU Bin Former Deputy General Manager Left the Company Expiry of the term of office
LI Lu Former Deputy General Manager Left the Company Expiry of the term of office
HU Fei Former Deputy General Manager Left the Company Expiry of the term of office
ZHAO Ruijin Former Financial Director Left the Company Expiry of the term of office
Left the Company Adjusted according to the specific
WU Xiliang Former key technical staff
standards for key technical personnel
(V) Penalties imposed by the securities regulatory authorities in the past three years
□ Applicable √ N/A
(VI) Others
□ Applicable √ N/A
VII. Board meetings held during the reporting period
Session Date of meeting Resolution
The meeting reviewed and passed several proposals, including the Proposal on Adjusting the Plan of
29th meeting of the first Board of Increasing the Capital of a Controlled Subsidiary by Issuing Additional Shares & Related-party
February 9, 2021
Directors Transaction, the Proposal on Expected Daily Related-party Transactions in 2021, and the Proposal on
Requesting Comprehensive Facility and Providing Guarantee by the Company and Subsidiaries in 2021.
The meeting reviewed and passed several proposals, including the Proposal on the “2021 Restricted
30th meeting of the first Board of
March 26, 2021 Share Incentive Plan (Draft)” and Summary Thereof and the Proposal on the Management Measures
Directors
for the Appraisal of the “2021 Restrict Share Incentive Plan”.
The meeting reviewed and passed several proposals, including the Proposal on the “2020 Work Report
31st meeting of the first Board of
April 22, 2021 of the Board of Directors”, the Proposal on the “2020 Annual Financial Final Report”, and the Proposal
Directors
on the “2020 Annual Report” and the Summary thereof.
The meeting reviewed and passed several proposals, including the Proposal on the Election of Non-
32nd meeting of the first Board of independent Director Candidates of the Second Board of Directors of the Company, the Proposal on the
July 15, 2021
Directors Election of Independent Director Candidates of the Second Board of Directors of the Company, and the
Proposal on Director Remunerations of the Second Board of Directors of the Company.
The meeting reviewed and passed several proposals, including the Proposal on Electing the Chairperson
1st meeting of the second Board for the Second Board of Directors of the Company, the Proposal on Electing Members for Specific-
August 3, 2021
of Directors purpose Committees under the Board of Directors of the Company, and the Proposal on Engaging Senior
Officers and Securities Representatives of the Company.
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Annual Report 2021
The meeting reviewed and passed several proposals, including the Proposal on the “2021 Semi-annual
2nd meeting of the second Board
August 24, 2021 Report” and the Summary Thereof, and the Proposal on the “2021 Semi-annual Special Report on the
of Directors
Deposit and Use of Offering Proceeds”.
The meeting reviewed and passed several proposals, including the Proposal on the “2021 Second
Restricted Share Incentive Plan (Draft)” and Summary Thereof and the Proposal on the Management
3rd meeting of the second Board
September 30, 2021 Measures for the Appraisal of the “2021 Second Restrict Share Incentive Plan”, and the Proposal on
of Directors
Requesting the General Meeting to Authorize the Board of Directors to Handle Matters Related to the
2021 Second Restricted Share Incentive Plan.
4th meeting of the second Board The meeting reviewed and passed the Proposal on the “2021 Third Quarter Report”, and the Proposal
October 22, 2021
of Directors on Discarding Certain Restricted Shares Granted but Not Vested.
The meeting reviewed and passed the Proposal on Increasing the Expected Amount of Day-to-day
5th meeting of the second Board
November 5, 2021 Related-party Translations for 2021 and the Proposal on Holding the 5th Extraordinary General Meeting
of Directors
of 2021.
6th meeting of the second Board
December 7, 2021 The meeting reviewed and passed the Proposal on Initially Granting Restricted Shares to Grantees.
of Directors
The meeting reviewed and passed several proposals, including the Proposal on Engaging Mr. LI Yi as
7th meeting of the second Board the General Manager of the Company, the Proposal on Engaging Mr. ZHANG Wei as the Deputy
December 31, 2021
of Directors General Manager of the Company, and the Proposal on Engaging Mr. LIANG Guanning as the Deputy
General Manager of the Company.
VIII. Performance of duties by the directors
(I) Attendance by the directors of the meetings of the Board of Directors and shareholders
Attendance of the
Attendance of the meetings of the Board of Directors general meetings of
Name of the Whether or not shareholders
Director an independent Meetings the Meetings Whether the director
Meetings Meetings
director director should attended through Absence has been absent from General meetings of
attended in attended by
have attended in communication times two consecutive shareholders attended
person proxy
2021 equipment meetings
LI Yi No 11 11 9 0 0 No 6
ZHANG Wei No 11 11 9 0 0 No 6
NING Yes 11 11 11 0 0 No 6
Xiangdong
TANG Guliang Yes 11 11 9 0 0 No 6
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CHEN Youchun Yes 7 7 7 0 0 No 2
WANG Yingxia No 7 7 7 0 0 No 2
BO Lianming No 11 11 9 0 0 No 6
(former director)
YAN Yan No 4 4 4 0 0 No 4
(Former director)
WUBIN (Former No 4 4 3 0 0 No 4
director)
Explanation about absence from two consecutive meetings of the Board of Directors
□ Applicable √ N/A
Meetings of the Board of Directors held in 2019 11
Where: Face-to-face meetings 0
Meeting held through communication equipment 9
Meetings held both in the form of face-to-face meeting 2
and through communication equipment
(II) Objections raised by directors to matters of the Company
□ Applicable √ N/A
(III) Others
□ Applicable √ N/A
IX. Specific-purpose committees under the Board of Directors
√ Applicable □ N/A
(1).Members of specific-purpose committees under the Board of Directors
Category of specific-purpose committee Members
Audit Committee TANG Guliang (chairperson), CHEN Youchun, LI Yi
Nomination Committee CHEN Youchun (chairperson), NING Xiangdong, LI Yi
Compensation and Performance Assessment
NING Xiangdong (chairperson), TANG Guliang, ZHANG Wei
Committee
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Strategy Committee LI Yi (chairperson), BO Lianming, NING Xiangdong
(2).The Audit Committee held 6 meetings during the reporting period
Performance of other
Date of meeting Content of meeting Major opinions and suggestions
duties
Reviewed the proposal on issuing additional shares by
February 6, 2021 All proposals are reviewed and passed None
subsidiaries, etc.
Reviewed the proposal on external investment by subsidiaries,
March 23, 2021 All proposals are reviewed and passed None
etc.
April 12, 2021 Reviewed the proposal on the 2020 Annual Report, etc. All proposals are reviewed and passed None
August 20, 2021 Reviewed the proposal on the 2021 Semi-annual Report, etc. All proposals are reviewed and passed None
October 19, 2021 Reviewed the proposal on the 2021 Third Quarter Report, etc. All proposals are reviewed and passed None
Reviewed the proposal on increasing the expected amount of
November 2, 2021 All proposals are reviewed and passed None
day-to-day related-party transactions for 2021, etc.
(3).The Nomination Committee held 3 meetings during the reporting period
Performance of other
Date of meeting Content of meeting Major opinions and suggestions
duties
Reviewed the proposal on the nomination of directors for the
July 11, 2021 All proposals are reviewed and passed None
second Board of Directors, etc.
August 3, 2021 Reviewed the proposal on engaging senior officers, etc. All proposals are reviewed and passed None
December 29, 2021 Reviewed the proposal on engaging senior officers, etc. All proposals are reviewed and passed None
(4).The Remuneration and Appraisal Committee held 7 meetings during the reporting period
Performance of other
Date of meeting Content of meeting Major opinions and suggestions
duties
Reviewed the proposal on the 2021 Restricted Share Incentive
March 23, 2021 All proposals are reviewed and passed None
Plan, etc.
Reviewed the proposal on the remunerations of directors and
April 12, 2021 All proposals are reviewed and passed None
senior officers, etc.
July 11, 2021 Reviewed the proposal on the remunerations of directors, etc. All proposals are reviewed and passed None
Reviewed the proposal on the remunerations of senior
August 3, 2021 All proposals are reviewed and passed None
officers, etc.
Reviewed the proposal on the 2021 Second Restricted Share
September 27, 2021 All proposals are reviewed and passed None
Incentive Plan, etc.
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October 19, 2021 Reviewed the proposal on discarding equity incentives, etc. All proposals are reviewed and passed None
Reviewed the proposal on the remunerations of senior
December 31, 2021 All proposals are reviewed and passed None
officers, etc.
(5).The Strategy Committee held 2 meetings during the reporting period
Performance of other
Date of meeting Content of meeting Major opinions and suggestions
duties
Reviewed the proposal on issuing additional shares by
February 6, 2021 All proposals are reviewed and passed None
subsidiaries, etc.
Reviewed the proposal on external investment by subsidiaries,
March 23, 2021 All proposals are reviewed and passed None
etc.
(6).Specific description of objections
□ Applicable √ N/A
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X. Risks of the Company identified by the Board of Supervisors
□ Applicable √ N/A
The Board of Supervisors raised no objections with respect to matters under supervision during the
reporting period.
XI. Employees of the parent company and major subsidiaries as of the end of the reporting period
(I) Employees
Number of active employees of the parent company 1,143
Number of active employees of major subsidiaries 422
Total number of active employees 1,565
Number of retired employees for whom the parent
company and major subsidiaries need to pay certain 0
expenses
Profession
Category Number of employees
Production staff 712
Sales staff 204
Technology staff 456
Financial staff 41
Management staff and administrative staff 152
Total 1,565
Education
Level of education Number
Master and above 184
Undergraduate 628
College or below 753
Total 1,565
(II) Compensation policy
√ Applicable □ N/A
The Company has designed a comprehensive remuneration system based on posts, competence, and
performance according to internationally universal remuneration system designing ideas and approaches
with reference to the strategic objectives, talent strategy, market competition, and other factors, of the
Company.
The Company has always advocated joint innovation, sharing, and result-orientation, and
continuously optimizes its incentive policies to gradually implement differentiated incentives for different
businesses and groups, hence motivating employees to make sustainable efforts focusing on the business
and customer needs to create value for customers; meanwhile, the Company enhances the management
over qualifications to improve employees’ professional competence and contributions for performance to
enhance the sense of gain by employees along with the development of the Company; the Company cares
about employees by providing comprehensive benefits, hence building a better working and living
environment for employees.
(III) Training programs
√ Applicable □ N/A
The Company achieved outstanding achievements in the development of training and learning
products in recent years. The Appotronics “R&D Management Training Camp” in 2021, which
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participated for the first time in the 6th Learning Design Competition conducted by China Society for
Talent Development (CSTD) won the silver award and the most popularity award, continuously assists in
the talent building of the Company by providing high-quality “resources” to effectively support the sound
development of the Company.
In 2021, Appotronics’ learning system operated smoothly by integrating a series of company-level
training programs, center-level general capability training, and department-level professional capability
training, hence effectively support both the organizations and individuals to make improvement and
achieve performance objectives. We achieved the score of 9 out of 10 in the overall employee satisfaction
for training. We organized 574 training sessions lasting for a total of nearly 12,000 hours involving nearly
5,500 participants this year. 90% trainees responded that the learning courses they participated are very
helpful for improving their personal performance; the trainees stated that 70-80% knowledge and content
are effectively transferred and put into practice, which meet their needs both for personal competence of
employees and the competence improvement of the organizations.
In 2021, the Company continued the efforts for building the lecturer system. Nearly 300 internal
lecturers went to the stage, including 29 persons participating in the procedure of internal training lecturer
review and got promoted to intermediate lecturers. Every one worked actively to share the courses within
their departments or crossing teams. The system of internal lecturers provides a stage for backbone
employees to share their knowledge and experience, and helps to cultivate the team atmosphere of sharing
with and learning from each other.
2022 will be a new stage for us to improve our training system - with the core objective of improving
the organization performance and product development intended for solving problems, we will empower
key personnel with capabilities to solve actual problems and develop various professional knowledge/skill
courses for backbone elites in various fields. By the wide use of a digital platform, we may effectively
operate the knowledge assets of Appotronics by explicitly revealing implicit knowledge in a centralized
manner, so as to achieve technology sharing and exchange more effectively, promote technological
innovation and transformation, build a learning organization, and assist in talent training and development,
hence assisting the leap-forward development of the Company by talent reservation.
(IV) Outsourced workers
√ Applicable □ N/A
Total man-hours of outsourced workers 312,944.50 hours
Total remunerations paid to outsourced workers RMB 7,321,162.63
XII. Proposals for profit distribution and capitalization of the capital reserve
(I) Establishment, implementation or adjustment of the cash dividend policy
√ Applicable □ N/A
1. Cash dividend policy
Pursuant to our Articles of Association and the Statement of Appotronics Corporation Limited
Regarding the Initial Public Offering of RMB-denominated Ordinary Shares (A-shares) and the Plan for
Distribution of Dividends to Shareholders within Three Years Following the Listing on the STAR Market,
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we will focus on long-term and sustainable development, and establish a clear profit distribution policy
taking into consideration our strategic development plan, actual business situation, development objectives,
future profitability, status of cash flows, shareholder return, cost of social capital, external financing
environment and other relevant factors, and the balance between the reasonable returns on investment for
shareholders and our sustainable development, to ensure the consistency and stability of the profit
distribution policy and ensure that we are able to operate continuously and healthily in the long run.
Subject to the satisfaction of the conditions for distributing cash dividends, we will distribute not less
than 10% of the distributable profit made in each year in cash.
The Board of Directors will adopt the following differential cash dividend policy according to the
procedures set forth in our Articles of Association, giving comprehensive consideration to the
characteristics of the industry in which we operate, our development stage, business model and earnings,
material capital expenditure arrangements and other relevant factors:
(1) If the Company is at the mature stage and does not have any material capital expenditure
arrangement, at least 80% of the distributable profit will be distributed in cash;
(2) If the Company is at the mature stage and has certain material capital expenditure arrangements,
at least 40% of the distributable profit will be distributed in cash; or
(3) If the Company is at the growth stage and has certain material capital expenditure arrangements,
at least 20% of the distributable profit will be distributed in cash.
If it is hard to determine the development stage but there are certain material capital expenditure
arrangements, the policy set forth above may apply.
We will formulate or adjust the shareholder returns plan subject to the profit distribution policy set
forth above, according to our actual situations and the opinions of the shareholders (in particular, the
minority shareholders) and the independent directors.
2. Preliminary plan on profit distribution for 2021
According to our 2021 consolidated financial statements as audited by Pan-China Certified Public
Accountants (Special General Partnership), Appotronics Corporation Limited (hereinafter referred to as
the Company) realized the net profit of RMB 221,534,817.14 in the consolidated financial statements for
2021, of which the net profit attributable to owners of the parent company is RMB 233,364,344.09, and
the distributable profit of the parent company is RMB 453,996,135.72.
In accordance with the provision of the Notice of China Securities Regulatory Commission on
Further Implementing Cash Dividend Distribution by Listed Companies, the Guidelines of Shanghai Stock
Exchange on Cash Dividend Distribution by Listed Companies, Regulatory Guidelines for Listed
Companies No. 3 - Cash Dividend Distribution by Listed Companies, and the Articles of Association, in
consideration of the current overall operation and development stage, the Company proposes to distribute
the cash dividend of RMB 1.05 (tax-inclusive) per 10 shares to all shareholders on the basis of the total
shares on the record date of interest distribution for 2021, deducted by shares in the special securities
account for repurchase by the Company. As of April 25, 2022, the Company has a total of 452,756,901
shares and 0 shares in the special securities account for repurchase, leading to the total cash dividend of
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Annual Report 2021
RMB 47,539,474.61 (tax-inclusive). The cash dividends proposed by the Company for this year account
for 20.37% of the net profits attributable to the shareholders of the listed company in the current
consolidated financial statements of the Company. No capitalization of the capital reserve or bonus shares
will be made or distributed in the profit distribution.
In the event of any change in the total shares of the Company after deducting the shares in the special
securities account for repurchase by the Company due to relevant events prior to the record date of interest
distribution, the Company intends to keep the total amount of distribution unchanged while
correspondingly change the distribution proportion for each share. In the event of changes in the total
shares, an announcement will be separately released to disclose the specific adjustment.
Reasons for distribution of cash dividends lower than 30% of the distributable profit: Being in the
growth stage, the Company needs a large amount of funds. We plan to use the undistributed profit to
satisfy the working capital requirements in our R&D and marketing activities and day-to-day management,
and support the implementation of our medium-to-long term development strategy and continuous and
healthy development.
The profit distribution proposal for the year of 2021 has been approved at the 11th meeting of the
second Board of Directors and the 10th meeting of the second Board of Supervisors of the Company. The
independent directors of the Company have reviewed the preliminary plan on profit distribution, expressed
their independent opinions on and given explicit consent to the proposal. The preliminary plan for profit
distribution is still subject to approval at the general meeting of shareholders of the Company.
3. Implementation of the policy on cash dividend distribution
During the reporting period, the Company has strictly complied with the dividend principles and
policies. Our dividend distribution criteria and ratio are clear, and the relevant decision-making procedures
and mechanism comply with the applicable regulations. Our independent directors have duly performed
their duties in the review of the preliminary plan on profit distribution by the Board of Directors, to ensure
that the legitimate rights and interests of the minority shareholders are fully protected.
(II) Special explanation about the cash dividend policy
√ Applicable □ N/A
Whether the policy is in compliance with the provisions of the Articles of √ Yes □ No
Association or the requirements of resolutions passed at the general meeting
Are the distribution standards and ratios specific and clear √ Yes □ No
Are the relevant decision-making procedure and mechanism complete √ Yes □ No
Whether independent directors perform their duties and roles √ Yes □ No
Whether small- and medium-sized shareholders have sufficient opportunities √ Yes □ No
to express their opinions and requests, and are their legitimate rights and
interests under sufficient protection
(III) If the Company made a profit in the reporting period and there’s profit distributable by the
parent company to the shareholders, but the Company does not propose to distribute profits in
cash, the Company shall explain the reason in detail and use of the undistributed profit.
□ Applicable √ N/A
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Annual Report 2021
XIII.Share incentive plan, employee stock ownership plan and other employee incentive measures
of the Company and their effect
(I) Overview of share incentives
√ Applicable □ N/A
1.Share incentive plan during the reporting period
In RMB
Proportion
Proportion of Number
Name of Type of Number of of Price of target
target shares of
plan incentive target shares grantees shares granted
(%) grantees
(%)
2019
Restricted Type II
Share restricted 5,500,000 1.21 206 17.61 17.37
Incentive shares
Plan
2021
Restricted Type II
17.445; 18.445;
Share restricted 18,500,000 4.09 224 19.15
20.945
Incentive shares
Plan
2021
Second
Type II
Restricted
restricted 10,500,000 2.32 55 4.70 20.00; 23.00
Share
shares
Incentive
Plan
Note: (1) The proportion of grantees is calculated with the total number of employees of the Company as
of December 31, 2020 described in the 2020 Annual Report as the denominator;
(2) The price at which the target shares are granted under the equity incentive plan above has been adjusted
according to the implementation of past profit distributions.
2.Implementation progress of the share incentive during the reporting period
√ Applicable □ N/A
1. On March 26, 2021, the Company held the 30th meeting of the first Board of Directors and the 17th
meeting of the first Board of Supervisors, which reviewed and passed the Proposal on the “2021
Restricted Share Incentive Plan (Draft)” and Summary Thereof and the Proposal on the Management
Measures for the Appraisal of the “2021 Restrict Share Incentive Plan”.
The incentive plan grants 18.5000 million restricted shares, accounting for 4.09% of the total amount
share capital 452.7569 million shares of the Company at the time of releasing the draft of the incentive
plan, including 17.1000 million shares granted for the first time, accounting for 3.78% of the total share
capital of 452.7569 million shares of the Company as of the announcement date of the incentive plan, and
1.4000 million shares reserved, account for 0.31% of the total share capital of 452.7569 million shares of
the Company as of the announcement date of the incentive plan. There are a total of 224 new grantees of
share incentives under the incentive plan.
2. On April 22, 2021, the Company held the 31st meeting of the first Board of Directors and the 18th
meeting of the first Board of Supervisors, which reviewed and passed the Proposal on the Adjustment of
the 2021 Restricted Share Incentive Plan and the Proposal on Initial Grant of Restricted Shares.
(1) Given that 1 grantee determined in the incentive plan left the company and 3 grantees decided not
to participate in the incentive plan due to personal reasons, after the adjustment, the number of grantees
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Annual Report 2021
under the incentive plan is changed from 224 persons to 220 persons, while the total 18.5000 million
restricted shares granted and 17.1000 million restricted shares granted initially shall remain unchanged.
(2) Since the conditions provided in the incentive plan for granting the restricted shares have been
satisfied, it’s determined that 17.1000 million restricted shares were granted to 220 grantees who met the
grant conditions on the grant date of April 22, 2021.
3. On September 30, 2021, the Company held the 3rd meeting of the second Board of Directors and
the 3rd meeting of the second Board of Supervisors, which reviewed and passed the Proposal on the “2021
Second Restricted Share Incentive Plan (Draft)” and Summary Thereof and the Proposal on the
Management Measures for the Appraisal of the “2021 Second Restrict Share Incentive Plan”.
The 2021 Second Restricted Share Incentive Plan grants 10.5000 million restricted shares, accounting
for 2.32% of the total amount share capital 452.7569 million shares of the Company at the time of releasing
the draft of the incentive plan, including 8.4000 million shares granted for the first time, accounting for
1.86% of the total share capital of 452.7569 million shares of the Company as of the announcement date
of the incentive plan, and 2.1000 million shares reserved, account for 0.46% of the total share capital of
452.7569 million shares of the Company as of the announcement date of the incentive plan. There are a
total of 55 new grantees of share incentives under the incentive plan.
4. On October 22, 2021, the Company held the 4th meeting of the second Board of Directors and the
4th meeting of the second Board of Supervisors, which reviewed and passed the Proposal on Discarding
Certain Restricted Shares Granted but Not Vested.
(1) Considering that 1 grantee of share incentives in the initial grant under the 2019 Restricted Share
Incentive Plan have left the Company, and 1 grantee has become a supervisor of the Company, in
accordance with the relevant provisions of the 2019 Restricted Share Incentive Plan (Draft), such grantees
are no longer qualified as grantees. Therefore, the restricted shares granted but not vested should not be
vested, but should be invalidated by the Company.
(2) The 2019 Restricted Share Incentive Plan (Draft) and the Management Measures for the
Appraisal of the 2019 Restricted Share Incentive Plan, specified the vesting conditions that “with the
operating income of 2018 as the basis, the growth rate of 2020 shall be no less than 50%”. According to
the audited Annual Report 2020 of the Company, the growth rate in operating income failed to reach this
indicator. As a result, the Board of Directors of the Company decided to discard the restricted shares that
cannot be vested this time.
5. On December 7, 2021, the Company held the 6th meeting of the second Board of Directors and the
6th meeting of the second Board of Supervisors, which reviewed and passed the Proposal on Initial
Granting Restricted Shares to Grantees.
Since the conditions provided in the second restricted share incentive plan for granting the restricted
shares have been satisfied, it’s determined that 8.4000 million restricted shares were granted to 55 grantees
who met the grant conditions on the grant date of December 7, 2021.
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Annual Report 2021
3.Share-based payment recognized due to the share incentive during the reporting period
In RMB
Total share-based payment recognized for the 63,345,172.32
current period
(II) Incentives already disclosed in the interim announcements about which no new information is
available
√ Applicable □ N/A
Summary Reference
On March 26, 2021, the Company held the 30th meeting of the
first Board of Directors and the 17th meeting of the first Board For details, please refer to the relevant
of Supervisors, which reviewed and passed the Proposal on announcement issued on the website
the “2021 Restricted Share Incentive Plan (Draft)” and of Shanghai Stock Exchange
Summary Thereof and the Proposal on the Management (www.sse.com.cn) on March 27,
Measures for the Appraisal of the “2021 Restrict Share 2021.
Incentive Plan”.
On April 22, 2021, the Company held the 31st meeting of the
For details, please refer to the relevant
first Board of Directors and the 18th meeting of the first Board
announcement issued on the website
of Supervisors, which reviewed and passed the Proposal on
of Shanghai Stock Exchange
the Adjustment of the 2021 Restricted Share Incentive Plan
(www.sse.com.cn) on April 24, 2021.
and the Proposal on Initial Grant of Restricted Shares.
On September 30, 2021, the Company held the 3rd meeting of
the second Board of Directors and the 3rd meeting of the For details, please refer to the relevant
second Board of Supervisors, which reviewed and passed the announcement issued on the website
Proposal on the “2021 Second Restricted Share Incentive of Shanghai Stock Exchange
Plan (Draft)” and Summary Thereof and the Proposal on the (www.sse.com.cn) on October 8,
Management Measures for the Appraisal of the “2021 Second 2021.
Restrict Share Incentive Plan”.
On October 22, 2021, the Company held the 4th meeting of the For details, please refer to the relevant
second Board of Directors and the 4th meeting of the second announcement issued on the website
Board of Supervisors, which reviewed and passed the of Shanghai Stock Exchange
Proposal on Discarding Certain Restricted Shares Granted (www.sse.com.cn) on October 23,
but Not Vested. 2021.
For details, please refer to the relevant
On December 7, 2021, the Company held the 6th meeting of
announcement issued on the website
the second Board of Directors and the 6th meeting of the
of Shanghai Stock Exchange
second Board of Supervisors, which reviewed and passed the
(www.sse.com.cn) on December 9,
Proposal on Initial Granting Restricted Shares to Grantees.
2021.
Other information
□ Applicable √ N/A
Employee stock ownership plan
□ Applicable √ N/A
Other incentives
□ Applicable √ N/A
(III) Share incentives granted to directors, senior officers and key technical staff during the
reporting period
1.Share options
□ Applicable √ N/A
2.Type I restricted shares
□ Applicable √ N/A
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Annual Report 2021
3.Type II restricted shares
√ Applicable □ N/A
Unit: Share
Market
Number of Number
Number of price
restricted of Number of
Number of Exercise restricted as of
shares restricte restricted
restricted price of the shares the end
already d shares shares
shares restricted already of the
granted as that actually
Name Title granted shares granted as reporti
at the could be vested in
during the granted of the end ng
beginning vested in the
reporting (RMB per of the period
of the the reporting
period share) reporting (RMB
reporting reporting period
period per
period period
share)
Chairman,
General
Manager,
LI Yi 0 3,500,000 21.00 0 0 3,500,000 34.35
key
technical
staff
Director,
WANG 18.50;
Financial 20,560 350,000 0 0 370,560 34.35
Yingxia 23.00
Director
Board 18.50;
YAN Li 70,000 530,000 0 0 600,000 34.35
Secretary 23.00
Key
HU Fei technical 40,000 350,000 18.50 0 0 390,000 34.35
staff
Key
18.50;
YU Xin technical 20,000 500,000 0 0 520,000 34.35
20.00
staff
Key
WANG 18.50;
technical 20,000 400,000 0 0 420,000 34.35
Lin 20.00
staff
Key
WANG 18.50;
technical 22,000 400,000 0 0 422,000 34.35
Zeqin 20.00
staff
Key
GUO 18.50;
technical 16,000 400,000 0 0 416,000 34.35
Zuqiang 20.00
staff
Total / 208,560 6,430,000 / 0 0 6,638,560 /
Note: The table above presents the granting and vesting of Type II restricted shares for directors,
supervisors, senior officers, and key technical staff existing on the disclosure date of this Report, and
the share price at which the restricted shares are granted has not been adjusted according to the plan for
profit distribution implemented in the past.
(IV) Performance assessment mechanism for senior officers and the establishment and
implementation of incentive mechanism for senior officers during the reporting period
√ Applicable □ N/A
The remunerations of the senior officers comprise salaries and bonuses. The Compensation and
Performance Assessment Committee of the Board of Directors is responsible for formulating and
implementing the compensation proposal and performance assessment proposal for senior officers. The
compensation proposal for senior officers has been reviewed in accordance with the AOA and other
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Annual Report 2021
relevant corporate governance policies. During the reporting period, the remunerations paid to the senior
officers of the Company have been reviewed and approved by the Board of Directors. During the reporting
period, the senior officers have been assiduous in their duties in strict accordance with the requirements
of the Company Law and other applicable laws and regulations and the AOA, and continuously enhanced
internal management of the Company under the guidance of the Board of Directors, to lay a solid
foundation for future development of the Company.
XIV. Measures and implementation for building internal control regulations during the
reporting period
√ Applicable □ N/A
For details, refer to the 2021 Audit Report on Internal Controls of Appotronics Corporation Limited
disclosed on the website of Shanghai Stock Exchange on April 27, 2022.
Explanation about material loopholes in internal controls during the reporting period
□ Applicable √ N/A
XV. Management and control over subsidiaries during the reporting period
√ Applicable □ N/A
The Company has formulated the Internal Control Management Regulations and the Regulations for
Internal Reporting of Significant Information in accordance with relevant provisions of the Company Law,
the Securities Law, and the AOA. During the reporting period, the Company managed subsidiaries in
aspects of compliant operation, personnel management, operation management, financial management,
etc. At present, all subsidiaries are in normal operation under proper management and control of the
Company over controlled subsidiaries.
XVI. Explanation about the auditor’s report on internal controls
√ Applicable □ N/A
For details, refer to the 2021 Audit Report on Internal Controls of Appotronics Corporation Limited
disclosed on the website of Shanghai Stock Exchange on April 27, 2022.
Whether an auditor’s report on internal controls has been disclosed: Yes
Opinions in the audit report on internal controls: Standard unqualified opinion
XVII. Rectification of issues detected during the self-inspection of governance of the listed
company
Issue existing and reasons thereof: After sorting out the attendance of the general meeting by directors,
supervisors, and senior officers, it’s detected that some senior officers were absent from the general
meeting due to business or other reasons.
Specific rectification: Upon detection of such an issue, the Company has required relevant senior
officers to submit a supplementary Request for Absence. In order to further improve the procedures for
the attendance of directors, supervisors, and senior officers as voting or non-voting participants, the
Company will send an attendance notice to directors, supervisors, and senior officers prior to each general
meeting; any director, supervisor, or senior officer who cannot attend the general meeting due to business
or other reasons shall submit a statement on request for absence signed in person, which request for
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Annual Report 2021
absence shall be retained by the office of the Board of Directors. The Company implemented such
rectification measures in May 2021, and the directors, supervisors, and senior officers supported and
cooperated in the rectification; the rectification measures were properly implemented in subsequent
general meetings of the Company.
XVIII. Others
□ Applicable √ N/A
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Annual Report 2021
Section V Environment, Social Responsibility, and Other Corporate
Governance
I. Statement of the Board of Directors on ESG
The Company attaches great importance to ESG matters. Since its listing in 2019, the Company has
released social responsibility reports for two consecutive years, and incorporated the social value as a
corporate citizen into its daily operating activities to build a model for the laser display industry; moreover,
the social responsibility report has been upgraded to the more comprehensive strategic management of
environment, society, and corporate governance during the reporting period.
In order to effectively implement ESG efforts, the Company has gradually established and improved
an integrated ESG management, communication, and coordination mechanism. The Chairman, as the first
responsible person, is responsible for reviewing and deciding the strategy and objective of the Company’s
ESG efforts; and the functional departments, business departments, subsidiaries, and branches are
responsible for making corresponding working objectives and plans to implement the Company’s strategy,
and to keep communication with internal and external stakeholders. This results in an approach featuring
review and decision-making, coordination and supervision, and step-by-step implementation.
(I) Striving to achieve the carbon peaking and carbon neutrality goals by green technologies
The Company created the ALPD phosphor laser display technology in 2007. Compared with
conventional display technologies, this technology has advantages of high brightness, wide color gamut,
high contrast, high reliability, high light effect, energy conservation, and environment friendliness. We
develop green products by making use of such green technology to achieve technological industrialization.
As of December 31, 2021, the Company has achieved over 2.5 installations of the laser projection
solution in China, creating “win-win” solutions intended for both economic benefits and environment
protection benefits for customer. According to incomplete statistics, ALPD laser projection solutions
ran 188 million hours in total, saving a total of 338 million kWh power consumption, and reducing about
148 million cubic meters of carbon dioxide emissions arising from power generation, which established
an industry model for energy conservation and emission reduction to achieve the “carbon neutrality” goals.
Moreover, given the great importance attached to environment protection management, we have no
environmental violations in 2021, with the total emissions of waste gas and wastewater not exceeding the
standards. We implement the green operation philosophy by continuously improving production processes
to strive for energy conservation and consumption reduction; improve the rate of resource recycling and
utilization by “trade-in” practices; and advocate thrift and green office among employees.
(II) Fulfilling responsibilities actively to serve society
The Company attaches great importance to its responsibilities as a corporate citizen. Holding
technological innovation as the sole of the Company’s development, the Company continuously promotes
technological innovation and transformation of achievements by laying out the industrial chain around the
innovation chain. During the reporting period, the Company released new applications of laser display in
aviation, vehicle display, and other fields, and entered into cooperation with leading enterprises like Airbus,
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Huawei, etc. to fulfill its responsibilities in striving for breakthrough for the industry as the leader in the
laser display industry.
With emphasis on the protection of intellectual property rights, the Company has won the Gold
Award of Guangdong Patent Award for four consecutive years to widen the patent moat.
The Company actively advocates and always implements the value concept of being “people-oriented”
and insists on equal opportunity for employment. We establish a series of formal and informal
communication methods such as the trade union employee representative conference, quarterly employee
communication conference, democratic life meeting, new employee colloquium, performance counseling
and evaluation communication, so as to actively encourage our employees to participate in corporate
management; moreover, the Company launched two restricted share incentive plans during the reporting
period. We establish a learning and exchange platform for employees to cultivate all-round talents required
by our business, thus achieving a win-win result of corporate development and personal development.
With adherence to engage in social welfare deeply, the Company continuously promotes the
popularization of scientific knowledge. During the reporting period, the Company supported Shenzhen
government for the urban strategic construction of a “child-friendly city”, receiving 5 batches of 97 visitors
from the Children’s Public Welfare Visit Project of the Children’s Science Alliance in Nanshan District,
Shenzhen. We actively convey love and warmth to the society, and make contributions to the
establishment of adolescent creative space which acts as a local service site for the young in Qianxi City,
Guizhou Province, as to help revitalize rural talents. We strive to realize the integration of corporate
business value and social value to gives back to the society with practical actions.
(III) Improving governance for long-lasting operation
The Company has established a diversified governance structure to fully mobilize the resources of
all parties for coordination and continuously raise the level of corporate governance. The Board of
Directors has four special committees established under it, namely, the Strategy Committee, the
Compensation and Performance Assessment Committee, the Nomination Committee, and the Audit
Committee, which are responsible for monitoring specific tasks of the Company and assisting the Board
of Directors in performing its duties, hence ensuring diligent and efficient decision-making of the
Company. The Company establishes good investor relations by disclosing corporate information in a true,
accurate, complete and timely manner, and establishing a sound mechanism for the protection of
shareholders’ rights and interests. We insist on thinking about worst-case scenarios and strengthening red-
line awareness, and incorporate risk prevention and control into the whole process of enterprise operation
to safeguard the long-lasting operation of the Company.
(IV) Striving for innovation in fulfilling responsibilities for safety management
In 2021, the Company continued to improve the safety management mechanism and promote the
safety production system construction. We set up a safety management committee with a safety
management committee office, and arrange the Company’s R&D center and supply chain center to be
responsible for the specific implementation. We promote the Company’s headquarters platform and R&D
assessment department to sign the safety responsibility letter with the signing rate reaching 100%. At the
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same time, we have completed the safety hazards investigation and remediation and the preparation of
emergency plans for production safety accidents, and obtained the “Safety Production Standardization
Certificate” issued by the Safety Production Association of Nanshan District, Shenzhen in April 2021,
which promoted the Company’s safety production standardization.
The Company has disclosed its 2021 Environmental, Social and Governance (ESG) Report on the
website of Shanghai Stock Exchange (www.sse.com.cn) on April 27, 2022. For details, please refer to
such report.
II. Environment
(I) Whether the Company is a major polluter identified by the environmental protection authority
□ Yes √ No
The Company mainly engages in the research, development, production and sales of laser display
core devices and complete machines and application of laser display technology to different scenarios
based on ALPD laser display technology and architecture, and provides laser cinema projection services.
During the reporting period, the Company has no production or operating entity included in the list of
major polluters identified by the environmental protection authority.
(II) Administrative penalties imposed due to environmental issues during the reporting period
During the reporting period, the Company experienced no administrative penalty imposed due to
environmental issues.
(III) Information of resource and energy consumption and emissions
√ Applicable □ N/A
The Company mainly engages in the research, production, and sales of core devices and terminal
products for laser display, which is a low energy consumption industry. During its production and daily
operation, the Company mainly consumes electricity, water, and other resources, and mainly emits waste
gas and waste water. During the reporting period, the Company has no environmental violations with the
total emissions of waste gas and wastewater not exceeding the standards. Moreover, the laser display
technology developed by the Company is a green technology, which can help other enterprises in energy
conservation and emission reduction.
1. Green-house gas emission
√ Applicable □ N/A
The Company does not directly emit carbon dioxide, methane, or other green-house gases in its daily
production activities. However, the Company consumes electricity and other resources, which are in the
scope of equivalent emission of green-house gas. The Company strives to reduce carbon emission by
innovating production technologies, advocating green office, etc.
2. Energy and resource consumption
√ Applicable □ N/A
Focused on innovative production technology, the Company has achieved low-carbon and
environmental-friendly production by improving production efficiency and process. In 2021, for the
Company’s Shenzhen Bao’an Plant, the average water consumption and the average electricity
consumption per product decreased by 33.33% and 28.61% on a year-on-year basis respectively, and the
working hours for manufacturing a product decreased by 18%.
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During the reporting period, given the great increase in office staff of the Company and the lease of
an additional floor of office space, the Company emphasizes the improvement of utilization efficiency in
the consumption of water, electricity, and other major resources to minimize energy consumption. The
specific environmental performance is as follows:
Year-on-year
Indicator Unit 2020 2021
decrease
Office water
Ton 8.20 8.10 1.17%
consumption per capita
Office electricity
kWh 1066.35 963.24 9.67%
consumption per capita
3. Emission of wastes and pollutants
√ Applicable □ N/A
In 2021, the Company has no environmental violations, with the total emissions of waste gas and
wastewater not exceeding the standards, and all discharge indicators achieving 100% compliance rate.
Management regulations of the Company for environment protection
√ Applicable □ N/A
In strict compliance with requirements in the Environmental Protection Law of the People’s Republic
of China and other laws and regulations, Approtronics strengthens environmental management in multiple
dimensions, such as organization, supervision and assessment, statistical accounting of indicators,
education and training, hidden danger investigation and control, and accident emergency response plans,
as to minimize the impact of our operations on the environment.
(IV) Measures taken to reduce carbon emissions during the reporting period and their effect
√ Applicable □ N/A
During the reporting period, the Company established an online work platform system, through which
we cooperated with I-Yin Technology to conduct electronic printing sheet for contract seal, so that we
eliminated the printing link and saved paper costs effectively. Meanwhile, through the SaaS cloud service
operation model in the Company’s ERP/CRM system, we achieved an 11% reduction in overall energy
saving and emission reduction for the internal data center in terms of server energy consumption, storage
service energy consumption, air conditioning energy and emission, and network energy consumption.
(V) New technologies, new products, and new services for carbon emission reduction
√ Applicable □ N/A
The Company has always attached great importance to the research and development of
environmental-friendly products, and is committed to providing customers with product solutions with
environmental benefits. As of December 31, 2021, more than 25,000 sets of ALPD laser projection
solutions of CINEAPPO, a subsidiary of the Company, have been installed in total. The ALPD laser
projection solutions ran 188 million hours in total, saving a total of 338 million kWh power consumption,
and reducing about 148 million cubic meters of carbon dioxide emissions arising from power generation.
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(VI) Relevant information conducive to protecting ecology, preventing pollution and fulfilling
environmental responsibilities
√ Applicable □ N/A
The Company attaches importance to improving the efficiency of resource use and ensures the
resources are used efficiently, so as to reduce the effect of production and operation to environment.
During the reporting period, , a controlled subsidiary of the Company, launched the “trade-in”
function through its mini program, which may help improve the overall energy efficiency of home
appliances, reduce environmental pollution, and use recyclable steel, non-ferrous metals, plastics and
rubber in waste home appliances fully and effectively, thus promoting the development of recycling
economy. This measure is conducive to improving the efficiency of energy resources utilization, reducing
environmental pollution, and promoting energy conservation, emission reduction and recycling economy
development.
III. Performance of social responsibilities
(I) Social contributions of the main business and industry key indicators
The Company mainly engages in the research, development, production and sales of laser display
core devices and complete machines based on ALPD laser display technology and architecture. The
Company created the ALPD phosphor laser display technology in 2007, which can emit high-quality
high-brightness light with a small volume. This technology is considered to be a core technology for next-
generation mobile display technologies represented by AR, and therefore has great market potential. From
the viewpoint of technology leadership, this technology has become the mainstream technology in the
field of laser display, and as the underlying key architecture technology, has been cited more than 600
times by industry giants such as Philips of the Netherlands, Osram of Germany, Epson of Japan, and NEC
etc.
At the national level, the laser display industry has always been one of the focuses of the state, from
the 863 Program (National High-tech R&D Program) which included laser display in the 1980s, to the
Development Plan for National Strategic Emerging Industry in the 12th Five-year Plan, to the New Display
and Strategic Electronic Materials of the Ministry of Science and Technology and other key projects in
the 14th Five-year Plan listing laser display, new display, and the third-generation in 2021, and the National
Key Research and Development Programs of the Ministry of Science and Technology containing laser
display for chips in 2021. The ALPD laser display technology of the Company not only broke the
monopoly of foreign enterprises, but also maintained the leading position of the Chinese technology
throughout the world.
As a leader in the laser display industry, the Company took the lead in undertaking the “RGB Laser
Display Machine Product Model Line” supported by the National Key R&D Program of China. On the
basis of the ALPD laser display technology, at the end of 2019, the laser phosphor digital cinema
projector developed by the Company for the first time in China and certified according to the DCI standard
- C5 was put into mass production, introducing the technology from China for the digital cinema industry.
The Company fully utilized its leading advantages to integrate the industry chain from the upstream
to the downstream, and provides core devices or complete equipment to XGIMI, Dangbei, Anker, VAVA,
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and many other enterprises to promote the development of the industry. As the only Chinese brand in the
Laser Illuminated Projector Association (LIPA), the Company speaks for Chinese technologies. Moreover,
the Company took lead in formulating multiple industrial standards for laser TVs, smart projection, etc.
to promote the formulation and implementation of national standards for laser safety.
(II) Types of and contributions for public charity activities
Type Quantity Remark
Rural revitalization / None
Where: Funds (RMB 0’000) / None
Value of materials (RMB 0’000) 8 Donated laser display devices to
make contributions to the
establishment of adolescent
creative space which acts as a local
service site for the young in Qianxi
City, Guizhou Province, as to help
revitalize rural talents
1. Specific information about public charity activities
√ Applicable □ N/A
With adherence to engage in social welfare deeply, the Company continues to promote the
popularization of scientific knowledge, pay attention to social disadvantaged groups, and actively conveys
love and warmth to the society, striving to realize the integration of corporate business value and social
value to gives back to the society with practical actions.
During the reporting period, the Company supported Shenzhen government for the urban strategic
construction of a “child-friendly city”, receiving 5 batches of 97 visitors from the Children’s Public
Welfare Visit Project of the Children’s Science Alliance in Nanshan District, Shenzhen. The Company
vigorously promote the traditional virtues of the Chinese nation, actively advocate all employees to offer
care, help and condolence to the elderly, the disabled, the left-behind children and other special groups,
so as to convey the public welfare concepts and actions of Appotronics.
2. Information on consolidation and expansion of the results of poverty alleviation, rural
revitalization and other specific work
√ Applicable □ N/A
To actively respond to the national policy of “culture-to-the countryside activity” and support the
rural film projections, the Company develops two models of laser light source cinema projection
equipment, which can realize mobile movie screening or fixed screening in vast rural areas, and helps the
revitalization of rural culture using advanced laser display technology.
At the same time, the Company actively supports and guides young people to start their own
businesses and create employment appropriately by virtue of its own industry resources and advantages,
and makes contributions to the establishment of adolescent creative space which acts as a local service
site for the young in Qianxi City, Guizhou Province, as to help revitalize rural talents.
(III) Protection of the rights and interests of shareholders and creditors
During the reporting period, the Company continuously improved its corporate governance structure
focusing on regulated operation of the Company in accordance with the requirements of laws and
regulations, including the Company Law and the Securities Law. The Company has established a
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diversified governance structure to fully mobilize the resources of all parties for coordination and
continuously raise the level of corporate governance.
The Board of Directors of the Company is mainly responsible for formulating overall strategies and
policies of the group, setting performance and management goals, assessing the performance of the
businesses, and supervising the performance of the management. The Board of Directors has four special
committees established under it, namely, the Strategy Committee, the Compensation and Performance
Assessment Committee, the Nomination Committee, and the Audit Committee, which are responsible for
monitoring specific tasks of the Company and assisting the Board of Directors in performing its duties,
hence ensuring diligent and efficient decision-making of the Company.
(IV) Protection of the rights and interests of employees
We strictly abide by the Labor Law of the People’s Republic of China, the Contract Law of the
People’s Republic of China and other laws and regulations, eliminate the employment of child labor and
other forced labor, and combat harassment and abuse. With great attention to the employment of persons
with disabilities, we actively create jobs to promote the employment of the disabled, and strive to build a
diverse and inclusive talent team. With adherence to equal employment, we treat employees fairly
regardless of nationalities, races, religions, genders and ages, and create a diverse, inclusive, fair and
reasonable work environment for employees. We insist on equal pay for equal work and execute
employment contracts with employees in accordance with the law.
During the reporting period, despite complicated impact from the COVID-19 epidemic, we actively
responded to the national deployment of “stabilizing employment”. The total number of our employees
reached 1,565, up nearly 34% over that of the previous year.
We attach great importance to the demands and opinions of employees, and continue to improve the
channels and mechanisms for communication. At the company level, we establish a series of formal and
informal communication methods such as trade union employee representative conference, quarterly
employee communication conference, democratic life meeting, new employee colloquium, performance
counseling and evaluation communication, so as to actively encourage our employees to participate in
corporate management, and safeguard employees’ rights to information and participation.
The Company places talent development at a strategic height. We evaluate and select talents by using
scientific methods, cultivate talents in all aspects and at multiple levels, fully tap the potential of employees,
improve the professional ability and leadership of employees at all levels, and build career development
channels for employees, so as to promote the continuous growth of employees. During the reporting period,
the Company launched two restricted share incentive plans.
With adherence to the employee-oriented concept, the Company cares for the work and life of every
employee, pays attention to solving the problems that employees care about, and improves the working
environment for employees. We actively carry out entertainment and leisure activities according to the
employees’ needs, and provide irregular condolences to employees in financial difficulties, so that
employees can truly feel the warmth of “home”. We care about the health and safety of employees, and
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take all measures to prevent occupational hazards, striving to create a safe and comfortable working
environment for employees.
Employee share ownership
Number of employees owning shares (persons) 228
Ratio of employees owning shares to the total
14.57
number of employees (%)
Number of shares owned by employees (0’000
2,536.45
shares)
Ratio of shares owned by employees to the total
5.6
share capital (%)
(V) Protection of the rights and interests of suppliers, customers and consumers
The Company attaches great importance to cooperation with suppliers and strategic partners. We
actively implement clean and responsible procurement, choose to purchase environmentally friendly raw
materials, actively deploy core areas and links of the industrial chain and deem them as an important
component of the Company’s production and operation. By strengthening the management of suppliers’
corporate responsibility and standardizing procurement transactions, we have improved sustainable
competitiveness of the supply chain. We are working together with our suppliers to develop and build a
responsible value chain.
The Company focuses on the authenticity and compliance of the Company’s products and services,
we strengthen comprehensive product training for publicity channel personnel, introduce product
parameters and services in a true and objective manner, and specify in the contract that after-sales and
similar terms are restricted and protected by laws and regulations, so as to ensure that the product and
service information provided to the market and society is compliant, truthful and transparent.
(VI) Product safety
In order to provide the public with safer and more assured products with better quality, the Company
has established a DQA laboratory with a safety testing laboratory in strict accordance with relevant
international standards, which is fully responsible for product design quality assurance and safety
assurance. The design quality and safety testing assurance capabilities of the DQA laboratory have been
recognized by various world authoritative certification and testing organizations such as CNAS, UL, TUV,
ITS, etc., demonstrating positive actions and effective practices made by Appotronics in building a safer,
more reliable world under sustainable development. At the same time, Appotronics attaches great
importance to the safe use of products by customers, and actively popularize product function and risk
knowledge to domestic and foreign customers by carrying out knowledge lectures, special education and
training, and other activities, so as to eliminate safety risks and raise product service levels.
(VII) Other information about the performance of social responsibilities
√ Applicable □ N/A
As an industry leader in the laser display industry, the Company actively carries out cross-border
cooperation to build a wide range of cooperation platforms, and strives to cooperate sincerely with
important cities, key enterprises, scientific research institutions, and financial institutions for mutual
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benefits and common development, so as to support for the sustainable development of economy and
society.
For cooperation with city governments, during the reporting period, the Company cooperated with
Chongqing, Chengdu, Hangzhou, Xining and other cities to jointly explore more excellent light and
shadow effects, energize and invigorate economic development of cities, and help create characteristic
business cards.
For cooperation with universities, the Company funded the Photoelectric Design Competition of
Shenzhen University in order to support college students to explore and research photoelectric science;
moreover, the Company worked with cooperative universities and research institutes to further promote
the integration of production, education, research and application.
For cooperation with other enterprises, the Company reached a strategic cooperation with Airbus,
and demonstrated laser product prototypes that can be applied in the field of civil aviation display in
Zhuhai Airshow for the first time. Giving full play to respective professional advantages, we have explored
a more efficient, pragmatic and innovative cooperation model with relevant industry leading enterprises.
IV. Other corporate governance
(I) Party building
√ Applicable □ N/A
The Party organization of the Company was established in September 2016, and was upgraded into
a Party Committee in September 2020. As of the end of the reporting period, the Party Committee has 4
Party branches and 63 Party members.
In recent years, the Party Committee of the Company emphasized “three combinations”, that is, the
combination of Party building efforts with the operating goals of the Company, with the corporate culture
building, and with the practice of social responsibilities, so as to give full play to the role of Party members
leading and setting a model and the safeguarding role of the Party organization. We insisted on the driving
force based on innovation and substantial strength improvement by technologies, hence making our
contributions as a private company in the independent technology development of the “Shenzhen team”,
and illuminate the world with light from China.
At the beginning of 2021, the Party Committee of the Company called on employees who are Party
members to actively practice corporate social responsibilities, and established the Appotronics Volunteer
Association to join the Nanshan Volunteer Association for active participation in various public charity
activities. In July 2021, at the 100th anniversary of the Communist Party of China, the Party Committee of
Appotronics won the honor of “Advanced Grass-root Party Organization of Shenzhen” as an outstanding
representative of innovative technology enterprises in Shenzhen.
(II) Investor relation and protection
Type Times Remark
The Company held two performance briefings in May
2021 and September 2021, respectively, which were
Convening presided over by the Chairman, to help investors gain an
2
performance briefings in-depth understanding of the operating performance of
the Company, and respond to hot issues of concern. This
leads to the 2020 Award of Outstanding Practical Case of
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Performance Briefing granted by China Association for
Public Companies.
Given the feature of transforming from print media to
Conduct investor video for the dissemination of popular information, the
relation management Company operated a video account, under which 27
27
activities through new videos were released. This innovative dissemination
media channel provides abundant information to investors and
builds a comprehensive image of the listed company.
Column of investor https://www.appotronics.com/investor_team.html
relation on the official √ Yes □ No
website
Specific information about investor relation management and investor protection
√ Applicable □ N/A
The Company is dedicated to establishing good investor relations by disclosing corporate information
in a true, accurate, complete and timely manner, and establishing a sound mechanism for the protection of
shareholders’ rights and interests. We actively provided suggestions and communication services with
regulatory agencies, and disclosed a total of 209 announcement documents in 2021. In 2021, we organized
2 performance briefing sessions, 4 online live broadcasts/Q&A activities, and more than 150 surveys and
reverse roadshows, answered more than 480 calls, replied more than 70 questions on the SSE e-interactive
platform, and held 3 public online investor reception day activities actively, so as to effectively respond
to the expectations and suggestions of small and medium investors.
Explanation about communication with investors by other means
√ Applicable □ N/A
The Company obtained in-depth coverage of 7 tier-1 securities companies including China Fund,
Zhongtai Securities, China Merchants Securities, Guoxin Securities, etc. and released 7 in-depth research
reports. Besides, the Company obtained seven seller-side securities companies, and released 13 research
reports on the Company’s semi-annual report, third quarter report, new product release, and other
performance-related events or material events, to help investors better understand the Company’s
businesses.
(III) Transparency of information disclosure
√ Applicable □ N/A
In strict compliance with the provisions of the Administrative Measures for Information Disclosure
by the Listed Companies and the Management Regulations of Information Disclosure of the Company, the
Company discloses relevant information in a prompt and fair manner in accordance with laws, regulations,
and the AOA to practice true, accurate, and complete information disclosure, and safeguard the legitimate
rights and interests of the Company, investors, creditors, and other stakeholders.
(IV) Protection of intellectual property rights and information security
√ Applicable □ N/A
With great importance to intellectual property protection, the Company spares no effort to ensure that
intellectual property management is in place. In compliance with the requirements of laws and regulations
such as the Trademark Law of the People’s Republic of China, the Patent Law of the People’s Republic of
China, and the Anti-Unfair Competition Law of the People’s Republic of China, we have established a
legal center consisting of an intellectual property department and a legal department, and formulated the
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Patent Management Regulations, the Patent Application Review Measures and the Trademark
Management Regulations, through which the intellectual property management system have been
gradually established and improved to create high-value patents and widen the patent moat continuously.
At the same time, with adherence to openness and cooperation attitudes, the Company steadily promote
patent rights protection and safeguard legitimate rights and interests to protect intellectual property rights
from infringement.
In 2021, the Company’s patents filed and granted both increased compared with that of the previous
year. As of December 31, 2021, Appotronics has been issued with 1,434 patents, and filed 774 domestic
and oversea patent applications (of which 641 cases are invention applications) and 211 PCT patent
applications, resulting in a total of 2,419 patents filed or granted cumulatively all over the world.
The Company continues to establish and improve the information security system, and
comprehensively improves its capabilities on information confidentiality and data security, and on
information leakage monitoring. In strict accordance with the Personal Information Protection Law of the
People’s Republic of China, , a subsidiary of Appotronics, has formulated different regulatory systems
and process documents around FengOS user privacy protection such as Information (Data) Management
Process System of , and Information Security Management Code and Confidentiality System of , and a new
version of user privacy agreement to ensure that the user data is collected legally and compliantly. At the
same time, actively carries out training on user personal information protection to continuously improve
the awareness of information protection among employees.
(V) Information about participation of institutional investors in corporate governance
√ Applicable □ N/A
During the reporting period, in one aspect, institutional investors of the Company actively
participated in voting at the general meetings of the Company, and fully exercised their right of information,
voting right, and other shareholder’s rights provided in the Company Law, so as to enhance the supervision
over and suggestions for corporate governance of the Company. In another aspect, with full awareness of
the Company about the continuity and importance of institutional investors in promoting the governance
capability of the Company, the Company keeps active mutual communication with institutional investors
to present information about the Company to and receive suggestions about the development of the
Company from institutional investors, assisting the management in making adjustment and decisions in a
faster and more accurate manner and continuously improving corporate governance.
For example, considering the multiple applications for the Company’s technologies, an institutional
investor suggested the Company to break down businesses in the annual report with reference to the
prospectus to keep consistency in the study of the Company. The management of the Company responded
rapidly after learning such suggestion, and resumed to present the businesses in the same manner as in the
prospectus. This helped investors better understand the operating performance of the Company, and was
highly praised by investors, hence effectively optimizing the governance of the Company.
(VI) Other corporate governance
□ Applicable √ N/A
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Section VISignificant Matters
I. Fulfillment of covenants
(I) Covenants made by the actual controller, shareholders, affiliates and acquirer of the Company, the Company itself and other related parties during the
reporting period or the outstanding covenants made by them in the prior periods
√ Applicable □ N/A
Whether Whether the Reason for Action plan
Validity there’s a time covenant has failure to fulfill if failing to
Background Covenant Covenant
Covenantor period of limit for the been strictly the covenant on fulfill the
of covenant Type Content
covenant fulfillment of fulfilled on time (if covenant on
the covenant time applicable) time
Covenant by the controlling
36 months
shareholder regarding
after
restriction on the sale of
Restriction Refer to completion of
shares held by him, voluntary
on the sale IPO the IPO and Yes Yes N/A N/A
lock-up of such shares,
of shares Prospectus the extended
extension of lock-up period,
period stated
intention to hold and dispose
below
of shares and other issues
36 months
Covenant
after
relating to
Covenant by the actual completion of
IPO
controller regarding the IPO and
restriction on the sale of the extended
Restriction Refer to
shares held by him, voluntary period stated
on the sale IPO Yes Yes N/A N/A
lock-up of such shares, below, and 6
of shares Prospectus
extension of lock-up period, months after
intention to hold and dispose termination of
of shares and other issues employment
with the
Company
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Covenant by the concert
parties of the actual controller 36 months
regarding restriction on the after
Restriction sale of shares held by them, Refer to completion of
on the sale voluntary lock-up of such IPO the IPO and Yes Yes N/A N/A
of shares shares, extension of lock-up Prospectus the extended
period, intention to hold and period stated
dispose of shares and other below
issues
Covenant by the directors
12 months
regarding restriction on the
after
sale of shares held by them,
Restriction Refer to completion of
voluntary lock-up of such
on the sale IPO the IPO and Yes Yes N/A N/A
shares, extension of lock-up
of shares Prospectus the extended
period, intention to hold and
period stated
dispose of shares and other
below
issues
Covenant by the supervisors
regarding restriction on the
sale of shares held by them, 12 months
Restriction Refer to
voluntary lock-up of such after
on the sale IPO Yes Yes N/A N/A
shares, extension of lock-up completion of
of shares Prospectus
period, intention to hold and the IPO
dispose of shares and other
issues
12 months
Covenant by HU Fei, as a
after
senior officer and member of
completion of
key technical staff, regarding
the IPO and
Restriction restriction on the sale of Refer to
the extended
on the sale shares held by him, voluntary IPO Yes Yes N/A N/A
period stated
of shares lock-up of such shares, Prospectus
below, and 6
extension of lock-up period,
months after
intention to hold and dispose
termination of
of shares and other issues
employment
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with the
Company
Covenant by the senior
officers BO Lianming and 12 months
others regarding restriction after
Restriction on the sale of shares held by Refer to completion of
on the sale them, voluntary lock-up of IPO the IPO and Yes Yes N/A N/A
of shares such shares, extension of Prospectus the extended
lock-up period, intention to period stated
hold and dispose of shares below
and other issues
Covenant by the key 12 months
technical staff YU Xin and after
others regarding restriction completion of
Restriction on the sale of shares held by Refer to the IPO and
on the sale them, voluntary lock-up of IPO listing of Yes Yes N/A N/A
of shares such shares, extension of Prospectus stock and the
lock-up period, intention to extended
hold and dispose of shares period stated
and other issues below
Covenant by the holders of
more than 5% shares
12 months
regarding restriction on the
after
Restriction sale of shares held by them, Refer to
completion of
on the sale voluntary lock-up of such IPO Yes Yes N/A N/A
the IPO and
of shares shares, extension of lock-up Prospectus
listing of
period, intention to hold and
stock
dispose of shares and other
issues
Covenant by the other 12 months
shareholders regarding after
Restriction Refer to
restriction on the sale of completion of
on the sale IPO Yes Yes N/A N/A
shares held by them, the IPO and
of shares Prospectus
voluntary lock-up of such listing of
shares, extension of lock-up stock
95 / 337
Annual Report 2021
period, intention to hold and
dispose of shares and other
issues
Covenant by senior officers
and core employees
participating in strategic At least 12
allotment regarding months after
Restriction Refer to
restriction on the sale of completion of
on the sale IPO Yes Yes N/A N/A
shares held by him, voluntary the IPO and
of shares Prospectus
lock-up of such shares, listing of
extension of lock-up period, stock
intention to hold and dispose
of shares and other issues
36 months
Issuer’s plan for stabilizing
after
the Company’s stock price Refer to
completion of
Others and covenant regarding share IPO Yes Yes N/A N/A
the IPO and
repurchase measures within Prospectus
listing of
three years after the listing
stock
Controlling shareholder and
36 months
the actual controller’s plan
after
for stabilizing the Company’s Refer to
completion of
Others stock price and covenant IPO Yes Yes N/A N/A
the IPO and
regarding share repurchase Prospectus
listing of
measures within three years
stock
after the listing
Directors and senior officers’ 36 months
plan for stabilizing the after
Refer to
Company’s stock price and completion of
Others IPO Yes Yes N/A N/A
covenant regarding share the IPO and
Prospectus
repurchase measures within listing of
three years after the listing stock
Refer to
Issuer’s covenant regarding
Others IPO Permanent No Yes N/A N/A
measures against fraud in IPO
Prospectus
96 / 337
Annual Report 2021
Controlling shareholder,
actual controller and their Refer to
Others concert parties’ covenant IPO Permanent No Yes N/A N/A
regarding measures against Prospectus
fraud in IPO
Directors, supervisors and
Refer to
senior officers’ covenant
Others IPO Permanent No Yes N/A N/A
regarding measures against
Prospectus
fraud in IPO
Issuer’s covenant regarding Refer to
Others remedial measures for diluted IPO Permanent No Yes N/A N/A
earnings in the current period Prospectus
Controlling shareholder,
actual controller and their
Refer to
concert parties’ covenant
Others IPO Permanent No Yes N/A N/A
regarding remedial measures
Prospectus
for diluted earnings in the
current period
Directors, supervisors and
senior officers’ covenant Refer to
Others regarding remedial measures IPO Permanent No Yes N/A N/A
for diluted earnings in the Prospectus
current period
Refer to
Issuer’s covenant regarding
Others IPO Permanent No Yes N/A N/A
profit distribution policy
Prospectus
Issuer’s covenant regarding
restraint measures and Refer to
Others liability for compensation in IPO Permanent No Yes N/A N/A
the event of failure to fulfill Prospectus
its covenants
Controlling shareholder,
Refer to
actual controller and their
Others IPO Permanent No Yes N/A N/A
concert parties’ covenant
Prospectus
regarding restraint measures
97 / 337
Annual Report 2021
and liability for
compensation in the event of
failure to fulfill their
covenants
Directors, supervisors and
senior officers’ covenant
regarding restraint measures Refer to
Term of
Others and liability for IPO No Yes N/A N/A
office
compensation in the event of Prospectus
failure to fulfill their
covenants
Controlling shareholder’s
Resolve
covenant on avoiding Refer to
horizontal
horizontal competition and IPO Permanent No Yes N/A N/A
competition
regulating and reducing Prospectus
issues
related-party transactions
Resolve Actual controller’s covenant
related- on avoiding horizontal Refer to
party competition and regulating IPO Permanent No Yes N/A N/A
transaction and reducing related-party Prospectus
issues transactions
For details,
refer to the
2019
Restricted
Share
Covenant Covenant by the grantee of Incentive
related to share incentives regarding Plan
Others Permanent No Yes N/A N/A
share information disclosure (Draft), the
incentives documents 2021
Restrict
Share
Incentive
Plan
(Draft), and
98 / 337
Annual Report 2021
the 2021
Second
Restricted
Share
Incentive
Plan (Draft)
of the
Company
For details,
refer to the
2019
Restricted
Share
Incentive
Plan
(Draft), the
2021
Covenant Restrict
Company’s covenant on
related to Share
Others refraining from providing Permanent No Yes N/A N/A
share Incentive
financial assistance
incentives Plan
(Draft), and
the 2021
Second
Restricted
Share
Incentive
Plan (Draft)
of the
Company
(II) If the Company has made any profit forecast on its assets or project and the reporting period falls within the period of such profit forecast, explanation
about whether the goal has been achieved and the relevant reasons
Explanation about whether the goal has been achieved and the relevant reasons
□ Reached□ Not reached√ N/A
99 / 337
Annual Report 2021
(III) Fulfillment of performance covenant and the relevant effect on goodwill impairment test
□ Applicable √ N/A
100 / 337
Annual Report 2021
II. Non-operating occupation of funds by the controlling shareholder or its affiliates during the
reporting period
□ Applicable √ N/A
III. Guarantees in violation of regulations
□ Applicable √ N/A
IV. Explanation of the Board of Directors about the modified audit opinion issued by the
accounting firm
□ Applicable √ N/A
V. Explanation about the reasons and effect of changes in accounting policies and accounting
estimates and correction of material accounting errors
(I) Analysis of the reasons of changes in accounting policies and accounting estimates and the
relevant effect
√ Applicable □ N/A
For details, refer to “V.44 Changes in significant accounting policies and accounting estimates” in “Section
X Financial Report” herein.
(II) Explanation about the reasons and effect of correction of material accounting errors
□ Applicable √ N/A
(III) Communication with the former accounting firm
□ Applicable √ N/A
(IV) Other information
□ Applicable √ N/A
VI. Appointment and termination of appointment of accounting firm
In RMB 0’000
Current accounting firm
Name of domestic accounting firm Pan-China Certified Public Accountants (Special
General Partnership)
Fee payable to domestic accounting firm 125.00
Audit period of domestic accounting firm 6 years
Name Fee
Sponsor Huatai United Securities Co., /
Ltd.
Explanation about the appointment and termination of appointment of accounting firm
√ Applicable □ N/A
The annual general meeting of shareholders of the Company for the year of 2020 approved the
resolution to continue to appoint Pan-China Certified Public Accountants (Special General Partnership)
as the auditor of the Company for the year of 2021 for a term of one year. Pan-China Certified Public
101 / 337
Annual Report 2021
Accountants (Special General Partnership) has issued auditor’s reports for the Company between 2016 to
2020.
Explanation about re-appointment of accounting firm during the audit period
□ Applicable √ N/A
VII. Delisting risks
(I) Reasons causing the delisting risk warning
□ Applicable √ N/A
(II) Response measures taken by the Company
□ Applicable √ N/A
(III) Risk of delisting and the reason
□ Applicable √ N/A
VIII. Matters relating to bankruptcy and reorganization
□ Applicable √ N/A
102 / 337
Annual Report 2021
IX. Material litigations and arbitrations
√ The Company was involved in material litigations or arbitration during the current year
□ The Company was not involved in material litigations or arbitration during the current year
(I) Litigations and arbitrations already disclosed in interim announcements about which no new information is available
√ Applicable □ N/A
Summary and type of case Reference
I. Case for changing the inventor of patent 19-cv-00466-RGD-LRL in the United States
District Court for the Eastern District of Virgini
The Company brings a suit against Delta in the United States District Court for the
Eastern District of Virginia for breach of non-disclosure agreement, wrongful
Refer to the Announcement on Litigation disclosed on September 9, 2019
appropriation of the technical solutions actually invented by the Company’s employees
(No. 2019-012).
LI Yi and HU Fei, and filing for patent application in the United States without
authorization, and petitions the court to order that the inventors of the patent-in-suit
US9,024,241 shall be changed from WANG Bo, ZHANG Kesu and HUA Jianhao into
LI Yi and HU Fei.
II. (2020) Yue 73 Zhi Min Chu No. 1335-1341, No. 1353, No. 1355-1361
In August 2020, the Company initiated a civil litigation on the ground that Delta
Electronics (Shanghai) Co., Ltd., Delta Video Display System (Wujiang) Limited,
Refer to the Announcement on Litigation Against Delta Electronics
Digital Protection (Beijing) Electronics Technology Co., Ltd. and other entities
(Shanghai) Co., Ltd. and Other Entities disclosed on August 11, 2020 (No.
infringed the patents for invention ZL200880107739.5 and ZL200810065225.X owned
2020-037).
by the Company, requesting the court to order to stop the acts of infringing the
Company’s patent rights and the damages for infringement in the amount of RMB80.00
million.
III. (2021) Chuan 01 Zhi Min Chu No. 684, No. 685, and No. 686
Refer to the Announcement on Malicious Litigation Initiated by Delta
In December 2021, Delta Electronics, Inc. initiated a civil litigation on the ground that
Electronics disclosed on December 21, 2021 (No. 2021-097).
the Company infringed the patent for invention ZL201410249663.7,
103 / 337
Annual Report 2021
ZL201610387831.8, and ZL201110041436.1, requesting the court to order to stop the
acts of infringing the patent rights and the damages for infringement in the amount of
RMB48.03 million.
IV. (2021) Yue 73 Zhi Min Chu No. 1860
In December 2021, Delta maliciously initiated an intellectual property litigation against
Refer to the Announcement on Malicious Litigation Initiated by Delta
the Company. Since such act infringed the rights and interests of the Company, the
Electronics disclosed on December 21, 2021 (No. 2021-097).
Company sued Delta to Guangzhou Intellectual Property Court on December 17, 2021
on the ground of such malicious act, involving the amount of RMB10.00 million.
(II) Litigations and arbitrations that have not been disclosed in interim announcements or about which there’s new information available
√ Applicable □ N/A
In RMB 0’000
During the reporting period:
Whether any
Party jointly provision is
Type of Amount Result and Enforcement of
Plaintiff/claimant Defendant/respondent and severally Background recognized Status
litigation/arbitration claimed effect judgment/award
liable and the
amount
[2019] Yue 73 Zhi Min
Chu No. 662, the RMB10.00
Futian SPN
Plaintiff alleges that it million
Projector &
Delta Appotronics Infringement on is the owner of the released, In trial of the
Video 1,614.53 No
Electronics, Inc. Corporation Limited patent for invention patent for invention and in trial first instance
System Firm
ZL201610387831.8 of the first
of Shenzhen
and the Defendant instance
infringed such patent
104 / 337
Annual Report 2021
for invention of the
Plaintiff and caused
economic losses to the
Plaintiff.
[2019] Yue 73 Zhi Min
Chu No. 663, the
Plaintiff alleges that it Ruling of
is the owner of the the second
Futian SPN
patent for invention Trial of the instance:
Projector &
Delta Appotronics Infringement on ZL201310017478.0 second Delta was
Video 1,614.53 No
Electronics, Inc. Corporation Limited patent for invention and the Defendant instance allowed to
System Firm
infringed such patent completed withdraw
of Shenzhen
for invention of the the
Plaintiff and caused litigation.
economic losses to the
Plaintiff.
[2019] Yue 73 Zhi Min
Chu No. 664, the
Ruling of
Plaintiff alleges that it
the second
Futian SPN is the owner of the
Trial of the instance:
Projector & patent for invention
Delta Appotronics Infringement on second Delta was
Video ZL20310625063.1 and 1,614.53 No
Electronics, Inc. Corporation Limited patent for invention instance allowed to
System Firm the Defendant infringed
completed withdraw
of Shenzhen such patent for
the
invention of the
litigation.
Plaintiff and caused
economic losses to the
105 / 337
Annual Report 2021
Plaintiff.
(2019) Jing 73 Min Chu
No. 1275 and No. 1276,
the Plaintiff alleges that
it is the owner of the
patent for invention
ZL201410249663.7
Appotronics In trial of
Delta Fengmi (Beijing) Infringement on and In trial of the
Corporation 3,202.00 No the first
Electronics, Inc. Technology Co., Ltd. patent for invention ZL201610387831.8, first instance
Limited instance
and the Defendant
infringed such patent
for invention of the
Plaintiff and caused
economic losses to the
Plaintiff.
[2019] Jing 73 Min Chu
No. 1277, the Plaintiff
alleges that it is the
Ruling of
owner of the patent for
the second
invention Trial of the
Appotronics instance:
Delta Fengmi (Beijing) Infringement on ZL201310017478.0 second
Corporation 1,601.00 No The case of
Electronics, Inc. Technology Co., Ltd. patent for invention and the Defendant instance
Limited the Plaintiff
infringed such patent completed
was
for invention of the
rejected.
Plaintiff and caused
economic losses to the
Plaintiff.
106 / 337
Annual Report 2021
(2019) Jing 73 Min Chu
No. 1278, the Plaintiff
alleges that it is the Ruling of
owner of the patent for the first
invention Trial of the instance
Appotronics
Delta Fengmi (Beijing) Infringement on ZL201010624724.5 first Delta was
Corporation 1,601.00 No
Electronics, Inc. Technology Co., Ltd. patent for invention and the Defendant instance allowed to
Limited
infringed such patent completed withdraw
for invention of the the
Plaintiff and caused litigation.
economic losses to the
Plaintiff.
(2019) Hu 73 Zhi Min
Chu No. 1069, the
Plaintiff alleges that it
Ruling of
is the owner of the
Shanghai the first
patent for invention Trial of the
Haichi instance
Delta Appotronics Infringement on ZL201410249663.7 first
Digital 1,601.00 No Ruling that
Electronics, Inc. Corporation Limited patent for invention and the Defendant instance
Technology this case was
infringed such patent completed
Co., Ltd. withdrawn
for invention of the
by Delta.
Plaintiff and caused
economic losses to the
Plaintiff.
Shanghai (2019) Hu 73 Zhi Min In trial of
Delta Appotronics Infringement on
Haichi Chu No. 1070, the 1,601.00 No the first
Electronics, Inc. Corporation Limited patent for invention
Digital Plaintiff alleges that it instance
107 / 337
Annual Report 2021
Technology is the owner of the
Co., Ltd. patent for invention
ZL201110041436.1
and the Defendant
infringed such patent
for invention of the
Plaintiff and caused
economic losses to the
Plaintiff.
(2019) Yue 03 Min Chu
No. 2942, No. 2945,
Delta Video
No. 2947, No. 2949,
Display
and No. 2950, the
System
Plaintiff alleges that the
Delta Electronics (Wujiang) The The court
Appotronics Defendant 1, Defendant
Business Limited; Infringement on Plaintiff ordered the
Corporation 2, and Defendant 3 2,800.00 No
Management Shenzhen patent for invention withdraw case to be
Limited infringed the patent for
(Shanghai) Co., Ltd. Super its case withdrawn.
invention
Network
200880107739.5 of the
Technology
Plaintiff and caused
Co., Ltd.
economic losses to the
Plaintiff.
Delta Video (2019) Yue 03 Min Chu
Delta Electronics Under trial
Appotronics Display No. 2943, No. 2944,
Business Infringement on of the
Corporation System No. 2948, and No. 2,400.00 No
Management patent for invention second
Limited (Wujiang) 2951, the Plaintiff
(Shanghai) Co., Ltd. instance
Limited; alleges that the
108 / 337
Annual Report 2021
Shenzhen Defendant 1, Defendant
Super 2, and Defendant 3
Network infringed the patent for
Technology invention
Co., Ltd. 200810065225.X of the
Plaintiff and caused
economic losses to the
Plaintiff.
(2019) Yue 03 Min Chu
Delta Video
No. 2946, the Plaintiff
Display
alleges that the
System
Defendant 1, Defendant
Delta Electronics (Wujiang)
Appotronics 2, and Defendant 3 under trial
Business Limited; Infringement on
Corporation infringed the patent for 400.00 No of the
Management Shenzhen patent for invention
Limited invention second trial
(Shanghai) Co., Ltd. Super
200810065225.X of the
Network
Plaintiff and caused
Technology
economic losses to the
Co., Ltd.
Plaintiff.
(2019) Yue 03 Min Chu
No. 4309, the Plaintiff
petitions the court to The The court
Appotronics Dispute over the
declare that the patent Plaintiff ordered the
Corporation Delta Electronics, Inc. ownership of patent 30.00 No
ZL201610387831.8 withdraw case to be
Limited right
“phosphor color wheel its case withdrawn
and its applicable light
source system” is
109 / 337
Annual Report 2021
owned by the
Company.
(2021) Yue 03 Min Chu
No. 2295, the Plaintiff
petitions the court to
Appotronics ZHANG declare that the patent
Dispute over the In trial of
Corporation Kesu, HUA ZL201610387831.8
Delta Electronics, Inc. ownership of patent 30.00 No the first
Limited, LI Yi, Jianhao, “phosphor color wheel
right instance
HU Fei WANG Bo and its applicable light
source system” is
owned by the
Company.
01-021-0003-7526 U.S.
case of arbitration
GDC BVI failed to
achieve the The Parties
performance covenant 46,535,911 settled, and
for the year 2020, hence ordinary the
The
Appotronics GDC Technology Dispute over triggering the shares in American
Plaintiff
Hong Kong Limited (Cayman performance performance GDC BVI No Arbitration
withdraw
Limited Islands) compensation compensation or USD5.6 Association
its case
provisions. Therefore, million in has issued
GDC Cayman needs to cash the closing
fulfill the performance receipt
compensation
commitment. In May
2021, the subsidiary
110 / 337
Annual Report 2021
Appotronics HK
applied with American
Arbitration Association
for the arbitration
against GDC Cayman,
requesting the
Respondent to pay the
Company performance
compensation.
(III) Other information
√ Applicable □ N/A
As of December 31, 2021, a total of 15 invalidation petitions has been raised against the Company’s patent for invention ZL200880107739.5 (hereinafter referred
to as the “7739”), and a total of 11 invalidation petitions has been raised against the Company’s patent for invention ZL200810065225.X (hereinafter referred to as
“5225”). As of the end of the reporting period, among the invalidation petitions raised against 7739 and 5225, 25 cases have been decided by the National Intellectual
Property Administration, with the patent sustained, or withdrawn by the petitioner, and only 1 case is in trial at the National Intellectual Property Administration. As
of the end of the reporting period, 2 invalidation cases with the Company as the patentee have been decided by the National Intellectual Property Administration,
where the National Intellectual Property Administration partially sustained the patent right in 1 case, and the other case is in trial at the National Intellectual Property
Administration. In December 2021, the invalidation petitioners WANG Lihua and QIN Songli separately submitted invalidation petitions to the National Intellectual
Property Administration against the design patent 202130075102.0 held by Beijing Fengmi, for which the case numbers are 6W120283 and 6W120359, respectively.
As of the end of the reporting period, there were 3 invalidation cases where the Company acted as a petitioner. The case is in trial at the National Intellectual
Property Administration, and is related to the invalidation petition against patents held by Delta Electronics, Inc.
111 / 337
Annual Report 2021
X. Penalties imposed on the listed company and its directors, supervisors, senior officers,
controlling shareholder, actual controller for suspected violation of laws and regulations and
rectification of the relevant violations
□ Applicable √ N/A
XI. Credit standing of the Company and its controlling shareholder and actual controller during
the reporting period
□ Applicable √ N/A
XII. Material related-party transactions
(I) Related-party transactions in connection with day-to-day operation
1. Matters already disclosed in the interim announcements about which no new information is
available
□ Applicable √ N/A
2. Matters already disclosed in the interim announcements about which there’s new information
available
√ Applicable □ N/A
In RMB 0’000
Expected
Actual amount Reason for the great difference
Category of amount
Related party of last year between the expected amount
related-party of last year
(previous) and the actual amount
transaction (previous)
Xiaomi
Communications
The relevant demands decreased
Technologies Co., 91,000.00 59,277.41
due to the impact of COVID-19
Ltd. and its
affiliates
CFEC and its The relevant demands decreased
Provide a 11,000.00 7,426.00
affiliates due to the impact of COVID-19
related party
CINIONIC and its
with 4,000.00 3,236.18 N/A
affiliates
products,
Beijing Donview
goods,
Education
leases, and
Technology Co., 650.00 453.61 N/A
services
Ltd. and its
affiliates
The relevant demands decreased
GDC and its
2,100.00 997.35 due to the impact of COVID-19
affiliates
overseas
WeCast and its The subsidiary experienced
5,800.00 1,713.29
affiliates changes in the sales channels
112 / 337
Annual Report 2021
for expanding the overseas
business
Subtotal 114,550.00 73,103.84
Xiaomi
Communications
The relevant demands decreased
Technologies Co., 38,000.00 24,362.78
due to the impact of COVID-19
Ltd. and its
Purchasing affiliates
goods and CFEC and its 1,500.00 1,561.42 N/A
raw materials affiliates
from a Shenzhen YLX
related party Technology
400.00 116.05 N/A
Development Co.,
Ltd.
GDC and its The relevant demands decreased
1,500.00 571.20
affiliates due to the impact of COVID-19
Subtotal 41,400.00 26,611.45
WeCast and its
35.00 24.14 N/A
affiliates
Xiaomi
Communications
Technologies Co., 200.00 118.80 N/A
Ltd. and its
Receive affiliates
labor CFEC and its
services from affiliates 4,000.00 3,170.40 N/A
a related
GDC and its
party 0.00 1.15 N/A
affiliates
Beijing Donview
Education
Technology Co., 10.00 1.41 N/A
Ltd. and its
affiliates
Subtotal 4,245.00 3,315.90
Property CFEC and its
200.00 202.36 N/A
lease affiliates
Subtotal 200.00 202.36
Total 160,395.00 103,233.55
113 / 337
Annual Report 2021
3. Matters that have not been disclosed in any interim announcement
□ Applicable √ N/A
(II) Related-party transactions involving acquisition or sale of assets or equities
1. Matters already disclosed in the interim announcements about which no new information is
available
□ Applicable √ N/A
2. Matters already disclosed in the interim announcements about which there’s new information
available
□ Applicable √ N/A
3. Matters that have not been disclosed in any interim announcement
□ Applicable √ N/A
4. Fulfillment of performance covenants (if any) during the reporting period
√ Applicable □ N/A
In July 2021, the Company signed the Settlement Agreement with GDC Cayman, under which GDC
BVI shall increase the business of purchasing cinema hardware products from the Company. That is, GDC
BVI shall purchase cinema hardware products over a certain quantity in 2021, 2022, 2023, and 2024. The
Parties shall sign a specific purchase agreement within 60 days from the effectiveness of the Settlement
Agreement.
The Parties have not reached a consensus on the Purchase Agreement by now, and GDC BVI has not
purchased the foregoing hardware products from the Company.
At present, the Company is in dispute with relevant GDC parties concerning the protective provisions,
such as the veto right held by the Company, which may affect the listing of GDC BVI, and the infringement
of shareholder’s rights, such as the protective provisions, of the Company by relevant GDC parties. The
Parties are in the process of arbitration and counter arbitration, namely a key stage of commercial
negotiation. The Company will take legal measures or communicate with relevant GDC parties to solve
the existing main disputes between the Parties.
As a result, based on the communication between the Parties at present, the cooperation on the
purchase business for cinema hardware products between the Company and GDC BVI is subject to
uncertainty.
114 / 337
Annual Report 2021
(III) Related-party transactions involving joint external investments
1. Matters already disclosed in the interim announcements about which no new information is
available
√ Applicable □ N/A
Summary Reference
th
On March 26, 2021, the Company held the 30
meeting of the first Board of Directors and the 17th
meeting of the first Board of Supervisors, at which
the Proposal on Capital Increase by in a Wholly-
owned Subsidiary and Acquisition of 51% Equity
Interests in WeCast Technology Corp. and the
Please refer to the Announcement No. 2021-018
Related-party Transaction was reviewed and
Announcement on Increase by of Capital to the
approved, under which (Chongqing) Innovative
Wholly-owned Subsidiary and Subscription for
Technology Co., Ltd., a subsidiary in the scope of
51% of Equity of WeCast Technology Corp. and on
consolidation for the Company’s financial
related-party transactions” issued by the Company
statements, shall make additional contribution of
on www.sse.com.cn and the designated media for
USD4.00 million to the wholly-owned subsidiary
information disclosure on March 27, 2021.
Limited, where the additional capital shall be used
to subscribe to 51% equity interests in WeCast
Technology Corp. LI Yi, the actual controller and
the Chairman of the Company, acts as a director of
WeCast, hence this subscription constitutes a
related-party transaction.
2. Matters already disclosed in the interim announcements about which there’s new information
available
√ Applicable □ N/A
The Company held the 24th meeting of the first Board of Directors on August 17, 2020 and the second
interim general meeting for 2020 on September 3, 2020, at which the Proposal on Increasing the Capital
of a Controlled Subsidiary by Issuing Additional Shares and Introducing a Strategic Investor was
reviewed and passed, approving the controlled subsidiary to introduce a strategic investor.
As of February 2021, the plan of capital increase by issuing additional shares has not been duly
implemented. The parties negotiated to optimize and adjust the original transaction plan. In February 2021,
the Company held the 29th meeting of the first Board of Directors and the first interim general meeting for
2021, at which the Proposal on Adjusting the Plan of Increasing the Capital of a Controlled Subsidiary
by Issuing Additional Shares & Related-party Transaction was reviewed and passed. Refer to the
Announcement No. 2021-002 Announcement on Adjusting the Plan for Increasing the Capital of a
115 / 337
Annual Report 2021
Controlled Subsidiary by Issuing Additional Shares & Related-party Transaction issued by the Company
on www.sse.com.cn on February 10, 2021.
3. Matters that have not been disclosed in any interim announcement
□ Applicable √ N/A
(IV) Accounts receivable from and payable to related parties
1. Matters already disclosed in the interim announcements about which no new information is
available
□ Applicable √ N/A
2. Matters already disclosed in the interim announcements about which there’s new information
available
□ Applicable √ N/A
3. Matters that have not been disclosed in any interim announcement
□ Applicable √ N/A
(V) Financial business between the Company and its affiliated financial companies, or between the
Company’s controlled financial companies and affiliates
□ Applicable √ N/A
1. Deposit business
□ Applicable √ N/A
2. Loan business
□ Applicable √ N/A
3. Facility business or other financial business
□ Applicable √ N/A
4. Other information
□ Applicable √ N/A
(VI) Others
□ Applicable √ N/A
XIII. Material contracts and performance thereof
(I) Trusteeship, contracting and lease
1、 Trusteeship
2、 Contracting
□ Applicable √ N/A
3、 Lease
√ Applicable □ N/A
In RMB 0’000
116 / 337
Annual Report 2021
Impact
Amoun Basis for of lease Related-
Lease
Name of Leased t of Lease Lease determini income party Relationsh
Lessor incom
lessee assets leased start date end date ng lease on the transactio ip
e
assets income Compan n or not
y
Shenzhe Appotroni Office, 1,231.9 2020.01.0 2022.11.3 // / No None
n cs R&D, 31 0
Meishen Corporatio factory,
g n Limited employe
Industry e
Co., Ltd. dormitor
y
Description of lease
None
117 / 337
Annual Report 2021
(II) Guarantees
√ Applicable □ N/A
In RMB 0’000
Total amount of guarantees provided during the reporting period 0
(excluding those provided for the subsidiaries)
Balance of guarantees as of the end of the reporting period (excluding 0
those provided for the subsidiaries) (A)
Guarantees provided by the Company or its subsidiaries for the subsidiaries of the Company
Total amount of guarantees provided for the subsidiaries during the 93,347.64
reporting period
Balance of guarantees provided for the subsidiaries as of the end of 53,780.99
the reporting period (B)
Total amount of guarantees provided by the Company (including those provided for the subsidiaries)
Total amount guaranteed (A+B) 53,780.99
Proportion of total amount guaranteed to the net assets of the 22.06
Company (%)
Including:
Total amount of guarantees provided for the shareholders, actual 0.00
controller and their affiliates (C)
Total amount of debt guarantees directly or indirectly provided for the 28,652.90
obligors whose equity-debt ratio exceeds 70% (D)
Total amount guaranteed in excess of 50% of the net assets of the
Company (E)
Total amount guaranteed (C+D+E) 28,652.90
Explanation about outstanding guarantees for which the Company may N/A
assume joint and several liability
Explanation about guarantees N/A
118 / 337
Annual Report 2021
(III) Entrusted cash asset management
1. Entrusted wealth management
(1) Overall situation of entrusted wealth management
√ Applicable □ N/A
In RMB 0’000
Outstanding
Type Source of funds Total amount Overdue amount
amount
Bank wealth Idle funds raised 43,500.00 37,100.00 0.00
management
amount
Bank wealth Self-funded 13,000.00 0.00 0.00
management capital
amount
Other information
□ Applicable √ N/A
(2) Single entrusted wealth management
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(3) Provision for impairment of entrusted wealth management products
□ Applicable √ N/A
2. Entrusted loans
(1) Overall situation of entrusted loans
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(2) Single entrusted loans
□ Applicable √ N/A
Other information
□ Applicable √ N/A
(3) Provision for impairment of entrusted loans
□ Applicable √ N/A
3. Other information
□ Applicable √ N/A
(IV) Other material contracts
□ Applicable √ N/A
119 / 337
Annual Report 2021
XIV. Use of offering proceeds
√ Applicable □ N/A
(I) Overall use of funds raised
√ Applicable □ N/A
In RMB
Cumulative
Cumulative
Net offering investment Ratio of the
Total offering total offering
Source of proceeds after Total offering progress as of Amount amount
Total offering proceeds proceeds used
offering deduction of proceeds the end of the invested in this invested in
proceeds committed after as of the end of
proceeds offering committed reporting year (4) this year (%)
adjustment (1) the reporting
expenses period (%) (5)=(4)/(1)
period (2)
(3)=(2)/(1)
Initial public
1,190,000,000.00 1,062,470,797.73 1,000,000,000.00 1,000,000,000.00 562,394,147.94 56.24 110,161,741.65 11.02
offering
(II) Breakdown of investment projects
√ Applicable □ N/A
In RMB
Wh
Cumulati Materi
ethe Wheth Bene
ve al
r er the fits
Cumulativ investme change
cha Total Total Date for the invest or
e total nt s in the
nge Source investment investmen project to ment R&D
offering progress Specific reason project Balance
of of from the t from the reach the progre result
proceeds as of the Comp for failing to feasibil amount
inv offerin offering offering working ss s
Item used as of end of leted achieve the plan ity, if and
est g proceeds proceeds condition meets achie
the end of the or not of investment any, reasons
me procee committed after for its the ved
the reporting progress describ thereof
nt ds for the adjustmen intended progre by
reporting period e the
is project t (1) use ss the
period (2) (%) specifi
inv planne proje
(3)=(2)/( c
olv d ct
1) reasons
ed
120 / 337
Annual Report 2021
On the principles of
cost control and risk
reduction, in the
past two years,
under the impact of
COVID-19 and
general chip
R&D and
shortage in the
industrializa
industry, the
tion of new Initial
313,000,000.0 313,000,000 173,503,966 December Company acted
generation No public 55.43 No No None No N/A
0 .00 .84 2022 more diligently in
of laser offering
production capacity
display
expansion in
products
consideration of the
actual existing
production capacity
and demands to
respond to
uncertainties in the
macro environment.
The construction of
the head office
building was slowed
down due to the
repeated outbreak of
COVID-19 and
complex geological
R&D center conditions on the
Initial
at the head 284,000,000.0 284,000,000 30,790,010. December site. This project
No public 10.84 No No None No N/A
office of 0 .00 30 2023 may be fully
offering
Appotronics implemented only
after the
construction of the
head office building
is completed. As a
result, the project
implementation is
postponed.
Initial Since the main body
Information 70,000,000. 22,705,133. December
No public 70,000,000.00 32.44 No No of the head office None No N/A
system 00 19 2023
offering building of the
121 / 337
Annual Report 2021
upgrade and Company is still
building under construction,
the prerequisites for
implementing this
project have not
been satisfied.
Supplement Initial
333,000,000.0 333,000,000 335,395,037
ary working No public 100.72 None Yes Yes None No N/A
0 .00 .62
capital offering
Note:
1. On March 18, 2022, the 9th meeting of the second Board of Directors and the 8th meeting of the second of Board of Supervisors reviewed the Proposal on Postponing
Some Investment Projects, approving the Company to adjust the time for some investment projects to reach the working condition for its intended use. For details,
please refer to the Announcement on Postponing Some Investment Projects disclosed on the website of Shanghai Stock Exchange (www.sse.com.cn) on March 21,
2022.
2. During the project, the total wealth management returns of RMB2.3950 million were realized from the special account of supplementary working capital, which
have been put into use in the project (supplementary working capital). As of the date of approval for issue of this Report, the special account (Huaxia Bank Co., Ltd.
Houhai Branch, account number: 10869000000251463) has been deregistered. The interest RMB1,418.11 incurred after the project has been paid to the basic account
of the Company to be used as supplementary working capital.
(III) Change in investment projects during the reporting period
□ Applicable √ N/A
122 / 337
Annual Report 2021
(IV) Other information about the use of offering proceeds during the reporting period
1. Early investment and replacement of offering proceeds
√ Applicable □ N/A
On July 29, 2019, the Proposal on Replacing Early Funds Invested with Offering Proceeds was
reviewed and passed at the 16th meeting of the first Board of Directors, approving the Company to replace
the invested funds of RMB18.9584 million as of July 19, 2019 with the offering proceeds, and replace the
offering expenses paid in the amount of RMB3.1056 million with the offering proceeds. The matters above
have been assured by Pan-China Certified Public Accountants (Special General Partnership), which issued
the Assurance Report on Replacement of Funds with Offering Proceeds by Appotronics Corporation
Limited (Tian Jian Shen [2019] No. 7-393).
2. Supplement the working capital with idle offering proceeds
□ Applicable √ N/A
3. Cash management of idle offering proceeds, and investment in relevant products
√ Applicable □ N/A
On July 21, 2020, the Proposal on Cash Management of Temporarily Idle Offering Proceeds was
reviewed and passed at the 23rd meeting of the first Board of Directors and the 11th meeting of the first
Board of Supervisors. It was approved that, without affecting the normal implementation of the investment
plan for offering proceeds, a maximum of RMB670 million temporarily idle offering proceeds may be put
under cash management to purchase investment products featuring high security, good liquidity, and
guarantee of the principal (including but not limited to structural deposits, agreement deposits, notice
deposits, term deposits, large-amount deposit note, and return notes), where the total amount for
purchasing return notes shall be no more than RMB200 million for no more than 12 months, which shall
be effective within 12 months from the review and approval by the Board of Directors and Board of
Supervisors.
On July 15, 2021, the Proposal on Cash Management of Temporarily Idle Offering Proceeds was
reviewed and passed at the 32nd meeting of the first Board of Directors and the 19th meeting of the first
Board of Supervisors. It was approved that, without affecting the normal implementation of the investment
plan for offering proceeds, a maximum of RMB602 million temporarily idle offering proceeds may be put
under cash management to purchase investment products featuring high security, good liquidity, and
guarantee of the principal (including but not limited to structural deposits, agreement deposits, notice
deposits, term deposits, large-amount deposit note, and return notes), where the total amount for
purchasing return notes shall be no more than RMB200 million for no more than 12 months, which shall
be effective within 12 months from the review and approval by the Board of Directors and Board of
Supervisors.
4. Supplement working capital or repay bank loans with excess offering proceeds
□ Applicable √ N/A
5. Others
□ Applicable √ N/A
123 / 337
Annual Report 2021
XV. Explanation about other significant matters having significant influence on the value
judgement and investment decision-making of investors
□ Applicable √ N/A
124 / 337
Annual Report 2021
Section VII Changes in Shares and Shareholders
I. Changes in share capital
(I) Statement of changes in shares
1. Statement of changes in shares
Unit: Share
Before the change +/- After the change
Capitalization
Percentage New Bonus Percentage
Number of capital Others Subtotal Number
(%) shares shares (%)
reserve
I. Non-tradable shares 169,456,766 37.43 - -2,720,000 166,736,766 36.83
2,720,000
1. Shares held by the State
2. Shares held by State-owned
corporations
3. Shares held by other domestic 165,462,755 36.55 -
-2,720,000 162,742,755 35.95
investors 2,720,000
Including: Shares held by domestic non- 165,462,755 36.55 -
-2,720,000 162,742,755 35.95
stated-owned corporations 2,720,000
Shares held by domestic natural 0 0
persons
4. Shares held by foreign investors 3,994,011 0.88 3,994,011 0.88
Including: Shares held by foreign 3,994,011 0.88
3,994,011 0.88
corporations
Shares held by foreign natural
persons
II. Tradable shares 283,300,135 62.57 2,720,000 2,720,000 286,020,135 63.17
1. RMB-denominated ordinary shares 283,300,135 62.57 2,720,000 2,720,000 286,020,135 63.17
2. Foreign currency-denominated shares
listed domestically
3. Foreign currency-denominated shares
listed overseas
125 / 337
Annual Report 2021
4. Others
III. Total shares 452,756,901 100 0 0 452,756,901 100
2. Explanation about changes in shares
√ Applicable □ N/A
The 2,720,000 restricted shares under strategic allotment in the initial public offering became available for trading on July 22, 2021, accounting for 0.6008% of
the total share capital of the Company on that day. One shareholder is involved, for whom the lockup period is 24 months from the listing of the Company’s shares.
For details, please refer to the Announcement on the Circulation of Restricted Shares under Strategic Allotment during Initial Public Offering (2021-053) dated July
16, 2021 on the website of the Shanghai Stock Exchange (www.sse.com.cn).
3. Effect of the changes in shares on the earnings per share, net assets per share and other financial indicators of the most recent year and the most recent
reporting period (if any)
□ Applicable √ N/A
4. Other information disclosed as the Company deems necessary or required by the securities regulatory authority
□ Applicable √ N/A
(II) Changes in non-tradable shares
√ Applicable □ N/A
Unit: Share
Balance of non-
Balance of non- Number of non- Number of non-
tradable shares as
Shareholder tradable shares as at tradable shares tradable shares Reason for restriction Unlock date
at December 31,
January 1, 2020 unlocked in 2020 increased in 2020
2020
Huatai Venture Capital Non-tradable strategic
2,720,000 2,720,000 0 0 July 22, 2021
Investment Co., Ltd. allotted shares in IPO
Total 2,720,000 2,720,000 0 0 / /
126 / 337
Annual Report 2021
II. Issuance and listing of securities
(I) Securities issued during the reporting period
□ Applicable √ N/A
Explanation about the securities issued during the reporting period (in case of any outstanding bonds
with different interest rates, please explain separately):
□ Applicable √ N/A
(II) Changes in total number of shares, shareholding structure, and structure of assets and
liabilities of the Company
□ Applicable √ N/A
III. Shareholders and actual controller
(I) Total number of shareholders
Total number of ordinary shareholders as of the end 14,138
of the reporting period
Total number of shareholders of ordinary shares as 14,426
of the end of the month immediately prior to the issue
date of this annual report (accounts)
Total number of shareholders of preferred shares N/A
whose voting right has been restituted as of the end
of the reporting period (accounts)
Total number of shareholders of preferred shares N/A
whose voting right has been restituted as of the end
of the month immediately prior to the issue date of
this annual report
Total number of shareholders holding shares with N/A
special voting rights as of the end of the reporting
period (accounts)
Total number of shareholders holding shares with N/A
special voting rights as of the end of the month prior
to the disclosure date of the annual report (accounts)
Number of holders of depository receipts
□ Applicable √ N/A
(II) Shares held by top 10 shareholders and top 10 holders of tradable shares as of the end of the
reporting period
127 / 337
Annual Report 2021
Unit: Share
Shares held by top 10 shareholders
Shares pledged,
Number of non- marked, or frozen
Balance of shares
Change tradable shares held,
held
Shareholder during the Percentage Number of non- including the shares Shareholder
as of the end of
(Full name) reporting (%) tradable shares held lent out under the nature
the reporting Share
period refinancing Number
period status
arrangement
Shenzhen Domestic non-
Appotronics 0 79,762,679 17.62 79,762,679 79,762,679 None 0 stated owned
Holdings Limited corporation
Shenzhen
Yuanshi Laser
Domestic non-
Industrial
0 24,139,500 5.33 24,139,500 24,139,500 None 0 stated owned
Investment
corporation
Consulting
Partnership (LP)
Nantong Strait
Domestic non-
Appotronics
-1,984,408 23,080,329 5.10 0 0 None 0 stated owned
Investment
corporation
Partnership (LP)
Citron PE
Investment (Hong Foreign
-15,680,029 21,733,003 4.80 0 0 None 0
Kong) 2016 corporation
Limited
Shenzhen
Domestic non-
Appotronics Daye
0 20,430,250 4.51 20,430,250 20,430,250 None 0 stated owned
Investment
corporation
Partnership (LP)
128 / 337
Annual Report 2021
SAIF IV Hong
Kong (China Foreign
-35,929,457 17,984,278 3.97 0 0 None 0
Investments) corporation
Limited
Shenzhen
Appotronics Domestic non-
Hongye 0 15,662,374 3.46 15,662,374 15,662,374 None 0 stated owned
Investment corporation
Partnership (LP)
Shenzhen
Jinleijing Domestic non-
Investment 0 12,353,106 2.73 12,353,106 12,353,106 None 0 stated owned
Limited corporation
Partnership (LP)
Green Future Foreign
-4,171,092 12,333,426 2.72 0 0 None 0
Holdings Limited corporation
Shenzhen
Appotronics Domestic non-
Chengye 0 10,394,846 2.30 10,394,846 10,394,846 None 0 stated owned
Consulting corporation
Partnership (LP)
Shares held by top 10 holders of tradable shares
Type and number of shares
Shareholder Number of tradable shares held
Category Number
RMB-denominated ordinary
Nantong Strait Appotronics Investment Partnership (LP) 23,080,329 23,080,329
share
RMB-denominated ordinary
Citron PE Investment (Hong Kong) 2016 Limited 21,733,003 21,733,003
share
RMB-denominated ordinary
SAIF IV Hong Kong (China Investments) Limited 17,984,278 17,984,278
share
RMB-denominated ordinary
Green Future Holdings Limited 12,333,426 12,333,426
share
Shenzhen Guochuang Chenggu Capital Management Co., Ltd. - RMB-denominated ordinary
6,964,369 6,964,369
Shenzhen Chengguhui Equity Investment Partnership (LP) share
129 / 337
Annual Report 2021
RMB-denominated ordinary
Shenzhen Liansong Capital Management Partnership (LP) 5,833,817 5,833,817
share
China Merchants Bank Co., Ltd. - Agricultural Bank of China
RMB-denominated ordinary
Huili Strategic Income One-year Holding Hybrid Securities 5,648,894 5,648,894
share
Investment Fund
China Construction Bank Corporation - Invesco Great Wall
RMB-denominated ordinary
Environment Protection Advantageous Stock Securities 5,570,992 5,570,992
share
Investment Fund
RMB-denominated ordinary
LUO Xiaobin 4,564,961 4,564,961
share
RMB-denominated ordinary
Smart Team Investment Limited 4,288,748 4,288,748
share
Explanation about the special purchase account in top 10
N/A
shareholders
Explanation about entrusted voting rights, proxy voting rights,
N/A
waiver of voting rights by the shareholders above
1. As of December 31, 2021, the Company has received no statement from aforementioned
shareholders to confirm that there is a related-party relationship or concerted action, except the
concerted action among Shenzhen Appotronics Holdings Co., Ltd., Shenzhen Yuanshi Laser
Industrial Investment Consulting Partnership (LP), Shenzhen Appotronics Daye Investment
Partnership (LP), Shenzhen Appotronics Hongye Investment Partnership (LP), Shenzhen
Affiliates or concert parties among the shareholders stated above
Jinleijing Investment Limited Partnership (LP), and Shenzhen Appotronics Chengye
Consulting Partnership (LP) in top 10 shareholders of the Company.
2. We are not aware whether there are affiliates or concert parties as defined in the
Administrative Measures for the Acquisition of the Listed Companies among other
shareholders.
Holders of preferred shares whose voting right has been
N/A
restituted and the number of shares held by them
130 / 337
Annual Report 2021
Top 10 holders of non-tradable shares and lock-up period
√ Applicable □ N/A
Unit: Share
Unlocking of non-tradable shares
Number of non-tradable
No. Holder of non-tradable shares Number of shares newly Lock-up period
shares held Unlock date
unlocked
36 months after the
1 Shenzhen Appotronics Holdings Limited 79,762,679 July 22, 2022 0
listing date
Shenzhen Yuanshi Laser Industrial 36 months after the
2 24,139,500 July 22, 2022 0
Investment Consulting Partnership (LP) listing date
Shenzhen Appotronics Daye Investment 36 months after the
3 20,430,250 July 22, 2022 0
Partnership (LP) listing date
Shenzhen Appotronics Hongye Investment 36 months after the
4 15,662,374 July 22, 2022 0
Partnership (LP) listing date
Shenzhen Jinleijing Investment Limited 36 months after the
5 12,353,106 July 22, 2022 0
Partnership (LP) listing date
Shenzhen Appotronics Chengye Consulting 36 months after the
6 10,394,846 July 22, 2022 0
Partnership (LP) listing date
36 months after the
7 BLACKPINE Investment Corp. Limited 3,994,011 July 22, 2022 0
listing date
As of December 31, 2021, among the shareholders of the restricted shares above, Appotronics
Affiliates or concert parties among the shareholders Holdings, Yuanshi, Appotronics Daye, Appotronics Hongye, Jinleijing, Appotronics Chengye, and
stated above BLACKPINE Investment Corp. Limited are concert parties. We have not received any notice about
affiliates or concert parties among other shareholders stated above.
Statement of top 10 holders of domestic depository receipts as of the end of the reporting period
□ Applicable √ N/A
Number of non-tradable depository receipts held by top 10 holders and lock-up period
□ Applicable √ N/A
(III) Statement of top 10 shareholders by number of votes held as of the end of the reporting period
□ Applicable √ N/A
(IV) Strategic investors or general corporations that become top shareholders as a result of allotment of new shares/depository receipts
□ Applicable √ N/A
131 / 337
Annual Report 2021
(V) Strategic allotment in IPO
1. Participation by any special asset management plan established by senior officers and key
employees in the strategic allotment in IPO
√ Applicable □ N/A
Unit: Share
Closing number
of non-tradable
shares held,
Number of including the
Changes during the
Shareholder shares/depository Unlock date shares/depository
reporting period
receipts allotted receipts lent out
under the
refinancing
arrangement
Huatai
Appotronics
Employee
Stock
Ownership Plan July 22,
4,548,685 -4,548,685 0
- Jiayuan I 2020
Collective
Asset
Management
Plan
2. Participation by any subsidiary of the sponsor in the strategic allotment in IPO
√ Applicable □ N/A
Unit: Share
Closing number
of non-tradable
shares held,
Changes
Relationship Number of including the
during the
Shareholder with the shares/depository Unlock date shares/depository
reporting
sponsor receipts allotted receipts lent out
period
under the
refinancing
arrangement
Huatai
Venture Subsidiary
July 22,
Capital of the 2,720,000 -2,720,000 0
2021
Investment sponsor
Co., Ltd.
IV. Controlling shareholder and actual controller
(I) Controlling shareholder
1 Legal person
√ Applicable □ N/A
Name Shenzhen Appotronics Holdings Limited
Principal or legal representative LI Yi
Date of establishment January 17, 2014
Main business Investment holding
Shares held in other domestic or foreign listed
None
companies during the reporting period
132 / 337
Annual Report 2021
Other information N/A
2 Natural person
□ Applicable √ N/A
3 Special explanation if the Company does not have a controlling shareholder
□ Applicable √ N/A
4 Explanation about the change in the controlling shareholder during the reporting period
□ Applicable √ N/A
5 Block diagram of the controlling shareholder’s ownership of and control over the Company
√ Applicable □ N/A
Appotronics
Holdings
Appotronics
(II) Actual controller
1 Legal person
□ Applicable √ N/A
2 Natural person
√ Applicable □ N/A
Name LI Yi
Nationality China
Whether or not have right of residence
Yes
in any other country or region
Main occupation and title President and General Manager of Appotronics
Whether or not control any domestic or
foreign listed company in the past 10 None
years
3 Special explanation if the Company does not have an actual controller
□ Applicable √ N/A
4 Explanation about the change of control of the Company during the reporting period
□ Applicable √ N/A
5 Illustration of shareholding and controlling relation between the Company and its ultimate
controlling shareholder
√ Applicable □ N/A
133 / 337
Annual Report 2021
LI Yi
Appotronics Yuanshi Appotronics Appotronics Jinleijing Appotronics
Holdings Daye Hongye Chengye
Control 35.95% in total
Appotronics
6 The actual controller controls the Company by means of trust or other assets management
□ Applicable √ N/A
(III) Other information about the controlling shareholder and the actual controller
□ Applicable √ N/A
V. The total shares pledged by the controlling shareholder or largest shareholder and parties
acting in concert therewith account for over 80% of the share held by such shareholder in the
Company
□ Applicable √ N/A
VI. Other corporate shareholders holding more than 10% shares
□ Applicable √ N/A
VII. Restrictions on the disposal of shares/depository receipts
□ Applicable √ N/A
VIII.Specific implementation of share repurchase during the reporting period
□ Applicable √ N/A
134 / 337
Annual Report 2021
Section VIII Preferred Shares
□ Applicable √ N/A
135 / 337
Annual Report 2021
Section IXCorporate Bonds
I. Enterprise bonds, corporate bonds, and non-financial enterprise debt financing instruments
□ Applicable √ N/A
II. Convertible corporate bonds
□ Applicable √ N/A
136 / 337
Annual Report 2021
Section X Financial Report
I. Auditor’s report
√ Applicable □ N/A
Auditor’s report
Tian Jian Shen (2022) No. 7-384
To all shareholders of Appotronics Corporation Limited:
I. Opinion
We have audited the financial statements of Appotronics Corporation Limited
(“Appotronics”), which comprise the consolidated and the parent company’s balance sheets
as at December 31, 2021, and the consolidated and the parent company’s income statements,
the consolidated and the parent company’s statements of cash flow and the consolidated and
the parent company’s statements of changes in owners’ equity for the year then ended, and
the notes to the relevant financial statements.
In our opinion, the accompanying financial statements of Appotronics are prepared and
present fairly, in all material respects, the consolidated and the parent company’s financial
position as of December 31, 2021, and the consolidated and the parent company’s results of
operations and cash flows for the year then ended in accordance with Accounting Standards
for Business Enterprises.
II. Basis for opinion
We conducted our audit in accordance with Auditing Standards for Certified Public
Accounts of China. Our responsibilities under those standards are further described in the
Auditors’ Responsibilities for Audit of Financial Statements section of our report. We are
independent of Appotronics Corporation in accordance with the code of ethics for Chinese
Certified Public Accountants, 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 items
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters were
137 / 337
Annual Report 2021
addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
(I) Revenue recognition
1. Description
Details of relevant information are disclosed in V.38, V.42, VII.61, and XVI.6 of section
X.
Appotronics Corporation is mainly engaged in research, development, production, sales
and leasing of laser display core devices and complete equipment. In 2021, the operating
income of Appotronics Corporation amounted to RMB 2,498,228,401.78, of which sales and
other incomes were RMB 2,137,606,392.96, representing 85.56% of the total operating
income, and lease incomes were RMB 360,622,008.82, representing 14.44% of the total
operating income.
The specific methods for revenue recognition are as follows:
(1) Revenue from sales of goods
Revenue from sales of goods denotes contractual obligations to be performed at a time
point. Our sales include sales to the domestic market and sales to foreign markets.
Goods sold to the domestic market: 1) Under the direct sale model and the distribution
mode, the Company recognizes the revenue when the goods sent have been delivered to
customers with customers’ receipt given to the Company. For goods sold attached with return
conditions, the Company recognizes the revenue when the validity period of goods return
conditions expires, and recognizes liabilities to write off the revenue according to the
expected amount to be refunded due to the return of goods; for goods required for installment
and inspection after sales, the Company recognizes the revenue when such goods have been
installed and inspected with customers’ acceptance certificate given to the Company. If the
Company shares profits from sales of products by a downstream end customer, the Company
recognizes the revenue at the goods price agreed between the parties upon the delivery of
goods to the customer and reconciliation, and recognizes shared revenue according to the
share profit reconciliation statement when the profits from sales of goods are realized. 2)
Under the commissioned sales mode, the Company recognizes the revenue when it receives
the list of commissioned sales from the customer.
Goods exported to overseas markets: The Company mainly adopts FCA for export of
goods. Under this mode, the Company recognizes revenue when it delivers goods at the
designated location with export customs clearance procedures completed.
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(2) Other incomes
Other revenues of the Company denote contractual obligations to be performed at a time
point/during a specific period of time. For installation services provided by the Company,
the Company recognizes the revenue when it has completed the services and received
customers’ acceptance certificate; for repair and maintenance services provided by the
Company, the Company recognizes the revenue when it has completed the services and
received payments; for patrol inspection services provided by the Company, which are
obligations to be performed during a specific period of time, the Company determines the
service performance progress by using the output approach, and recognizes the revenue
according to the performance progress; for patent license services provided by the Company,
the Company recognizes the revenue when the patent license is delivered; for technology
development services provided by the Company, the Company recognizes the revenue when
it has completed the services or when the agreed time point of service acceptance is reached.
(3) Lease incomes
In each period during the lease term, the Company recognizes lease payments as rental
incomes by using the straight-line method/units of production method. The variable lease
payments acquired by the Company that are related to operating leases and not recognized in
lease payments are recognized in the profit or loss for the current period when they actually
occur.
As the operating income is one of Appotronics Corporation’s KPIs, there may be an
inherent risk that the management of Appotronics Corporation (hereinafter referred to as
"management”) may recognize the revenue inappropriately to achieve specific objectives or
expectations. Therefore, we identified revenue recognition as a key audit matter.
2. Description of how the key audit matter was addressed in the audit
For revenue recognition, our audit procedures include, inter alia:
(1) Understand the key internal controls related to revenue recognition, evaluate the
design of those controls, determine whether they are implemented, and test the operational
effectiveness of the relevant internal controls;
(2) Examine major sales contracts and lease contracts, understand the major provisions
or conditions thereof, and evaluate whether revenue recognition methods are appropriate;
(3) Implement analysis procedures for operating income and gross margin by month,
product, customer, etc., to identify whether there are significant or unusual fluctuations and
to find out the causes of such fluctuations;
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(4) For sales income, sample supporting documents related to revenue recognition,
including sales contracts or orders, sales invoices, warehouse receipts, delivery notes,
transport information, customer signature forms, export declarations and electronic port
system information; for lease income, sample supporting documents including, among other
things, lease contracts, orders, installation orders, unit lease price per hour, and number of
hours consumed; for sales income, sample supporting documents including, among other
things, sales contracts, customs declaration forms, and bills of lading;
(5) In conjunction with accounts receivable confirmation procedures, send confirmation
to major customers to recognize the current incomes on a sample basis;
(6) Conduct the cut-off test on the operating incomes recognized on or after the balance
sheet date to evaluate whether the operating incomes are recognized during the appropriate
period;
(7) Obtain a record of sales returns after the balance sheet date to check if there is any
instance that conditions for revenue recognition were not met at the balance sheet date;
(8) Check whether information relative to operating income is properly presented in the
financial statements.
(II) Net realizable value of inventories
1. Description
Details of relevant information are disclosed in V.15 and VII.9 of Section X.
As of December 31, 2021, the carrying amount of inventories of Appotronics amounted
to RMB 808,619,692.36, and provisions for decline in value of inventories amounted to RMB
38,998,559.36, hence the book value of inventories amounted to RMB 769,621,133.00.
At the balance sheet date, inventories are measured at the lower of cost and net realizable
value. If the net realizable value is below the cost of inventories, a provision for decline in
value of inventories is made. In view of the purpose of holding inventories, the management
determines the estimated selling price of inventories based on historical or actual selling
prices, and the net realizable value of inventories in accordance with the balance of the
estimated selling price less the sum of the estimated costs of completion and the estimated
costs necessary to make the sale and relevant taxes. The amount of inventories is material
and the determination of the net realizable value of inventories involves significant
management judgment, therefore, we identified the determination of the net realizable value
of inventories as a key audit matter.
2. Description of how the key audit matter was addressed in the audit
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For the net realizable value of inventories, our audit procedures include, inter alia:
(1) Understand the key internal controls related to the net realizable value of inventories,
evaluate the design of those controls, determine whether they are implemented, and test the
operational effectiveness of the relevant internal controls;
(2) Review the management’s forecast of the estimated selling price of inventories on a
sample basis, comparing the estimated selling price with historical data and subsequent
situations, etc.;
(3) Evaluate the appropriateness of the management’s estimates on the estimated costs
of completion of inventories and the estimated costs necessary to make the sale and relevant
taxes;
(4) Test the accuracy of the management’s calculation on the net realizable value of
inventories;
(5) Evaluate the reasonableness of the management’s estimates on the net realizable
value of inventories by checking inventories recognized at the end of the period in terms of
long age, obsolescence, changes in technology or market demand in conjunction with
inventory monitoring;
(6) Check whether information relative to the net realizable value of inventories is
properly presented in the financial statements.
IV. Other information
The management is responsible for other information. The other information comprises
the information included in the annual report, but does not include the financial statements
and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing
to report in this regard.
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V. Responsibilities of the Management and governance with respect to the
financial statements
The management is responsible for the preparation and fair presentation of the financial
statements in accordance with Accounting Standards for Business Enterprises, and designing,
implementing and maintaining internal control that is necessary to enable the financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing
Appotronics’ 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 Appotronics or to cease operations, or has no realistic alternative
but to do so.
Those charged with governance of Appotronics (hereinafter referred to as “Those
Charged with Governance”) are responsible for overseeing Appotronics’ financial reporting
process.
VI. Responsibilities of Certified Public Accountants with respect to the financial
statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes our opinion solely to you. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with China
Standards on Auditing will always detect a material misstatement when it exists.
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 China Standards on Auditing, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than that
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
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(II) Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the management.
(IV) Conclude on the appropriateness of the management’s use of the going concern
basis of accounting. Meanwhile, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on
Appotronics Corporation’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required by audit standards to draw users’ attention in our
auditor’s report to the related disclosures in the financial statements. If such disclosures are
inadequate, we are supposed to express an unqualified 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 Appotronics Corporation to cease to continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements,
and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial
information of the entities or business activities within Appotronics Corporation to express
an 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 communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not be communicated in
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our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Pan-China Certified Public Accountants (Special General Partnership) Chinese Certified
Public Accountant:
(Partner in Charge)
Hangzhou City, China Chinese Certified Public Accountant:
April 25, 2022
II. Financial statements
Consolidated Balance Sheet
December 31, 2021
Prepared by: Appotronics Corporation Limited
In RMB
Item Note December 31, 2021 December 31, 2020
Current Assets:
Cash and bank balances VII. 1 957,729,831.15 1,037,760,573.27
Balances with clearing
agencies
Placements with banks and
other financial institutions
Held-for-trading financial VII. 2 417,200,000.00 114,000,000.00
assets
Derivative financial assets
Notes receivable VII. 4 5,256,603.03 3,726,328.91
Accounts receivable VII. 5 403,134,471.87 341,660,832.43
Receivables financing VII. 6 244,860.00 11,959,000.00
Prepayments VII. 7 98,116,970.83 47,447,601.43
Premiums receivable
Amounts receivable under
reinsurance contracts
Reinsurer’s share of
insurance contract reserves
Other receivables VII. 8 30,472,595.66 12,534,062.15
Including: Interest
receivable
Dividend receivable VII. 8 12,623,886.00
Financial assets purchased
under resale agreements
Inventories VII. 9 769,621,133.00 418,812,140.80
Contract assets VII. 10 3,903,859.23 3,744,655.50
Assets held for sale
Non-current assets due VII. 12 3,473,049.18
within one year
Other current assets VII. 13 52,761,820.83 13,002,195.46
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Total current assets 2,741,915,194.78 2,004,647,389.95
Non-current Assets:
Loans and advances
Debt investments
Other debt investments
Long-term accounts VII. 16 5,793,552.74 13,196,087.78
receivable
Long-term equity VII. 17 293,601,085.27 262,744,772.48
investment
Investment in other equity VII. 18 7,075,419.38 11,975,419.38
instruments
Other non-current financial
assets
Investment property
Fixed assets VII. 21 470,410,450.18 447,571,328.91
Construction in progress VII. 22 148,620,511.35 51,576,850.72
Productive biological assets
Oil and gas assets
Right-of-use assets VII. 25 26,803,910.76
Intangible assets VII. 26 301,164,605.56 320,488,235.60
Development expenditure
Goodwill
Long-term prepaid expenses VII. 29 10,126,164.82 11,572,346.79
Deferred tax assets VII. 30 80,721,419.29 96,132,114.02
Other non-current assets VII. 31 10,998,641.77 6,299,781.06
Total non-current assets 1,355,315,761.12 1,221,556,936.74
Total assets 4,097,230,955.90 3,226,204,326.69
Current Liabilities:
Short-term borrowings VII. 32 5,570,878.11 88,778,852.86
Loans from the central bank
Taking from banks and other
financial institutions
Held-for-trading financial
liabilities
Derivative financial
liabilities
Notes payable VII. 35 134,378,967.61 116,822,674.67
Accounts payable VII. 36 419,966,567.27 226,494,815.90
Advance from customers VII. 37 130,288,312.62 153,258,189.88
Contract liabilities VII. 38 45,541,629.55 31,518,312.59
Financial assets sold under
repurchase agreements
Customer deposits and
deposits from banks and other
financial institutions
Funds from securities
trading agency
Funds from underwriting
securities agency
Employee benefits payable VII. 39 64,119,087.51 46,105,566.15
Taxes payable VII. 40 19,546,190.23 19,871,846.94
Other payables VII. 41 54,115,784.80 59,848,053.83
Including: Interest payable
Dividend payable
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Fees and commissions
payable
Amounts payable under
reinsurance contracts
Liabilities held for sale
Non-current liabilities due VII. 43 154,785,116.35 181,417,412.46
within one year
Other current liabilities VII. 44 19,561,104.12 3,045,831.07
Total current liabilities 1,047,873,638.17 927,161,556.35
Non-current Liabilities:
Insurance contract reserves
Long-term borrowings VII. 45 368,635,614.64 64,845,281.53
Bonds payable
Where: Preferred shares
Perpetual bonds
Leasing liabilities VII. 47 10,789,352.69
Long-term payables VII. 48 3,262,450.00
Long-term employee
benefits payable
Estimated liabilities VII. 50 36,428,688.94 28,799,354.65
Deferred income VII. 51 10,266,982.08 16,723,257.15
Deferred tax liabilities
Other non-current liabilities
Total non-current 426,120,638.35 113,630,343.33
liabilities
Total liabilities 1,473,994,276.52 1,040,791,899.68
Owners’ Equity (Shareholders’ Equity):
Paid-in capital (or share VII. 53 452,756,901.00 452,756,901.00
capital)
Other equity instruments
Where: Preferred shares
Perpetual bonds
Capital reserve VII. 55 1,400,605,136.65 1,249,020,991.15
Less: Treasury shares
Other comprehensive VII. 57 -16,840,512.60 -3,214,291.93
income
Special reserve
Surplus reserve VII. 59 56,265,868.31 35,242,179.57
General risk reserve
Undistributed profit VII. 60 545,277,188.08 357,793,891.96
Total owners’ (or 2,438,064,581.44 2,091,599,671.75
shareholders’) equity
attributable to owners of the
parent company
Minority interests 185,172,097.94 93,812,755.26
Total owners’ (or 2,623,236,679.38 2,185,412,427.01
shareholders’) equity
Total liabilities and 4,097,230,955.90 3,226,204,326.69
owners’ (or shareholders’)
equity
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the Accounting
Body: WANG Yingxia
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Annual Report 2021
Balance Sheet of the parent company
December 31, 2021
Prepared by: Appotronics Corporation Limited
In RMB
Item Note December 31, 2021 December 31, 2020
Current Assets:
Cash and bank balances 535,787,452.32 709,932,686.71
Held-for-trading financial 417,200,000.00 114,000,000.00
assets
Derivative financial assets
Notes receivable 5,036,603.03 2,314,628.91
Accounts receivable XVII. 1 616,216,169.96 567,539,506.79
Receivables financing 244,860.00 100,000.00
Prepayments 24,555,245.46 11,001,439.23
Other receivables XVII. 2 6,645,181.15 71,654,117.57
Including: Interest
receivable
Dividend receivable
Inventories 327,484,120.10 169,022,971.44
Contract assets 3,903,859.23 3,720,160.50
Assets held for sale
Non-current assets due 2,688,446.82
within one year
Other current assets 1,297,388.01
Total current assets 1,939,761,938.07 1,650,582,899.16
Non-current Assets:
Debt investments
Other debt investments
Long-term accounts 3,528,917.07 13,196,087.78
receivable
Long-term equity XVII. 3 440,559,012.12 421,648,284.99
investment
Investment in other equity 7,075,419.38 7,075,419.38
instruments
Other non-current financial
assets
Investment property
Fixed assets 59,043,066.43 57,409,189.33
Construction in progress 133,111,026.64 37,982,329.74
Productive biological assets
Oil and gas assets
Right-of-use assets 17,152,430.20
Intangible assets 305,569,269.44 319,438,893.42
Development expenditure
Goodwill
Long-term prepaid expenses 4,841,091.62 9,562,162.36
Deferred tax assets 22,028,444.60 6,680,188.67
Other non-current assets 6,093,687.23 5,411,561.28
Total non-current assets 999,002,364.73 878,404,116.95
Total assets 2,938,764,302.80 2,528,987,016.11
Current Liabilities:
Short-term borrowings 11,410,560.27
Held-for-trading financial
liabilities
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Annual Report 2021
Derivative financial
liabilities
Notes payable 41,601,830.90 32,313,678.21
Accounts payable 311,370,715.78 210,885,240.65
Advance from customers 999,484.03 2,688,210.54
Contract liabilities 14,130,218.03 20,609,190.34
Employee benefits payable 41,239,602.09 28,514,763.09
Taxes payable 11,755,599.27 5,830,858.89
Other payables 13,006,204.53 23,058,804.83
Including: Interest payable
Dividend payable
Liabilities held for sale
Non-current liabilities due 43,166,652.33 1,001,024.66
within one year
Other current liabilities 839,898.70 1,918,391.60
Total current liabilities 478,110,205.66 338,230,723.08
Non-current Liabilities:
Long-term borrowings 54,497,768.01 29,029,715.07
Bonds payable
Where: Preferred shares
Perpetual bonds
Leasing liabilities 4,445,612.91
Long-term payables 3,262,450.00
Long-term employee
benefits payable
Estimated liabilities 20,275,524.78 16,345,891.60
Deferred income 9,543,692.89 14,450,411.10
Deferred tax liabilities
Other non-current liabilities
Total non-current 88,762,598.59 63,088,467.77
liabilities
Total liabilities 566,872,804.25 401,319,190.85
Owners’ Equity (Shareholders’ Equity):
Paid-in capital (or share 452,756,901.00 452,756,901.00
capital)
Other equity instruments
Where: Preferred shares
Perpetual bonds
Capital reserve 1,410,150,134.25 1,351,261,718.84
Less: Treasury shares
Other comprehensive
income
Special reserve
Surplus reserve 54,988,327.58 33,964,638.84
Undistributed profit 453,996,135.72 289,684,566.58
Total owners’ (or 2,371,891,498.55 2,127,667,825.26
shareholders’) equity
Total liabilities and 2,938,764,302.80 2,528,987,016.11
owners’ (or shareholders’)
equity
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the Accounting
Body: WANG Yingxia
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Annual Report 2021
Consolidated Income Statement
January to December 2021
In RMB
Item Note 2021 2020
I. Total operating income 2,498,228,401.78 1,948,884,176.83
Where: Operating income VII. 61 2,498,228,401.78 1,948,884,176.83
Interest income
Premiums earned
Fee and commission income
II. Total operating costs 2,338,656,541.27 1,882,807,642.88
Where: Operating costs VII. 61 1,651,089,557.25 1,393,075,043.93
Interest expenses
Fee and commission expenses
Surrenders
Claims and policyholder
benefits (net of amounts recoverable
from reinsurers)
Net withdrawal of insurance
contract reserves
Insurance policyholder
dividends
Expenses for reinsurance
accepted
Tax and surcharge VII. 62 8,776,858.79 6,718,744.79
Selling expenses VII. 63 252,854,103.31 133,588,234.60
Administrative expenses VII. 64 187,933,417.27 135,757,276.26
R&D expenses VII. 65 236,702,224.29 204,443,369.10
Financial expenses VII. 66 1,300,380.36 9,224,974.20
Where: Interest expense 17,079,723.61 20,066,451.02
Interest income 17,645,299.09 10,322,478.28
Add: Other income VII. 67 46,147,218.18 45,255,000.90
Investment income (loss is VII. 68 32,633,507.12 17,945,571.02
indicated by “-”)
Where: Income from 22,856,529.68 -679,282.94
investments in associates and joint
ventures
Gains from
derecognition of financial assets at
amortized assets
Foreign exchange gains (loss
is indicated by “-”)
Gains from net exposure
hedges (loss is indicated by “-”)
Gains from changes in fair VII. 70 40,127,764.00
values (loss is indicated by “-”)
Losses of credit impairment VII. 71 -6,809,291.29 -9,121,278.95
(loss is indicated by “-”)
Impairment losses of assets VII. 72 -36,946,167.95 -11,590,694.43
(loss is indicated by “-”)
Gains from disposal of assets VII. 73 2,967,788.29 281,040.26
(loss is indicated by “-”)
III. Operating profit (loss is indicated 237,692,678.86 108,846,172.75
by “-”)
Add: Non-operating income VII. 74 52,628,162.08 4,638,435.10
Less: Non-operating expenses VII. 75 1,793,084.65 2,063,172.96
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Annual Report 2021
IV. Total profits (total losses are 288,527,756.29 111,421,434.89
indicated by “-”)
Less: Income tax expenses VII. 76 66,992,939.15 24,764,236.32
V. Net profits (net losses are 221,534,817.14 86,657,198.57
indicated by “-”)
(I) Categorized by the continuity of operation
1. Net profits from continuing 221,534,817.14 86,657,198.57
operations (net losses are indicated by
"-")
2. Net profits from discontinued
operations (net losses are indicated by
“-”)
(II) Categorized by the ownership
1. Net profits attributable to 233,364,344.09 113,847,873.06
shareholders of the parent company
(net losses are indicated by "-")
2. Profits or losses attributable to -11,829,526.95 -27,190,674.49
minority shareholders (net losses are
indicated by “-”)
VI. Other comprehensive income, net -13,577,010.78 -6,496,909.69
of tax
(I) Other comprehensive income -13,626,220.67 -6,501,355.78
that can be attributable to owners of
the parent company, net of tax
1. Other comprehensive income -4,900,000.00
that cannot be reclassified
subsequently to profit or loss
(1) Changes from remeasurement
of defined benefit plans
(2) Other comprehensive income
that cannot be reclassified to profit or
loss under the equity method
(3) Changes in fair value of -4,900,000.00
investments in other equity
instruments
(4) Changes in fair value of
enterprises’ own credit risks
2. Other comprehensive income -8,726,220.67 -6,501,355.78
that will be reclassified to profit or
loss
(1) Other comprehensive income -366,814.82
that will be reclassified to profit or
loss under the equity method
(2) Changes in fair value of other
debt investments
(3) Amount of financial assets
reclassified to other comprehensive
income
(4) Provision for credit impairment
of other debt investments
(5) Reserve for cash flow hedges
(6) Exchange differences on -8,359,405.85 -6,501,355.78
translation of financial statements
denominated in foreign currencies
(7) Others
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Annual Report 2021
(II) Other comprehensive income 49,209.89 4,446.09
that can be attributable to minority
shareholders, net of tax
VII. Total comprehensive income 207,957,806.36 80,160,288.88
(I) Total comprehensive income 219,738,123.42 107,346,517.28
that can be attributable to owners of
the parent company
(II) Total comprehensive income -11,780,317.06 -27,186,228.40
that can be attributable to minority
shareholders
VIII. Earnings per share:
(I) Basic earnings per share 0.52 0.25
(RMB/share)
(II) Diluted earnings per share 0.51 0.25
(RMB/share)
In the event of business combinations involving enterprises under common control, the net profits realized
prior to the combination by the party being absorbed is: RMB 0, and the net profits realized in the last
period by the party being absorbed is: RMB 0.
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the Accounting
Body: WANG Yingxia
Income Statement of the parent company
January to December 2021
In RMB
Item Note 2021 2020
I. Operating income XVII. 4 1,445,208,597.94 1,064,149,969.51
Less: Operating costs XVII. 4 951,761,428.41 720,452,860.84
Tax and surcharge 4,824,423.22 4,809,443.68
Selling expenses 81,267,047.72 68,169,938.33
Administrative expenses 114,480,252.18 94,065,391.84
R&D expenses 128,807,240.92 104,873,635.92
Financial expenses -21,476,404.98 -16,982,053.25
Where: Interest expense 2,244,930.36 432,518.40
Interest income 24,781,253.41 16,041,306.76
Add: Other income 27,780,796.53 34,560,094.28
Investment income (loss is XVII. 5 27,249,704.79 18,624,853.96
indicated by “-”)
Where: Income from
investments in associates and joint
ventures
Gains from
derecognition of financial assets at
amortized assets
Gains from net exposure
hedges (loss is indicated by “-”)
Gains from changes in fair 2,200,000.00
values (loss is indicated by “-”)
Losses of credit impairment -4,798,060.82 -627,070.09
(loss is indicated by “-”)
Impairment losses of assets -21,377,940.23 -7,565,039.37
(loss is indicated by “-”)
Gains from disposal of assets 1,318.53
(loss is indicated by “-”)
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Annual Report 2021
II. Operating profit (loss is indicated 216,599,110.74 133,754,909.46
by “-”)
Add: Non-operating income 2,396,233.70 4,409,022.52
Less: Non-operating expenses 973,929.02 1,228,453.52
III. Total profits (total losses are 218,021,415.42 136,935,478.46
indicated by “-”)
Less: Income tax expenses 8,133,765.70 12,515,924.03
IV. Net profits (net losses are 209,887,649.72 124,419,554.43
indicated by “-”)
(I) Net profits from continuing 209,887,649.72 124,419,554.43
operations (net losses are indicated by
“-”)
(II) Net profits from discontinued
operations (net losses are indicated by
“-”)
V. Other comprehensive income, net
of tax
(I) Other comprehensive income
that cannot be reclassified
subsequently to profit or loss
1. Changes from remeasurement
of defined benefit plans
2. Other comprehensive income
that cannot be reclassified to profit or
loss under the equity method
3. Changes in fair value of
investments in other equity
instruments
4. Changes in fair value of
enterprises’ own credit risks
(II) Other comprehensive income
that will be reclassified to profit or
loss
1. Other comprehensive income
that will be reclassified to profit or
loss under the equity method
2. Changes in fair value of other
debt investments
3. Amount of financial assets
reclassified to other comprehensive
income
4. Provision for credit
impairment of other debt investments
5. Reserve for cash flow hedges
6. Exchange differences on
translation of financial statements
denominated in foreign currencies
7. Others
VI. Total comprehensive income 209,887,649.72 124,419,554.43
VII. Earnings per share:
(I) Basic earnings per share
(RMB/share)
(II) Diluted earnings per share
(RMB/share)
152 / 337
Annual Report 2021
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the Accounting
Body: WANG Yingxia
Consolidated Cash Flow Statement
January to December 2021
In RMB
Item Note 2021 2020
I. Cash Flows from Operating Activities:
Cash receipts from the sale of 2,750,740,564.95 1,974,492,309.02
goods and the rendering of
services
Net increase in customer
deposits and deposits from banks
and other financial institutions
Net increase in loans from the
central bank
Net increase in taking from
banks and other financial
institutions
Cash receipts from premiums
under direct insurance contracts
Net cash receipts from
reinsurance business
Net cash receipts from
policyholders’ deposits and
investment contract liabilities
Cash receipts from interest,
fees and commissions
Net increase in taking from
banks
Net increase in financial assets
sold under repurchase
arrangements
Net cash received from
securities trading agencies
Receipts of tax refunds 8,006,027.05 6,524,647.54
Other cash receipts relating to VII. 78(1) 184,950,300.13 140,364,333.47
operating activities
Subtotal of cash inflows 2,943,696,892.13 2,121,381,290.03
from operating activities
Cash payments for goods 2,086,007,277.39 1,450,758,815.22
purchased and services received
Net increase in loans and
advances to customers
Net increase in balance with
the central bank and due from
banks and other financial
institutions
Cash payments for claims and
policyholders’ benefits under
direct insurance contracts
Net increase in placements
with banks and other financial
institutions
Cash payments for interest,
fees and commissions
153 / 337
Annual Report 2021
Cash payments for insurance
policyholder dividends
Cash payments to and on 363,360,992.08 294,069,230.11
behalf of employees
Payments of various types of 82,594,392.29 79,174,713.78
taxes
Other cash payments relating VII. 78(2) 353,397,003.53 244,988,100.50
to operating activities
Subtotal of cash outflows 2,885,359,665.29 2,068,990,859.61
from operating activities
Net cash flow from 58,337,226.84 52,390,430.42
operating activities
II. Cash Flows from Investing Activities:
Cash receipts from disposals 2,073,056,003.00 2,704,000,000.00
and recovery of investments
Cash receipts from investment 9,785,727.49 18,624,853.96
income
Net cash receipts from 3,265,966.25 1,365,554.96
disposals of fixed assets,
intangible assets and other long-
term assets
Net cash receipts from
disposals of subsidiaries and
other business units
Other cash receipts relating to
investing activities
Subtotal of cash inflows 2,086,107,696.74 2,723,990,408.92
from investing activities
Cash payments to acquire or 123,016,450.20 66,273,509.36
construct fixed assets, intangible
assets and other long-term assets
Cash payments to acquire 2,396,564,750.05 2,436,196,580.78
investments
Net increase in pledged loans
receivables
Net cash payments for 11,432,903.47 15,614,062.32
acquisitions of subsidiaries and
other business units
Other cash payments relating
to investing activities
Subtotal of cash outflows 2,531,014,103.72 2,518,084,152.46
from investing activities
Net cash flows from -444,906,406.98 205,906,256.46
investment activities
III. Cash Flows from Financing Activities:
Cash receipts from capital 225,131,579.00 20,953,388.25
contributions
Where: Cash receipts from 225,131,579.00 20,953,388.25
capital contributions from
minority shareholders of
subsidiaries
Cash receipts from borrowings 486,480,176.26 205,991,111.29
Other cash receipts relating to VII. 78(5) 19,320,000.00
financing activities
Subtotal of cash inflows 711,611,755.26 246,264,499.54
from financing activities
154 / 337
Annual Report 2021
Cash repayments of 309,332,017.81 290,953,213.70
borrowings
Cash payments for distribution 59,438,696.90 54,437,838.70
of dividends or profits or
settlement of interest expenses
Where: Payments for 18,400,000.00
distribution of dividends or
profits to minority shareholders
of subsidiaries
Other cash payments relating VII. 78(6) 47,271,031.50
to financing activities
Subtotal of cash outflows 416,041,746.21 345,391,052.40
from financing activities
Net cash flows from 295,570,009.05 -99,126,552.86
financing activities
IV. Effect of Foreign Exchange -1,330,751.62 -5,434,532.44
Rate Changes on Cash and
Cash Equivalents
V. Net Increase in Cash and -92,329,922.71 153,735,601.58
Cash Equivalents
Add: Opening balance of cash 983,525,089.44 829,789,487.86
and cash equivalents
VI. Closing Balance of Cash 891,195,166.73 983,525,089.44
and Cash Equivalents
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the Accounting
Body: WANG Yingxia
Cash Flow Statement of the parent company
January to December 2021
In RMB
Item Note 2021 2020
I. Cash Flows from Operating Activities:
Cash receipts from the sale of 1,537,029,483.55 919,034,315.48
goods and the rendering of
services
Receipts of tax refunds 1,992,222.29 3,108,523.77
Other cash receipts relating to 51,349,254.59 125,185,112.12
operating activities
Subtotal of cash inflows 1,590,370,960.43 1,047,327,951.37
from operating activities
Cash payments for goods 1,086,842,696.51 776,294,426.96
purchased and services received
Cash payments to and on 216,225,456.23 175,144,803.35
behalf of employees
Payments of various types of 45,905,948.64 28,453,770.47
taxes
Other cash payments relating 129,883,242.51 120,311,024.70
to operating activities
Subtotal of cash outflows 1,478,857,343.89 1,100,204,025.48
from operating activities
Net cash flow from operating 111,513,616.54 -52,876,074.11
activities
II. Cash Flows from Investing Activities:
155 / 337
Annual Report 2021
Cash receipts from disposals 1,650,716,923.79 2,704,000,000.00
and recovery of investments
Cash receipts from investment 21,200,960.36 18,624,853.97
income
Net cash receipts from 844,985.38
disposals of fixed assets,
intangible assets and other long-
term assets
Net cash receipts from
disposals of subsidiaries and
other business units
Other cash receipts relating to 141,582,498.60 71,725,375.54
investing activities
Subtotal of cash inflows 1,813,500,382.75 2,795,195,214.89
from investing activities
Cash payments to acquire or 94,427,931.02 40,725,074.65
construct fixed assets, intangible
assets and other long-term assets
Cash payments to acquire 1,962,997,653.52 2,464,734,756.73
investments
Net cash payments for
acquisitions of subsidiaries and
other business units
Other cash payments relating 45,139,057.42 75,345,631.45
to investing activities
Subtotal of cash outflows 2,102,564,641.96 2,580,805,462.83
from investing activities
Net cash flows from -289,064,259.21 214,389,752.06
investment activities
III. Cash Flows from Financing Activities:
Cash receipts from capital 20,953,388.25
contributions
Cash receipts from borrowings 54,430,844.66 82,259,570.15
Other cash receipts relating to
financing activities
Subtotal of cash inflows 54,430,844.66 103,212,958.40
from financing activities
Cash repayments of 12,511,648.92 50,000,000.00
borrowings
Cash payments for distribution 26,734,065.79 34,374,706.92
of dividends or profits or
settlement of interest expenses
Other cash payments relating 21,027,248.92 39,403,824.29
to financing activities
Subtotal of cash outflows 60,272,963.63 123,778,531.21
from financing activities
Net cash flows from -5,842,118.97 -20,565,572.81
financing activities
IV. Effect of Foreign Exchange -11,728.85 1,031,900.06
Rate Changes on Cash and
Cash Equivalents
V. Net Increase in Cash and -183,404,490.49 141,980,005.20
Cash Equivalents
Add: Opening balance of cash 666,628,105.82 524,648,100.62
and cash equivalents
156 / 337
Annual Report 2021
VI. Closing Balance of Cash 483,223,615.33 666,628,105.82
and Cash Equivalents
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the Accounting
Body: WANG Yingxia
157 / 337
Annual Report 2021
Consolidated Statement of Changes in Owners’ Equity
January to December 2021
In RMB
2021
Equity attributable to owners of the parent company
Other equity
Less: Gen Total
Item Paid-in instruments Other Spe Minority
Treas eral owner’s
capital (or Prefe Capital comprehe cial Surplus Undistribut Oth interests
Perpe ury risk Subtotal equity
share rred Oth reserve nsive rese reserve ed profit ers
tual share reser
capital) share ers income rve
bonds s ve
s
I. Closing 452,756,90 1,249,020,99 - 35,242,17 357,793,89 2,091,599,67 93,812,755 2,185,412,42
balance of 1.00 1.15 3,214,291. 9.57 1.96 1.75 .26 7.01
last year 93
Add: 34,923.77 9,346.56 44,270.33 - 33,021.69
Changes 11,248.64
in
accountin
g policies
Corre
ctions of
prior
period
errors
Busin
ess
combinati
on
involving
enterprises
under
common
control
Other
s
158 / 337
Annual Report 2021
II. 452,756,9 1,249,020, - 35,277,1 357,803,2 2,091,643, 93,801,50 2,185,445,
Opening 01.00 991.15 3,214,29 03.34 38.52 942.08 6.62 448.70
balance of
1.93
the current
year
III. 151,584,14 - 20,988,7 187,473,9 346,420,63 91,370,59 437,791,23
Changes 5.50 13,626,2 64.97 49.56 9.36 1.32 0.68
for the
20.67
year
(decrease
is
indicated
by “-”)
(I) Total - 233,364,3 219,738,12 - 207,957,80
comprehe 13,626,2 44.09 3.42 11,780,31 6.36
nsive
20.67 7.06
income
(II) 151,584,14 151,584,14 121,550,9 273,135,05
Owners’ 5.50 5.50 08.38 3.88
contributi
ons and
reduction
in capital
1.
Ordinary
shares
contribute
d by
owners
2. Capital
contributi
on from
holders of
other
equity
instrument
s
3. Share- 58,961,897 58,961,897 11,541,57 70,503,471
based .75 .75 4.13 .88
payment
recognize
d in
159 / 337
Annual Report 2021
owners’
equity
4. Others 92,622,247 92,622,247 110,009,3 202,631,58
.75 .75 34.25 2.00
(III) Profit 20,988,7 - - - -
distributio 64.97 45,890,39 24,901,629 18,400,00 43,301,629
n
4.53 .56 0.00 .56
1. 20,988,7 -
Transfer 64.97 20,988,76
to surplus
4.97
reserve
2.
Transfer
to general
reserve
3. - - - -
Distributio 24,901,62 24,901,629 18,400,00 43,301,629
ns to
9.56 .56 0.00 .56
owners (or
shareholde
rs)
4. Others
(IV)
Transfers
within
owners’
equity
1.
Capitalizat
ion of
capital
reserve
2.
Capitalizat
ion of
surplus
reserve
3. Loss
offset by
surplus
reserve
160 / 337
Annual Report 2021
4.
Retained
earnings
carried
forward
from
changes in
defined
benefit
plans
5.
Retained
earnings
carried
forward
from other
comprehe
nsive
income
6. Others
(V)
Special
reserve
1.
Transfer
to special
reserve in
the period
2. Amount
utilized in
the period
(VI)
Others
IV. 452,756,9 1,400,605, - 56,265,8 545,277,1 2,438,064, 185,172,0 2,623,236,
Closing 01.00 136.65 16,840,5 68.31 88.08 581.44 97.94 679.38
balance of
12.60
the current
year
Item 2020
161 / 337
Annual Report 2021
Equity attributable to owners of the parent company
Other equity Less: Gen Total
Paid-in instruments Other Spe Minority
Treas eral owner’s
capital (or Prefe Capital comprehe cial Surplus Undistribut Oth interests
Perpe ury risk Subtotal equity
share rred Oth reserve nsive rese reserve ed profit ers
tual share reser
capital) share ers income rve
bonds s ve
s
I. Closing 451,554,4 1,207,942, 3,287,0 22,800,2 288,975,8 1,974,559,83 149,649,3 2,124,209,
balance of 11.00 318.37 63.85 24.13 20.29 7.64 06.18 143.82
last year
Add: 1,278,734.8 1,278,734.88 - 632,227.31
Changes 8 646,507.57
in
accountin
g policies
Corre
ctions of
prior
period
errors
Busin
ess
combinati
on
involving
enterprises
under
common
control
Other
s
II. 451,554,4 1,207,942, 3,287,0 22,800,2 290,254,5 1,975,838, 149,002,7 2,124,841,
Opening 11.00 318.37 63.85 24.13 55.17 572.52 98.61 371.13
balance of
the current
year
III. 1,202,490 41,078,672 - 12,441,9 67,539,33 115,761,09 - 60,571,055
Changes .00 .78 6,501,3 55.44 6.79 9.23 55,190,04 .88
for the
55.78 3.35
year
162 / 337
Annual Report 2021
(decrease
is
indicated
by “-”)
(I) Total - 113,847,8 107,346,51 - 80,160,288
comprehe 6,501,3 73.06 7.28 27,186,22 .88
nsive
55.78 8.40
income
(II) 1,202,490 41,078,672 42,281,162 - 14,277,347
Owners’ .00 .78 .78 28,003,81 .83
contributi
4.95
ons and
reduction
in capital
1. 1,202,490 19,750,898 20,953,388 20,953,388
Ordinary .00 .25 .25 .25
shares
contribute
d by
owners
2. Capital
contributi
on from
holders of
other
equity
instrument
s
3. Share- 18,783,763 18,783,763 1,787,189 20,570,952
based .38 .38 .38 .76
payment
recognize
d in
owners’
equity
4. Others 2,544,011. 2,544,011. - -
15 15 29,791,00 27,246,993
4.33 .18
(III) Profit 12,441,9 - - -
distributio 55.44 46,308,53 33,866,580 33,866,580
n
6.27 .83 .83
163 / 337
Annual Report 2021
1. 12,441,9 -
Transfer 55.44 12,441,95
to surplus
5.44
reserve
2.
Transfer
to general
reserve
3. - - -
Distributio 33,866,580. 33,866,580 33,866,580
ns to 83
.83 .83
owners (or
shareholde
rs)
4. Others
(IV)
Transfers
within
owners’
equity
1.
Capitalizat
ion of
capital
reserve
2.
Capitalizat
ion of
surplus
reserve
3. Loss
offset by
surplus
reserve
4.
Retained
earnings
carried
forward
from
changes in
defined
164 / 337
Annual Report 2021
benefit
plans
5.
Retained
earnings
carried
forward
from other
comprehe
nsive
income
6. Others
(V)
Special
reserve
1.
Transfer
to special
reserve in
the period
2. Amount
utilized in
the period
(VI)
Others
IV. 452,756,9 1,249,020, - 35,242,1 357,793,8 2,091,599, 93,812,75 2,185,412,
Closing 01.00 991.15 3,214,2 79.57 91.96 671.75 5.26 427.01
balance of
91.93
the current
year
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the Accounting Body: WANG Yingxia
Statement of Changes in Owners’ Equity of the parent company
January to December 2021
In RMB
2021
Item Other equity instruments Less: Total
Paid-in Capital Other Special Surplus Undistribu
Preferred Perpetual Treasury owner’s
capital (or Others reserve comprehen reserve reserve ted profit
shares bonds shares equity
165 / 337
Annual Report 2021
share sive
capital) income
I. Closing balance of last year 452,756,9 1,351,26 33,964,6 289,684, 2,127,66
01.00 1,718.84 38.84 566.58 7,825.26
Add: Changes in accounting 34,923.77 314,313. 349,237.
policies 95 72
Corrections of prior
period errors
Others
II. Opening balance of the 452,756,9 1,351,26 33,999,5 289,998, 2,128,01
current year 01.00 1,718.84 62.61 880.53 7,062.98
III. Changes for the year 58,888,4 20,988,7 163,997, 243,874,
(decrease is indicated by “-”) 15.41 64.97 255.19 435.57
(I) Total comprehensive 209,887, 209,887,
income 649.72 649.72
(II) Owners’ contributions and 58,888,4 58,888,4
reduction in capital 15.41 15.41
1. Ordinary shares contributed
by owners
2. Capital contribution from
holders of other equity
instruments
3. Share-based payment 58,888,4 58,888,4
recognized in owners’ equity 15.41 15.41
4. Others
(III) Profit distribution 20,988,7 - -
64.97 45,890,3 24,901,6
94.53 29.56
1. Transfer to surplus reserve 20,988,7 -
64.97 20,988,7
64.97
2. Distributions to owners (or - -
shareholders) 24,901,6 24,901,6
29.56 29.56
3. Others
(IV) Transfers within owners’
equity
166 / 337
Annual Report 2021
1. Capitalization of capital
reserve
2. Capitalization of surplus
reserve
3. Loss offset by surplus
reserve
4. Retained earnings carried
forward from changes in
defined benefit plans
5. Retained earnings carried
forward from other
comprehensive income
6. Others
(V) Special reserve
1. Transfer to special reserve
in the period
2. Amount utilized in the
period
(VI) Others
IV. Closing balance of the 452,756,9 1,410,15 54,988,3 453,996, 2,371,89
current year 01.00 0,134.25 27.58 135.72 1,498.55
2020
Paid-in Other equity instruments Other
Less: Total
Item capital (or Capital comprehen Special Surplus Undistribu
Preferred Perpetual Treasury owner’s
share Others reserve sive reserve reserve ted profit
shares bonds shares equity
capital) income
I. Closing balance of last year 451,554,4 1,310,93 21,522,6 211,573, 1,995,59
11.00 9,867.82 83.40 548.42 0,510.64
Add: Changes in accounting
policies
Corrections of prior
period errors
Others
II. Opening balance of the 451,554,4 1,310,93 21,522,6 211,573, 1,995,59
current year 11.00 9,867.82 83.40 548.42 0,510.64
III. Changes for the year 1,202,490 40,321,8 12,441,9 78,111,0 132,077,
(decrease is indicated by “-”) .00 51.02 55.44 18.16 314.62
167 / 337
Annual Report 2021
(I) Total comprehensive 124,419, 124,419,
income 554.43 554.43
(II) Owners’ contributions 1,202,490 40,321,8 41,524,3
and reduction in capital .00 51.02 41.02
1. Ordinary shares 1,202,490 19,750,8 20,953,3
contributed by owners .00 98.25 88.25
2. Capital contribution from
holders of other equity
instruments
3. Share-based payment 20,570,9 20,570,9
recognized in owners’ equity 52.77 52.77
4. Others
(III) Profit distribution 12,441,9 - -
55.44 46,308,5 33,866,5
36.27 80.83
1. Transfer to surplus reserve 12,441,9 -
55.44 12,441,9
55.44
2. Distributions to owners (or - -
shareholders) 33,866,5 33,866,5
80.83 80.83
3. Others
(IV) Transfers within owners’
equity
1. Capitalization of capital
reserve
2. Capitalization of surplus
reserve
3. Loss offset by surplus
reserve
4. Retained earnings carried
forward from changes in
defined benefit plans
5. Retained earnings carried
forward from other
comprehensive income
6. Others
(V) Special reserve
168 / 337
Annual Report 2021
1. Transfer to special reserve
in the period
2. Amount utilized in the
period
(VI) Others
IV. Closing balance of the 452,756,9 1,351,26 33,964,6 289,684, 2,127,66
current year 01.00 1,718.84 38.84 566.58 7,825.26
Legal Representative: LI Yi Chief Accountant: WANG Yingxia Person in Charge of the Accounting Body: WANG Yingxia
169 / 337
Annual Report 2021
III. Company profile
1. Profile
√ Applicable □ N/A
Appotronics Corporation Limited (hereinafter referred to as “Company” or “the Company”),
formally named as Shenzhen Appotronics Optoelectronics Technology Inc. (hereinafter referred to as
“Appotronics Inc.”), was jointly invested and established by LI Yi and XU Yanzheng and registered in
Nanshan Branch of Market Supervision and Regulation Bureau of Shenzhen on October 24, 2006 with the
legal person business license numbered in 4403011245637. Upon establishment, the registered capital of
Appotronics Inc. was RMB 100,000. On May 31, 2018, the benchmark date, Appotronics Inc was changed
into a company limited by shares entirety. On July 20, 2018, the Company completed the registration in
Nanshan Branch of Market Supervision and Regulation Bureau of Shenzhen and headquartered in
Shenzhen City, Guangdong Province. The Company holds the business license bearing the credibility code
91440300795413991N. The Company’s registered capital is RMB 452,756,901.00 divided into
452,756,901 shares (RMB 1 Yuan per share), including 166,736,766 outstanding shares subject to sale
restrictions and 286,020,135 outstanding shares not subject to sale restrictions. The Company’s shares
were listed for trading on Shanghai Stock Exchange on July 22, 2019.
The Company can be classified into the computer, communication and other electronic equipment
manufacturing industry. It mainly engages in research and development, production, sales and leasing of
laser display core devices and whole machines, and can provide customers with technical research and
development services and customized products. Its products mainly include laser business and education
projectors, smart mini projectors, laser TV, laser large venue projector and laser digital cinema projector.
The financial statements have been approved by the Company’s 11th meeting of the second Board of
Directors on April 25, 2022 for public disclosure.
2. Scope of consolidated financial statements
√ Applicable □ N/A
The Company has included 26 subsidiaries into the consolidated financial statements for the current
period, including Beijing Orient Appotronics Technology Co., Ltd., Shenzhen Appotronics Laser Display
Technology Co., Ltd., Qingda Appotronics (Xiamen) Technology Co., Ltd., Shenzhen Appotronics Laser
Technology Co., Ltd., Appotronics Hong Kong Limited, Shenzhen Appotronics Software Technology Co.,
Ltd., Shenzhen City Appotronics Xiaoming Technology Co., Ltd., Fabulus Display (Beijing) Co., Ltd.,
170 / 337
Annual Report 2021
Appotronics USA, Inc., Fabulus Technology Hong Kong Limited, JoveAI Limited, JoveAI Innovation,
Inc., Appotronics Technology (Changzhou) Co., Ltd., Shenzhen Appotronics Display Device Co., Ltd.,
WEMAX LLC, JoveAI Asia Company Limited, Tianjin Bonian Film Partnership (LP), Fengmi (Beijing)
Technology Co., Ltd., Shenzhen Appotronics Home Line Technology Co., Ltd., Technology Inc.,
(Chongqing) Innovative Technology Co., Ltd., Limited, Chongqing Guangbo Ecommerce Co., Ltd.,
Chongqing Ewei Ecommerce Co., Ltd., Shenzhen Orange Juice Energy Technology Co., Ltd.,
CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd., and other subsidiaries. Refer to descriptions
in VIII and IX of Section X for details.
IV. Basis of preparation of financial statements
1. Basis of preparation
The Company’s financial statements are prepared on a going-concern basis.
2. Going concern
√ Applicable □ N/A
The Company has detected no events or circumstances that may cast significant doubt upon its ability to
continue as a going concern within 12 months from the reporting period.
V. Significant accounting policies and accounting estimates
Specific accounting policies and accounting estimates:
√ Applicable □ N/A
Important note: The Company establishes the specific accounting policies and makes the specific
accounting estimates with respect to the impairment of financial instruments, depreciation of fixed assets,
depreciation of right-of-use assets, amortization of intangible assets, recognition of revenues and other
transactions and events according to the actual production and operation characteristics of the Company.
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company conform to the requirements of the Accounting
Standards for Business Enterprises and truly and completely reflect the Company’s financial position,
operating results, changes in shareholders’ equity, cash flows and other related information.
2. Accounting period
The Company’s accounting year is from January 1 to December 31 of each calendar year.
3. Operating cycle
√ Applicable □ N/A
The Company has a relatively short operating cycle, and determines the liquidity of assets and liabilities
on the basis of 12 months.
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4. Functional currency
The Company adopts RMB as its functional currency. The following overseas subsidiaries operate
outside of China, and adopt the currency of their primary economic environment as the functional currency:
Appotronics Hong Kong Limited, Appotronics USA, Inc., Fabulus Technology Hong Kong Limited,
JoveAI Limited, JoveAI Innovation, Inc., WEMAX LLC, JoveAI Asia Company Limited, Technology
Inc., Limited, etc.
5. The accounting treatment of business combinations involving entities under common control
and not involving entities under common control
√ Applicable □ N/A
1. Accounting method for business combinations involving enterprises under common control
Assets and liabilities acquired from a business combination by the Company are measured at the
carrying amounts of the assets and liabilities of the acquiree in the consolidated financial statements of the
ultimate controller at the date of combination. The Company made adjustment to capital reserves
according to the differences between the shares in the owners’ equity of the combined party on the
consolidated financial statements of the ultimate controlling party and the book value of paid combination
considerations or the face value of issued shares; In case the capital reserve is not sufficient to absorb the
difference, the remaining balance is adjusted against the retained earnings.
2. Accounting method for business combinations not involving enterprises under common control
Where the cost of combination exceeds the Company’s interest in the fair value of the acquiree’s
identifiable net assets, the difference is recognized as goodwill. Where the cost of combination is less than
the Company’s interest in the fair value of the acquiree’s identifiable net assets, the Company firstly
reassesses the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities and the
measurement of the cost of combination. If after that reassessment, the cost of combination is still less
than the Company’s interest in the fair value of the acquiree’s identifiable net assets, the acquirer
recognizes the remaining difference immediately in profit or loss for the current period.
6. Method of preparation of consolidated financial statements
√ Applicable □ N/A
The parent company includes all of its controlled subsidiaries in its consolidated financial statements.
The consolidated financial statements are prepared by the parent company in accordance with the
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Accounting Standards for Business Enterprises No. 33 -- Consolidated Financial Statements, on the basis
of the respective financial statements of the parent company and its subsidiaries, by reference to other
relevant data.
7. Classification of joint arrangements and accounting treatment of joint operations
√ Applicable □ N/A
1. Joint arrangements are classified into joint operations and joint ventures.
2. When the Company is a party to a joint operation, the Company recognizes the following items
relating to its interest in the joint operation:
(1) the assets individually held by the Company, and the Company’s share of the assets held jointly;
(2) the liabilities incurred individually by the Company, and the Company’s share of the liabilities
incurred jointly;
(3) the Company’s revenue from the sale of its share of output of the joint operation;
(4) the Company’s share of revenue from the sale of assets by the joint operation; and
(5) the expenses incurred individually by the Company, and the Company’s share of the expenses
incurred jointly.
8. Recognition of cash and cash equivalents
Cash equivalents are the Group’s short-term (generally due within 3 months from the acquisition date),
highly liquid investments that are readily convertible to known amounts of cash and which are subject to
an insignificant risk of changes in value.
9. Translation of transactions and financial statements denominated in foreign currencies
√ Applicable □ N/A
1. Transactions denominated in foreign currencies
A foreign currency transaction is recorded in RMB, on initial recognition, by applying the spot
exchange rate on the date of the transaction. At the balance sheet date, foreign currency monetary items
are translated into RMB using the spot exchange rates at the balance sheet date. Exchange differences
arising from such translations are recognized in profit or loss for the current period, except for those
attributable to foreign currency borrowings that have been taken out specifically for the acquisition or
construction of qualifying assets and accrued interest. Non-monetary items denominated in foreign
currencies that are measured at historical cost are translated using the foreign exchange rates ruling at the
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transaction dates, without adjusting the amounts in RMB. Non-monetary items denominated in foreign
currencies that are measured at fair value are translated using the foreign exchange rates prevailing at the
dates when the fair value was determined, with exchange differences arising from such translations
recognized in profit or loss for the current period or other comprehensive income.
2. Translation of financial statements denominated in foreign currencies
Asset and liability items on the balance sheet are translated at the spot exchange rate prevailing at the
balance sheet date; shareholders’ equity items other than "undistributed profits” are translated at the spot
exchange rates at the dates on which such items arose; income and expense items in the income statement
are translated at the exchange rates that approximate the actual spot exchange rates on the dates of the
transactions. Exchange differences arising from such translations are recognized in other comprehensive
income.
10. Financial instruments
√ Applicable □ N/A
1. Classification of financial assets and financial liabilities
On initial recognition, the Company’s financial assets are classified into three categories, including
(1) financial assets at amortized cost; (2) financial assets at fair value through other comprehensive income;
and (3) financial assets at fair value through profit or loss for the current period.
Upon initial recognition, the Company’s financial liabilities are classified into four categories,
including (1) financial liabilities at fair value through profit or loss for the current period; (2) financial
liabilities arising as a result of the transfer of financial assets not meeting the criteria for derecognition or
continuing involvement in the financial assets transferred; (3) financial guarantee contracts not falling
under Clauses (1) and (2), and loan commitments not falling under Clause (1) and below market interest
rate; and (4) financial liabilities at amortized cost.
2. Recognition, measurement and derecognition of financial assets and financial liabilities
(1) Recognition and initial measurement of financial assets and financial liabilities
When the Company becomes a party to a financial instrument contract, a financial asset or liability
is recognized. Financial assets and liabilities are initially measured at fair value. Transaction costs relating
to financial assets or liabilities at fair value through profit or loss are directly recognized in profit or loss
for the current period. Transaction costs relating to other kinds of financial assets or liabilities are included
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in their initially recognized amount. However, the accounts receivable, if do not contain any significant
financing component or are recognized by the Company without taking into consideration the financing
components under the contracts with a term of less than one year upon initial recognition, are initially
measured at transaction price defined in Accounting Standards for Business Enterprises No.14 - Revenue.
(2) Subsequent measurement of financial assets
1) Financial assets at amortized cost
Financial assets at amortized cost are subsequently measured at amortized cost using the effective
interest method. Gains or losses arising from financial assets at amortized cost that do not belong to any
hedging relationship are recognized in profit or loss for the current period upon derecognition,
reclassification, amortization using the effective interest method or recognition of impairment.
2) Investments in debt instruments at fair value through other comprehensive income
Investments in debt instruments at fair value through other comprehensive income are subsequently
measured at fair value. Interest, impairment losses or gains and exchange gains or losses calculated using
the effective interest method are recognized in profit or loss for the current period, and other gains or
losses are recognized in other comprehensive income. Upon derecognition, the aggregate gains or losses
previously recognized in other comprehensive income are transferred to profit or loss for the current period.
3) Investments in equity instruments at fair value through other comprehensive income
Investments in debt instruments at fair value through other comprehensive income are subsequently
measured at fair value. Dividends received (other than those received as recovery of investment cost) are
recognized in profit or loss for the current period, and other gains or losses are recognized in other
comprehensive income. Upon derecognition, the accumulated gains or losses previously recognized in
other comprehensive income are transferred to retained earnings.
4) Financial assets at fair value through profit or loss for the current period
Financial assets at fair value through profit or loss for the current period are subsequently measured
at fair value, with gains or losses arising therefrom, including interest and dividend income, recognized in
profit or loss for the current period, except the financial assets belonging to any hedging relationship.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss for the current period
Financial liabilities at fair value through profit or loss for the current period include financial
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liabilities held for trading (including derivatives classified as financial liabilities), and financial liabilities
directly designated as at fair value through profit or loss for the current period. Such financial liabilities
are subsequently measured at fair value. Changes in the fair value of financial liabilities designated as at
fair value through profit or loss for the period arising out of changes in the Company’s own credit risk are
recognized in other comprehensive income, unless such treatment will result in or increase any accounting
mismatch in profit or loss. Other gains or losses arising from such financial liabilities, including interest
expenses and changes in fair value not arising out of changes in the Company’s own credit risk, are
recognized in profit or loss for the current period, except the financial liabilities belonging to any hedging
relationship. Upon derecognition, the accumulated gains or losses previously recognized in other
comprehensive income are transferred to retained earnings.
2) Financial liabilities arising as a result of the transfer of financial assets not meeting the criteria for
derecognition or continuing involvement in the financial assets transferred
Such financial liabilities are measured in accordance with the Accounting Standards for Business
Enterprises No. 23 -- Transfer of Financial Assets.
3) Financial guarantee contracts not falling under Clauses 1) and 2), and loan commitments not falling
under Clause 1) and below market interest rate
Such financial liabilities are subsequently measured at the higher of ① provision for impairment
losses determined according to the policy for impairment of financial instruments; and ① balance of the
initially recognized amount after deduction of the accumulated amortization determined in accordance
with the relevant provisions of the Accounting Standards for Business Enterprises No.14 - Revenue.
4) Financial liabilities at amortized cost
Financial liabilities at amortized cost are subsequently measured at amortized cost using the effective
interest method. Gains or losses on financial liabilities at amortized cost that do not belong to any hedging
relationship are recognized in profit or loss for the current period upon derecognition or amortization using
the effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
① the contractual right to receive cash flows from the financial assets has expired; or
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② the financial assets have been transferred and such transfer meets the criteria for derecognition of
financial assets as set forth in the Accounting Standards for Business Enterprises No. 23 -- Transfer of
Financial Assets.
2) A financial liability (or part thereof) is derecognized when all or part of the outstanding obligations
thereon have been discharged.
3. Recognition and measurement of financial assets transferred
When a financial asset of the Company is transferred, if substantially all the risks and rewards
incidental to the ownership of the financial asset have been transferred, the financial asset is derecognized,
and the rights and obligations incurred or retained in such transfer are separately recognized as assets or
liabilities (as the case may be); if substantially all the risks and rewards incidental to the ownership of the
financial asset have been retained, the financial asset transferred continues to be recognized. If the
Company neither transferred nor retained a substantial portion of all risks and rewards incidental to the
ownership of the financial asset, then: (1) if the Company does not retain control over the financial asset,
the financial asset is derecognized, and the rights and obligations incurred or retained in such transfer are
separately recognized as assets or liabilities (as the case may be); and (2) if the Company retains control
over the financial asset, the financial asset continues to be recognized to the extent of the Company’s
continuing involvement in the financial asset transferred, and a corresponding liability is recognized.
If an entire transfer of a financial asset meets the criteria for derecognition, the difference between
(1) the carrying amount of the financial asset transferred at the date of derecognition; and (2) the sum of
the consideration received from the transfer and the portion of the accumulated amount of changes in fair
value directly recorded as other comprehensive income originally that corresponds to the part
derecognized (where the financial asset transferred is an investment in debt instruments at fair value
through other comprehensive income) is recognized in profit or loss for the current period. If part of a
financial asset is transferred and the part transferred entirely meets the criteria for derecognition, the total
carrying amount of the financial asset immediately prior to the transfer is allocated between the part
derecognized and the part not derecognized in proportion to their relative fair value at the date of transfer,
and the difference between (1) the carrying amount of the part derecognized; and (2) the sum of the
consideration received from the transfer of the part derecognized and the portion of the accumulated
amount of changes in fair value directly recorded as other comprehensive income originally that
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corresponds to the part derecognized (where the financial asset transferred is an investment in debt
instruments at fair value through other comprehensive income) is recognized in profit or loss for the
current period.
4. Determination of fair value of financial assets and financial liabilities
The Company adopts the valuation techniques applicable to the current situations and with sufficient
data available and support of other information, to determine the fair value of financial assets and financial
liabilities. The Company classifies the inputs used by the valuation techniques in the following levels and
uses them in turn:
(1) Level 1 inputs: quoted market price (unadjusted) in an active market for an identical asset or
liability available at the date of measurement;
(2) Level 2 inputs: inputs other than inputs included within Level 1 that are observable directly or
indirectly. This category includes quoted prices for similar assets or liabilities in active markets, quoted
prices for identical or similar assets or liabilities in inactive markets, observable inputs other than quoted
prices (such as interest rate and yield curves observable during regular intervals of quotation), and inputs
validated by the market;
(3) Level 3 inputs: inputs that are unobservable. This category includes interest rate or stock volatility
that cannot be directly observed or validated by observable market data, future cash flows from retirement
obligation incurred in business combinations, and financial forecasts made using own data.
5. Impairment of financial instruments
(1) Measurement and accounting treatment of impairment of financial instruments
The Company determines the impairment and assesses provision for impairment losses of financial
assets at amortized cost, investments in debt instruments at fair value through other comprehensive income,
contract assets, lease receivable, loan commitments other than financial liabilities designated at fair value
through profit or loss for the current period, and financial guarantee contracts other than financial liabilities
designated at fair value through profit or loss for the current period and financial liabilities arising as a
result of the transfer of financial assets not meeting the criteria for derecognition or continuing
involvement in the financial assets transferred, on the basis of expected credit losses.
Expected credit loss is the weighted average of credit losses on financial instruments taking into
account the possibility of default. Credit loss is the difference between all contractual cash flows receivable
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under the contract and estimated future cash flows discounted at the original effective interest rate, i.e. the
present value of all cash shortage, wherein the Company’s purchased or originated financial assets that
have become credit impaired are discounted at their credit-adjusted effective interest rate.
With respect to purchased or originated financial assets that have become credit impaired, at the
balance sheet date, the Company recognizes a loss allowance equal to the accumulated amount of changes
in lifetime expected credit losses since initial recognition.
With respect to lease receivable, accounts receivable and contract assets that are formed from
transactions under the Accounting Standards for Business Enterprises No. 14 - Revenue, the Company
uses the simple measurement method and recognizes a loss allowance equal to the lifetime expected credit
loss.
With respect to financial assets not using the measurement methods stated above, at each balance
sheet date, the Company assesses whether the credit risk has increased significantly since initial
recognition, and recognizes a loss allowance equal to the lifetime expected credit loss if the credit risk has
increased significantly since initial recognition, or to the expected credit losses within the next 12 months
if the credit risk has not increased significantly since initial recognition.
The Company uses reasonable and supportable information, including forward-looking information,
and compares the possibility of default at the balance sheet date with the possibility of default upon initial
recognition, to determine whether the credit risk of the financial instruments has increased significantly
since initial recognition.
At the balance sheet date, if the Company determines that a financial instrument only has low credit
risk, the Company assumes that its credit risk has not increased significantly since initial recognition.
The Company assesses expected credit risk and measures expected credit losses of financial
instruments individually or collectively. When assessing the financial instruments collectively, the
Company includes the financial instruments in different groups according to their common risk
characteristics.
At each balance sheet date, the Company re-assesses the expected credit losses, with the amount of
increase in or reversal of loss allowance recognized in profit or loss for the current period as impairment
losses or gains. With respect to a financial asset at amortized cost, its carrying amount recorded in the
balance sheet is written off against the loss allowance. With respect to an investment in debt instruments
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at fair value through other comprehensive income, the Company recognizes the loss allowance in other
comprehensive income, without reducing its carrying amount.
(2) Financial instruments for which expected credit risk is assessed and expected credit losses are
measured collectively
Item Basis for Method for measuring expected credit losses
determining
a group
Other receivables
- group of deposit
and security
receivable Nature of
Other other
receivables- receivables
group of
By reference to historic credit loss experience, and taking into
withholding
account the current situations and prediction of future economic
receivable
conditions, calculate the expected credit losses according to the
Other receivables
Receivables default risk exposure and 12-month or rate of lifetime expected
- group of
from related credit loss.
receivables from
parties in the
related parties in
scope of
the scope of
consolidation
consolidation
Other receivables
- grouping by Aging
aging
(3) Accounts receivable for which expected credit losses are measured collectively and contract
assets
1) Groups and method for measuring expected credit losses
Item Basis for determining a group Method for measuring expected
credit losses
Bank acceptance bills receivable By reference to historic credit
loss experience, and taking into
Commercial acceptance bills Type of notes
account the current situations
receivable and prediction of future
Accounts receivable - group of Receivables from related economic conditions, calculate
receivables from related parties parties in the scope of the expected credit losses
in the scope of consolidation consolidation according to the default risk
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exposure and rate of lifetime
expected credit loss.
By reference to historic credit
loss experience, and taking into
account the current situations
and prediction of future
Accounts receivable - grouping economic conditions, prepare a
Aging
by aging comparison table of the aging of
accounts receivable and rate of
lifetime expected credit loss,
and calculate the expected credit
losses.
By reference to historic credit
loss experience, and taking into
account the current situations
Receivables from related
Contract assets - group of and prediction of future
receivables from related parties parties in the scope of economic conditions, calculate
in the scope of consolidation the expected credit losses
consolidation
according to the default risk
exposure and rate of lifetime
expected credit loss.
By reference to historic credit
loss experience, and taking into
account the current situations
and prediction of future
economic conditions, prepare a
Contract assets - group of aging Aging
comparison table of the aging of
contract assets and rate of
lifetime expected credit loss,
and calculate the expected credit
losses.
By reference to historic credit
loss experience, and taking into
account the current situations
and prediction of future
Long-term receivables - economic conditions, prepare a
Aging
grouping by aging comparison table of the aging of
long-term receivables and rate
of lifetime expected credit loss,
and calculate the expected credit
losses.
2) Accounts receivable - comparison table of the age of accounts receivable and rate of lifetime
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expected credit loss
Accounts receivable
Aging Rate of expected credit loss for accounts
receivable (%)
Within 1 year (including, the same below) 5.00
1-2 years 25.00
2-3 years 50.00
Over 3 years 100.00
6. Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are presented in the balance sheet separately, without
offsetting each other. However, the Company may represent the financial assets and financial liabilities
on a net basis in the balance sheet only if: (1) the Company has a legal right that is currently enforceable
to set off the recognized financial assets and financial liabilities, and (2) the Company intends either to
settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously.
With respect to the transfer of financial assets not meeting the criteria for derecognition, the Company
does not offset the financial assets transferred against the relevant liabilities.
11. Notes receivable
Method for recognition of expected credit losses of notes receivable and relevant accounting
treatments
√ Applicable □ N/A
The Company’s method for recognition of expected credit losses of notes receivable and relevant
accounting treatments are disclosed in V.10 of Section X in details.
12. Accounts receivable
Method for recognition of expected credit losses of accounts receivable and relevant accounting
treatments
√ Applicable □ N/A
The Company’s method for recognition of expected credit losses of accounts receivable and relevant
accounting treatments are disclosed in V.10 of Section X in details.
13. Receivables financing
√ Applicable □ N/A
The Company’s accounting policies on receivables financing are disclosed in V.10 of Section X in details.
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14. Other receivables
Method for recognition of expected credit losses of other receivables and relevant accounting
treatments
√ Applicable □ N/A
The Company’s method for recognition of expected credit losses of other receivables and relevant
accounting treatments are disclosed in V.10 of Section X in details.
15. Inventories
√ Applicable □ N/A
1. Categories of inventories
Inventories mainly include finished goods or commodities held for sale in the ordinary course of
businesses, work in progress in the process of production or materials and supplies consumed in the
process of production or rendering service.
2. Costing method of inventories transferred out
The actual cost of inventories upon delivery is calculated using the moving weighted average method.
3. Basis for determining net realizable value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. If
the net realizable value is below the cost of inventories, a provision for decline in value of inventories is
made. For inventories directly used for sale, the net realizable value is determined as the estimated selling
price in the ordinary course of business less the estimated costs necessary to make the sale and relevant
taxes. For inventories required for processing, the net realizable value is determined as the estimated
selling price of finished goods in the ordinary course of business less the estimated costs of completion,
and the estimated costs necessary to make the sale and relevant taxes. As at the balance sheet date, if in
the same item of inventories, some are agreed with contractual prices while the others are not, the net
realizable value for such inventories is determined separately, and compared with the costs of the two parts
of inventories distinctively, as to determine the provisions or reversal of provisions for decline in value of
inventories separately.
4. Inventory counting system
The perpetual inventory system is maintained for stock system.
5. Amortization method for low cost and short-lived consumable items and packaging materials
(1) Low cost and short-lived consumable items
Low cost and short-lived consumable items are amortized using the immediate write-off method.
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(2) Packaging materials
Low cost and short-lived consumable items are amortized using the immediate write-off method.
(XII) Contract costs
Assets related to contract costs include contract acquisition costs and contract performance costs.
If costs incurred by the Company for acquiring a contract are expected to be recovered, such costs
are recognized as an asset as contract acquisition costs.
The costs incurred by the Company for performing a contract are recognized as an asset of contract
performance costs if they do not fall within the scope of other relevant standards, like inventories, fixed
assets, or intangible assets, and meet all the following conditions:
1. The cost is directly related to a present or expected contract, including direct labor, direct materials,
manufacturing expenses (or similar expenses), costs explicitly to be borne by customers, and other costs
arising from the contract;
2. The cost leads to the increase in resources of the Company for fulfilling its performance obligations
in the future; and
3. The cost is expected to be recovered.
Assets related to contract costs are amortized on the same basis as recognizing incomes from goods
related to assets, and are recognized in the profit or loss for the current period.
If the book value of the assets related to contract costs is greater than the consideration expected to
be acquired by transferring the goods or services related to such assets less the costs expected to be
incurred, the Company makes provision for impairment for the exceeding portion and recognizes
impairment loss of assets. In the event of a change in the factors causing impairment in a prior period, so
that the consideration expected to be acquired by transferring the goods or services related to such assets
less the costs expected to be incurred is greater than the book value of such assets, the provision for
impairment made for such assets is reversed and recognized in the profit or loss for the current period;
provided, however, that the reversed book value of such assets shall not exceed the book value of such
assets at the reversal data on the assumption that no provision for impairment has been made.
16. Contract assets
(1). Recognition method and criteria of contract assets
√ Applicable □ N/A
The Company presents contract assets or contract liabilities in the balance sheet according to the
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relationship between the performance of contractual obligations and payment by customers. Contract
assets and contract liabilities under a same contract are presented at the net amount after offsetting each
other.
Rights owned by the Company for unconditionally collecting the consideration from customers (that
is, depending only on the time) are presented as receivables, and rights for collecting the consideration for
goods that have been transferred to customers (depending on other factors than the time) are presented as
contract assets.
(2). Method for recognition of expected credit losses of contract assets and relevant accounting
treatments
√ Applicable □ N/A
The method for recognition of expected credit losses of contract assets and relevant accounting treatments
are disclosed in V.10 of Section X in details.
17. Held-for-sale assets
□ Applicable √ N/A
18. Debt investments
(1). Method for recognition of expected credit losses of debt investments and relevant accounting
treatments
□ Applicable √ N/A
19. Other debt investments
(1). Method for recognition of expected credit losses of other debt investments and relevant
accounting treatments
□ Applicable √ N/A
20. Long-term receivables
(1). Method for recognition of expected credit losses of long-term receivables and relevant
accounting treatments
√ Applicable □ N/A
The method for recognition of expected credit losses of long-term receivables and relevant accounting
treatments are disclosed in V.10 of Section X in details.
21. Long-term equity investments
√ Applicable □ N/A
1. Judgments on joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when
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decisions about the relevant activities of such arrangement require unanimous consent of the parties
sharing control. Significant influence is the power to participate in the financial and operating policy
making of an entity, but does not control or jointly control over those policies.
2. Determination of investment cost
(1) In case of an equity investment acquired through a business combination involving entities under
common control, if the acquirer pays consideration for the business combination by cash, transfer of non-
monetary assets, assumption of liabilities or issuance of equity securities, the initial investment cost of the
long-term equity investment is the Company’s share of the carrying amount of the owners’ equity of the
acquiree in the consolidated financial statements of the ultimate controller at the date of combination. The
difference between: (i) the initial investment cost of the long-term equity investment; and (ii) the carrying
amount of the consideration paid for the combination or the total par value of the shares issued is treated
as an adjustment to the capital reserve. In case the capital reserve is not sufficient to absorb the difference,
the remaining balance is adjusted against the retained earnings.
For a long-term equity investment acquired through business combination involving enterprises
under common control that is achieved through multiple transactions by steps, the Company shall judge
whether such transactions constitute a package deal. If such transactions constitute a package deal, the
Company accounts for such transactions as one transaction to acquire control. If such transactions do not
constitute a package deal, the initial investment cost is the Company’s share of the carrying amount of the
owners’ equity of the acquiree in the consolidated financial statements of the ultimate controller at the date
of combination. The difference between: (i) the initial investment cost of the long-term equity investment
at the date of combination; and (ii) the sum of the carrying amount of long-term equity investment before
the combination and the carrying amount of the consideration paid for acquisition of the additional shares
at the date of combination is adjusted against the capital reserve. In case the capital reserve is not sufficient
to absorb the difference, the remaining balance is adjusted against the retained earnings.
(2) In case of an equity investment acquired through a business combination not involving entities
under common control, the initial investment cost is the fair value of the carrying amount of the
consideration paid for the combination at the date of acquisition.
For a long-term equity investment acquired through a business combination not involving entities
under common control and achieved through multiple transactions by steps, the accounting treatment
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thereof in the separate financial statements is different from that in the consolidated financial statements
as stated below:
1) In the separate financial statements, the sum of the carrying amount of the equity investment
originally held in the acquiree and the additional investment cost incurred is recorded as the initial
investment cost of the equity investment changed into the cost method.
2) In the consolidated financial statements, it is required to judge whether such transactions constitute
a package deal. If such transactions constitute a package deal, the Company accounts for such transactions
as one transaction to acquire control. If such transactions do not constitute a package deal, the Company
re-measures the fair value of the equity held in the acquiree prior to the date of acquisition, and records
the difference between the fair value and the carrying amount as investment income for the current period;
if the equity held in the acquiree prior to the date of acquisition involves other comprehensive income
under equity method, such other comprehensive income is transferred to the income of the period in which
the date of acquisition falls, except for other comprehensive income arising from re-measurement of
changes in net liabilities or net assets of defined benefit plans.
(3) In the event of no business combination: The initial investment cost is the purchase price actually
paid if it is acquired by cash, or the fair value of the equity securities issued if it is acquired through
issuance of equity securities, or determined in accordance with the Accounting Standards for Business
Enterprises No. 12 -- Debt Restructuring if it is acquired through debt restructuring, or determined in
accordance with the Accounting Standards for Business Enterprises No. 7 -- Exchange of Non-monetary
Assets if it is acquired through exchange of non-monetary assets.
3. Subsequent measurement and recognition of profit or loss
Long-term equity investments in investees are measured using the cost method. Long-term equity
investments in associates and joint ventures are measured using the equity method.
22. Investment properties
N/A
23. Fixed assets
(1). Criteria for recognition
√ Applicable □ N/A
Fixed assets are tangible assets held for production of goods, rendering of service, lease or operation
and management with a useful life of more than one accounting year. A fixed asset is recognized if the
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economic benefits relating to it are very likely to flow to the Company and its cost can be reliably measured.
(2). Method of depreciation
√ Applicable □ N/A
Annual
Depreciation Residual value
Category Depreciation depreciation rate
period (years) rate (%)
(%)
Machinery and Straight line 5 5.00 19.00
equipment method
Transportation Straight line 5 5.00 19.00
equipment method
Electronic Straight line 3-5 5.00 19.00-31.67
equipment and method
others
Operating leased Straight line 3, 7 5.00 31.67, 13.57
equipment method
(3). Identification basis, valuation method and depreciation method for fixed assets acquired under
finance leases
□ Applicable √ N/A
24. Construction in progress
√ Applicable □ N/A
1. A construction in progress is recognized if the economic benefits relating to it are very likely to
flow to the Company and its cost can be reliably measured. A construction in progress is measured at the
actual cost incurred before it is completed and ready for intended use.
2. When a construction in progress is ready for intended use, it is transferred to fixed assets at its
actual construction cost. A construction in progress that is ready for intended use but the final settlement
of which has not yet been completed is transferred to fixed assets at estimated value first, and after the
completion of final settlement, the estimated value is adjusted according to the actual cost, but the accrued
depreciation is not adjusted.
25. Borrowing costs
√ Applicable □ N/A
1. Recognition for capitalization of borrowing costs
Borrowing costs incurred by the Company that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other
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borrowing costs are recognized as expenses and charged to the current profit and loss.
2. Capitalization period of borrowing costs
(1) Borrowing expenses are capitalized when all of the following conditions are met: 1) capital
expenditure has been incurred; 2) borrowing expenses have been incurred; and 3) activities relating to the
acquisition, construction or production of the asset that are necessary to prepare the asset for its intended
use or sale have commenced.
(2) Where acquisition and construction or production of a qualified asset is interrupted abnormally
and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be
suspended. The borrowing expenses incurred during these periods shall be recognized as expenses for the
current period until the acquisition, construction or production of a qualifying asset is resumed.
(3) Capitalization of borrowing expenses shall be ceased when acquisition, construction or production
of the qualifying asset has prepared for its intended use or sale.
3. Capitalization rate and capitalization amount of borrowing expenses
As for the specific borrowings for the acquisition and construction or production of assets qualifying
for capitalization, the to-be-capitalized amount of interests shall be determined in light of the actual cost
incurred on the current specific borrowings (including the amortization of discounts or premiums
determined using the effective interest method) minus the income of interests earned from the unused
borrowings by depositing it in the bank or investment income from such borrowing by making it as a
temporary investment; where a general borrowing is used for the acquisition and construction or
production assets qualifying for capitalization, the Company shall calculate and determine the to-be-
capitalized amount of interests on the general borrowing by multiplying the weighted average value of the
accumulative expenditures to asset minus the specific borrowing by the capitalization rate of the general
borrowing used.
26. Biological assets
□ Applicable √ N/A
27. Oil and gas assets
□ Applicable √ N/A
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28. Right-of-use assets
√ Applicable □ N/A
Right-of-use assets are initially measured at cost; the cost includes: 1) initial measurement amount of
lease liabilities; 2) lease payments made on or before the commencement date of the lease term, where
relevant acquired amount related to lease incentives is excluded if there are lease incentives; 3) initial
direct expenses incurred by the lessee; and 4) costs expected to be incurred by the lessee for dismantling
and removing the leased assets, restoring the place of the leased assets, or restoring the leased assets to the
state provided under lease provisions.
The Company depreciates right-of-use assets by using the straight-line method. If there is reasonable
certainty that the lessee will obtain ownership of the leased asset by the end of the lease term, the Company
depreciates the leased asset over its useful life. If there is no reasonable certainty that the lessee will obtain
ownership of the leased asset by the end of the lease term, the Company depreciates the leased asset over
the shorter of the lease term and its remaining useful life.
29. Intangible assets
(1). Measurement, service life and impairment test
√ Applicable □ N/A
1. Intangible assets include land use rights, patents, and software etc. and are measured at cost initially.
2. An intangible asset with a finite useful life is amortized over its useful life in a systematical and
rational expected realization of economic benefits relative to the intangible asset, or is amortized using the
straight-line method if it is impossible to determine expected realization reliably. The specific years are as
follows:
Item Amortization period (years)
Land use rights 30
Patents 10
Software 3-5
(2). Accounting policy on internal research and development expenditures
□ Applicable √ N/A
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30. Impairment of long-term assets
√ Applicable □ N/A
For long-term equity investments, fixed assets, construction in progress, right-of-use assets,
intangible assets with a finite useful life and other long-term assets, if there’s an indication of impairment
at the balance sheet date, the Company assesses their recoverable amount. Goodwill arising from business
combinations and intangible assets with an infinite useful life are tested for impairment every year
regardless of whether there’s an indication of impairment. Goodwill is tested for impairment together with
the relevant groups of assets or combinations of groups of assets.
If the recoverable amount of a long-term asset is less than its carrying amount, the difference is
measured as impairment loss of the asset and recognized in profit or loss for the current period.
31. Long-term prepaid expenses
√ Applicable □ N/A
Long-term prepaid expenses are expenses that have already been incurred but should be amortized
over a period of more than one year (excluding one year). Long-term prepaid expenses are stated as the
amount actually incurred and shall be amortized evenly by stages within the benefit period or specified
period. If an item of long-term prepaid expenses will not benefit the subsequent periods, the amortized
value of the item that has not yet been amortized is wholly transferred to profit or loss for the current
period.
32. Contract liabilities
(1). Recognition method for contract liabilities
√ Applicable □ N/A
The Company presents contract assets or contract liabilities in the balance sheet according to the
relationship between the performance of contractual obligations and payment by customers. Contract
assets and contract liabilities under a same contract are presented at the net amount after offsetting each
other.
The obligations of the Company for transferring goods to customers corresponding to considerations
that have been received or receivable are presented as contract liabilities.
33. Employee benefits
(1). Accounting treatment of short-term employee benefits
√ Applicable □ N/A
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1. Employee benefits include short-term benefits, post-employment benefits, termination benefits and
other long-term employee benefits.
2. Accounting treatment of short-term employee benefits
The short-term employee benefits actually incurred are recognized as liabilities in the accounting
period during which employee services are rendered, and included in profit or loss for the current period
or the cost of related assets.
(2). Accounting treatment of post-employment benefits
√ Applicable □ N/A
Post-employment benefits are classified into defined contribution plans and defined benefit plans.
(1) In the accounting period during which employee services are rendered, the amount in contribution
as calculated according to the defined contribution plan is recognized as liabilities and included in profit
or loss for the current period or the cost of related assets.
(2) The accounting treatment of a defined benefit plan generally involves the following steps:
1) According to the projected unit credit method, use the unbiased and consistent actuarial
assumptions to estimate demographic variables and financial variables, measure the obligation arising
from the defined benefit plan and determine the period to which the relevant obligation belongs.
Meanwhile, discount the obligation arising from the defined benefit plan, in order to determine the present
value of the defined benefit plan obligation and the current service cost;
2) If the defined benefit plan has assets, the deficit or surplus resulting after reducing the present
value of the defined benefit plan obligation by the fair value of the defined benefit plan is recognized as a
net liability or asset of the defined benefit plan. If the defined benefit plan has a surplus, the net assets of
the defined benefit plan are measured at the lower of surplus in the defined benefit plan and asset ceiling;
3) At the end of the reporting period, the cost of employee benefits arising from the defined benefit
plan is recorded as service cost, net interest on the net liabilities or net assets of the defined benefit plan,
and changes arising from re-measurement of the net liabilities or net assets of the defined benefit plan,
wherein the service cost and the net interest on the net liabilities or net assets of the defined benefit plan
are included in profit or loss for the current period or the cost of related assets, and the changes arising
from re-measurement of the net liabilities or net assets of the defined benefit plan are included in other
comprehensive income, which will not be reserved to profit or loss in subsequent periods, but may be
transferred within the scope of equity.
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(3). Accounting treatment of termination benefits
√ Applicable □ N/A
If dismissal benefits are provided to employees, the liabilities of employee benefits from the dismissal
benefits are recognized at the earlier of the following and are recognized in the profit or loss for the current
period: (1) when the Company cannot unilaterally withdraw the dismissal benefits provided due to the
cancellation of the labor relationship or lay-off suggestions; (2) when the Company recognizes costs or
expenses in connection with restructuring involving dismissal benefits.
(4). Accounting treatment of other long-term employee benefits
√ Applicable □ N/A
Other long-term employee benefits are accounted for in accordance with the provisions applicable to
defined contribution plans if they are qualified as defined contribution plans, otherwise, are accounted for
in accordance with the provisions applicable to defined benefit plans. In order to simplify the accounting
treatment, the total net amount of the cost of employee benefits arising from the defined benefit plans that
is recorded as service cost, net interest on the net liabilities or net assets of other long-term employee
benefits, changes arising from re-measurement of the net liabilities or net assets of other long-term
employee benefits and other components is included in profit or loss for the current period or the cost of
related assets.
34. Leasing liabilities
√ Applicable □ N/A
On the lease inception date, the Company recognizes the present value of lease payments not paid as
lease liabilities. The interest rate implicit in the lease is used as the discount rate for calculating the present
value of the lease payments; if the interest rate implicit in the lease cannot be determined, the incremental
borrowing interest rate of the Company is used as the discount rate. The difference between the lease
payments and the present value thereof is considered as unrecognized finance charges; in each period
during the lease term, interest expenses are recognized in the profit or loss for the current period according
to the discount rate of the present value of recognized lease payments. Variable lease payments not
included in measurement of lease liabilities are recognized in the profit or loss for the current period when
the actually arise.
Where, after the lease inception date, there are changes in the substantial fixed payment, the payables
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expected on the basis of the residual value of the guarantee, the index or ratio used for determining the
lease payment, the evaluation results or actual exercising of purchase option, renewal option or lease
termination option, the Company re-measures the lease liability as per the present value of the lease
payment after change, and adjust the book value of the use right assets accordingly. Where the book value
of the use right asset has been reduced to zero, but the lease liability still needs to be further reduced, the
Company includes the residual amount in the current profit or loss.
35. Provisions
√ Applicable □ N/A
1. An obligation arising from any external guarantee, instigation, product quality warranty, onerous
contract or other contingencies is recognized as a provision if it is a present obligation assumed by the
Company, and it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation, and the amount of the obligation can be reliably measured.
2. The amount recognized as a provision is the best estimate of the consideration required to settle
the present obligation. The carrying amount of provisions is reviewed at the balance sheet date.
36. Share-based payments
√ Applicable □ N/A
1. Categories of share-based payments
Share-based payments include equity-settled share-based payments and cash-settled share-based
payments
2. Accounting treatment for implementation, modification and termination of share-based payment
plan
(1) Equity-settled share-based payments
Equity-settled share-based payments in exchange for services rendered by employees that can be
executed immediately upon being granted, are measured at the fair value of the equity instruments at the
grant date, and recognized as related costs or expenses with a corresponding adjustment to capital reserve.
At each balance sheet date during the vesting period, equity-settled share-based payments in exchange for
services rendered by employees that cannot be executed until services in the vesting period are completed
or required performance conditions are satisfied, are measured at the fair value of the equity instruments
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at the grant date based on the best estimate of exercisable numbers of equity instruments, and recognized
as related costs or expenses with a corresponding adjustment to capital reserve.
For equity-settled share-based payments in exchange for services rendered by other parties, if the fair
value of services from other parties can be measured reliably, they are measured at the fair value of services
from other parties at the date when such services are received. If the fair value of services from other
parties cannot be measured reliably but the fair value of the equity instruments can be measured reliably,
they are measured at the fair value of the equity instruments at the date when such services are received.
The fair value of the equity instruments are recognized as related costs or expenses, with a corresponding
increase in owners’ equity.
(2) Cash-settled share-based payments
Cash-settled share-based payments in exchange for services rendered by employees that can be
executed immediately upon being granted, are recognized as related costs or expenses based on the fair
value of liabilities assumed by the Company at the grant date, with a corresponding increase in liability.
At each balance sheet date during the vesting period, cash-settled share-based payments in exchange for
services rendered by employees that cannot be executed until services in the vesting period are completed
or required performance conditions are satisfied, are measured at the fair value of liabilities assumed by
the Company based on the best estimate of exercisable conditions, and recognized as related costs or
expenses and relevant liabilities.
(3) Modification and termination of share-based payment plan
In case the Company modifies a share-based payment plan, if the modification increases the fair value
of the equity instruments granted, the Company will include the incremental fair value of the equity
instruments granted in the measurement of the amount recognized for services received. If the
modification increases the number of the equity instruments granted, the Company will include the fair
value of additional equity instruments granted in the measurement of the amount recognized for services
received. If the Company modifies the exercisable conditions of the share-based payment plan in a manner
beneficial to the employee, the Company will consider the modified exercisable conditions when dealing
with exercisable conditions.
If the modification decreases the fair value of the equity instruments granted, the Company will
continue to measure the amount recognized for services received at the fair value of the equity instruments
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at the grant date without including the decremental fair value of the equity instruments. If the modification
decreases the number of the equity instruments granted, the Company will treat the decreased number as
the cancelled number of equity instruments granted. If the Company modifies the exercisable conditions
in a manner unbeneficial to the employee, the Company will not consider the modified exercisable
conditions when dealing with exercisable conditions.
If cancellation or settlement of the equity instruments granted occurs (not due to unsatisfaction of
exercisable conditions) during the vesting period, the Company will account for the cancellation or
settlement of the equity instruments granted as an acceleration of vesting, and recognize immediately the
amount that otherwise would have been recognized over the remainder of the vesting period.
37. Preferred shares, perpetual bonds and other financial instruments
□ Applicable √ N/A
38. Revenue
(1). Accounting policies adopted for income recognition and measurement
√ Applicable □ N/A
1. Principles for revenue recognition
At the beginning date of a contract, the Company assesses the contract to identify individual
performance obligations contained in the contract and determine whether individual obligations are to be
performed during a period of time or at a specific time point.
An obligation meeting one of the following conditions is one to be performed within a period of time,
and the remaining are obligations to be performed at a specific time point: (1) the customer receives and
consumes the economic benefits from the performance of the Company when the Company performs its
obligations; (2) the customer can control the goods in progress during the performance of the Company;
or (3) the goods generated during the performance process of the Company have irreplaceable uses, and
the Company is entitled to payment for the portion completed during the entire contract term.
The Company recognizes revenue according to the performance progress during the period of time
for obligations to be performed during a period of time. If the performance progress cannot be determined
reasonably, and the Company is expected to be paid based on the costs incurred, the Company recognizes
revenue according to the amount of costs incurred until the performance progress can be determined
reasonably. For obligations to be performed at a specific time point, the Company recognizes revenue
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when the customer receives the control over the relevant goods or services. The following will be
considered when determining whether the customer has obtained the control over the goods: (1) the
Company has the present rights of receiving payments for such goods, that is, the customer has the present
obligation of making payment for the goods; (2) the Company has transferred the legal title in the goods
to the customer, that is, the customer has acquired the legal title in the goods; (3) the Company has
transferred the physical goods to the customer, that is, the customer is in possession of the physical goods;
(4) the Company has transferred major risks and rewards of the legal title in the goods to the customer,
that is, the customer has acquired the major risks and rewards of the legal title in the goods; (5) the
customer has accepted the goods; and (6) there are other signs indicating that the customer has acquired
the control over the goods.
2. Principles of revenue measurement
(1) The Company measures the revenue according to the transaction price allocated to individual
performance obligations. The transaction price refers to the amount of the consideration expected to be
received by the Company on the basis of transferring goods or providing services to the customer,
excluding amounts collected on behalf of a third party and amounts expected to be refunded to the
customer.
(2) If a contract contains a variable consideration, the Company determines the best estimate of the
variable consideration according to the expected value or the most likely amount; however, the transaction
price containing the variable consideration does not exceed the amount for which no material reversal of
recognized revenue is highly probable when relevant uncertainty is eliminated.
(3) If a contract contains a major financing portion, the Company determines the transaction price as
the amount payable in cash when the customer obtains the control over the goods or services. The
difference between the transaction price and contract consideration is amortized using the effective interest
method during the term of the contract. If the Company expects that the interval between the acquisition
of the goods or services by the customer and the payment of prices by the customer will not exceed one
year from the commencement date of the contract, no significant financing factor is considered.
(4) If a contract contains two or more performance obligations, at the beginning date of the contract,
the Company allocates the transaction price to individual performance obligations according to the relative
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proportion of the individual sale prices of the goods promised under such individual performance
obligations.
3. Specific methods for revenue recognition
(1) Revenue from sales of goods
Revenue from sales of goods denotes contractual obligations to be performed at a time point. Our
sales include sales to the domestic market and sales to foreign markets.
Goods sold to the domestic market: 1) Under the direct sale model and the distribution mode, the
Company recognizes the revenue when the goods sent have been delivered to customers with customers’
receipt given to the Company. For goods sold attached with return conditions, the Company recognizes
the revenue according to the amount of the consideration expected to be received by the Company on the
basis of transferring goods to the customer, and recognizes liabilities to write off the revenue according to
the expected amount to be refunded due to the return of goods; for goods required for installment and
inspection after sales, the Company recognizes the revenue when such goods have been installed and
inspected with customers’ acceptance certificate given to the Company. If the Company shares profits
from sales of product to downstream end customers, the Company recognizes the revenue at the goods
price agreed between the parties upon the delivery of goods to the customer and reconciliation, and
recognizes shared revenue according to the share profit reconciliation statement when the profits from
sales of goods are realized. 2) Under the commissioned sales mode, the Company recognizes the revenue
when it receives the list of commissioned sales from the customer.
Goods exported to overseas markets: The Company mainly adopts FCA for export of goods. Under
this mode, the Company recognizes revenue when it delivers goods at the designated location with export
customs clearance procedures completed.
(2) Other incomes
Other revenues denote contractual obligations to be performed at a time point/during a specific period
of time. For installation services provided by the Company, the Company recognizes the revenue when it
has completed the services and received customers’ acceptance certificate; for repair and maintenance
services provided by the Company, the Company recognizes the revenue when it has completed the
services and received payments; for patrol inspection services provided by the Company, the Company
determines the service performance progress by using the output approach, and recognizes the revenue
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according to the performance progress; for patent license services provided by the Company, the Company
recognizes the revenue when the patent license is delivered; for technology development services provided
by the Company, the Company recognizes the revenue when it has completed the services or when the
agreed time point of service acceptance is reached.
(2). Description of differences in the accounting policies in revenue recognition due to different
operating modes adopted for the same business type
□ Applicable √ N/A
39. Contract costs
√ Applicable □ N/A
Assets related to contract costs include contract acquisition costs and contract performance costs.
If costs incurred by the Company for acquiring a contract are expected to be recovered, such costs
are recognized as an asset as contract acquisition costs.
The costs incurred by the Company for performing a contract are recognized as an asset of contract
performance costs if they do not fall within the scope of other relevant standards, like inventories, fixed
assets, or intangible assets, and meet all the following conditions:
1. The cost is directly related to a present or expected contract, including direct labor, direct materials,
manufacturing expenses (or similar expenses), costs explicitly to be borne by customers, and other costs
arising from the contract;
2. The cost leads to the increase in resources of the Company for fulfilling its performance obligations
in the future; and
3. The cost is expected to be recovered.
Assets related to contract costs are amortized on the same basis as recognizing incomes from goods
related to assets, and are recognized in the profit or loss for the current period.
If the book value of the assets related to contract costs is greater than the consideration expected to
be acquired by transferring the goods or services related to such assets less the costs expected to be
incurred, the Company makes provision for impairment for the exceeding portion and recognizes
impairment loss of assets. In the event of a change in the factors causing impairment in a prior period, so
that the consideration expected to be acquired by transferring the goods or services related to such assets
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less the costs expected to be incurred is greater than the book value of such assets, the provision for
impairment made for such assets is reversed and recognized in the profit or loss for the current period;
provided, however, that the reversed book value of such assets shall not exceed the book value of such
assets at the reversal data on the assumption that no provision for impairment has been made.
40. Government grants
√ Applicable □ N/A
1. Government grants are recognized if (1) the Company meets the conditions attaching to the
government grants; and (2) the Company will receive the government grants. Government grants in the
form of monetary assets are measured at the amount received or receivable. Government grants in the
form of non-monetary assets are measured at fair value, or if their fair value is unavailable, at nominal
amount.
2. Determination and accounting treatment of government grants related to assets
Government grants related to assets are government grants which are offered for purchasing,
constructing or otherwise acquiring long-term assets as provided by the applicable government documents.
In the absence of such express provision in the applicable government documents, government grants
related to assets are those with a primary condition that the Company should purchase, construct or
otherwise acquire long-term assets. Government grants related to assets are offset against the carrying
amount of the relevant assets or recognized as deferred. Government grants related to assets recognized
as deferred shall be included in profit or loss over the service life of the relevant assets on a reasonable
and systemic basis. Government grants measured at nominal amount are directly recognized in profit or
loss for the current period. In case of sale, transfer, retirement or damage of the relevant assets before the
end of intended service life, the balance of the unallocated deferred is transferred to profit or loss for the
period in which the assets are disposed of.
3. Determination and accounting treatment of government grants related to income
Government grants related to income are government grants other than those related to assets.
Government grants related to both assets and income in which it is difficult to make a distinction between
the portion related to assets and the portion related to income are wholly classified as government grants
related to income. Government grants related to income as compensation for expenses or losses to be
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incurred in subsequent periods are recognized as deferred and in the period for recognizing the relevant
costs, expenses or losses, included in profit or loss for the current period or offset against the relevant
costs. Government grants related to income as compensation for expenses or losses already incurred are
directly included in profit or loss for the current period or offset against the relevant costs.
4. Government grants related to daily operations of the Company are recognized in other income or
offset against the relevant costs and expenses depending on the nature of economic business. Government
grants not related to daily operations of the Company are recognized in non-operating income or expenses.
5. Accounting treatment of policy preferential loans and interest subsidies
(1) If the Ministry of Finance appropriates the interest subsidies to the lending bank, who then grants
the loan to the Company at the policy preferential rate, the loan is stated as the amount actually received,
and the borrowing cost is calculated according to the principal of the loan and the policy preferential rate.
(2) If the Ministry of Finance directly appropriates the interest subsidies to the Company, the interest
subsidies are offset against the borrowing cost.
41. Deferred tax assets and deferred tax liabilities
√ Applicable □ N/A
1. The difference between the tax base of an asset or liability and its carrying amount (or in case of
an item not recognized as asset or liability whose tax base can be determined according to the applicable
tax law, the difference between its tax base and carrying amount) is recognized as a deferred tax asset or
deferred tax liability according to the tax rate applicable to the period in which the asset or liability is
expected to be recovered or settled.
2. Deferred tax assets are recognized to the extent of the amount of income tax payable that will be
available in future periods against which deductible temporary differences are deductible. At the balance
sheet date, deferred tax assets not recognized in prior periods are recognized if there’s conclusive evidence
that it is probable that sufficient taxable income will be available in future periods against which the
deductible temporary differences are deductible.
3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced to
the extent that it is no longer probable that sufficient taxable income will be available in future periods to
allow the benefit of the deferred tax assets to be utilized. If it is probable that sufficient taxable income
will be available, the reduced amount is reversed.
4. The income taxes and deferred taxes are included in profit or loss for the current period as income
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tax expenses or gains, except the income taxes arising from any: (1) business combination; or (2)
transaction or event directly recognized in owners’ equity.
42. Leases
(1). Accounting treatment of operating leases
□ Applicable √ N/A
(2). Accounting treatment of finance leases
□ Applicable √ N/A
(3). Method for determination and accounting treatments of lease under the New Lease Standard
√ Applicable □ N/A
1. The Company as the lessee
On the lease inception date, the Company recognizes a lease with a lease term of not more than 12
months and not containing an option as a short-term lease; and recognizes a low-value assets lease for a
lease in which individually leased assets have a low value when they are new. If the Company subleases
or expects to sublease the leased asset, the original lease is not recognized as a low-value assets lease.
For short-term leases and low-value assets leases, the Company recognizes lease payment in the costs
of relevant assets or the profit or loss for the current period by using the straight-line method in each period
during the lease term.
Except for short-term leases and low-value assets leases subject to simplified treatment above, on the
lease inception date, the Company recognizes right-of-use assets and lease liabilities for leases.
(1) Right-of-use assets
Right-of-use assets are initially measured at cost; the cost includes: 1) initial measurement amount of
lease liabilities; 2) lease payments made on or before the commencement date of the lease term, where
relevant acquired amount related to lease incentives is excluded if there are lease incentives; 3) initial
direct expenses incurred by the lessee; and 4) costs expected to be incurred by the lessee for dismantling
and removing the leased assets, restoring the place of the leased assets, or restoring the leased assets to the
state provided under lease provisions.
The Company depreciates right-of-use assets by using the straight-line method. If there is reasonable
certainty that the lessee will obtain ownership of the leased asset by the end of the lease term, the Company
depreciates the leased asset over its useful life. If there is no reasonable certainty that the lessee will obtain
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ownership of the leased asset by the end of the lease term, the Company depreciates the leased asset over
the shorter of the lease term and its remaining useful life.
(2) Leasing liabilities
On the lease inception date, the Company recognizes the present value of lease payments not paid as
lease liabilities. The interest rate implicit in the lease is used as the discount rate for calculating the present
value of the lease payments; if the interest rate implicit in the lease cannot be determined, the incremental
borrowing interest rate of the Company is used as the discount rate. The difference between the lease
payments and the present value thereof is considered as unrecognized finance charges; in each period
during the lease term, interest expenses are recognized in the profit or loss for the current period according
to the discount rate of the present value of recognized lease payments. Variable lease payments not
included in measurement of lease liabilities are recognized in the profit or loss for the current period when
the actually arise.
Where, after the lease inception date, there are changes in the substantial fixed payment, the payables
expected on the basis of the residual value of the guarantee, the index or ratio used for determining the
lease payment, the evaluation results or actual exercising of purchase option, renewal option or lease
termination option, the Company re-measures the lease liability as per the present value of the lease
payment after change, and adjust the book value of the use right assets accordingly. Where the book value
of the use right asset has been reduced to zero, but the lease liability still needs to be further reduced, the
Company includes the residual amount in the current profit or loss.
2. The Company as the lessor
On the lease inception date, the Company classifies a lease in which almost all the risks and rewards
related to the ownership of the leased asset have been substantially transferred as a finance lease, and
recognizes all other leases as operating leases.
(1) Operating lease
In each period during the lease term, the Company recognizes lease payments as rental incomes by
using the straight-line method/units of production method; initial direct expenses incurred are capitalized,
and amortized on the same basis for recognizing lease incomes for recognizing in the profit or loss for
each period.The variable lease payments acquired by the Company that are related to operating leases and
not recognized in lease payments are recognized in the profit or loss for the current period when they
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actually occur.
43. Other significant accounting policies and accounting estimates
□ Applicable √ N/A
44. Changes in significant accounting policies and accounting estimates
(1). Changes in significant accounting policies
√ Applicable □ N/A
Remarks (name and amount of
Changes in accounting policies line items in financial
Approval procedures
and associated reasons statements that have been
materially affected)
Implement the amended Approved by the management Refer to the table below for
Accounting Standard for details
Business Enterprises No. 21 -
Leases
Other information
(1) The Company implements the amended Accounting Standard for Business Enterprises No. 21 -
Lease (hereinafter referred to as the New Lease Standard) from January 1, 2021 (hereinafter referred to
as the Date of Initial Application).
1) For contracts existing prior to the Date of Initial Application, the Company opts not to assess
whether such contracts are leases or contain leases.
2) For lease contracts in which the Company is the lessee, the Company adjusts the amounts of the
initial retained earnings of the current reporting period and other relevant items in the financial statements
according to the cumulative effects between the application of the New Lease Standard and the original
standard on the Date of Initial Application, but makes no adjustment to comparable periods. The specific
treatment is as follows:
For an operating lease prior to the Date of Initial Application, on the Date of Initial Application, the
Company measures lease liabilities according to the present value of the remaining lease payments
discounted at the Company’s incremental borrowing interest rate on the Date of Initial Application, and
measures right-of-use assets according to the book value on the assumption that the New Lease Standard
has been adopted from the lease inception date (the discount rate is the Company’s incremental borrowing
interest rate on the Date of Initial Application).
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On the Date of Initial Application, the Company performed impairment test on the right-of-use assets
and implemented corresponding accounting treatment in accordance with the provisions in V.44 of section
X.
① The New Lease Standard mainly caused the following effects on the Company’s financial
statements as at January 1, 2021:
Balance sheet
Adjustment effect
Item of the
December 31, 2020 January 1, 2021
New Lease
Standard
Prepayments 47,447,601.43 1,727,030.09 49,174,631.52
Right-of-use assets 39,368,070.17 39,368,070.17
Deferred tax assets 96,132,114.02 323,676.36 96,455,790.38
Other payables 59,848,053.83 -1,026,101.82 58,821,952.01
Non-current liabilities due
181,417,412.46 18,607,011.39 200,024,423.85
within one year
Leasing liabilities 23,804,845.36 23,804,845.36
Surplus reserve 35,242,179.57 34,923.77 35,277,103.34
Undistributed profit 357,793,891.96 9,346.56 357,803,238.52
Total equity attributable to
owners of the parent 2,091,599,671.75 44,270.33 2,091,643,942.08
company
Minority interests 93,812,755.26 -11,248.64 93,801,506.62
① The weighted average of the Company’s incremental borrowing interest rate adopted for the lease
liabilities recognized in the balance sheets on the Date of Initial Application is 4.45%.
3) For operating lease contracts of low-value assets existing prior to the Date of Initial Application,
the Company adopts the simplified approach, and instead of recognizing right-of-use assets and lease
liabilities, implement accounting treatment in accordance with the New Lease Standard from the Date of
Initial Application.
4) For lease contracts in which the Company is the lessor, the Company implements accounting
treatment in accordance with the New Lease Standard from the Date of Initial Application.
(2) The Company has implemented the Interpretation of the Accounting Standards for Business
Enterprises No. 14 released on January 26, 2021 by the Ministry of Finance since 2021. This change in
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the accounting policy has no effect on the financial statements of the Company.
(3) The Company has implemented the provisions on “presentation of centralized funds management”
in the Interpretation of the Accounting Standards for Business Enterprises No. 15 since December 31,
2021. This change in the accounting policy has no effect on the financial statements of the Company.
(2). Changes in significant accounting estimates
□ Applicable √ N/A
(3). Description of adjustments in opening balances of line items in financial statements of the year
due to the initial implementation of the New Lease Standard since 2021
√ Applicable □ N/A
Consolidated Balance Sheet
In RMB
Item December 31, 2020 January 1, 2021 Adjusted amount
Current Assets:
Cash and bank balances 1,037,760,573.27 1,037,760,573.27
Balances with clearing
agencies
Placements with banks and
other financial institutions
Held-for-trading financial 114,000,000.00 114,000,000.00
assets
Derivative financial assets
Notes receivable 3,726,328.91 3,726,328.91
Accounts receivable 341,660,832.43 341,660,832.43
Receivables financing 11,959,000.00 11,959,000.00
Prepayments 47,447,601.43 49,174,631.52 1,727,030.09
Premiums receivable
Amounts receivable under
reinsurance contracts
Reinsurer’s share of insurance
contract reserves
Other receivables 12,534,062.15 12,534,062.15
Including: Interest receivable
Dividend receivable
Financial assets purchased
under resale agreements
Inventories 418,812,140.80 418,812,140.80
Contract assets 3,744,655.50 3,744,655.50
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Assets held for sale
Non-current assets due within
one year
Other current assets 13,002,195.46 13,002,195.46
Total current assets 2,004,647,389.95 2,006,374,420.04 1,727,030.09
Non-current Assets:
Loans and advances
Debt investments
Other debt investments
Long-term accounts receivable 13,196,087.78 13,196,087.78
Long-term equity investment 262,744,772.48 262,744,772.48
Investment in other equity 11,975,419.38 11,975,419.38
instruments
Other non-current financial
assets
Investment property
Fixed assets 447,571,328.91 447,571,328.91
Construction in progress 51,576,850.72 51,576,850.72
Productive biological assets
Oil and gas assets
Right-of-use assets 39,368,070.17 39,368,070.17
Intangible assets 320,488,235.60 320,488,235.60
Development expenditure
Goodwill
Long-term prepaid expenses 11,572,346.79 11,572,346.79
Deferred tax assets 96,132,114.02 96,455,790.38 323,676.36
Other non-current assets 6,299,781.06 6,299,781.06
Total non-current assets 1,221,556,936.74 1,261,248,683.27 39,691,746.53
Total assets 3,226,204,326.69 3,267,623,103.31 41,418,776.62
Current Liabilities:
Short-term borrowings 88,778,852.86 88,778,852.86
Loans from the central bank
Taking from banks and other
financial institutions
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 116,822,674.67 116,822,674.67
Accounts payable 226,494,815.90 226,494,815.90
Advance from customers 153,258,189.88 153,258,189.88
Contract liabilities 31,518,312.59 31,518,312.59
Financial assets sold under
repurchase agreements
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Customer deposits and deposits
from banks and other financial
institutions
Funds from securities trading
agency
Funds from underwriting
securities agency
Employee benefits payable 46,105,566.15 46,105,566.15
Taxes payable 19,871,846.94 19,871,846.94
Other payables 59,848,053.83 58,821,952.01 -1,026,101.82
Including: Interest payable
Dividend payable
Fees and commissions payable
Amounts payable under
reinsurance contracts
Liabilities held for sale
Non-current liabilities due 181,417,412.46 200,024,423.85 18,607,011.39
within one year
Other current liabilities 3,045,831.07 3,045,831.07
Total current liabilities 927,161,556.35 944,742,465.92 17,580,909.57
Non-current Liabilities:
Insurance contract reserves
Long-term borrowings 64,845,281.53 64,845,281.53
Bonds payable
Where: Preferred shares
Perpetual bonds
Leasing liabilities 23,804,845.36 23,804,845.36
Long-term payables 3,262,450.00 3,262,450.00
Long-term employee benefits
payable
Estimated liabilities 28,799,354.65 28,799,354.65
Deferred income 16,723,257.15 16,723,257.15
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 113,630,343.33 137,435,188.69 23,804,845.36
Total liabilities 1,040,791,899.68 1,082,177,654.61 41,385,754.93
Owners’ Equity (Shareholders’ Equity):
Paid-in capital (or share 452,756,901.00 452,756,901.00
capital)
Other equity instruments
Where: Preferred shares
Perpetual bonds
Capital reserve 1,249,020,991.15 1,249,020,991.15
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Less: Treasury shares
Other comprehensive income -3,214,291.93 -3,214,291.93
Special reserve
Surplus reserve 35,242,179.57 35,277,103.34 34,923.77
General risk reserve
Undistributed profit 357,793,891.96 357,803,238.52 9,346.56
Total owners’ (or 2,091,599,671.75 2,091,643,942.08 44,270.33
shareholders’) equity attributable
to owners of the parent company
Minority interests 93,812,755.26 93,801,506.62 -11,248.64
Total owners’ (or 2,185,412,427.01 2,185,445,448.70 33,021.69
shareholders’) equity
Total liabilities and 3,226,204,326.69 3,267,623,103.31 41,418,776.62
owners’ (or shareholders’) equity
Description of adjustments on each line item:
√ Applicable □ N/A
The Company has initially implemented the New Lease Standard since January 1, 2021 to recognize
right-of-use assets and lease liabilities, and adjust relevant line items.
Balance Sheet of the Parent Company
In RMB
Adjusted
Item December 31, 2020 January 1, 2021
amount
Current Assets:
Cash and bank balances 709,932,686.71 709,932,686.71
Held-for-trading financial 114,000,000.00 114,000,000.00
assets
Derivative financial assets
Notes receivable 2,314,628.91 2,314,628.91
Accounts receivable 567,539,506.79 567,539,506.79
Receivables financing 100,000.00 100,000.00
Prepayments 11,001,439.23 13,163,045.06 2,161,605.83
Other receivables 71,654,117.57 71,654,117.57
Including: Interest receivable
Dividend receivable
Inventories 169,022,971.44 169,022,971.44
Contract assets 3,720,160.50 3,720,160.50
Assets held for sale
Non-current assets due within
one year
Other current assets 1,297,388.01 1,297,388.01
Total current assets 1,650,582,899.16 1,652,744,504.99 2,161,605.83
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Non-current Assets:
Debt investments
Other debt investments
Long-term accounts 13,196,087.78 13,196,087.78
receivable
Long-term equity investment 421,648,284.99 421,648,284.99
Investment in other equity 7,075,419.38 7,075,419.38
instruments
Other non-current financial
assets
Investment property
Fixed assets 57,409,189.33 57,409,189.33
Construction in progress 37,982,329.74 37,982,329.74
Productive biological assets
Oil and gas assets
Right-of-use assets 29,494,047.23 29,494,047.23
Intangible assets 319,438,893.42 319,438,893.42
Development expenditure
Goodwill
Long-term prepaid expenses 9,562,162.36 9,562,162.36
Deferred tax assets 6,680,188.67 7,000,018.34 319,829.67
Other non-current assets 5,411,561.28 5,411,561.28
Total non-current assets 878,404,116.95 908,217,993.85 29,813,876.90
Total assets 2,528,987,016.11 2,560,962,498.84 31,975,482.73
Current Liabilities:
Short-term borrowings 11,410,560.27 11,410,560.27
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 32,313,678.21 32,313,678.21
Accounts payable 210,885,240.65 210,885,240.65
Advance from customers 2,688,210.54 2,688,210.54
Contract liabilities 20,609,190.34 20,609,190.34
Employee benefits payable 28,514,763.09 28,514,763.09
Taxes payable 5,830,858.89 5,830,858.89
Other payables 23,058,804.83 23,058,804.83
Including: Interest payable
Dividend payable
Liabilities held for sale
Non-current liabilities due 1,001,024.66 15,192,394.42 14,191,369.76
within one year
Other current liabilities 1,918,391.60 1,918,391.60
Total current liabilities 338,230,723.08 352,422,092.84 14,191,369.76
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Non-current Liabilities:
Long-term borrowings 29,029,715.07 29,029,715.07
Bonds payable
Where: Preferred shares
Perpetual bonds
Leasing liabilities 17,434,875.25 17,434,875.25
Long-term payables 3,262,450.00 3,262,450.00
Long-term employee benefits
payable
Estimated liabilities 16,345,891.60 16,345,891.60
Deferred income 14,450,411.10 14,450,411.10
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 63,088,467.77 80,523,343.02 17,434,875.25
Total liabilities 401,319,190.85 432,945,435.86 31,626,245.01
Owners’ Equity (Shareholders’ Equity):
Paid-in capital (or share 452,756,901.00 452,756,901.00
capital)
Other equity instruments
Where: Preferred shares
Perpetual bonds
Capital reserve 1,351,261,718.84 1,351,261,718.84
Less: Treasury shares
Other comprehensive income
Special reserve
Surplus reserve 33,964,638.84 33,999,562.61 34,923.77
Undistributed profit 289,684,566.58 289,998,880.53 314,313.95
Total owners’ (or 2,127,667,825.26 2,128,017,062.98 349,237.72
shareholders’) equity
Total liabilities and 2,528,987,016.11 2,560,962,498.84 31,975,482.73
owners’ (or shareholders’)
equity
Description of adjustments on each line item:
√ Applicable □ N/A
The Company has initially implemented the New Lease Standard since January 1, 2021 to recognize
right-of-use assets and lease liabilities, and adjust relevant line items.
(4). Description of retrospective adjustments on comparable data in previous periods upon the
initial implementation of the New Lease Standard from 2021
□ Applicable √ N/A
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45. Others
□ Applicable √ N/A
VI. Taxes
1. Major categories of taxes and tax rates
Description of major categories of taxes and tax rates
√ Applicable □ N/A
Category of tax Basis of tax computation Tax rate
Value-added tax (VAT) VAT payable is the difference of 3%, 6%, 9%, 13%
the output tax calculated based
on the incomes from selling
goods and taxable services in
accordance with the Tax Law,
less the input tax allowed to be
reduced in the period
City maintenance and Turnover tax payable 5%, 7%
construction tax
Enterprise income tax Taxable income 8.25%、8.70%、8.84%、
15%、16.5%、20%、21%、
25%
Education surcharges Turnover tax payable 3%
Local education surcharges Turnover tax payable 2%
Disclosure of taxpayers with different rates of enterprise income tax:
√ Applicable □ N/A
Taxpayer Rate of enterprise income tax (%)
Appotronics Corporation Limited 15%
Fengmi (Beijing) Technology Co., Ltd. 15%
Appotronics Hong Kong Limited 8.25%、16.5%
Beijing Orient Appotronics Technology Co., Ltd. 20%
Fabulus Technology Hong Kong Limited 16.5%
JoveAI Innovation, Inc. 8.70%、8.84%、21%
Appotronics USA, Inc. 21%
TECHNOLOGY INC 21%
JoveAI Limited Tax exemption
WEMAX LLC 21%
Shenzhen Appotronics Display Device Co., Ltd. 20%
Appotronics Technology (Changzhou) Co., Ltd. 20%
Fabulus Display (Beijing) Co., Ltd. 20%
Qingda Appotronics (Xiamen) Technology Co., 20%
Ltd.
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Shenzhen Appotronics Home Line Technology 20%
Co., Ltd.
Shenzhen Appotronics Laser Technology Co., Ltd. 20%
Shenzhen Appotronics Xiaoming Technology Co., 20%
Ltd.
JoveAI Asia Company Limited 20%
Limited 16.5%
Chongqing Ewei Ecommerce Co., Ltd. 20%
Chongqing Guangbo Ecommerce Co., Ltd. 20%
Shenzhen Orange Juice Energy Technology Co., 20%
Ltd.
Tianjin Bonian Film Partnership (LP) Tax exemption
CINEAPPO Laser Cinema Technology (Beijing) 15%
Co., Ltd.
Other taxpayers except above 25%
Note:
1. Appotronics Hong Kong Limited, as domiciled in Hong Kong, one of which can apply the two-
level income tax system, namely, applying the tax rate of 8.25% for the first HKD 2 million taxable income
and 16.50% for the remaining taxable income.
2. JoveAI Limited, as domiciled in the Cayman Islands, is exempt from enterprise income tax.
3. Appotronics USA, Inc., as domiciled in the United States, applies the federal enterprise income tax
rate of 21%.
4. JoveAI Innovation, Inc., as domiciled in the United States, applies the federal enterprise income
tax rate of 21%, and the Delaware state enterprise income tax rate of 8.70%.
5. TECHNOLOGY INC, as domiciled in the United States, applies the federal enterprise income tax
rate of 21%.
6. JoveAI Asia Company Limited, as domiciled in Vietnam, applies the enterprise income tax rate of
20%.
7. WEMAX LLC, as domiciled in the United States, applies the federal enterprise income tax rate of
21%.
8. Limited, ,as domiciled in Hong Kong, applies the income tax rate of 16.50%.
2. Tax incentives
√ Applicable □ N/A
1. Enterprise income tax
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Annual Report 2021
(1) On December 9, 2019, the Company obtained the High-tech Enterprise Certificate (Certificate
No.: GR201944204257) jointly issued by Shenzhen Science and Technology Innovation Commission,
Shenzhen Finance Bureau and Shenzhen Tax Service of State Taxation Administration with a valid term
of three years. Therefore, the Company paid the enterprise income tax at a rate of 15% in 2021.
(2) On December 17, 2021, Fengmi (Beijing) Technology Co., Ltd. obtained the High-tech Enterprise
Certificate (Certificate No.: GR202111004001) jointly issued by Beijing Municipal Science and
Technology Commission, Beijing Finance Bureau and Beijing Tax Service of State Taxation
Administration with a valid term of three years. It paid the enterprise income tax at a rate of 15% in 2021.
(3) On October 15, 2019, CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd. obtained the
High-tech Enterprise Certificate (Certificate No.: GR201911002720) jointly issued by Beijing Municipal
Science and Technology Commission, Beijing Finance Bureau and Beijing Tax Service of State Taxation
Administration with a valid term of three years. It paid the enterprise income tax at a rate of 15% in 2021.
(4) In accordance with the Notice of the Ministry of Finance and the State Taxation Administration
on Implementing the Inclusive Tax Deduction and Exemption Policies for Micro and Small Enterprises
(Cai Shui [2019] No. 13), and the Announcement of the Ministry of Finance and the State Taxation
Administration on Implementing Preferential Income Tax Policies for Micro and Small Enterprises and
Individually-owned Businesses (Announcement No. 12 in 2021 of the Ministry of Finance and the State
Taxation Administration), the annual taxable income of a small low-profit enterprise that is not more than
RMB 1 million shall be levied with the enterprise income tax rate at a discount of 12.5%, namely, for
which the applicable enterprise income tax rate is 20%; for the annual taxable income more than RMB 1
million but no more than RMB 3 million, the taxable income shall be calculated at a discount of 50%,
namely, for which the applicable enterprise income tax rate is 20%. The following companies are qualified
for enjoying such tax incentives: Beijing Orient Appotronics Technology Co., Ltd., Shenzhen Appotronics
Display Device Co., Ltd., Appotronics Technology (Changzhou) Co., Ltd., Fabulus Display (Beijing) Co.,
Ltd., Qingda Appotronics (Xiamen) Technology Co., Ltd., Shenzhen Appotronics Home Line Technology
Co., Ltd., Shenzhen Appotronics Laser Technology Co., Ltd., Shenzhen City Appotronics Xiaoming
Technology Co., Ltd., Chongqing Ewei Ecommerce Co., Ltd., Chongqing Guangbo Ecommerce Co., Ltd.,
and Shenzhen Orange Juice Energy Technology Co., Ltd.
2. Value-added tax (VAT)
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Annual Report 2021
(1) In accordance with the Notice of the Ministry of Finance and the State Administration of Taxation
on Value-added Tax Policies for Software Products (Cai Shui [2011] No. 100), for self-developed and
produced software products sold by general VAT taxpayers, the tax-refund-upon-collection policy is
applicable to the part of their actual VAT burden in excess of 3% after the VAT has been collected at a
tax rate of 17%. Fengmi (Beijing) Technology Co., Ltd. and Shenzhen Appotronics Software Technology
Co., Ltd. are qualified for enjoying such tax incentives.
(2) In accordance with Article 1 (26) of Annex 3 of the Notice of the Ministry of Finance and the
State Administration of Taxation on Implementing the Pilot Program of Replacing Business Tax with
Value-Added Tax in an All-round Manner (Cai Shui [2016] No. 36), taxpayers are exempted from VAT if
they provide technology transfer, technology development, and technology consultation and services in
connection therewith. The Company is qualified for enjoying such tax incentives.
3. Others
□ Applicable √ N/A
VII. Notes to items in the consolidated financial statements
1. Monetary funds
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Cash on hand 5,680.24 5,858.56
Bank deposits 924,308,952.81 1,020,747,657.62
Other monetary funds 33,415,198.10 17,007,057.09
Total 957,729,831.15 1,037,760,573.27
Where: Total 71,132,556.44 78,611,378.23
oversea deposits
Other information
In other monetary funds, an amount of RMB 26,131,914.42, as security deposits, is subject to restriction
in use; in bank deposits, an amount of RMB 40,000,000.00, as 3-year term deposits, is subject to restriction
in use; the bank deposits contain unmature interests of RMB 402,750.00.
2. Held-for-trading financial assets
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Financial assets at fair value through 417,200,000.00 114,000,000.00
profit or loss
Including:
Equity instrument investment 46,200,000.00
Structural deposits 371,000,000.00 114,000,000.00
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Annual Report 2021
Total 417,200,000.00 114,000,000.00
Other information:
□ Applicable √ N/A
3. Derivative financial assets
□ Applicable √ N/A
4. Notes receivable
(1). Categories of notes receivable
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Bank acceptances 4,020,000.00 950,000.00
Commercial acceptances 1,236,603.03 2,776,328.91
Total 5,256,603.03 3,726,328.91
(2). Notes receivable pledged by the Company at the end of the period
□ Applicable √ N/A
(3). Notes receivable which are undue as at the balance sheet date but endorsed or discounted by the
Company at the end of the period
√ Applicable □ N/A
In RMB
Amount derecognized at the end Amount not derecognized at the
Item
of the period end of the period
Bank acceptances 310,000.00
Commercial acceptances 742,845.61
Total 1,052,845.61
(4). Notes transferred to accounts receivable due to drawer’s failure in cashing at the end of the
period
√ Applicable □ N/A
In RMB
Amounts transferred to accounts receivable as of the
Item
end of the period
Commercial acceptances 498,000.00
Total 498,000.00
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(5). Disclosure by categories of provision for bad debts
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Percentage Percentage
Category Book Book
Percentage of Percentage of
Amount Amount value Amount Amount value
(%) provision (%) provision
(%) (%)
Provision
for bad
5,321,687.40 100.00 65,084.37 1.22 5,256,603.03 3,872,451.48 100.00 146,122.57 3.77 3,726,328.91
debts made
by group
Where:
Bank
acceptance 4,020,000.00 75.54 4,020,000.00 950,000.00 24.53 950,000.00
bills
Commercial
acceptance 1,301,687.40 24.46 65,084.37 5.00 1,236,603.03 2,922,451.48 75.47 146,122.57 5.00 2,776,328.91
bills
Total 5,321,687.40 / 65,084.37 / 5,256,603.03 3,872,451.48 / 146,122.57 / 3,726,328.91
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Annual Report 2021
Provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
√ Applicable □ N/A
Item by group: Commercial acceptance bills and bank acceptance bills
In RMB
Closing balance
Name Proportion of provision
Notes receivable Bad debt provision
(%)
Group of bank 4,020,000.00
acceptance bills
Commercial 1,301,687.40 65,084.37 5.00
acceptance bills
group
Total 5,321,687.40 65,084.37 1.22
Recognition criterion to make the bad debt provision by group and explanation
□ Applicable √ N/A
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,
please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables:
□ Applicable √ N/A
(6). Provision for bad debts
√ Applicable □ N/A
In RMB
Changes for the current period
Opening Closing
Category Recovery or Write off or
balance Provision balance
reversal cancellation
Commercial 146,122.57 -81,038.20 65,084.37
acceptance bills
Total 146,122.57 -81,038.20 65,084.37
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
Other information:
None
(7). Notes receivable actually canceled in the current period
□ Applicable √ N/A
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Annual Report 2021
Other information
□ Applicable √ N/A
5. Accounts receivable
(1). Disclosure by aging
√ Applicable □ N/A
In RMB
Aging Closing balance of carrying amount
Within 1 year
Where: Subitems within 1 year
Subtotal of items within 1 year 420,707,573.33
1 to 2 years 4,630,552.27
2 to 3 years 1,763,773.18
Over 3 years 525,040.26
Total 427,626,939.04
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Annual Report 2021
(2). Disclosure by categories of provision for bad debts
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Percentage Percentage
Category Book Book
Percentage of Percentage of
Amount Amount value Amount Amount value
(%) provision (%) provision
(%) (%)
Provision
for bad
2,117,500.23 0.50 1,279,675.64 60.43 837,824.59
debts made
individually
Provision
for bad
425,509,438.81 99.50 23,212,791.53 5.46 402,296,647.28 361,346,260.89 100.00 19,685,428.46 5.45 341,660,832.43
debts made
by group
Where:
220 / 337
Annual Report 2021
Accounts
receivable
for which
the
provision 425,509,438.81 99.50 23,212,791.53 5.46 402,296,647.28 361,346,260.89 100.00 19,685,428.46 5.45 341,660,832.43
for bad
debts is
made by
aging group
Total 427,626,939.04 / 24,492,467.17 / 403,134,471.87 361,346,260.89 / 19,685,428.46 / 341,660,832.43
221 / 337
Annual Report 2021
Provision for bad debts made individually:
√ Applicable □ N/A
In RMB
Closing balance
Name Bad debt Proportion of Reason for
Carrying amount
provision provision (%) provision
Legal person 1 1,675,649.18 837,824.59 50.00 Since its group
defaulted on debts
to a large extent,
there are high
expected credit
losses
Legal person 2 372,000.00 372,000.00 100.00 The amounts are
expected to be
unrecoverable
Legal person 3 69,851.05 69,851.05 100.00 The amounts are
expected to be
unrecoverable
Total 2,117,500.23 1,279,675.64 60.43 /
Explanation about provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
√ Applicable □ N/A
Item by group: Accounts receivable for which the provision for bad debts is made by aging group
In RMB
Closing balance
Name Proportion of provision
Accounts receivable Bad debt provision
(%)
Within 1 year 419,247,195.15 20,962,359.75 5.00
1-2 years 4,360,916.24 1,090,229.06 25.00
2-3 years 1,482,249.41 741,124.71 50.00
Over 3 years 419,078.01 419,078.01 100.00
Total 425,509,438.81 23,212,791.53 5.46
Recognition criterion to make the bad debt provision by group and explanation:
□ Applicable √ N/A
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,
please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables:
□ Applicable √ N/A
222 / 337
Annual Report 2021
(3). Provision for bad debts
√ Applicable □ N/A
In RMB
Changes for the current period
Opening Recovery Closing
Category Write off or Other
balance Provision or balance
cancellation changes
reversal
Provision 1,279,675.64 1,279,675.64
for bad
debts made
individually
Provision 19,685,428.46 3,607,893.25 80,530.18 23,212,791.53
for bad
debts made
by group
Total 19,685,428.46 4,887,568.89 80,530.18 24,492,467.17
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
(4). Accounts receivable actually canceled in the current period
√ Applicable □ N/A
In RMB
Item Cancellation amount
Accounts receivable actually canceled 80,530.18
In which significant amounts canceled are described as below:
□ Applicable √ N/A
Description of accounts receivable cancellation:
□ Applicable √ N/A
(5). Top five closing balances of accounts receivable categorized by debtors
√ Applicable □ N/A
In RMB
Proportion to the total
closing balance of Closing balance of bad
Entity Closing balance
accounts receivable debt provision
(%)
Xiaomi 132,000,017.31 30.87 6,600,000.87
Communications
Technologies Co.,
Ltd. and its affiliates
223 / 337
Annual Report 2021
Beijing Jingdong 50,150,835.41 11.73 2,507,541.77
Century Trading Co.,
Ltd.
BARCO 43,607,149.06 10.20 2,180,357.47
Guangdong SACA 31,829,748.05 7.44 1,591,487.40
Precision
Manufacturing Co.,
Ltd. and its affiliates
Beijing Digital China 29,222,810.00 6.83 1,461,140.50
Co., Ltd.
Total 286,810,559.83 67.07 14,340,528.01
Other information
None
(6). Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ N/A
(7). Assets and liabilities arising from transfer of accounts receivable and continued involvement
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
6. Receivables financing
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Bank acceptance bills 244,860.00 11,959,000.00
Total 244,860.00 11,959,000.00
Changes in amount and fair value of receivables financing:
□ Applicable √ N/A
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,
please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables:
□ Applicable √ N/A
Other information:
√ Applicable □ N/A
Notes receivable which are undue as at the balance sheet date but endorsed or discounted by the
Company at the end of the period
224 / 337
Annual Report 2021
Amount Amount not
derecognized derecognized
Item
at the end of the at the end of the
period period
Bank acceptance bills 220,000.00
Subtotal 220,000.00
The acceptors of bank acceptance bills are large-sized commercial banks with high credit ratings and
listed joint-stock commercial banks. Because they always have high credit ratings, it is less probable that
bank acceptance bills will not get paid upon maturity; therefore, the Company has derecognized endorsed
or discounted bank acceptance bills accepted by banks with high credit ratings. However, if such notes are
unable to be paid at maturity, the Company will still be jointly and severally liable to the note holders
pursuant to the Negotiable Instruments Law.
7. Prepayments
(1). Disclosure of prepayments by aging
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1 90,997,714.13 92.74 45,488,048.90 92.50
year
1 to 2 years 7,119,256.70 7.26 3,686,582.62 7.50
Total 98,116,970.83 100.00 49,174,631.52 100.00
Reasons for overdue settlement of prepayments with significant amounts aged more than 1 year:
Entity Closing balance Reason for not settled
Advance payment has been
Kyocera SLD Laser, Inc. 5,738,130.00 made for high-end lasers,
which have not been produced
Subtotal 5,738,130.00
(2). Top five closing balances of prepayments categorized by receivers
√ Applicable □ N/A
Proportion to the total closing
Entity Closing balance
balance of prepayments (%)
CVTE and its affiliates 35,612,308.02 36.30
225 / 337
Annual Report 2021
Nanyang Nanfang Intelligent 24,698,617.60 25.17
Photoelectric Co., Ltd.
Kyocera SLD Laser, Inc. 5,738,130.00 5.85
Beijing Jingdong Century 2,956,805.98 3.01
Trading Co., Ltd.
Shenzhen Smart-core Cloud 2,360,242.95 2.41
Information Technology Co.,
Ltd.
Total 71,366,104.55 72.74
Other information
None
Other information
□ Applicable √ N/A
8. Other receivables
Presented by items
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Interest receivable
Dividend receivable 12,623,886.00
Other receivables 17,848,709.66 12,534,062.15
Total 30,472,595.66 12,534,062.15
Other information:
□ Applicable √ N/A
Interest receivable
(1). Categories of interest receivable
□ Applicable √ N/A
(2). Significant interests overdue
□ Applicable √ N/A
(3). Provision for bad debts
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
226 / 337
Annual Report 2021
Dividend receivable
(1). Dividend receivable
√ Applicable □ N/A
In RMB
Project (or investee) Closing balance Opening balance
Dividend distribution from GDC 12,623,886.00
Technology Limited (BVI)
Total 12,623,886.00
(2). Dividends receivable with significant amounts aged more than 1 year
□ Applicable √ N/A
(3). Provision for bad debts
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
Other receivables
(1). Disclosure by aging
√ Applicable □ N/A
In RMB
Aging Closing balance of carrying amount
Within 1 year
Where: Subitems within 1 year
Subtotal of items within 1 year 11,160,182.06
1 to 2 years 1,260,022.20
2 to 3 years 5,004,737.49
Over 3 years 1,353,671.40
Total 18,778,613.15
(2). Categories by the nature of other receivables
√ Applicable □ N/A
In RMB
Closing balance of carrying Opening balance of carrying
Nature of other receivables
amount amount
Deposits/margins/petty cash 9,664,667.87 8,832,850.67
Withholding 727,191.75 380,123.97
Temporary receivables 735,913.53 383,488.89
Compensation receivable 7,650,840.00 3,577,279.61
227 / 337
Annual Report 2021
Total 18,778,613.15 13,173,743.14
(3). Provision for bad debts
√ Applicable □ N/A
In RMB
Stage I Stage II Stage III
Bad debt Lifetime ECL
12-month ECL Lifetime ECL (with Total
provision (without credit
in the future credit impairment)
impairment)
Balance as at 639,680.99 639,680.99
January 1, 2021
Balance as at
January 1, 2021 in
the current period
--transferred to -6,833.12 6,833.12
Stage II
--transferred to
Stage III
--reversed to
Stage II
--reversed to
Stage I
Provision 262,890.02 27,332.48 290,222.50
Reversal
Write-off
Cancellation
Other changes
Balance as at 895,737.89 34,165.60 929,903.49
December 31,
2021
Description of significant changes in the balance of other receivables with changed provisions for losses
in the current period:
□ Applicable √ N/A
Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of financial
instruments has been increased significantly in the current period:
□ Applicable √ N/A
(4). Provision for bad debts
√ Applicable □ N/A
In RMB
228 / 337
Annual Report 2021
Changes for the current period
Opening Closing
Category Recovery Write off or Other
balance Provision balance
or reversal cancellation changes
Provision 639,680.99 290,222.50 929,903.49
made by
group
Bad debt
provision
Total 639,680.99 290,222.50 929,903.49
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
(5). Other receivables actually canceled in the current period
□ Applicable √ N/A
(6). Top five closing balances of other receivables categorized by debtors
√ Applicable □ N/A
In RMB
Proportion
to the Bad debt
Nature of other Closing balance of provision
Entity Aging
receivables balance other Closing
receivables balance
(%)
GDC Indemnity 7,662,715.00 Within 1 40.81 383,135.75
Technology receivable/Temporary year
Limited receivables
(BVI) and its
affiliates
Shenzhen Deposits/margins/petty 3,574,618.00 Over 3 19.04 178,730.90
Meisheng cash years
Industry Co.,
Ltd.
Shenzhen Deposits/margins/petty 1,310,675.20 1-2 6.98 65,533.76
High-tech cash years, 2-
Industry 3 years,
Promotion over 3
Center years
229 / 337
Annual Report 2021
Hong Kong Deposits/margins/petty 993,737.96 Within 1 5.29 49,686.84
Science & cash year, 1-2
Technology years, 2-
Parks 3 years
Corporation
Beijing Deposits/margins/petty 816,155.64 Within 1 4.35 40,807.78
Dongsheng cash year, 1-2
Bozhan years, 2-
Technology 3 years
Development
Co., Ltd.
Total / 14,357,901.80 / 76.47 717,895.03
Shenzhen Science and Technology Assessment Management Center has been renamed to Shenzhen High-
tech Industry Promotion Center.
(7). Accounts receivable involving government grants
□ Applicable √ N/A
(8). Other receivables derecognized due to transfer of financial assets
□ Applicable √ N/A
(9). Assets and liabilities arising from transfer of other receivables and continued involvement
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
9. Inventories
(1). Categories of inventories
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Provision for Provision for
decline in value decline in value
Item Carrying of Book Carrying of Book
amount inventories/impair value amount inventories/impair value
ment of contract ment of contract
performance cost performance cost
Raw 493,448,59 21,083,424.30 472,365,16 243,262,463. 12,343,116.67 230,919,347.
materials 3.04 8.74 77 10
230 / 337
Annual Report 2021
Work in 30,541,893. 2,147,311.13 28,394,582. 23,130,163.7 533,475.37 22,596,688.3
progress 32 19 2 5
Goods on 229,438,70 13,362,893.39 216,075,81 152,306,65 17,204,698.44 135,101,95
hand 9.58 6.19 6.10 7.66
Contract 7,263,873.3 729,907.80 6,533,965.5
performa 3 3
nce cost
Goods 43,433,678. 1,652,492.43 41,781,185. 15,345,357.0 15,345,357.0
upon 08 65 8 8
delivery
Materials 4,492,945.0 22,530.31 4,470,414.7 15,064,657.0 215,866.48 14,848,790.6
for 1 0 9 1
consigne
d
processin
g
Total 808,619,69 38,998,559.36 769,621,13 449,109,297. 30,297,156.96 418,812,140.
2.36 3.00 76 80
(2). Provision for decline in value of inventories and impairment of contract performance cost
√ Applicable □ N/A
In RMB
Increase Decrease
Opening Reversal Closing
Item
balance Provision Others or write- Others balance
off
Raw materials 12,343,116.67 20,000,399.66 7,620,640.33 3,639,451.70 21,083,424.30
Work in progress 533,475.37 2,077,039.94 463,204.18 2,147,311.13
Goods on hand 17,204,698.44 14,558,782.71 17,220,069.55 1,180,518.21 13,362,893.39
Contract 729,907.80 729,907.80
performance cost
Goods upon 1,652,492.43 1,652,492.43
delivery
Materials for 215,866.48 22,530.30 215,866.47 22,530.31
consigned
processing
Total 30,297,156.96 39,041,152.84 25,519,780.53 4,819,969.91 38,998,559.36
Since Fabulus Display (Beijing) Co., Ltd. was deregistered during the reporting period, the provisions
for loss on inventories were transferred out and presented in “Others” under “Decrease” for the current
period.
231 / 337
Annual Report 2021
Specify reasons for specific determination basis of net realizable value, and reversal or write-off of
the provision for decline in value of inventories
Reason for
Reason for writing off
reversal the provisions
Specific basis for to the provisions for decline in
Item
determining the net realizable value for loss on value of on
inventories in the inventories in
current period the current
period
The Company
For the
has
inventories of
The net realizable value of raw materials is consumed/sold
which a
determined as the historical average selling price the inventories
provision for
or actual average selling price of finished goods for which a
Raw decline in value
in the ordinary course of business less the provision for
materials has been made in
estimated costs of completion, and the estimated decline in value
prior period,
costs necessary to make the sale and relevant has been made
their net
taxes. at the beginning
realizable values
of the current
have increased
period.
The Company
has consumed
The net realizable value of work in progress is
the inventories
determined as the historical average selling price
for which a
or actual average selling price of finished goods
Work in provision for
in the ordinary course of business less the No reversal
progress decline in value
estimated costs of completion, and the estimated
has been made
costs necessary to make the sale and relevant
at the beginning
taxes.
of the current
period.
The Company
For the
has
inventories of
consumed/sold
which a
For inventories directly used for sale, the net the inventories
provision for
realizable value is determined as the historical for which a
Goods on decline in value
average selling price or actual average selling provision for
hand has been made in
price less the estimated costs necessary to make decline in value
prior period,
the sale and relevant taxes. has been made
their net
at the beginning
realizable values
of the current
have increased
period.
232 / 337
Annual Report 2021
Reason for
Reason for writing off
reversal the provisions
Specific basis for to the provisions for decline in
Item
determining the net realizable value for loss on value of on
inventories in the inventories in
current period the current
period
The Company
has consumed
The net realizable value is determined as the the inventories
Materials historical average selling price or actual average for which a
for selling price of finished goods in the ordinary provision for
No reversal
consigned course of business less the estimated costs of decline in value
processing completion, and the estimated costs necessary to has been made
make the sale and relevant taxes at the beginning
of the current
period.
Contract performance cost
Provision for
Opening impairment
Item Increase Amortization Closing balance
balance made in the
current period
Entrusted
6,507,958.06 3,843,821.31 729,907.80 1,934,228.95
development
Overseas
5,634,098.45 1,034,361.87 4,599,736.58
freight
Subtotal 12,142,056.51 4,878,183.18 729,907.80 6,533,965.53
(3). Description of capitalized amount of borrowing costs included in the closing balance of
inventories
□ Applicable √ N/A
(4). Description of amortization of contract performance cost during the period
□ Applicable √ N/A
Other information
□ Applicable √ N/A
10. Contract assets
(1). Description of contract assets
√ Applicable □ N/A
233 / 337
Annual Report 2021
In RMB
Closing balance Opening balance
Provision
Item Carrying Provision for Carrying Book
Book value for
amount impairment amount value
impairment
Warranty 292,607.50 198,551.88 94,055.62 492,467.50 181,635.38 310,832.12
security
receivable
Goods 5,342,438.43 1,532,634.82 3,809,803.61 4,842,771.16 1,408,947.78 3,433,823.38
payment
Total 5,635,045.93 1,731,186.70 3,903,859.23 5,335,238.66 1,590,583.16 3,744,655.50
(2). Amount and reasons of major changes in the book value during the reporting period
□ Applicable √ N/A
(3). Description of provision for impairment made on contract assets during the period
√ Applicable □ N/A
In RMB
Reversal Write-
Item Provision off/cancellation Reason
in the period
Provision for 140,603.54
impairment made by
group
Total 140,603.54 /
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,
please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
11. Held-for-sale assets
□ Applicable √ N/A
12. Non-current assets due within one year
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Long-term receivables due within 3,473,049.18
one year
234 / 337
Annual Report 2021
Total 3,473,049.18
Debt investments and other debt investments with significant amounts at the end of the period
□ Applicable √ N/A
Other information
Closing balance Opening balance
Provision
Item Carrying Provision for Carrying Book
Book value for
amount impairment amount value
impairment
Long-term
receivables due 4,520,449.18 1,047,400.00 3,473,049.18
within one year
Total 4,520,449.18 1,047,400.00 3,473,049.18
13. Other current assets
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Cost of returned goods receivable 503,062.91 1,381,990.01
Input VAT to be deducted 52,258,757.92 11,338,961.82
Prepaid enterprise income tax 281,243.63
Total 52,761,820.83 13,002,195.46
Other information
None
14. Debt investments
(1). Description of debt investments
□ Applicable √ N/A
(2). Debt investments with significant amounts at the end of the period
□ Applicable √ N/A
(3). Description of provision for impairment
□ Applicable √ N/A
Basis for recognizing the amount of provisions for impairment and evaluating whether the credit risk of
financial instruments has been increased significantly in the current period
□ Applicable √ N/A
Other information
□ Applicable √ N/A
235 / 337
Annual Report 2021
15. Other debt investments
(1). Description of other debt investments
□ Applicable √ N/A
(2). Other debt investments with significant amounts at the end of the period
□ Applicable √ N/A
(3). Description of provision for impairment
□ Applicable √ N/A
Basis for recognizing the amount of provisions for impairment and evaluating whether the credit risk of
financial instruments has been increased significantly in the current period
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
16. Long-term receivables
(1). Description of long-term receivables
√ Applicable □ N/A
In RMB
Closing balance Opening balance Range
of
Item Carrying Bad debt Carrying Bad debt
Book value Book value discount
amount provision amount provision
rate
Goods 7,528,000.00 1,376,400.00 6,151,600.00 15,000,000.00 750,000.00 14,250,000.00 4.65%
sold on
installment
payment
Labor
service by
installment
receivable
Less: -358,047.26 -358,047.26 -1,053,912.22 -1,053,912.22 4.65%
Financing
income
not
realized
Total 7,169,952.74 1,376,400.00 5,793,552.74 13,946,087.78 750,000.00 13,196,087.78 /
(2). Provision for bad debts
√ Applicable □ N/A
In RMB
236 / 337
Annual Report 2021
Stage I Stage II Stage III
Bad debt Lifetime ECL
12-month ECL Lifetime ECL (with Total
provision (without credit
in the future credit impairment)
impairment)
Balance as at 750,000.00 750,000.00
January 1, 2021
Balance as at
January 1, 2021 in
the current period
--transferred to
Stage II
--transferred to
Stage III
--reversed to
Stage II
--reversed to
Stage I
Provision 626,400.00 626,400.00
Reversal
Write-off
Cancellation
Other changes
Balance as at 1,376,400.00 1,376,400.00
December 31,
2021
Description of significant changes in the balance of long-term receivables with changed provisions for
losses in the current period:
□ Applicable √ N/A
Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of financial
instruments has been increased significantly in the current period
□ Applicable √ N/A
(3). Long-term receivables derecognized due to transfer of financial assets
□ Applicable √ N/A
(4). Assets and liabilities arising from transfer of long-term receivables and continued involvement
□ Applicable √ N/A
Other information
□ Applicable √ N/A
237 / 337
Annual Report 2021
17. Long-term equity investments
√ Applicable □ N/A
In RMB
Opening
Changes for the current period Closing
Balance
balance of
Investment Adjustme
Decre Declared Provisio Closing provision
Investees profit or nt in other
Additional ased Other equity cash n for Balance for
loss under comprehe Others
investment invest changes dividends impairm impairme
equity nsive
ment or profits ent nt
method income
I. Joint venture
Subtotal
II. Associates
Cinionic 131,406,424.6 -
1,632,357.09 -3,070,571.93 126,924,427.40
Limited 4 3,043,782.40
GDC
Technology 131,338,347.8 12,771,594.0
18,718,129.73 2,676,967.58 26,714,806.72 166,676,657.87
Limited 4 0
(BVI)
262,744,772.4 12,771,594.0
Subtotal 20,350,486.82 -366,814.82 23,644,234.79 293,601,085.27
8 0
262,744,772.4 12,771,594.0
Total 20,350,486.82 -366,814.82 23,644,234.79 293,601,085.27
8 0
Other information
The Company acquired 8% equity interests in GDC Technology Limited (BVI) in accordance with the performance compensation agreement, leading to the increase
in long-term equity investment by RMB 30,251,520.00, which was presented in “Others” under “Changes for the current period”; The remaining amount in “Others”
under “Changes for the current period” was the amount from the change in foreign currency exchange gain or loss.
238 / 337
Annual Report 2021
18. Other equity instrument investments
(1). Description of other equity instrument investments
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Shen Zhen Timewaying Technology 7,075,419.38 7,075,419.38
Co., Ltd.
Shenzhen Bevix Technology Co., Ltd. 4,900,000.00
Total 7,075,419.38 11,975,419.38
(2). Description of equity investments not held for trading
√ Applicable □ N/A
In RMB
Reasons for
Reasons for
Dividend Amounts to designating
transferring
s income retained as financial
to retained
recognize Accumulate Accumulate earnings assets at fair
Item earnings
d for the d gains d losses from other value
from other
current comprehensi through other
comprehensi
period ve income comprehensi
ve income
ve income
Shen Zhen Subject to the
Timewayin management’
g s intention of
Technolog holding
y Co., Ltd.
Shenzhen Subject to the
Bevix management’
Technolog s intention of
y Co., Ltd. holding
Other information:
√ Applicable □ N/A
The Company’s equity investments in Shen Zhen Timewaying Technology Co., Ltd. are mainly for
promoting future business cooperation rather than making transactions, hence they are designated as
investments in equity instruments at fair value through other comprehensive income.
19. Other non-current financial assets
□ Applicable √ N/A
Other information:
239 / 337
Annual Report 2021
□ Applicable √ N/A
20. Investment properties
Measurement mode of investment properties
N/A
21. Fixed assets
Presented by items
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Fixed assets 470,410,450.18 447,571,328.91
Disposal of fixed assets
Total 470,410,450.18 447,571,328.91
Other information:
□ Applicable √ N/A
Fixed assets
(1). Description of fixed assets
√ Applicable □ N/A
In RMB
Electronic Operating
Machinery and Transportation
Item equipment leased Total
equipment equipment
and others equipment
I. Cost:
1. 103,894,713.95 1,020,400.05 37,318,561.28 563,293,898.80 705,527,574.08
Opening
balance
2. 34,137,572.05 151,000.00 13,755,422.37 89,077,882.95 137,121,877.37
Increase
(1) 34,242,137.95 151,000.00 12,353,059.57 46,746,197.52
Purchase
(2)
Transfer
from 761,661.57 89,077,882.95 89,839,544.52
construction
in progress
(3)
Transfer
663,054.88 663,054.88
from
inventories
240 / 337
Annual Report 2021
(4)
Currency -104,565.90 -22,353.65 -126,919.55
movement
3.
8,441,672.65 1,820,636.17 1,549,422.48 11,811,731.30
Decrease
(1)
Disposal or 4,286,867.33 1,625,911.93 1,189,321.60 7,102,100.86
retirement
(2)
Transfer to 4,154,805.32 194,724.24 360,100.88 4,709,630.44
inventories
4.
Closing 129,590,613.35 1,171,400.05 49,253,347.48 650,822,359.27 830,837,720.15
balance
II. Accumulated depreciation
1. 41,528,570.15 447,672.23 17,109,387.09 198,870,615.70 257,956,245.17
Opening
balance
2. 19,153,101.36 145,660.96 7,408,945.88 81,930,074.00 108,637,782.20
Increase
(1) 19,164,690.75 145,660.96 7,426,913.10 81,930,074.00 108,667,338.81
Provision
(2) -11,589.39 -17,967.22 -29,556.61
Currency
movement
3. 3,732,615.28 1,365,972.17 1,397,822.35 6,496,409.80
Decrease
(1)
Disposal or 2,738,951.98 1,255,132.75 1,074,144.39 5,068,229.12
retirement
(2) 993,663.30 110,839.42 323,677.96 1,428,180.68
Transfer to
inventories
4.
Closing 56,949,056.23 593,333.19 23,152,360.80 279,402,867.35 360,097,617.57
balance
III. Provision for impairment
1.
Opening
balance
2.
329,652.40 329,652.40
Increase
241 / 337
Annual Report 2021
(1)
329,652.40 329,652.40
Provision
3.
Decrease
(1)
Disposal or
retirement
4.
Closing 329,652.40 329,652.40
balance
IV. Book value
1. 72,641,557.12 578,066.86 26,100,986.68 371,089,839.52 470,410,450.18
Closing
balance
2. 62,366,143.80 572,727.82 20,209,174.19 364,423,283.10 447,571,328.91
Opening
balance
(2). Temporarily idle fixed assets
√ Applicable □ N/A
In RMB
Original book Accumulated Provision for
Item Book value Remark
value depreciation impairment
Operating 7,432,794.11 4,052,213.77 17,585.72 3,362,994.62
leased
equipment
(3). Fixed assets acquired under finance lease
□ Applicable √ N/A
(4). Fixed assets leased out under operating lease
√ Applicable □ N/A
In RMB
Item Closing balance of carrying amount
Operating leased equipment 367,726,844.90
(5). Fixed assets of which certificates of title have not been obtained
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
Disposal of fixed assets
□ Applicable √ N/A
242 / 337
Annual Report 2021
22. Construction in progress
Presented by items
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Construction in progress 148,620,511.35 51,576,850.72
Materials for construction
Total 148,620,511.35 51,576,850.72
Other information:
□ Applicable √ N/A
Construction in progress
(1). Description of construction in progress
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Provision Provision
Item Carrying for Carrying for
Book value Book value
amount impairme amount impairme
nt nt
Headquart 133,111,026. 133,111,026. 37,982,329. 37,982,329.
er 64 64 74 74
buildings
Decoratio 18,265.97 18,265.97
n
constructi
on
Light 15,491,218.7 15,491,218.7 13,594,520. 13,594,520.
sources to 4 4 98 98
be leased
148,620,511. 148,620,511. 51,576,850. 51,576,850.
Total
35 35 72 72
243 / 337
Annual Report 2021
(2). Changes in significant constructions in progress for the current period
√ Applicable □ N/A
In RMB
Am
oun
Inte
t
rest
inje
capi
cted Con So
taliz
as a stru Amount of Where: ur
atio
Amount pro ctio accumulat Capitalize ce
Budget Opening Other Closing n
Item Increase transferred to port n ed d interest of
amount Balance decreases Balance rate
fixed assets ion pro capitalized for the fu
for
of gres interest period nd
the
bud s s
peri
get
od
amo
(%)
unt
(%)
Se
lf-
Head
fu
quart
534,635,2 37,982,329.7 133,111,026.6 689,208.1 689,208.1 nd
er 95,128,696.90 24.9 24.9 4.56
00.00 4 4 3 3 ed
buildi
ca
ngs
pit
al
244 / 337
Annual Report 2021
Se
Light lf-
sourc fu
es to 13,594,520.9 89,077,882.9 nd
99,097,636.39 8,123,055.68 15,491,218.74
be 8 5 ed
lease ca
d pit
al
534,635,2 51,576,850.7 194,226,333.2 89,077,882.9 148,602,245.3 689,208.1 689,208.1
Total 8,123,055.68 / / / /
00.00 2 9 5 8 3 3
245 / 337
Annual Report 2021
(3). Provision for impairment losses for construction in progress in the current period
□ Applicable √ N/A
Other information
□ Applicable √ N/A
Materials for construction
(1). Description of materials for construction
□ Applicable √ N/A
23. Productive biological assets
(1). productive biological assets measured at cost
□ Applicable √ N/A
(2). productive biological assets measured at fair value
□ Applicable √ N/A
Other information
□ Applicable √ N/A
24. Oil and gas assets
□ Applicable √ N/A
25. Right-of-use assets
√ Applicable □ N/A
In RMB
Item Total
I. Original book value
1. Opening balance 71,832,525.03 71,832,525.03
2. Increase 9,823,558.16 9,823,558.16
(1) Lease in 10,013,335.82 10,013,335.82
(2) Other changes -189,777.66 -189,777.66
3. Decrease 2,146,042.14 2,146,042.14
(1) Disposal 2,146,042.14 2,146,042.14
4. Closing balance 79,510,041.05 79,510,041.05
II. Accumulated depreciation
1. Opening balance 32,464,454.86 32,464,454.86
2. Increase 20,241,675.43 20,241,675.43
(1) Provision 20,389,229.02 20,389,229.02
(2) Other changes -147,553.59 -147,553.59
3. Decrease
246 / 337
Annual Report 2021
(1) Disposal
4. Closing balance 52,706,130.29 52,706,130.29
III. Provision for impairment
1. Opening balance
2. Increase
(1) Provision
3. Decrease
(1) Disposal
4. Closing balance
IV. Book value
1. Closing balance 26,803,910.76 26,803,910.76
2. Opening balance 39,368,070.17 39,368,070.17
Other information:
For the difference between the opening balance of the year and the closing balance of the prior year (as of
December 31, 2020), refer to V.44 of Section X for details.
26. Intangible assets
(1). Description of intangible assets
√ Applicable □ N/A
In RMB
Item Land use rights Patents Software Total
I. Original book value
1. Opening 330,630,000.00 23,247,800.00 13,996,355.81 367,874,155.81
balance
2. Increase 2,991,914.48 2,991,914.48
(1) 3,005,552.17 3,005,552.17
Purchase
(2) -13,637.69 -13,637.69
Currency
movement
3. Decrease 3,187,850.00 557,923.89 3,745,773.89
(1) 557,923.89 557,923.89
Disposal
(2) Other 3,187,850.00 3,187,850.00
changes
4. Closing 330,630,000.00 20,059,950.00 16,430,346.40 367,120,296.40
balance
II. Accumulated amortization
1. Opening 27,552,500.10 14,860,270.10 4,973,150.01 47,385,920.21
balance
2. Increase 11,021,000.04 1,530,330.04 2,907,014.58 15,458,344.66
247 / 337
Annual Report 2021
(1) 11,021,000.04 1,530,330.04 2,916,303.15 15,467,633.23
Provision
(2) -9,288.57 -9,288.57
Currency
movement
3. Decrease 557,923.89 557,923.89
(1) 557,923.89 557,923.89
Disposal
4. Closing 38,573,500.14 16,390,600.14 7,322,240.70 62,286,340.98
balance
III. Provision for impairment
1. Opening
balance
2. Increase 3,669,349.86 3,669,349.86
(1) 3,669,349.86 3,669,349.86
Provision
3. Decrease
(1)
Disposal
4. Closing 3,669,349.86 3,669,349.86
balance
IV. Book value
1. Closing 292,056,499.86 9,108,105.70 301,164,605.56
balance
2. Opening 303,077,499.90 8,387,529.90 9,023,205.80 320,488,235.60
balance
The proportion of intangible assets generated by the Company’s internal research and development to the
balance of intangible assets at the end of the period is 0.
The other changes in the original book value of patent use rights were caused because the patent use
rights acquired in previous years can no longer generate cash inflow for the Company due to technology
iteration; as a result, the Company decided not to make further payment in accordance with the agreement.
Instead, the original book value was used to write off the long-term payables provided in previous years,
the original book value of intangible assets was assessed on a temporary basis, and such patent use rights
were fully impaired.
(2). Land use rights of which certificates of title have not been obtained
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
27. Development expenditure
□ Applicable √ N/A
248 / 337
Annual Report 2021
28. Goodwill
(1). Original book value of goodwill
□ Applicable √ N/A
(2). Impairment provision of goodwill
□ Applicable √ N/A
(3). Relevant information of groups of assets or combinations of groups of assets where the goodwill
is recognized
□ Applicable √ N/A
(4). Specify test procedure, key parameters of impairment of goodwill (such as increase rate at the
projection period, increase rate at the steady period, profit rate, discount rate, and projection
period upon the estimates of the presented value of future cash flow) as well as recognition
method for impairment loss
□ Applicable √ N/A
(5). Impacts on test of goodwill impairment
□ Applicable √ N/A
Other information
□ Applicable √ N/A
29. Long-term prepaid expenses
√ Applicable □ N/A
In RMB
Item Opening Increase Amortization Other Closing
balance decreases balance
Decoration 11,020,278.57 5,906,070.66 7,008,105.89 42,524.96 9,875,718.38
construction
RTO gas for 107,339.45 19,266.03 88,073.42
the screen
project
Leased 552,068.22 389,695.20 162,373.02
software
Total 11,572,346.79 6,013,410.11 7,417,067.12 42,524.96 10,126,164.82
Other information:
None
30. Deferred tax assets and deferred tax liabilities
(1). Deferred tax assets that are not offset
√ Applicable □ N/A
In RMB
249 / 337
Annual Report 2021
Closing balance Opening balance
Deductible Deductible
Item Deferred tax Deferred tax
temporary temporary
assets assets
differences differences
Provision for 43,598,496.34 6,542,132.46 28,773,276.08 4,625,714.28
impairment of assets
Unrealized profits for 359,910,538.71 53,986,580.82 343,108,987.56 85,451,876.99
insider transactions
Deductible losses 3,339,193.87 834,798.46
Estimated liabilities 30,413,119.32 4,561,967.90 24,854,195.43 4,578,959.70
Share-based payment 103,555,776.28 15,645,325.93 639,138.44 101,038.96
expenses
Deferred income 10,035,489.25 1,505,323.38 15,797,285.68 2,504,280.31
Leases 1,474,346.78 221,152.02 2,147,584.57 323,676.36
Total 548,987,766.68 82,462,482.51 418,659,661.63 98,420,345.06
For the difference between the opening balance of the year and the closing balance of the prior year (as of
December 31, 2020), refer to V.44 of Section X for details.
(2). Deferred tax liabilities that are not offset
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Taxable Taxable
Item Deferred tax Deferred tax
temporary temporary
Liabilities Liabilities
differences differences
Long-term accounts 9,407,088.13 1,411,063.22 13,097,031.17 1,964,554.68
receivable
Gains from changes in 2,200,000.00 330,000.00
fair values
Total 11,607,088.13 1,741,063.22 13,097,031.17 1,964,554.68
(3). Deferred tax assets and deferred tax liabilities that are presented at the net amount after offset
√ Applicable □ N/A
In RMB
Opening
Closing set-off Closing balance Opening set-off
balance of
amounts of of deferred tax amount of
deferred tax
Item deferred tax assets or deferred tax
assets or
assets and liabilities after assets and
liabilities after
liabilities set-off liabilities
set-off
Deferred tax assets 1,741,063.22 80,721,419.29 1,964,554.68 96,455,790.38
Deferred tax liabilities 1,741,063.22 1,964,554.68
For the difference between the opening balance of the year and the closing balance of the prior year (as
of December 31, 2020), refer to V.44 of Section X for details.
250 / 337
Annual Report 2021
(4). Details of unrecognized deferred tax assets
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Deductible losses 326,263,103.27 275,961,696.98
Provision for impairment of 29,041,507.01 24,335,696.06
assets
Unrealized profits for insider 36,978,135.00 17,750,166.76
transactions
Estimated liabilities 6,015,569.62 3,945,159.22
Deferred income 231,492.83 925,971.47
Share-based payment 11,982,368.41 612,638.54
expenses
Leases 1,726,120.92
Profit distribution from 40,790.41
partnership enterprises
Provision for impairment of 4,900,000.00
other equity instrument
investments
Total 417,179,087.47 323,531,329.03
(5). Deductible losses, for which no deferred tax assets are recognized, will expire in the following
years
√ Applicable □ N/A
In RMB
Year Closing balance Opening balance Remark
2021 9,487,530.31
2022 1,747,737.55 11,900,329.00
2023 27,969,288.80 42,584,893.83
2024 66,901,681.33 69,711,255.86
2025 68,119,959.02 91,878,757.39
2026 98,077,911.35
No expiry date 63,446,525.22 50,398,930.59
Total 326,263,103.27 275,961,696.98 /
Other information:
√ Applicable □ N/A
Overseas subsidiaries have the deductible loss of RMB 63,446,525.22, for which there is no expiry date.
31. Other non-current assets
√ Applicable □ N/A
In RMB
251 / 337
Annual Report 2021
Closing balance Opening balance
Carrying Provision Carrying Provision
Item amount for amount for
Book value Book value
impairmen impairmen
t t
Prepaymen 10,998,641.7 10,998,641.7 6,299,781.0 6,299,781.0
t for 7 7 6 6
purchase
of long-
term assets
10,998,641.7 10,998,641.7 6,299,781.0 6,299,781.0
Total
7 7 6 6
Other information:
None
32. Short-term borrowings
(1). Categories of short-term borrowings
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Guaranteed loans 5,560,000.00 77,223,937.39
Credit loans 2,468.61 11,299,169.33
Interest 8,409.50 255,746.14
Total 5,570,878.11 88,778,852.86
Description for categories of short-term borrowings:
None
(2). Short-term borrowings overdue but not yet repaid
□ Applicable √ N/A
Of which the significant overdue short-term borrowings are described as below:
□ Applicable √ N/A
Other information
□ Applicable √ N/A
33. Held-for-trading financial liabilities
□ Applicable √ N/A
34. Derivative financial liabilities
□ Applicable √ N/A
252 / 337
Annual Report 2021
35. Notes payable
(1). Presented by notes payable
√ Applicable □ N/A
In RMB
Category Closing balance Opening balance
Bank acceptance bills 134,378,967.61 116,822,674.67
Total 134,378,967.61 116,822,674.67
Total notes payable matured but not paid yet is RMB 0 at the end of the period.
36. Accounts payable
(1). Presented by accounts payable
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Amounts payable for 419,966,567.27 226,494,815.90
purchase
Total 419,966,567.27 226,494,815.90
(2). Accounts payable with significant amounts aged more than 1 year
□ Applicable √ N/A
Other information
□ Applicable √ N/A
37. Receipts in advance
(1). Presented by receipts in advance
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Advance payments of recharge 130,288,312.62 153,258,189.88
fees
Total 130,288,312.62 153,258,189.88
(2). Receipts in advance with significant amounts aged more than 1 year
√ Applicable □ N/A
In RMB
Reasons for not repaid or
Item Closing balance
carried-forward
Jiangsu Happy Blue Sea 19,608,611.27 Lease payments received in
Cinema Development Co., Ltd. advance
Total 19,608,611.27 /
Other information
253 / 337
Annual Report 2021
□ Applicable √ N/A
38. Contract liabilities
(1). Description of contract liabilities
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Goods payment 45,541,629.55 31,518,312.59
Total 45,541,629.55 31,518,312.59
(2). Amount and reasons of major changes in the book value during the reporting period
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
39. Employee benefits payable
(1). Presented by employee benefits payable
√ Applicable □ N/A
In RMB
Opening
Item Increase Decrease Closing balance
balance
I. Short-term benefits 46,031,631.17 368,072,603.29 350,203,477.82 63,900,756.64
II. Post-employment 73,934.98 14,330,662.48 14,218,363.80 186,233.66
benefits-defined
contribution plan
III. Termination benefits 1,291,876.39 1,259,779.18 32,097.21
Total 46,105,566.15 383,695,142.16 365,681,620.80 64,119,087.51
(2). Presented by short-term employee benefits
√ Applicable □ N/A
In RMB
Opening
Item Increase Decrease Closing balance
balance
I. Wages or salaries, 45,956,435.30 331,055,519.39 313,590,736.48 63,421,218.21
bonuses, allowances and
subsidies
II. Staff welfare 9,783,129.58 9,492,129.58 291,000.00
III. Social security 53,986.52 10,073,278.61 10,004,679.76 122,585.37
contributions
Where: Medical insurance 53,183.08 9,597,504.73 9,533,391.75 117,296.06
254 / 337
Annual Report 2021
Work injury 786.46 245,176.91 240,691.04 5,272.33
insurance
Maternity insurance 16.98 230,596.97 230,596.97 16.98
IV. Housing funds 989.00 16,421,418.62 16,422,407.62
V. Union running costs and 20,220.35 739,257.09 693,524.38 65,953.06
employee education costs
VI. Short-term paid leaves
VII. Short-term profit
sharing plan
Total 46,031,631.17 368,072,603.29 350,203,477.82 63,900,756.64
(3). Presented by defined contribution plan
√ Applicable □ N/A
In RMB
Opening Closing
Item Increase Decrease
balance balance
1. Basic pensions 73,886.98 13,895,719.11 13,789,028.01 180,578.08
2. Unemployment 48.00 434,943.37 429,335.79 5,655.58
insurance
3. Enterprise annuity
contribution
Total 73,934.98 14,330,662.48 14,218,363.80 186,233.66
Other information:
□ Applicable √ N/A
40. Taxes payable
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Value-added tax (VAT) 4,246,010.43 12,205,136.88
Enterprise income tax 11,889,909.01 5,477,611.87
Individual income tax 1,613,116.75 1,067,512.87
City maintenance and 552,264.60 478,213.88
construction tax
Education surcharges 242,838.49 204,948.80
Local education surcharges 161,892.32 136,632.54
Stamp duty 832,145.97 294,612.70
Annual franchise right tax 8,012.66 7,177.40
Total 19,546,190.23 19,871,846.94
Other information:
255 / 337
Annual Report 2021
None
41. Other payables
Presented by items
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Interest payable
Dividend payable
Other payables 54,115,784.80 58,821,952.01
Total 54,115,784.80 58,821,952.01
Other information:
□ Applicable √ N/A
Interest payable
(1). Presented by categories
□ Applicable √ N/A
Dividends payable
(1). Presented by categories
□ Applicable √ N/A
Other payables
(1). Other payables presented by nature
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Withholding 117,948.38 110,389.10
Deposits/margins 6,388,325.48 6,600,475.05
Withdrawals in advance 43,694,291.49 21,126,906.43
Amount of equity transfer 11,548,387.32
payable
Borrowings 19,343,613.33
Temporary receipts payable 3,915,219.45 92,180.78
Total 54,115,784.80 58,821,952.01
For the difference between the opening balance of the year and the closing balance of the prior year (as of
December 31, 2020), refer to V.44 of Section X for details.
(2). Other payables with significant amounts aged more than 1 year
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
256 / 337
Annual Report 2021
42. Held-for-sale liabilities
□ Applicable √ N/A
43. Non-current liabilities due within one year
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Long-term borrowings due 135,843,834.00 181,057,099.90
within one year
Lease liabilities due within 18,770,827.17 18,607,011.39
one year
Interest payable 170,455.18 360,312.56
Total 154,785,116.35 200,024,423.85
Other information:
For the difference between the opening balance of the year and the closing balance of the prior year (as of
December 31, 2020), refer to V.44 of Section X for details.
44. Other current liabilities
Description of other current liabilities
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Amounts payable for goods 16,804,816.23
returned
Taxes to be written off 2,756,287.89 3,045,831.07
Total 19,561,104.12 3,045,831.07
Changes in short-term bonds payable:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
45. Long-term borrowings
(1). Categories of long-term borrowings
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Pledge borrowings
Mortgage borrowings
Guaranteed loans 313,799,994.00 29,000,000.00
Credit loans 2,043,500.81
257 / 337
Annual Report 2021
Guaranteed loans and loans 54,430,844.66 33,693,828.00
against collateral
Interest payable 404,775.98 107,952.72
Total 368,635,614.64 64,845,281.53
Description for categories of long-term borrowings:
None
Other description, including interest range:
□ Applicable √ N/A
46. Bonds payable
(1). Bonds payable
□ Applicable √ N/A
(2). Changes in bonds payable: (excluding other financial instruments such as preference shares,
perpetual bonds and others classified as financial liabilities)
□ Applicable √ N/A
(3). Description of converting terms and period of convertible corporate bonds
□ Applicable √ N/A
(4). Description of other financial instruments classified as financial liabilities
Basic information of other financial instruments including outstanding preferred shares and perpetual
bonds at the end of the period
□ Applicable √ N/A
Changes in financial instruments including outstanding preferred shares and perpetual bonds at the end of
the period
□ Applicable √ N/A
Other financial instruments classified as financial liabilities:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
47. Leasing liabilities
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Lease payment 10,789,352.69 23,804,845.36
Total 10,789,352.69 23,804,845.36
Other information:
258 / 337
Annual Report 2021
For the difference between the opening balance of the year and the closing balance of the prior year (as of
December 31, 2020), refer to V.44 of Section X for details.
48. Long-term payables
Presented by items
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Long-term payables 3,262,450.00
Special payables
Total 3,262,450.00
Other information:
□ Applicable √ N/A
Long-term payables
(1). Long-term payables presented by nature
√ Applicable □ N/A
In RMB
Item Opening balance Closing balance
Purchase of patent use rights by 3,262,450.00
installment
Other information:
None
Special payables
(1). Special payables presented by nature
□ Applicable √ N/A
49. Long-term employee benefits payable
□ Applicable √ N/A
50. Provisions
√ Applicable □ N/A
In RMB
Item Opening balance Closing balance Reason
Product quality 27,240,470.53 35,744,039.63 Expenses for “three
warranty guarantees” services
Amounts payable for 1,558,884.12 684,649.31
goods returned
Total 28,799,354.65 36,428,688.94 /
Other description, including significant assumptions and estimates relative to material provisions:
259 / 337
Annual Report 2021
None
51. Deferred income
Description of deferred income
√ Applicable □ N/A
In RMB
Opening
Item Increase Decrease Closing balance Reason
balance
Government 16,723,257.15 4,070,480.27 10,526,755.34 10,266,982.08
grants
Total 16,723,257.15 4,070,480.27 10,526,755.34 10,266,982.08 /
Items relating to government grants:
√ Applicable □ N/A
In RMB
Amount Amount
recogniz recognize
Increased
ed in d in other
governme
non- income Other Related to
Opening nt grants Closing
Liabilities operatin for the chang assets/inco
balance for the balance
g income current es me
current
for the period
period
current
period
Trichromatic 13,340,196. 2,815,480. 7,476,233.4 8,679,443.3 Related to
Laser 54 27 9 2 income
Display
Complete
Equipment
Production
Demonstratio
n Line
Ultra-high 1,683,873.2 1,683,873.2 Related to
Brightness 6 6 income
Laser Light
Source
Engineering
Technology
Research
Center, the
Science,
Technology,
and
260 / 337
Annual Report 2021
Innovation
Commission
of Shenzhen
Key 255,000.00 255,000.00 Related to
Technology income
of
Trichromatic
Laser
Display
Complete
Equipment
Industrializati
on
8K Ultra 1,699,187.3 774,722.75 924,464.60 Related to
High 5 assets
Definition
Laser
Display
Technology
Engineering
Research
Center
R&D of key 1,000,000. 336,925.84 663,074.16 Related to
technologies 00 income
for ultra
high-
definition
micro laser
projector
optical
engine based
on light-
emitting
ceramic
devices
16,723,257. 4,070,480. 10,526,755. 10,266,982.
Subtotal
15 27 34 08
Other information:
√ Applicable □ N/A
Government grants included in the current profit or loss are disclosed in VII.84 of Section X in details.
261 / 337
Annual Report 2021
52. Other non-current liabilities
□ Applicable √ N/A
53. Share capital
√ Applicable □ N/A
In RMB
Changes (+, -)
Opening Issue Capitalization Closing
Bonus
balance New of capital Others Subtotal balance
shares
share reserve
Total 452,756,901.00 452,756,901.00
shares
Other information:
None
54. Other equity instruments
(1). Basic information of other financial instruments including outstanding preferred shares and
perpetual bonds at the end of the period
□ Applicable √ N/A
(2). Changes in financial instruments including outstanding preferred shares and perpetual bonds
at the end of the period
□ Applicable √ N/A
Changes of other equity instruments in the current period, reasons for such change and basis for related
accounting treatments:
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
55. Capital reserve
√ Applicable □ N/A
In RMB
Item Opening balance Increase Decrease Closing balance
Capital 1,241,202,420.08 1,241,202,420.08
premium
(Share
premium)
Other capital 7,818,571.07
151,584,145.50 159,402,716.57
reserve
Total 1,249,020,991.15 151,584,145.50 1,400,605,136.65
Other description, including changes in the current period and reasons for changes:
262 / 337
Annual Report 2021
1) On March 5, 2021, the Company entered into the Share Transfer Agreement on (Chongqing)
Innovative Technology Co., Ltd. with Suzhou Industrial Park Shunwei Technology Venture Capital
Partnership (Limited Partnership), Tianjin Jinmi Investment Partnership (Limited Partnership), and
Shenzhen Fengye Investment Consulting Limited Partnership (Limited Partnership), under which the
Company transferred 45% equity interests in its wholly-owned subsidiary Foremovie at the transfer price
of RMB 1, respectively; after receiving the transfer price, the Company recognized the capital reserve
(other capital reserve) of RMB 3.
2) On March 23, 2021, the Company’s subsidiary Foremovie entered into the Investment Agreement
of (Chongqing) Innovative Technology Co., Ltd. with Shenzhen Pengfeng No. 1 Venture Capital
Partnership (Limited Partnership), Shenzhen Pengfeng No. 3 Venture Capital Partnership (Limited
Partnership), Chongqing Liangjiang New Area Chengwei Equity Investment Fund Partnership (Limited
Partnership), and LAI Yongsai, under which Chongqing Liangjiang New Area Chengwei Equity
Investment Fund Partnership (Limited Partnership), Shenzhen Pengfeng No. 1 Venture Capital Partnership
(Limited Partnership), Shenzhen Pengfeng No. 3 Venture Capital Partnership (Limited Partnership), and
LAI Yongsai made the total investment of RMB 200,000,000.00 in Foremovie, including RMB
17,543,860.00 recognized in Foremovie’s paid-in capital, and the remaining RMB 182,456,140.00
recognized in Foremovie’s capital reserve. The Company recognized capital reserve (other capital reserve)
at the difference of RMB 92,622,244.75 between the identifiable net assets of the subsidiary according to
its shareholding ratio before and after the capital increase.
3) On October 14, 2019, the Company held the eighteenth session of the first Board of Directors and
the eighth session of the first Board of supervisors, in which resolutions on matters related to the 2019
Restricted Stock Incentive Plan were discussed and approved; as the Company’s implementation of this
incentive plan was approved in the general meeting of shareholders, it was determined that 4.4 million
shares of restricted shares were granted to 169 incentive participants who met the grant conditions at a
grant price of RMB 17.5 per share on the grant date of October 14, 2019. On October 13, 2020, the
Company held the 27th meeting of the first Board of Directors and the 14th meeting of the first Board of
Supervisors, at which the Proposal on Adjusting the Grant Price of Restricted Shares under the 2019
Restricted Share Incentive Plan and the Proposal on Granting Reserved Restricted Shares to Grantees of
Share Incentives under the 2019 Restricted Share Incentive Plan were reviewed and passed, approving to
263 / 337
Annual Report 2021
adjust the grant price of restricted shares from RMB 17.5 per share to RMB 17.425 per share. As the
Company’s implementation of this incentive plan was approved in the general meeting of shareholders, it
was determined that 1.10 million shares of restricted shares were granted to 38 grantees of share incentives
who met the grant conditions at a grant price of RMB 17.425 per share on the grant date of October 13,
2020. On May 14, 2021, at the 2020 annual general meeting of shareholders, the Proposal on Preliminary
Plan on Profit Distribution for 2020 was reviewed and passed, approving to adjust the grant price of
restricted shares from RMB 17.425 per share to RMB 17.37 per share due to the ex-rights effect of profit
distribution. The total expense of equity-settled share-based payments amounted to RMB 7,796,726.37,
in which RMB 6,987,470.10 was recognized in the capital reserve (other capital reserve) and RMB
809,256.27 was charged to the amount attributable to minority interests.
4) On January 1, 2021, the Company granted restricted shares to senior officers of the subsidiary
CINEAPPO with shares of its shareholding platform with the grant waiting period of 24 months, for which
it’s determined that the grant date shall be January 1, 2021 at the grant price of RMB 4.00 per share. The
total expense of equity-settled share-based payments amounted to RMB 4,206,150.00, in which RMB
2,658,286.80 was recognized in the capital reserve (other capital reserve) and RMB 1,547,863.20 was
charged to the amount attributable to minority interests.
5) On April 22, 2021, the Company held the 31st meeting of the first Board of Directors and the 18th
meeting of the first Board of Supervisors, at which the Proposal on Initial Granting Restricted Shares to
Grantees was reviewed and passed; as the Company’s implementation of this incentive plan was approved
in the general meeting of shareholders, it was determined that 17.1000 million shares of restricted shares
were granted to 220 incentive participants who met the grant conditions at a grant price of RMB 21.00 per
share, RMB 17.50 per share, and RMB 18.50 per share, respectively, on the grant date of April 22, 2021.
The total expense of equity-settled share-based payments amounted to RMB 38,356,472.38, in which
RMB 35,909,218.95 was recognized in the capital reserve (other capital reserve) and RMB 2,447,253.43
was charged to the amount attributable to minority interests.
6) On December 7, 2021, the Company held the 6th meeting of the second Board of Directors and the
6th meeting of the second Board of Supervisors, at which the Proposal on Initial Granting Restricted
Shares to Grantees was reviewed and passed; as the Company’s implementation of this incentive plan was
approved in the general meeting of shareholders, it was determined that 8.4000 million shares of restricted
264 / 337
Annual Report 2021
shares were granted to 55 incentive participants who met the grant conditions at a grant price of RMB
20.00 per share and RMB 23.00 per share, respectively, on the grant date of December 7, 2021. The total
expense of equity-settled share-based payments amounted to RMB 2,602,214.14, in which RMB
2,593,206.52 was recognized in the capital reserve (other capital reserve) and RMB 9,007.62 was charged
to the amount attributable to minority interests.
7) On December 31, 2021, Shenzhen Fengye Investment Consulting Limited Partnership (Limited
Partnership), the employee shareholding platform for the Company’s subsidiary Foremovie, reviewed and
passed the Resolution on Granting Equity Shares of Shenzhen Fengye Investment Consulting Limited
Partnership (Limited Partnership), under which it was determined that 1.5505 million shares were granted
to 36 incentive participants who met the grant conditions at a grant price of RMB 1 per share (each share
corresponding to RMB 1 of Foremovie’s registered capital), where 1.0000 million shares were granted on
a one-off basis, while 0.5505 million shares were subject to restriction provisions and allocated over the
period of service. At the time of granting the share-based payment above, the fair value of Foremovie’s
equity interests was RMB 11.40 per registered capital; correspondingly, the Company recognized the
capital reserve (other capital reserve) of RMB 4,077,125.62 and the minority interests of RMB
6,326,358.98.
8) On December 31, 2021, with respect to the temporary difference by which the fair value at the end
of period of restricted shares is greater than the fair value at the grant date, the Company recognized the
deferred tax assets of RMB 7,138,424.39, the capital reserve (other capital reserve) of RMB 6,736,589.76,
and the minority interests of RMB 401,834.63.
56. Treasury shares
□ Applicable √ N/A
265 / 337
Annual Report 2021
57. Other comprehensive income
√ Applicable □ N/A
In RMB
Amount for the current period
Less: Amount
Less: Amount
previously
previously
included in
included in Less:
Amount other Attributable to Attributable to
Opening other Income Closing
Item incurred for comprehensiv owners of the minority
Balance comprehensiv tax Balance
current period e income and parent company shareholders
e income and expense
before tax transferred to after tax after tax
transferred to s
retained
profit or loss
earnings for
for the period
the period
I. Other
comprehensive
income that cannot be
-4,900,000.00 -4,900,000.00 -4,900,000.00
reclassified
subsequently to profit
or loss
Where: Changes from
remeasurement of
defined benefit plans
Other
comprehensive
income that cannot be
266 / 337
Annual Report 2021
reclassified to profit
or loss under the
equity method
Changes in fair
value of investments
-4,900,000.00 -4,900,000.00 -4,900,000.00
in other equity
instruments
Changes in fair
value of enterprises’
own credit risks
II. Other
comprehensive -
income that will be 3,214,291. -8,677,010.78 -8,726,220.67 49,209.89 -11,940,512.60
reclassified to profit 93
or loss
Where: Other
comprehensive
income that will be
-366,814.82 -366,814.82 -366,814.82
reclassified to profit
or loss under the
equity method
Changes in fair
value of other debt
investments
Amount of
financial assets
reclassified to other
267 / 337
Annual Report 2021
comprehensive
income
Provision for credit
impairment of other
debt investments
Reserve for cash
flow hedges
Exchange
differences on
-
translation of
3,214,291. -8,310,195.96 -8,359,405.85 49,209.89 -11,573,697.78
financial statements
93
denominated in
foreign currencies
Total other -
-
comprehensive 3,214,291. -13,626,220.67 49,209.89 -16,840,512.60
13,577,010.78
income 93
Other description, including adjustments on transferring effective portion of cash flow hedges to amount upon initial recognition of the hedged item:
0
268 / 337
Annual Report 2021
58. Special reserve
□ Applicable √ N/A
59. Surplus reserve
√ Applicable □ N/A
In RMB
Item Opening balance Increase Decrease Closing balance
Statutory surplus 35,277,103.34 20,988,764.97 56,265,868.31
reserve
Total 35,277,103.34 20,988,764.97 56,265,868.31
Surplus reserve description, including changes in the current period and reasons for changes:
The Company made provisions for statutory surplus reserves at 10% of the net profits realized by the
parent company in the period.
For the difference between the opening balance of the year and the closing balance of the prior year (as of
December 31, 2020), refer to V.44 of Section X for details.
60. Undistributed profits
√ Applicable □ N/A
In RMB
Item Current period Prior period
Retained profits at the end of prior 357,793,891.96 288,975,820.29
period before adjustment
Total adjusted undistributed profits at 9,346.56 1,278,734.88
the beginning of the period (Add: +;
Less: -)
Retained profits at the beginning of 357,803,238.52 290,254,555.17
the period after adjustment
Add: Net profit attributable to 233,364,344.09 113,847,873.06
owners of the parent company for the
period
Less: Appropriation to statutory 20,988,764.97 12,441,955.44
surplus reserve
Appropriation to discretionary
surplus reserve
Appropriation to general risk
reserve
Declaration of dividends on
ordinary shares
Conversion of ordinary shares’
dividends into share capital
Distributed dividend 24,901,629.56 33,866,580.83
269 / 337
Annual Report 2021
Retained profits at the end of the 545,277,188.08 357,793,891.96
period
On May 14, 2021, at the 2020 annual general meeting of shareholders, the Proposal on Preliminary
Plan on Profit Distribution for 2020 was reviewed and passed, approving to make profit distribution on
the basis of the total shares on the record date of interest distribution - the Company proposed to distribute
to all shareholders a cash dividend of RMB 0.55 (tax inclusive) for every 10 shares. The total cash dividend
to be paid is RMB 24,901,629.56.
The total adjusted undistributed profits at the beginning of the period are described in detail in V.4 of
Section X.
Details of adjustments to undistributed profits at the beginning of the period:
1) As a result of the retrospective adjustment of the Accounting Standards for Business Enterprises and
related new regulations, undistributed profits at the beginning of the period were affected by RMB
9,346.56.
2. Retained profits at the beginning of the period were affected by RMB 0.00 due to changes in accounting
policies.
3. Retained profits at the beginning of the period were affected by RMB 0.00 due to the correction of
significant accounting errors.
4. Retained profits at the beginning of the period were affected by RMB 0.00 due to changes in the scope
of consolidation resulting from business combination involving entities under common control.
5. Retained profits at the beginning of the period were affected by RMB 0.00 in total due to other
adjustments.
61. Operating income and operating costs
(1). Description of operating income and operating costs
√ Applicable □ N/A
In RMB
Amount for the current period Amount for the prior period
Item
Income Cost Income Cost
Main 2,498,228,401.78 1,651,089,557.25 1,948,884,176.83 1,393,075,043.93
business
Total 2,498,228,401.78 1,651,089,557.25 1,948,884,176.83 1,393,075,043.93
270 / 337
Annual Report 2021
(2). Description of incomes from contracts
□ Applicable √ N/A
Description of incomes from contracts:
□ Applicable √ N/A
(3). Description of performance obligations
□ Applicable √ N/A
(4). Description of allocation to remaining performance obligations
□ Applicable √ N/A
Other information:
Breakdown of revenue from contracts with customers by category
1) Breakdown of revenue by the types of goods or services
Amount of the current period Amount of the prior period
Item
Income Cost Income Cost
Laser optical
288,813,218.37 144,202,411.53 202,707,478.10 81,529,453.84
engine
Complete laser
1,708,041,893.50 1,257,091,802.95 1,465,195,649.90 1,151,787,097.57
projector
Others 140,751,281.09 106,666,550.86 109,248,434.17 52,005,419.13
Subtotal 2,137,606,392.96 1,507,960,765.34 1,777,151,562.17 1,285,321,970.54
2) Breakdown of revenue by operating region
Amount of the current period Amount of the prior period
Item
Income Cost Income Cost
Domestic 1,957,925,457.54 1,410,776,285.94 1,683,887,300.96 1,248,303,920.68
Overseas 179,680,935.42 97,184,479.40 93,264,261.21 37,018,049.86
Subtotal 2,137,606,392.96 1,507,960,765.34 1,777,151,562.17 1,285,321,970.54
3) Breakdown of revenue by timing of transfer of goods or services
Amount of the current Amount of the prior
Item
period period
Revenue recognized at a time point 2,134,111,664.03 1,775,472,347.41
Revenue recognized for a period of time 3,494,728.93 1,679,214.76
Subtotal 2,137,606,392.96 1,777,151,562.17
62. Taxes and levies
√ Applicable □ N/A
In RMB
Item Amount for the current period Amount for the prior period
City maintenance and 2,999,186.97 2,867,426.89
construction tax
Education surcharges 1,301,614.24 1,245,187.55
Stamp duty 3,556,088.99 1,670,633.82
271 / 337
Annual Report 2021
Local education surcharges 872,293.37 830,125.05
Others 47,675.22 105,371.48
Total 8,776,858.79 6,718,744.79
Other information:
None
63. Selling expenses
√ Applicable □ N/A
In RMB
Item Amount for the current period Amount for the prior period
Marketing fees 103,844,070.52 39,666,919.06
Employee benefits 81,119,249.58 57,290,923.11
After-sale repair expenses 18,604,120.04 6,175,382.08
Service fees 16,509,511.98 10,032,772.59
Advertising and business
5,940,168.90 4,839,376.53
promotion expenses
Travel expenses 4,223,301.47 2,561,838.29
Business entertainment expenses 2,792,164.38 1,671,853.12
Other expenses 19,821,516.44 11,349,169.82
Total 252,854,103.31 133,588,234.60
Other information:
None
64. Administration expenses
√ Applicable □ N/A
In RMB
Item Amount for the current Amount for the prior
period period
Employee benefits 69,177,011.83 59,421,774.51
Share-based payment expenses 63,345,172.32 20,581,939.14
Service fees 24,034,440.59 31,845,756.88
Depreciation and amortization expenses 11,240,594.44 9,094,503.87
Rent expense 6,437,051.98 7,449,392.71
Travel expenses 1,042,924.39 471,610.48
Other expenses 12,656,221.72 6,892,298.67
Total 187,933,417.27 135,757,276.26
Other information:
None
65. R&D expenses
√ Applicable □ N/A
In RMB
Item Amount for the current Amount for the prior
period period
Employee benefits 147,610,747.09 120,904,809.23
Material consumption expenses 24,805,748.98 21,280,414.59
Service fees 10,781,054.58 8,549,326.63
Depreciation and amortization expenses 12,249,517.10 13,073,784.95
Rent expense 6,954,468.80 8,983,285.74
Testing expenses 8,458,772.06 5,234,158.17
Patent fees 8,363,204.10 6,808,589.82
272 / 337
Annual Report 2021
Other expenses 17,478,711.58 19,608,999.97
Total 236,702,224.29 204,443,369.10
Other information:
None
66. Financial expenses
√ Applicable □ N/A
In RMB
Item Amount for the current Amount for the prior
period period
Interest expenses 17,079,723.61 20,066,451.02
Less: Interest income -17,645,299.09 -10,322,478.28
Exchange profit or loss 465,827.17 -2,227,674.26
Bank service charges 1,400,128.67 1,708,675.72
Total 1,300,380.36 9,224,974.20
Other information:
None
67. Other income
√ Applicable □ N/A
In RMB
Item Amount for the current period Amount for the prior period
Government grants related to 774,722.75 300,812.65
assets
Government grants related to 40,616,103.23 41,782,494.35
income
Refund of transaction fees for 576,787.99 323,003.17
withholding individual income
taxes
Additional deduction of input 4,179,604.21 2,848,690.73
VAT
Total 46,147,218.18 45,255,000.90
Other information:
Government grants recognized in other income in the current period are disclosed in VII.84 of Section X
in details.
68. Investment income
√ Applicable □ N/A
In RMB
Amount for the current
Item Amount for the prior period
period
Long-term equity investment 22,856,529.68 -679,282.94
accounted for using the equity method
Investment income from disposal of 9,785,727.49 18,624,853.96
held-for-trading financial assets
Fees for acquiring held-for-trading -8,750.05
financial assets
Total 32,633,507.12 17,945,571.02
Other information:
None
273 / 337
Annual Report 2021
69. Income from net exposure hedges
□ Applicable √ N/A
70. Gains from changes in fair values
√ Applicable □ N/A
In RMB
Source of gains from changes in fair
Amount for the current period Amount for the prior period
values
Held-for-trading financial assets 2,200,000.0
Compensation for performance 37,927,764.00
commitment
Total 40,127,764.00
Other information:
None
71. Losses of credit impairment
√ Applicable □ N/A
In RMB
Amount for the current
Item Amount for the prior period
period
Impairment losses of notes receivable 81,038.20 -138,169.75
Impairment losses of accounts -4,920,605.15 -8,005,819.07
receivable
Impairment losses of other receivables -481,845.13 -227,290.13
Impairment losses of long-term -1,440,479.21 -750,000.00
receivables
Impairment losses of non-current assets -47,400.00
due within one year
Total -6,809,291.29 -9,121,278.95
Other information:
None
72. Impairment losses of assets
√ Applicable □ N/A
In RMB
Amount for the current
Item Amount for the prior period
period
I. Bad debt losses -140,603.54 -1,393,709.16
II. Losses of decline in value of -32,806,562.15 -10,196,985.27
inventories and losses of contract
performance cost
III. Impairment losses of long-term
equity investments
IV. Impairment losses of investment
properties
V. Impairment losses of fixed assets -329,652.40
VI. Impairment losses of
construction materials
VII. Impairment losses of
construction in progress
VIII. Impairment losses of
productive biological assets
IX. Impairment losses of oil and gas
assets
274 / 337
Annual Report 2021
X. Impairment losses of intangible -3,669,349.86
assets
XI. Goodwill impairment losses
XII. Others
Total -36,946,167.95 -11,590,694.43
Other information:
None
73. Gains on disposal of assets
√ Applicable □ N/A
In RMB
Item Amount for the current period Amount for the prior period
Gains from disposal of fixed 2,967,788.29 281,040.26
assets
Total 2,967,788.29 281,040.26
Other information:
None
74. Non-operating income
Description of non-operating income
√ Applicable □ N/A
In RMB
Amount included in
Amount for the current Amount for the prior
Item non-recurring profit or
period period
loss for the period
Total gains from
disposal of non-
current assets
Where: Gains from
disposal of fixed
assets
Gains from
disposal of intangible
assets
Gains from exchange
of non-monetary
assets
Donation receipts
Government grants 51,500,000.00 1,539,340.28 51,500,000.00
Amounts not 102,168.27 275,714.05 102,168.27
required for payment
Indemnity 916,875.85 2,793,056.81 916,875.85
Others 109,117.96 30,323.96 109,117.96
Total 52,628,162.08 4,638,435.10 52,628,162.08
Government grants included in profit or loss for the period
√ Applicable □ N/A
In RMB
Amount for the current Amount for the prior Related to
Grant project
period period assets/income
Grant from Hong 139,340.28 Related to income
Kong government
for the
semiconductor R&D
275 / 337
Annual Report 2021
project of Hong
Kong University of
Science and
Technology
Enterprise Listing 1,400,000.00 Related to income
Financing Incentive
Program of
Shenzhen Nanshan
District Industry and
Information
Technology Bureau
Restructuring and 1,500,000.00 Related to income
Listing Supporting
Grant for 2021 from
the Service Bureau
for Small- and
Medium-sized
Enterprises of
Shenzhen
Project Supporting 30,000,000.00 Related to income
Fund of Chong
Liangjiang New Area
Administration
Commission - Head
Office Relocation
Supporting Fund
Project Supporting 20,000,000.00 Related to income
Fund of Chong
Liangjiang New Area
Administration
Commission - Head
Office Relocation
Supporting Fund
Other information:
□ Applicable √ N/A
75. Non-operating expenses
√ Applicable □ N/A
In RMB
Amount included in
Amount for the current Amount for the prior
Item non-recurring profit or
period period
loss for the period
External donations 593,309.76
Losses from damage 1,530,253.26 1,393,161.39 1,530,253.26
and retirement of
non-current assets
Penalties and 27,996.72 76,700.50 27,996.72
overdue fines
Others 234,834.67 1.31 234,834.67
Total 1,793,084.65 2,063,172.96 1,793,084.65
Other information:
None
276 / 337
Annual Report 2021
76. Income tax expense
(1). Statement of income tax expense
√ Applicable □ N/A
In RMB
Item Amount for the current period Amount for the prior period
Income tax expense in the current 44,120,143.66 11,910,373.50
period
Deferred income tax expenses 22,872,795.49 12,853,862.82
Total 66,992,939.15 24,764,236.32
(2). Reconciliation of income tax expenses to the accounting profit
√ Applicable □ N/A
In RMB
Item Amount for the current period
Total profit 288,527,756.29
Income tax expense calculated based on 43,279,163.44
statutory/applicable tax rate
Effect of different tax rates of subsidiaries -8,173,947.55
operating in other jurisdictions
Effect of income tax for the period before 694,125.80
adjustment
Effect of non-taxable income -17,700,337.40
Effect of non-deductible cost, expense and loss 1,167,899.61
Effect of utilizing deductible loss not -6,122,226.54
recognized for deferred tax assets for prior
period
Effect of deductible temporary difference or 38,142,008.03
deductible loss not recognized for deferred tax
assets for the current period
Change in the balance of opening deferred tax 35,981,277.63
assets caused by tax rate adjustment
Effect of additional deduction of R&D -20,275,023.87
expenses
Income tax expenses 66,992,939.15
Other information:
□ Applicable √ N/A
77. Other comprehensive income
√ Applicable □ N/A
Other comprehensive income net of tax is disclosed in VII.57 of Section X in detail.
78. Items in cash flow statement
(1). Other cash receipts relating to operating activities
√ Applicable □ N/A
In RMB
Item Amount for the current Amount for the prior period
period
Interest income 16,675,246.67 10,382,950.88
Government grants 79,816,846.91 40,365,718.97
Recovery of security deposits 68,674,714.21 51,523,088.26
277 / 337
Annual Report 2021
Funds frozen in connection with 30,000,000.00
litigations
Non-operating income 1,025,993.81 1,127,368.51
Other transaction accounts 18,757,498.53 6,965,206.85
Total 184,950,300.13 140,364,333.47
Description of other cash receipts relating to operating activities:
None
(2). Other cash payments relating to operating activities
√ Applicable □ N/A
In RMB
Item Amount for the current Amount for the prior period
period
Administrative expenses, selling 247,909,819.98 180,871,626.50
expenses, and R&D expenses paid
in cash
Non-operating expenses 57,390.87 670,011.57
Payment of security deposits 80,571,144.80 49,749,747.97
Service charges 1,400,128.67 1,708,675.72
Other transaction accounts 23,458,519.21 11,988,038.74
Total 353,397,003.53 244,988,100.50
Description of other cash payments relating to operating activities:
None
(3). Other cash receipts relating to investing activities
□ Applicable √ N/A
(4). Other cash payments relating to investing activities
□ Applicable √ N/A
(5). Other cash receipts relating to financing activities
√ Applicable □ N/A
In RMB
Item Amount for the current period Amount for the prior period
Shareholder borrowings 19,320,000.00
Total 19,320,000.00
Description of other cash receipts relating to financing activities:
None
(6). Other cash payments relating to financing activities
√ Applicable □ N/A
In RMB
Item Amount for the current period Amount for the prior period
Actual lease payment 27,871,604.50
Repayment of shareholder loans 19,399,427.00
Total 47,271,031.50
Description of other cash payments relating to financing activities:
278 / 337
Annual Report 2021
None
79. Supplementary information to the cash flow statement
(1). Supplementary information to the cash flow statement
√ Applicable □ N/A
In RMB
Amount for the current
Supplemental information Amount for the prior period
period
1. Reconciliation of net profit to cash flow from operating activities:
Net profit 221,534,817.14 86,657,198.57
Add: Provision for impairment of 36,946,167.95 11,590,694.43
assets
Losses of credit impairment 6,809,291.29 9,121,278.95
Depreciation of fixed assets, 108,667,338.81 99,229,686.22
depletion of oil and gas assets,
depreciation of productive biological
assets
Amortization of right-of-use assets 20,139,276.53
Amortization of intangible assets 4,446,633.19 7,377,145.47
Amortization of long-term prepaid 7,417,067.12 7,123,888.08
expenses
Losses on disposal of fixed assets, -2,967,788.29 -281,040.26
intangible assets and other long-term
assets (gains are indicated by “－”)
Losses on retirement of fixed assets 1,703,522.36 1,393,161.39
(gains are indicated by “－”)
Losses on changes in fair values -40,127,764.00
(gains are indicated by “－”)
Financial expenses (income is 18,410,475.23 17,838,776.76
indicated by “－”)
Investment losses (income is -32,633,507.12 -17,945,571.02
indicated by “－”)
Decrease in deferred tax assets 22,549,119.12 12,853,862.82
(increase is indicated by “-”)
Increase in deferred tax liabilities
(decrease is indicated by “-”)
Decrease in inventories (increase is -490,401,076.50 -172,605,815.49
indicated by “－”)
Decrease in receivables from -187,600,139.59 -128,184,406.23
operating activities (increase is
indicated by “－”)
Increase in payables from operating 289,551,990.78 96,596,705.75
activities (decrease is indicated by
“－”)
Others 73,891,802.82 21,624,864.98
Net cash flow from operating 58,337,226.84 52,390,430.42
activities
2. Significant investing and financing activities that do not involve cash receipts and payments:
Conversion of debt into capital
Convertible corporate bonds due
within one year
Fixed assets acquired under finance
leases
3. Net changes in cash and cash equivalents:
279 / 337
Annual Report 2021
Closing balance of cash 891,195,166.73 983,525,089.44
Less: Opening balance of cash 983,525,089.44 829,789,487.86
Add: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net increase in cash and cash -92,329,922.71 153,735,601.58
equivalents
(2). Net cash paid to acquire subsidiaries for the current period
√ Applicable □ N/A
In RMB
Amount
Cash or cash equivalents paid in the period for business
combination occurring in the period
Less: Cash and cash equivalents held by subsidiaries at the
acquisition date
Add: Cash or cash equivalents paid in the prior period for 11,432,903.47
business combination occurring in the period
Net cash paid for acquiring subsidiaries 11,432,903.47
Other information:
None
(3). Net cash receipts from disposal of subsidiaries for the current period
□ Applicable √ N/A
(4). Composition of cash and cash equivalents
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
I. Cash 891,195,166.73 983,525,089.44
Where: Cash on hand 5,680.24 5,858.56
Bank deposits that can be paid 883,906,202.81 980,570,123.37
at any time
Other monetary funds that can 7,283,283.68 2,949,107.51
be paid at any time
Deposits in the central bank
that can be used for payments
Deposits made with other
banks
Placements with banks
II. Cash equivalents
Where: Investments in debt
securities due within three months
280 / 337
Annual Report 2021
III. Closing balance of cash and 891,195,166.73 983,525,089.44
cash equivalents
Where: Restricted cash and cash
equivalents of the parent company
or subsidiaries within the Group
Other information:
□ Applicable √ N/A
80. Notes to items in the statement of changes in owners’ equity
Describe matters such as the names and the adjusted amounts of the items included in “others” in respect
of adjustments to the closing balances of the prior year:
□ Applicable √ N/A
81. Assets with limited ownership or use right
√ Applicable □ N/A
In RMB
Item Closing balance of carrying Reason
amount
Other monetary funds 26,131,914.42 Margins
Bank deposits 40,000,000.00 Term deposits
Bank deposits 402,750.00 Interests provided
Intangible assets 292,056,499.86 Mortgage collateral
Total 358,591,164.28 /
Other information:
None
82. Foreign currency monetary items
(1). Foreign currency monetary items
√ Applicable □ N/A
In RMB
Closing balance of Closing balance of
Item Exchange rate
foreign currency RMB equivalent
Cash and bank balances - - 93,028,168.45
Where: USD 14,292,733.81 6.3757 91,126,182.94
HKD 2,224,725.00 0.8169 1,817,377.85
GBP 365.96 8.6064 3,149.60
VND 290,921,637.00 0.0003 81,458.06
Accounts receivable - - 48,897,485.00
Where: USD 7,669,351.60 6.3757 48,897,485.00
Short-term borrowings - - 2,468.61
Where: USD 387.19 6.3757 2,468.61
Accounts payable - - 42,809,036.42
Where: USD 6,714,405.70 6.3757 42,809,036.42
Other information:
None
(2). Description of overseas operating entities, including significant overseas operating entities, of
which the major operation place, functional currency and choosing basis as well as the reason
for change of functional currency should be disclosed
√ Applicable □ N/A
281 / 337
Annual Report 2021
Functional Basis of
Item Major overseas
operation place currency choice
Common
Appotronics Hong Kong Limited Hong Kong USD
currency
Local
Appotronics USA, Inc. USA USD
currency
Common
Fabulus Technology Hong Kong Limited Hong Kong USD
currency
JoveAI Limited Cayman Common
USD
Islands currency
Local
JoveAI Innovation, Inc. USA USD
currency
Local
TECHNOLOGY INC USA USD
currency
Local
JoveAI Asia Company Limited Vietnam VND
currency
Local
WEMAX LLC USA USD
currency
83. Hedge
□ Applicable √ N/A
84. Government grants
(1). Basic information of government grants
√ Applicable □ N/A
In RMB
Amount recognized in
Category Amount Item presented
current profit or loss
Government grants 4,070,480.27 Other income 4,070,480.27
related to income and
used for compensation
of the Company’s
relevant costs or losses
in subsequent periods
Government grants 30,868,095.50 Other income 30,868,095.50
related to income and
used for compensation
of the Company’s
relevant costs or losses
that have been incurred
Government grants 51,500,000.00 Non-operating income 51,500,000.00
related to income and
used for compensation
of the Company’s
282 / 337
Annual Report 2021
relevant costs or losses
that have been incurred
Note: The amount refers to government grants actually received in the current period.
1) Government grants related to assets
Amortizati
Opening Closing
Increas Amortizati on
Item deferred deferred Description
e on item
income income
presented
8K Ultra
Project Contract of 8K
High
Ultra High Definition
Definition
Laser Display
Laser
Other Technology Engineering
Display 1,699,187.35 774,722.75 924,464.60 Research Center
Technolog income
(XMHT20190101023),
y
Development and
Engineerin
Reform Commission of
g Research
Shenzhen
Center
Subtotal 1,699,187.35 774,722.75 924,464.60
2) Government grants related to income and used for compensation of the Company’s relevant
costs or losses in subsequent periods
Carrying
Opening Closing
Carrying forward
Item deferred Increase deferred Description
forward item
income income
presented
Project Contract for
Shenzhen Science and
Ultra-high
Technology Plan (Shen
Brightness Laser
Ke Ji Chuang Xin
Light Source 1,683,873.2 Other
1,683,873.26 [2019] No. 33),
Engineering 6 income
Science, Technology,
Technology
and Innovation
Research Center
Commission of
Shenzhen
Notice on the
Establishment of 2018
Annual Projects for
Strategic Advanced
Electronic Materials in
Trichromatic
the National Key
Laser Display
Research and
Complete 2,815,48 7,476,233.4 8,679,443. Other
13,340,196.54 Development
Equipment
0.27 9 32 income Programs (Guo Ke
Production
Gao Fa Ji Zi [2018]
Demonstration
No. 41), High
Line
Technology Research
and Development
Center, Ministry of
Science and
Technology
Task Statements for
Key Technology Research and
of Trichromatic Development Program
255,000.0 Other
Laser Display 255,000.00 in Key Fields of
Complete 0 income Guangdong Province
Equipment (2019B010926001),
Industrialization Finance Bureau of
Shenzhen
R&D of key 1,000,000. 663,074.1 Other Project Application for
technologies for 336,925.84 Technology
00 6 income
ultra high- Breakthrough under
283 / 337
Annual Report 2021
definition micro Shenzhen Innovation
laser projector and Entrepreneurship
optical engine Plan
based on light- (20201026191136001),
emitting ceramic the Science,
devices Technology, and
Innovation
Commission of
Shenzhen
Subtotal 4,070,480. 9,752,032.5 9,342,517.
15,024,069.80
27 9 48
3) Government grants related to income and used for compensation of the Company’s relevant
costs or losses that have been incurred
Item
Item Amount Description
presented
Project Supporting Fund of
Chongqing Liangjiang New Non-
Investment Agreement with Chongqing
Area Administration 30,000,000.00 operating Liangjiang New Area Administration
Commission - Head Office income Commission
Relocation Supporting Fund
Project Supporting Fund of
Chongqing Liangjiang New Non-
Investment Agreement with Chongqing
Area Administration 20,000,000.00 operating Liangjiang New Area Administration
Commission - Awards for income Commission
Implementation of Project
Announcement of the Ministry of Finance and
State Taxation Administration on Tax
Offsetting by VAT at the End of the Period for
Other
Refunds of value-added taxes 5,174,354.78 Certain Advanced Manufacturing
income (Announcement No. 84 of 2019, Ministry of
Finance and State Taxation Administration),
Ministry of Finance, and State Taxation
Administration
Incentive Program for Industrial
Added Value of 2020, Nanshan Disclosure of the Fifth Batch of Entities that
Nanshan District Independent Innovation
Leadership Panel for Special Other
3,830,100.00 Industry Development Special Fund Proposes
Funds for Independent income to Support in 2020, Nanshan Leadership
Panel for Special Funds for Independent
Innovation Industry
Innovation Industry Development
Development
Notice of Shunyi Government on Promoting
2020 Shunyi District Cultural Other
3,000,000.00 and Supporting Enterprise Development,
and Creativity Fund Awards income People’s Government of Shunyi District,
Beijing
2019 Funds for Supporting Notice of Shunyi Government on Promoting
Other
Development of Enterprises in 2,200,000.00 and Supporting Enterprise Development,
income People’s Government of Shunyi District,
Shunyi District Beijing
US salary subsidy for COVID- Other Notice of Paycheck Protection Program
2,020,137.21 Forgiveness Payment, Small Business
19 income
Administration
Notice on Application for 2021 Support to
Patent Support Plan of Other
1,904,500.00 National High-tech Enterprises in Nanshan
Shenzhen Nanshan District income District, Shenzhen Nanshan District Science,
Technology, and Innovation Bureau
284 / 337
Annual Report 2021
Science, Technology, and
Innovation Bureau
2020 Grants for Domestic
Patent for Invention and Notice on Completing Formalities for
Other Claiming 2020 Grants for Domestic Patent
Overseas Patent for Invention of 1,807,500.00 for Invention and Overseas Patent for
income
Shenzhen Administration for Invention, Shenzhen Administration for
Market Regulation
Market Regulation
Science, Technology, and
Notice on Disclosure of the First Batch of
Innovation Commission of Enterprises Proposed to be Funded and the
Other
Shenzhen 2020 First Batch of 1,766,000.00 Second Batch of Approved Enterprises under
income 2020 Enterprise Research and Development
Grants for Enterprise Research Subsidy Scheme, Science, Technology, and
and Development Innovation Commission of Shenzhen
Restructuring and Listing Notice on Paying Grants for Supporting
Supporting Grant for 2021 from Non- Restructuring and Listing under the
Innovative Development Cultivation and
the Service Bureau for Small- 1,500,000.00 operating Support Plan by Private and Small- and
and Medium-sized Enterprises income Medium-sized Enterprises of Shenzhen in
2021, Service Bureau for Small- and
of Shenzhen Medium-sized Enterprises of Shenzhen
Shenzhen Nanshan District
Enterprise Development Service Disclosure of the Fourth Batch of Entities
that Nanshan District Independent Innovation
Center Scheme for Supporting Other
1,200,000.00 Industry Development Special Fund Proposes
Enterprise R&D Investment & income to Support in 2021, Shenzhen Nanshan
District Enterprise Development Service
Support Scheme of Rewards for
Center
Technology
Shenzhen Nanshan District
Nanshan District Independent Innovation
Science, Technology, and Industry Development Special Fund -
Other
Innovation Bureau Plan for 1,000,000.00 Application for R&D Investment Support
income Plan of Science, Technology, and Innovation
Supporting Enterprise R&D Funds (2020), Shenzhen Nanshan District
Investments Science, Technology, and Innovation Bureau
Science, Technology, and Notice on Disclosure of the First Batch of
Enterprises Proposed to be Funded and the
Innovation Commission of Other
1,000,000.00 Second Batch of Approved Enterprises under
Shenzhen 2022 High-tech income 2022 High-tech Enterprise Supporting Funds,
Science, Technology, and Innovation
Enterprise Supporting Funds
Commission of Shenzhen
Shenzhen Administration for
Market Regulation 2021 Special
Announcement on the Supported Projects for
Funds for Building the Other the 2021 Special Funds for Building the
700,000.00 Intellectual Property Rights Operation and
Intellectual Property Rights income
Service System of Shenzhen, Shenzhen
Operation and Service System Administration for Market Regulation
of Shenzhen
Talent Housing Rent Allowance
Supplementary Announcement on 2021 Talent
of the Housing and Other
620,000.00 Housing Rent Allowance of Nanshan District,
Construction Bureau of income Housing and Construction Bureau of Nanshan
District, Shenzhen
Nanshan District, Shenzhen
Shenzhen Nanshan District Other Nanshan District Independent Innovation
600,000.00 Industry Development Special Fund -
Science, Technology, and income
Technology Innovation Sub-funds -
285 / 337
Annual Report 2021
Innovation Bureau 2020 Application for Technology Reward
Supporting Scheme (2019), Shenzhen
Rewards for Intellectual
Nanshan District Science, Technology, and
Property Supporting of Innovation Bureau
Shenzhen
One-off Grants for Post-
doctoral Stations in Shenzhen Announcement on Candidate Entities for
Other
(Second Batch in 2020) from 500,000.00 One-off Grants for Post-doctoral Stations in
income Shenzhen (Second Batch in 2020), Shenzhen
Shenzhen Human Resources Human Resources and Social Security Bureau
and Social Security Bureau
Shenzhen Bureau of Industry
and Information Technology Notice of Shenzhen Bureau of Industry and
Information Technology on the Disclosure of
2021 Third Batch of Supported Other
500,000.00 the Third Batch of Candidate Projects under
Projects under the Plan of income the 2021 Plan of Supporting Industrial
Design Development, Shenzhen Bureau of
Supporting Industrial Design
Industry and Information Technology
Development
Commerce Bureau of Shenzhen Notice on the Disclosure of Projects on
Other Matters for Supporting Foreign Trade SMEs
2020 Central Special Funds for 500,000.00 to Expand Markets Funded by Central
income
Foreign Trade Special Funds for Foreign Trade in 2020,
Commerce Bureau of Shenzhen
Shenzhen Administration for
Disclosure of the List of Candidate Projects
Market Regulation 2021 Special Other
500,000.00 for the 2021 Special Funds for Intellectual
Funds for Intellectual Property income Property Protection, Shenzhen
Administration for Market Regulation
Protection
Allocation to the Standard Field
Notice on the Reward Scheme of Special
of Shenzhen in 2020 from Other
400,000.00 Funds for Standard Field of Shenzhen in
Shenzhen Administration for income 2020, Shenzhen Administration for Market
Regulation
Market Regulation
Guangdong Administration for
Announcement on 2021 Allocation Plan of
Market Regulation 2021 Special Other Special Funds for Promoting High-quality
400,000.00 Economic Development (Batch 2),
Funds for Promoting High- income
Guangdong Administration for Market
quality Economic Development Regulation
Guangdong Administration for
2020 Allocation Plan of Special Funds for
Market Regulation 2020 Special Other
300,000.00 Promoting High-quality Economic
Funds for Promoting High- income Development (Batch 3), Guangdong
Administration for Market Regulation
quality Economic Development
Subsidy for Post-doctoral
Application for Special Fund for Independent
Station Unit from Human Other Innovation Industry Development in Nanshan
250,000.00 District, Shenzhen - Post-doctoral Station
Resources Bureau of Nanshan income
Unit Project (2021), Human Resources
District in Shenzhen Bureau of Nanshan District in Shenzhen
Shenzhen Bureau of Industry
and Information Technology Notice on 2021 Shenzhen Industry and
Other Information Development - Special Funds for
2021 Shenzhen Industry and 180,000.00 Plan of Supporting both Quality and Brand
income
Information Development - Improvement, Shenzhen Bureau of Industry
and Information Technology
Special Funds for Plan of
286 / 337
Annual Report 2021
Supporting both Quality and
Brand Improvement
Maternity Grants from
Other Provisions of Guangdong for Maternity
Shenzhen Social Security 137,577.92 Insurance of Employees, Shenzhen Social
income
Bureau Insurance Fund Administration
Shenzhen Administration for
List of Grantees for 2020 Grants for PCT
Market Regulation 2020 Second Other Patent Application under Shenzhen
130,000.00 Intellectual Property Special Funds,
Batch of Grants for PCT Patent income
Shenzhen Administration for Market
Applications in Shenzhen Regulation
Shenzhen Administration for
Notice on Formalities of Claiming 2020
Market Regulation, Grant for Other
70,000.00 Grants for Trademark Registration and
Shenzhen Trademark income Grants for Copyright Registration, Shenzhen
Administration for Market Regulation
Registration
Grants for maintaining job Other
52,855.79
position income
Service Bureau for Small- and
Medium-sized Enterprises of
Shenzhen, Grants for Domestic
Notice on Grants for Domestic Market
Market Expansion under the Expansion under the Innovative Development
Other
Innovative Development 52,783.00 Cultivation and Support Plan by Private and
income Small- and Medium-sized Enterprises of
Cultivation and Support Plan by Shenzhen in 2021, Service Bureau for Small-
Private and Small- and and Medium-sized Enterprises of Shenzhen
Medium-sized Enterprises of
Shenzhen in 2021
Shenzhen Administration for Notice of Shenzhen Administration for Market
Regulation on Handling the General Subsidy
Market Regulation, First Other
30,000.00 Collection Procedures on Shenzhen
Reported Fund for the Second income Intellectual Property Special Fund in 2019,
Shenzhen Administration for Market
Batch of Patents in 2019
Regulation
Refund of Unemployment
Notice on Further Improving Unemployment
Benefits from Shunyi District Other
17,557.70 Insurance and Job Position Maintenance,
Social Insurance Business income Beijing Municipal Human Resources and
Social Security Bureau
Management Center
Other
Grant for social insurance 14,729.10
income
Patent Promotion and Protection Other Implementation Measures of Shunyi District
10,000.00 on Patent Promotion and Protection, Shunyi
Funds of Shunyi income
People’s Government, Beijing
Subtotal 82,368,095.50
(2). Refund of government grants
√ Applicable □ N/A
In RMB
Item Amount Reason
Employment Support Scheme of 4,024.86 Relevant employees left the
Hong Kong Government Company
4,024.86
287 / 337
Annual Report 2021
Other information:
None
85. Others
□ Applicable √ N/A
VIII. Changes in scope of consolidation
1. Business combination not involving enterprises under common control
□ Applicable √ N/A
2. Business combination involving enterprises under common control
√ Applicable □ N/A
(1). Business combinations involving enterprises under common control in the current period
□ Applicable √ N/A
(2). Combination costs
□ Applicable √ N/A
(3). Carrying amounts of assets and liabilities of the combined party at the combination date
□ Applicable √ N/A
Other information:
None
3. Counter purchase
□ Applicable √ N/A
288 / 337
Annual Report 2021
4. Disposal of subsidiaries
Single disposal of investments in subsidiaries, i.e. the loss of control
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
5. Changes in scope of consolidation for other reasons
Description of changes in the scope of consolidation for other reasons (e.g., new subsidiary establishment, subsidiary liquidation, etc.) and the relevant information:
√ Applicable □ N/A
1. Increased scope of combination
Time point of obtaining
Company Method of obtaining equity Capital contribution Proportion of contribution
equity
(Chongqing) Innovative Technology
Newly established 2020.12.29 RMB 27.50 million 39.19%
Co., Ltd.
Limited Newly established 2020.11.10 39.19%
Chongqing Guangbo Ecommerce Co., 2021.08.20
Newly established 39.19%
Ltd.
Chongqing Ewei Ecommerce Co., Ltd. Newly established 2021.08.20 39.19%
Shenzhen Orange Juice Energy
Newly established 2021.12.29 33.31%
Technology Co., Ltd.
2. Decreased scope of combination
Net profits from the
Method of disposing Time point of disposing Net assets on the disposal beginning
Company
equity equity date of the period to the disposal
date
Fabulus Display (Beijing) Co., Ltd. Deregistration 2021.11.25 21,207,779.79
Fabulus Technology Hong Kong
Deregistration 2021.7.30 22,180.64
Limited
6. Others
□ Applicable √ N/A
289 / 337
Annual Report 2021
IX. Equity in other entities
1. Equity in subsidiaries
(1). Composition of enterprise group
√ Applicable □ N/A
Principal Proportion of
Registration Business shareholding (%) Acquisition
Subsidiaries operation
place nature method
place Direct Indirect
Shenzhen Shenzhen Shenzhen R&D and 100 Business
Appotronics sales of laser combination
Laser Display display involving
Technology Co., products enterprises
Ltd. under
common
control
Appotronics Changzhou Changzhou Technology 100 Establishment
Technology research and
(Changzhou) development
Co., Ltd. of projection
equipment,
screen and
electronic
computer
Shenzhen Shenzhen Shenzhen Technology 100 Establishment
Appotronics development
Software and sales of
Technology Co., computer
Ltd. software and
hardware
Shenzhen Shenzhen Shenzhen Technology 100 Establishment
Appotronics development,
Display Device sales, and
Co., Ltd. technology
services for
display
products;
import and
export
business
WEMAX LLC USA USA Sales of laser 100 Establishment
equipment
Shenzhen Shenzhen Shenzhen Development, 100 Establishment
Appotronics consultation
Xiaoming and transfer of
Technology Co., laser display
Ltd. technology
Shenzhen Shenzhen Shenzhen Software 100 Establishment
Appotronics development
Home Line related to
Technology Co., semiconductor
Ltd. optoelectronic
products
Shenzhen Shenzhen Shenzhen Software 100 Establishment
Appotronics development
Laser for
semiconductor
290 / 337
Annual Report 2021
Technology Co., optoelectronic
Ltd. devices
Tianjin Bonian Tianjin Tianjin No specific 99 1 Business
Film Partnership business combination
(LP) conducted not involving
enterprises
under
common
control
Beijing Orient Beijing Beijing Technology 59 Establishment
Appotronics promotion;
Technology Co., computer
Ltd. systems,
application
software
services
Qingda Shenzhen Xiamen Information 51 Establishment
Appotronics technology
(Xiamen) consulting
Technology Co., services
Ltd.
(Chongqing) Chongqing Chongqing Technology 39.19 Establishment
Innovative and software
Technology Co., development
Ltd.
Fengmi Beijing Beijing Technology 39.19 Establishment
(Beijing) and software
Technology Co., development
Ltd.
Chongqing Chongqing Chongqing No specific 39.19 Establishment
Guangbo business
Ecommerce Co., conducted
Ltd.
Chongqing Ewei Chongqing Chongqing No specific 39.19 Establishment
Ecommerce Co., business
Ltd. conducted
Shenzhen Shenzhen Shenzhen Technology 33.31 Establishment
Orange Juice and software
Energy development
Technology Co.,
Ltd.
Limited Hong Hong Kong No specific 39.19 Establishment
Kong business
conducted
USA USA No specific 39.19 Establishment
TECHNOLOGY business
INC conducted
CINEAPPO Beijing Beijing Research and 24.84 38.36 Business
Laser Cinema development, combination
Technology production, involving
(Beijing) Co., technology enterprises
Ltd. services, sales under
and lease of common
laser cinema control
projection
equipment
291 / 337
Annual Report 2021
Appotronics Hong Hong Kong Production, 100 Establishment
Hong Kong Kong research, and
Limited development
of
semiconductor
optoelectronic
products, sales
and
consulting,
investment
and video
content value-
added services
Appotronics USA USA R&D, 100 Business
USA, Inc. manufacture combination
and sales of involving
semiconductor enterprises
optoelectronic under
products common
control
JoveAI Limited Cayman Cayman No specific 64.29 Establishment
Islands Islands business
conducted
JoveAI USA USA R&D of laser 64.29 Establishment
Innovation, Inc. display
software
system
JoveAI Asia Vietnam Vietnam Technology 64.29 Establishment
Company research and
Limited development
of projection
equipment,
screen and
electronic
computer
Fabulus Display Beijing Beijing Sales; 90 Establishment
(Beijing) Co., technology
Ltd. development,
consulting
Fabulus Hong Hong Kong R&D, 100 Establishment
Technology Kong manufacture
Hong Kong and sales of
Limited screens
Description of the difference between the proportion of shareholding and the proportion of voting rights
in a subsidiary:
Fengmi (Beijing) Technology Co., Ltd., Technology Inc., Limited, Chongqing Ewei Ecommerce Co.,
Ltd., and Chongqing Guangbo Ecommerce Co., Ltd. are wholly-owned subsidiaries of (Chongqing)
Innovative Technology Co., Ltd.; Shenzhen Orange Juice Energy Technology Co., Ltd. is a controlled
subsidiary of (Chongqing) Innovative Technology Co., Ltd.
The Company and Shenzhen Fengye Investment Consulting Limited Partnership (Limited
Partnership), a party acting in concert with the Company, hold a total of 53.6250% voting rights in
(Chongqing) Innovative Technology Co., Ltd., for which the voting rights are exercised according to the
292 / 337
Annual Report 2021
opinions of the Company. Since the voting rights are sufficient to exercise significant influence on the
resolution of the general meeting, the Company becomes the controlling shareholder of (Chongqing)
Innovative Technology Co., Ltd.
Basis for holding half of the voting rights or below but still controlling the investee, and holding over
half voting rights but having no control over the investee:
Fengmi (Beijing) Technology Co., Ltd., Technology Inc., Limited, Chongqing Ewei Ecommerce Co.,
Ltd., and Chongqing Guangbo Ecommerce Co., Ltd. are wholly-owned subsidiaries of (Chongqing)
Innovative Technology Co., Ltd.; Shenzhen Orange Juice Energy Technology Co., Ltd. is a controlled
subsidiary of (Chongqing) Innovative Technology Co., Ltd.
The Company and Shenzhen Fengye Investment Consulting Limited Partnership (Limited
Partnership), a party acting in concert with the Company, hold a total of 53.6250% voting rights in
(Chongqing) Innovative Technology Co., Ltd., for which the voting rights are exercised according to the
opinions of the Company. Since the voting rights are sufficient to exercise significant influence on the
resolution of the general meeting, the Company becomes the controlling shareholder of (Chongqing)
Innovative Technology Co., Ltd.
Basis for controls over significant structured entities included in consolidation scope:
None
Basis to determine the company acts as the agent or the principal:
None
Other information:
None
(2). Significant non-wholly subsidiaries
√ Applicable □ N/A
In RMB
Profit or loss Dividends declared
Shareholding attributable to for distribution to Closing balance
Subsidiaries ratio by minority minority minority of minority
shareholders shareholders for the shareholders in the interests
current period current period
(Chongqing) 60.81% -49,489,469.10 34,686,328.73
Innovative
Technology
Co., Ltd.
CINEAPPO 36.80% 34,530,686.38 18,400,000.00 158,586,216.77
Laser Cinema
Technology
(Beijing) Co.,
Ltd.
Description of the difference between the proportion of shareholding by minority shareholders and their
proportion of voting rights in a subsidiary:
√ Applicable □ N/A
Fengmi (Beijing) Technology Co., Ltd. completed business combination involving enterprises under
293 / 337
Annual Report 2021
common control on April 1, 2021, and became a subsidiary of (Chongqing) Innovative Technology Co.,
Ltd.; therefore, Fengmi (Beijing) Technology Co., Ltd. is not disclosed for the current period, while
(Chongqing) Innovative Technology Co., Ltd. is disclosed.
Other information:
□ Applicable √ N/A
294 / 337
Annual Report 2021
(3). Significant financial information of significant non-wholly subsidiaries
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Curren Non-
Subsidiari Non- Total
Current Non-current Total t Non-current Total Current Total Current current
es current liabiliti
assets assets assets liabiliti liabilities liabilities assets assets liabilitie
liabilities
assets es
es s
923,415,138 42,178,49 965,593,6 735,63 172, 908,553,1 602,519,1 16,903, 619,422,6 692,707,2 4,763,0 697,47
(Chongqin .40 4.73 33.13 3,264.6 919,867.39 32.01 23.96 557.91 81.87 01.11 26.34 0,227.
g) 2 45
Innovative
Technolog
y Co., Ltd.
CINEAPP 231,461,535 738,260,9 969,722,4 377,53 161,248,165 538,781,6 218,942,3 712,35 931,300,3 509,106,7 43,613, 552,72
O Laser .13 40.26 75.39 3,503.1 .77 68.94 42.82 8,020.4 63.27 20.26 620.72 0,340.
Cinema 7 5 98
Technolog
y (Beijing)
Co., Ltd.
Amount for the current period Amount for the prior period
Total Cash flow
Total
Subsidiaries Cash flow from Operating comprehe from
Operating income Net profit comprehensive Net profit
operating activities income nsive operating
income
income activities
(Chongqing) 1,138,441,956.97 -81,383,767.63 -81,383,767.63 -171,445,331.62
Innovative
Technology
Co., Ltd.
CINEAPPO 477,001,950.71 93,833,386.89 93,833,386.89 101,026,487.30 288,699,197. 3,358,107.9 3,358,107. 85,283,24
Laser Cinema 97 7 97 6.66
295 / 337
Annual Report 2021
Technology
(Beijing) Co.,
Ltd.
Other information:
None
296 / 337
Annual Report 2021
(4). Significant limitations on use of the group assets and pay off the group debts
□ Applicable √ N/A
(5). Financial or other support provided to structured entities included in consolidated financial
statements
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
2. Changes of shares of owners’ equity in subsidiaries but continue to remain control over
transactions of subsidiaries
√ Applicable □ N/A
(1). Description of changes in the share in the owner’s equity of subsidiaries
√ Applicable □ N/A
Shareholding ratio Shareholding ratio
Subsidiaries Date of change
prior to change after change
(Chongqing)
Innovative Technology 2021.03.16 100% 55%
Co., Ltd.
(Chongqing)
Innovative Technology 2021.04.06 55% 52.25%
Co., Ltd.
(Chongqing)
Innovative Technology 2021.05.06 52.25% 44.79%
Co., Ltd.
(Chongqing)
Innovative Technology 2021.05.25 44.79% 39.19%
Co., Ltd.
(2). Impact of the transaction on minority interests and owners’ interests attributable to owners of
the parent company
√ Applicable □ N/A
In RMB
(Chongqing) Innovative Technology Co., Ltd.
Acquisition cost/disposal consideration
-- Cash 202,631,582.00
-- Fair value of non-cash assets
Total acquisition cost/disposal consideration 202,631,582.00
Less: Share of net assets of subsidiaries
calculated based on the acquired/disposed 110,009,334.25
shareholding ratio
Difference 92,622,247.75
Where: Adjustment to capital reserves 92,622,247.75
Adjustment to surplus reserves
Adjustment to undistributed profits
Other information
□ Applicable √ N/A
297 / 337
Annual Report 2021
3. Equity in joint ventures or associates
√ Applicable □ N/A
(1). Significant joint ventures or associates
√ Applicable □ N/A
In RMB
Proportion of Accounting
Joint Principal shareholding (%) treatment method
Registration Business
ventures or operation for investments in
place nature
associates place Direct Indirect joint ventures or
associates
GDC Asia and British R&D, 44.00 Accounting for
Technology North Virgin production, under equity
Limited America Islands and sales of method
(BVI) digital
cinema
servers and
cinema
management
system
Description of the difference between the proportion of shareholding and the proportion of voting rights
in joint ventures or associates:
None
Basis that the company owns less than 20% voting rights but may exercise major impact, or that the
company owns 20% or over voting rights but does not has major impact:
None
On July 15, 2021, the Company’s subsidiary Appotronics HK acquired 8% shares as the compensation
of GDC Technology Limited (BVI) in accordance with the Supplementary Agreement, and therefore the
shareholding ratio changed from 36% to 44%.
(2). Major financial information of significant joint ventures
□ Applicable √ N/A
(3). Major financial information of significant associates
√ Applicable □ N/A
In RMB
Closing balance/Amount for Opening balance/Amount
the current period for the prior period
GDC Technology Limited GDC Technology
(BVI) Limited (BVI)
Current assets 648,413,809.69 553,504,350.37
Non-current assets 53,380,720.39 72,596,748.61
Total assets 701,794,530.08 626,101,098.98
Current liabilities 458,123,239.33 379,295,268.80
Non-current liabilities 25,008,058.43 41,349,472.31
Total liabilities 483,131,297.76 420,644,741.11
Minority interests
Interests attributable to shareholders of 218,663,232.32 205,456,357.87
the parent company
298 / 337
Annual Report 2021
Share of net assets calculated based on 96,211,822.22 73,964,288.83
shareholding ratio
Adjustment 76,520,776.40 62,044,191.37
77,772,341.43 62,560,946.33
--Goodwill
--Unrealized profits for insider -1,251,565.03 -516,754.96
transactions
--Others
Carrying amount of equity investments in 166,676,657.87 131,338,347.84
associates
Fair values of equity investments in
associates having publicly quoted prices
Operating income 299,867,319.42 251,049,184.00
Net profit 55,000,205.18 6,256,577.59
Net profit of discontinued operations
Other comprehensive income 1,876,677.39 26,383,768.27
Total comprehensive income 56,876,882.57 32,640,345.86
Dividends received from associates in the
current year
Other information
None
(4). Summary financial information of insignificant joint ventures and associates
√ Applicable □ N/A
In RMB
Closing balance/Amount for the Opening balance/Amount for the
current period prior period
Joint ventures:
Total carrying amount of
investments
Total amounts calculated based on shareholding proportions
--Net profit
--Other comprehensive income
--Total comprehensive income
Associates:
Total carrying amount of 126,924,427.40 131,406,424.64
investments
Total amounts calculated based on shareholding proportions
--Net profit 1,632,357.09 -1,179,972.05
--Other comprehensive income -3,043,782.40 -5,001,459.87
--Total comprehensive income -1,411,425.31 -6,181,431.92
Other information
None
(5). Descriptions of significant limitations over the ability of joint ventures or associates to transfer
funds to the Company
□ Applicable √ N/A
(6). Excessive loss of joint ventures or associates
□ Applicable √ N/A
299 / 337
Annual Report 2021
(7). Unrecognized commitment relating to investments in joint ventures
□ Applicable √ N/A
(8). Contingent liabilities relating to investments in joint ventures or associates
□ Applicable √ N/A
4. Significant joint operations
□ Applicable √ N/A
5. Interests in structured entities that are not included in consolidated financial statements
Description of structured entities that are not included in consolidated financial statements:
□ Applicable √ N/A
6. Others
□ Applicable √ N/A
X. Risks associated with financial instruments
√ Applicable □ N/A
The Company’s risk management objectives are to achieve a proper balance between risks and yield,
minimize the adverse impacts of risks on the Company’s operation performance, and maximize the
benefits of the shareholders and other stakeholders. Based on these risk management objectives, the
Company’s basic risk management strategy is to identify and analyze its exposure to various risks,
establish an appropriate minimum tolerance to risk, implement risk management, and monitor regularly
and effectively these exposures to ensure the risks are monitored at a certain level.
The Company is exposed to various risks associated with financial instruments in its daily routines,
primarily including credit risk, liquidity risk and market risk. The management has reviewed and approved
policies to manage these risks, summarized as below.
(I) Credit risk
Credit risk refers to the risk that a party of the financial instrument will default on its obligations
resulting in financial loss to the counterparty.
1. Management of credit risk
(1) Evaluation of credit risk
The Company assesses at each balance sheet date whether the credit risk of the underlying financial
instruments has increased significantly since initial recognition. In determining whether the credit risk has
increased significantly since initial recognition, the Company considers reasonable and supportable
information that is available without undue cost or effort, including quantitative and qualitative analysis
based on historical data, ranking of external credit risks and forward-looking information. The Company
compares the risk of a default occurring on a financial instrument as at the balance sheet date with the risk
of a default occurring on the financial instrument as at the date of initial recognition based on individual
financial instrument or a group of financial instruments with similar credit risk characteristics, to
determine the change of the risk of a default occurring on a financial instrument over the expected life.
300 / 337
Annual Report 2021
The Company considers the credit risk of financial instruments has increased significantly when one
or more of the following quantitative and qualitative criteria are met:
1) The quantitative criterion primarily refers to a certain percentage of increase in the probability of
default over the remaining life of the financial instruments as of the balance sheet date when comparing
with that at initial recognition of the financial instruments;
2) The qualitative criterion includes, inter alia, adverse material changes in business or financial
conditions that are expected to cause a significant decrease in the debtor’s ability to meet its debt
obligations, and an actual or expected significant adverse change in the technological, market, economic,
or legal environment of the debtor that results in a significant decrease in the debtor’s ability to meet its
debt obligations.
(2) Definition of defaulted or credit-impaired assets
A financial asset is defined as defaulted when the financial instrument meets one or more conditions
stated as below, and the criterion of defining defaulted asset is consistent with that of defining credit-
impaired asset:
1) significant financial difficulty of the debtor;
2) a breach of contract terms with binding force by the debtor;
3) it is becoming probable that the debtor will enter bankruptcy or other financial reorganization;
4) the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial
difficulty, has granted to the debtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of ECL
Key parameters to measure ECL include the probability of default, loss given default and the
exposure at default. The Company established models of the probability of default, loss given default and
the exposure at default on the basis of quantitative analysis on historical statistical data (such as
counterparty ranking, guarantee methods, collateral category, and repayment way) and forward-looking
information.
3. The reconciliation of the opening balance and the closing balance of the provision for impairment
of financial instruments is described in detail in VII.4, VII.5, VII.6, VII.8, VII.10, and VII.16 of Section
X.
4. Credit risk exposure and credit risk concentration
The Company’s credit risk is primarily from cash and bank balances and receivables. In order to
control the risks associated with aforementioned items, the Company has taken the following measures.
(1) Cash and bank balances
The credit risk of the Company is limited because the Company has deposited bank deposits and
other monetary funds in banks with high credit ratings.
(2) Receivables
The Company regularly evaluates the creditworthiness of its customers with deals on credit, and
selects to deal with approved and creditworthy customers subject to the results of the credit assessment
301 / 337
Annual Report 2021
with monitoring the balance of its receivables, so as to ensure that the Company is not exposed to
significant risk of bad debt.
No collaterals are required since the Company only deals with third parties that are approved and
creditworthy. The concentrated credit risks are managed by customers. As of December 31, 2021, the
Company is exposed to certain concentration of credit risks, as the Company’s accounts receivable from
top 5 customers have accounted for 67.07% of the total balance of accounts receivable (December 31,
2020: 86.37%). The Company held no collateral or other credit ranking measures for the balance of
accounts receivable.
The maximum exposure to the Company is the carrying amount of each financial asset in the balance
sheet.
(II) Liquidity risk
Liquidity risk refers to the risk that the Company is in shortage of funds in performing obligations
that are settled by delivering cash or another financial asset. Liquidity risk may arise from an inability to
sell a financial asset at fair value as soon as possible, a counterparty’s inability to pay its contractual
liabilities, the accelerated maturity of liabilities, or an inability to generate expected cash flows.
In order to control this risk, the Company balances the continuity and flexibility of financing by using
various financing measures such as notes settlement and bank loans comprehensively and adopting both
long-term and short-term financing methods to optimize the financing structure. The Company has
received credit facilities from a number of commercial banks to satisfy its working capital requirements
and capital expenditures.
Financial liabilities classified by remaining maturity dates
Closing balance
Item Undiscounted
Book value Within 1 year 1-3 years Over 3 years
contract amount
Bank
509,637,141.27 565,968,031.25 161,844,102.83 335,211,636.92 68,912,291.50
borrowings
Notes
144,456,001.87 144,456,001.87 144,456,001.87
payable
Accounts
409,889,533.01 409,889,533.01 409,889,533.01
payable
Other
54,115,784.80 54,115,784.80 54,115,784.80
payables
Lease
29,560,179.86 30,987,424.69 19,686,637.60 10,725,062.82 575,724.27
liabilities
Subtotal 1,147,658,640.81 1,205,416,775.62 789,992,060.11 345,936,699.74 69,488,015.77
(Continued to above table)
Closing of last year
Item Undiscounted
Book value contract Within 1 year 1-3 years Over 3 years
amount
Bank borrowings 335,041,546.85 347,893,031.23 281,565,349.76 66,327,681.47
Notes payable 116,822,674.67 116,822,674.67 116,822,674.67
302 / 337
Annual Report 2021
Closing of last year
Item Undiscounted
Book value contract Within 1 year 1-3 years Over 3 years
amount
Accounts payable 226,494,815.90 226,494,815.90 226,494,815.90
Other payables 59,848,053.83 59,848,053.83 59,848,053.83
Long-term payables 3,262,450.00 3,572,382.75 3,572,382.75
Subtotal 741,469,541.25 754,630,958.38 684,730,894.16 69,900,064.22
(III) Market risk
Market risk refers to the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices. Market risk mainly includes interest rate risk and currency
risk.
1. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. The Company is exposed to the risk of fair value
interest rate due to financial instruments with a fixed interest rate and to the risk of cash flow interest rate
due to financial instruments with a floating interest rate. The Company determines the proportion between
the fixed-rate financial instruments and the floating-rate financial instruments based on market conditions,
and maintains appropriate portfolios of financial instruments through regular review and monitoring. The
cash flow interest rate risk exposed to the Company relates primarily to the Company’s floating-rate
interest-bearing bank borrowings.
As at December 31, 2021, the principal of the Company’s floating-rate interest-bearing bank
borrowings amounted to RMB 509,637,141.27 (December 31, 2020: RMB 334,317,535.43). On the basis
of the assumption that the interest rate has changed 50 basic points, where all other variables are held
constant, it will bring no material impacts on the Company’s total profits and shareholders’ equity.
2. Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. The Company’s exposure to the currency risk is primarily
associated with the Company’s monetary assets and liabilities dominated in foreign currencies. If the
monetary assets and liabilities dominated in foreign currencies are imbalanced in a short time, the
Company will purchase and sell foreign currencies at the market exchange rate to keep the net risk
exposure acceptable.
The closing balance of the Company’s monetary assets and liabilities dominated in foreign currencies
is disclosed in VII.82 of Section X in details.
XI. Disclosure of fair value
1. The closing balance of the fair value of assets and liabilities measured at fair value
√ Applicable □ N/A
In RMB
Closing balance of fair value
Item
Level 1 Level 2 Level 3 Total
303 / 337
Annual Report 2021
I. Continuous fair
value measurement
(I) Held-for-trading
16,200,000.00 401,000,000.00 417,200,000.00
financial assets
1. Financial assets at 16,200,000.00 401,000,000.00 417,200,000.00
fair value through profit
or loss
(1) Investment in debt
instrument
(2) Investment in equity 16,200,000.00 30,000,000.00 46,200,000.00
instrument
(3) Derivative financial
assets
(4) Structural deposits 371,000,000.00 371,000,000.00
2. Designated as
financial assets at fair
value through profit or
loss
(1) Investment in debt
instrument
(2) Investment in equity
instrument
(II) Other debt
investments
(III) Other equity 7,075,419.38 7,075,419.38
instrument investments
(IV) Investment
properties
1. Land use right for
leasing purpose
2. Buildings leased
3. Land use right held
for the purpose of
transfer after value
appreciation
(V) Biological assets
1. Consumable
biological assets
2. Productive biological
assets
Receivables financing 244,860.00 244,860.00
Total assets 16,200,000.00 408,320,279.38 424,520,279.38
continuously
measured at fair value
(VI) Held-for-trading
financial liabilities
1. Financial liabilities at
fair value through profit
or loss
Where: Held-for-trading
bonds issued
Derivative
financial liabilities
Others
304 / 337
Annual Report 2021
2. Designated as
financial liabilities at
fair value through profit
or loss
Total liabilities
continuously
measured at fair value
II. Non-continuous
fair value
measurement
(I) Held-for-sale assets
Total assets that are
not continuously
measured at fair value
Total liabilities that
are not continuously
measured at fair value
2. Basis for determining the market price of continuous and non-continuous level 1 fair value
measurement items
□ Applicable √ N/A
3. Valuation techniques and qualitative and quantitative information of key parameters adopted
for continuous and non-continuous level 2 fair value measurement items
√ Applicable □ N/A
The equity instrument investment presented stocks subscribed on the New Third Board: considering
the factors including the level of activity for trading of stocks on the New Third Board, the Company
classified stocks on the New Third Board as level 2 for the measurement of fair value, where the fair
value is determined according to the average closing price of the previous 20 trading days.
4. Valuation techniques and qualitative and quantitative information of key parameters adopted
for continuous and non-continuous level 3 fair value measurement items
√ Applicable □ N/A
No public market is available for equity instrument investments, structural deposits, receivables
financing, and investment in other equity instruments, hence the fair value of the foregoing are measured
at cost.
5. Reconciliation between opening and closing carrying amounts and sensitivity analysis of
unobservable parameters for continuous level 3 fair value measurement items
□ Applicable √ N/A
6. Where transfers among levels occurred in the period, transfer reasons and policies for
determining transfer time point for continuous fair value measurement items
□ Applicable √ N/A
305 / 337
Annual Report 2021
7. Changes in valuation techniques in the period and reasons for changes
□ Applicable √ N/A
8. Fair value of financial assets and financial liabilities not measured at fair value
□ Applicable √ N/A
9. Others
□ Applicable √ N/A
XII. Related-party relationships and transactions
1. Parent of the Company
√ Applicable □ N/A
In RMB 0’000
Proportion of Proportion of the
the Company’s Company’s
Parent Registration Business Registered
shares held by voting right held
company place nature capital
the parent by the parent
company (%) company (%)
Shenzhen Shenzhen R&D and 1,000 17.62 17.62
Appotronics sales of
Holdings semiconductor
Limited products
Description of the parent company of the Company
None
The ultimate controlling party of the Company is LI Yi.
Other information:
None
2. Subsidiaries of the Company
Refer to the Notes for details about the subsidiaries of the Company
√ Applicable □ N/A
Refer to the description in IX.1 of Section X for details about the subsidiaries of the Company
3. Joint ventures and associates of the Company
Refer to the Notes for details about the significant joint ventures or associates of the Company
√ Applicable □ N/A
Refer to the description in IX.1 of Section X for details about the associates of the Company
Details of other joint ventures or associates having related-party transactions and balances with the
Company in the period or in prior periods:
□ Applicable √ N/A
Other information
□ Applicable √ N/A
4. Other related parties of the Company
√ Applicable □ N/A
Other related party Relationship between other related party and the
Company
Beijing Donview Education Technology Minority shareholders holding more than 10% shares in
Co., Ltd. and its affiliates the subsidiary and their affiliates
Shenzhen YLX Technology Development Controlled by the same de facto controller
Co., Ltd.
Xiaomi Communications Technologies Minority shareholders holding more than 10% shares in
Co., Ltd. and its affiliates the subsidiary and their affiliates
306 / 337
Annual Report 2021
Minority shareholders holding more than 10% shares in
CFEC and its affiliates
the subsidiary and their affiliates
Enterprise in which the actual controller holds the post
WeCast and its affiliates
of director
Shenzhen Bevix Technology Co., Ltd. Holding more than 5% of shares in the company
Other information
None
5. Related-party transactions
(1). Sales and purchase of goods, rendering and receipt of services
Purchase of goods/receipt of services
√ Applicable □ N/A
In RMB
Amount for the Amount for the prior
Related party Subject matter
current period period
GDC Technology Electronic 5,723,460.99 8,703,704.00
Limited (BVI) and its components and
affiliates services
Beijing Donview Service 14,070.79 36,371.68
Education Technology
Co., Ltd. and its affiliates
Shenzhen YLX Electronic 1,160,549.59
Technology Development components and
Co., Ltd. services
Xiaomi Communications Electronic 244,815,868.46 205,885,065.38
Technologies Co., Ltd. components and
and its affiliates services
CFEC and its affiliates Power supply, water 47,318,159.54 27,172,641.25
cooling and services
WeCast and its affiliates Service 241,371.26
Subtotal 299,273,480.63 241,797,782.31
Sales of goods/rendering of services
√ Applicable □ N/A
In RMB
Amount for the current Amount for the prior
Related party Subject matter
period period
GDC Technology Cinema projector, 9,973,463.25 3,740,484.98
Limited (BVI) and its spare parts, and
affiliates software
WeCast and its affiliates Laser TV, smart mini 17,132,902.25
projector
Beijing Donview Laser business 4,536,140.66 26,233,035.11
Education Technology education projector
Co., Ltd. and its affiliates
Xiaomi Communications Laser TV, smart mini 592,774,055.44 650,541,969.04
Technologies Co., Ltd. projector
and its affiliates
CFEC and its affiliates Laser digital cinema 74,259,971.78 92,512,007.78
projector, laser light
source, lease services
Shenzhen Bevix Service 4,508.85
Technology Co., Ltd.
307 / 337
Annual Report 2021
CINIONIC and its Laser light source 32,361,780.86 35,706,691.15
affiliates
Subtotal 731,038,314.24 808,738,696.91
Description of sales and purchase of goods, rendering and receipt of services
□ Applicable √ N/A
(2). Details of trust/contracting and trust management/contract-issuing with related parties
Details of trust/contracting where a group entity is the trustor/main contractor:
□ Applicable √ N/A
Description of trust/contracting with related parties
□ Applicable √ N/A
Details of trust management/contract-issuing where a group entity is the trustor/main contractor
□ Applicable √ N/A
Description of trust management/contract-issuing with related parties
□ Applicable √ N/A
(3). Leases with related parties
The Company as the lessor:
□ Applicable √ N/A
The Company as the lessee:
√ Applicable □ N/A
In RMB
Type of leased Lease fees recognized in Lease fees recognized in the
Lessor
assets the current period prior period
CFEC and its Property lease 1,981,168.69 1,794,184.41
affiliates
Description of leases with related parties
□ Applicable √ N/A
(4). Guarantees with related parties
The Company as a guarantor:
□ Applicable √ N/A
The Company as a guaranteed party:
□ Applicable √ N/A
Description of guarantees with related parties
□ Applicable √ N/A
(5). Borrowings/loans with related parties
√ Applicable □ N/A
In RMB
Related party Borrowing amount Start date Expiry date Description
Borrowing
CFEC and its 19,320,000.00 2020.07.06 2021.07.05 Repaid on
affiliates January 26,
2021
(6). Assets transfer/debt restructuring with related parties
□ Applicable √ N/A
(7). Compensation for key management personnel
√ Applicable □ N/A
In RMB 0’000
308 / 337
Annual Report 2021
Amount for the prior
Item Amount for the current period
period
Compensation for key 1,234.62 1,463.12
management personnel
(8). Other related-party transactions
□ Applicable √ N/A
6. Amounts due from/to related parties
(1). Amounts due from related parties
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Item Related party Carrying Bad debt Carrying Bad debt
amount provision amount provision
Accounts CINIONIC and 26,592,355.61 1,329,617.78 452,175.57 22,608.78
receivable its affiliates
GDC 5,159,950.72 257,997.54 2,283,483.24 114,174.16
Technology
Limited (BVI)
and its affiliates
WeCast and its 20,597,638.81 1,029,881.92
affiliates
Beijing 912,982.89 45,649.14 3,017.00 150.85
Donview
Education
Technology Co.,
Ltd. and its
affiliates
Xiaomi 132,000,017.31 6,600,000.87 248,915,862.75 12,445,793.14
Communications
Technologies
Co., Ltd. and its
affiliates
CFEC and its 1,019,071.79 51,248.40 6,125,422.64 306,402.16
affiliates
Subtotal 186,282,017.13 9,314,395.65 257,779,961.20 12,889,129.09
CFEC and its 1,369,286.22 3,107,696.59
Prepayments
affiliates
Xiaomi 40,000.00
Communications
Technologies
Co., Ltd. and its
affiliates
GDC 2,883,384.53
Technology
Limited (BVI)
and its affiliates
Subtotal 1,409,286.22 5,991,081.12
Other CFEC and its 229,355.00 11,467.75 296,435.00 14,821.75
receivables affiliates
GDC 20,286,601.00 383,135.75
Technology
Limited (BVI)
and its affiliates
309 / 337
Annual Report 2021
Xiaomi 100,000.00 5,000.00
Communications
Technologies
Co., Ltd. and its
affiliates
Subtotal 20,515,956.00 394,603.50 396,435.00 19,821.75
(2). Amounts due to related parties
√ Applicable □ N/A
In RMB
Item Related party Closing balance of Opening balance of carrying
carrying amount amount
GDC Technology 5,593.76
Accounts payable Limited (BVI) and
its affiliates
Shenzhen YLX 1,147,275.29
Technology
Development Co.,
Ltd.
Xiaomi 65,042,097.29
Communications
Technologies Co.,
Ltd. and its affiliates
CFEC and its 17,315,868.17
affiliates
Subtotal 83,510,834.51
CFEC and its 5,049,000.17
Notes payable
affiliates
Subtotal 5,049,000.17
Advance from CFEC and its 11,025,498.93 14,032,071.28
customers affiliates
Subtotal 11,025,498.93 14,032,071.28
GDC Technology 3,469.81 15,108.32
Contract liabilities Limited (BVI) and
its affiliates
CFEC and its 4,396,474.85 1,384,955.75
affiliates
Subtotal 4,399,944.66 1,400,064.07
Beijing Donview 10,800.00
Education
Other payables
Technology Co., Ltd.
and its affiliates
Xiaomi 1,976.10 101,668.48
Communications
Technologies Co.,
Ltd. and its affiliates
CFEC and its 19,343,613.33
affiliates
Subtotal 12,776.10 19,445,281.81
Xiaomi 16,804,816.23
Other current Communications
liabilities Technologies Co.,
Ltd. and its affiliates
Subtotal 16,804,816.23
310 / 337
Annual Report 2021
7. Related party commitments
□ Applicable √ N/A
8. Others
□ Applicable √ N/A
XIII. Share-based payments
1. Summary of share-based payments
√ Applicable □ N/A
Unit: Share, RMB
Item Company (Chongqing)
Innovative
Technology Co.,
Ltd.
Total number of the Company’s equity 26,150,000
1,550,500
instruments granted during the period
Total number of the Company’s equity
1,000,000
instruments executed during the period
Total number of the Company’s equity 4,022,025.00
instruments lapsed during the period
Range of exercise prices and remaining Grant date: October 14, 2019; grant Grant date:
contractual life of the Company’s share price: RMB 17.37/share; 10 months December 31, 2021;
options outstanding at the end of the Grant date: October 13, 2020; grant grant price: RMB
period price: RMB 17.37/share; 10 months 1/share; 54 months
Grant date: January 1, 2021; grant
price: RMB 4.30/share; 12 months
Grant date: April 22, 2021; grant
price: RMB 20.945/share; 27 months
Grant date: April 22, 2021; grant
price: RMB 18.445/share; 27 months
Grant date: April 22, 2021; grant
price: RMB 17.445/share; 27 months
Grant date: December 7, 2021; grant
price: RMB 20.00/share; 35 months
Grant date: December 7, 2021; grant
price: RMB 23.00/share; 35 months
Range of exercise prices and remaining None None
contractual life of the Company’s other
equity instruments outstanding at the
end of the period
Other information
None
2. Equity-settled share-based payments
√ Applicable □ N/A
In RMB
Item Company Chongqing
The method of determining the fair value Option pricing model Evaluation of all
of equity instruments at the grant date shareholder’s equity
interests
The basis of determining the number of Actual grant amount Actual grant amount
equity instruments expected to be
executed
311 / 337
Annual Report 2021
Reasons for the significant difference None None
between the estimate in the current
period and that in the prior period
Amounts of equity-settled share-based 81,144,459.30 10,403,484.60
payments accumulated in capital reserve
Total expenses recognized arising from 52,961,562.89 10,403,484.60
equity-settled share-based payments in
the current period
Other information
All restricted shares granted by the Company are Type II restricted shares, while the registered capital
granted by Chongqing was treated with reference to Type I restricted shares
3. Cash-settled share-based payments
□ Applicable √ N/A
4. Modification to and termination of share-based payments
□ Applicable √ N/A
5. Others
□ Applicable √ N/A
XIV. Commitments and contingencies
1. Significant commitments
√ Applicable □ N/A
Significant external commitments, and nature and amount thereof as of the balance sheet date
Significant lease contracts which the Company has entered into or will perform and their financial
impacts are disclosed in the following table:
Rent area
No. Rent address Rent purpose Rent period Rent expense/year
(square meters)
20/F, 21/F,
22/F, United
Headquarter
Research and
Building, High-
development, 2022.1.1-
1 Tech Zone, No. 6,143.79 5,310,893.71
office 2026.12.31
63 Xuefu Road,
administration
Nanshan
District,
Shenzhen
Yaochuan
Industrial Zone,
Tangwei
2018.12.1-
2 Community, 23,765.57 Plant 12,319,285.88
2022.11.30
Fuhai Street,
Bao’an District,
Shenzhen
2. Contingencies
(1). Significant contingencies as of the balance sheet date
√ Applicable □ N/A
Pending litigation
1. Civil litigation and arbitration where the Company acted as the plaintiff
As of December 31, 2021, there are 23 civil litigation cases where the Company acted as a plaintiff,
specifically including:
312 / 337
Annual Report 2021
Plaintiff/App
Case No. Cause of action Defendant/Appelee Patents involved Amount Progress
ellant
Defendant 1: Delta Electronics (Shanghai)
(1) Compensation amount
(2019) Yue 03 Min Chu Co., Ltd.;
Infringement on Appotronics decided in the trial of the first
No. 2943 Defendant 2: Delta Video Display System
patent for Corporation 200810065225.X RMB 8.00 million instance: RMB 271,399.40;
(2021) Zui Gao Fa Zhi (Wujiang) Limited;
invention Limited (2) Under trial of the second
Min Zhong No. 1582 Defendant 3: Shenzhen Super Network
instance
Technology Co., Ltd.
Defendant 1: Delta Electronics (Shanghai)
(1) Compensation amount
(2019) Yue 03 Min Chu Co., Ltd.;
Infringement on Appotronics decided in the trial of the first
No. 2944 Defendant 2: Delta Video Display System
patent for Corporation 200810065225.X RMB 8.00 million instance: RMB 501,399.40;
(2021) Zui Gao Fa Zhi (Wujiang) Limited;
invention Limited (2) Under trial of the second
Min Zhong No. 1718 Defendant 3: Shenzhen Super Network
instance
Technology Co., Ltd.
(1) Compensation amount
Defendant 1: Delta Electronics (Shanghai)
decided in the trial of the first
Co., Ltd.;
Infringement on Appotronics instance: RMB 151,399.40;
(2019) Yue 03 Min Chu Defendant 2: Delta Video Display System
patent for Corporation 200810065225.X RMB 4.00 million (2) Both the plaintiff and
No. 2946 (Wujiang) Limited;
invention Limited defendant in the trial of the
Defendant 3: Shenzhen Super Network
first instance appealed; under
Technology Co., Ltd.
trial of the second instance
Defendant 1: Delta Electronics (Shanghai)
(1) Compensation amount
(2019) Yue 03 Min Chu Co., Ltd.;
Infringement on Appotronics decided in the trial of the first
No. 2948 Defendant 2: Delta Video Display System
patent for Corporation 200810065225.X RMB 4.00 million instance: RMB 146,399.40;
(2021) Zui Gao Fa Zhi (Wujiang) Limited;
invention Limited (2) Under trial of the second
Min Zhong No. 1548 Defendant 3: Shenzhen Super Network
instance
Technology Co., Ltd.
Defendant 1: Delta Electronics (Shanghai)
(1) Compensation amount
(2019) Yue 03 Min Chu Co., Ltd.;
Infringement on Appotronics decided in the trial of the first
No. 2951 Defendant 2: Delta Video Display System
patent for Corporation 200810065225.X RMB 4.00 million instance: RMB 581,399.40;
(2021) Zui Gao Fa Zhi (Wujiang) Limited;
invention Limited (2) Under trial of the second
Min Zhong No. 1550 Defendant 3: Shenzhen Super Network
instance
Technology Co., Ltd.
Correcting the Appotronics
19-cv-00466-RGD-LRL inventor of the Corporation Defendant: Delta Electronics, Inc. Patent No. 9,024,241 N/A Accepted but not tried
patent Limited
313 / 337
Annual Report 2021
Appotronics
Dispute over the
(2021) Yue 03 Min Chu Corporation Defendant: Delta Electronics, Inc., Case accepted for trial of the
ownership of ZL201610387831.8 RMB 0.30 million
No. 2295 Limited, HU ZHANG Kesu, HUA Jianhao, WANG Bo first instance
patent right
Fei, LI Yi
Defendant 1: Delta Video Display System
(Wujiang) Limited
Defendant 2: WANG Yuhai
Defendant 3: Hunan Dehao Cultural and RMB 3.00 million
Infringement on Appotronics Creative Co., Ltd. and right
(2020) Yue 73 Zhi Min
patent for Corporation Defendant 4: Delta Electronics (Shanghai) ZL200880107739.5 protection In trial of the first instance
Chu No. 1335
invention Limited Co., Ltd. expenses of RMB
Defendant 5: Guangdong Jianye Display 0.50 million
Information Technology Co., Ltd.
Defendant 6: Guangzhou Jianye Network
Technology Co., Ltd.
Defendant 1: Delta Video Display System
(Wujiang) Limited
Defendant 2: WANG Yuhai
Defendant 3: Hunan Dehao Cultural and RMB 6.50 million
Infringement on Appotronics Creative Co., Ltd. and right
(2020) Yue 73 Zhi Min
patent for Corporation Defendant 4: Delta Electronics (Shanghai) ZL200880107739.5 protection In trial of the first instance
Chu No. 1336
invention Limited Co., Ltd. expenses of RMB
Defendant 5: Guangdong Jianye Display 0.50 million
Information Technology Co., Ltd.
Defendant 6: Guangzhou Jianye Network
Technology Co., Ltd.
Defendant 1: Delta Video Display System
(Wujiang) Limited
Defendant 2: WANG Yuhai
Defendant 3: Hunan Dehao Cultural and RMB 2.50 million
Infringement on Appotronics Creative Co., Ltd. and right
(2020) Yue 73 Zhi Min
patent for Corporation Defendant 4: Digital Projection (Beijing) ZL200880107739.5 protection In trial of the first instance
Chu No. 1337
invention Limited Electronics Technology Co., Ltd. expenses of RMB
Defendant 5: Guangdong Jianye Display 0.50 million
Information Technology Co., Ltd.
Defendant 6: Guangzhou Jianye Network
Technology Co., Ltd.
314 / 337
Annual Report 2021
Defendant 1: Delta Video Display System
(Wujiang) Limited
Defendant 2: WANG Yuhai
Defendant 3: Hunan Dehao Cultural and RMB 2.00 million
Infringement on Appotronics Creative Co., Ltd. and right
(2020) Yue 73 Zhi Min
patent for Corporation Defendant 4: Delta Electronics (Shanghai) ZL200880107739.5 protection In trial of the first instance
Chu No. 1338
invention Limited Co., Ltd. expenses of RMB
Defendant 5: Guangdong Jianye Display 0.50 million
Information Technology Co., Ltd.
Defendant 6: Guangzhou Jianye Network
Technology Co., Ltd.
Defendant 1: Delta Video Display System
(Wujiang) Limited
Defendant 2: WANG Yuhai
Defendant 3: Hunan Dehao Cultural and RMB 6.00 million
Infringement on Appotronics Creative Co., Ltd. and right
(2020) Yue 73 Zhi Min
patent for Corporation Defendant 4: Digital Projection (Beijing) ZL200880107739.5 protection In trial of the first instance
Chu No. 1340
invention Limited Electronics Technology Co., Ltd. expenses of RMB
Defendant 5: Guangdong Jianye Display 0.50 million
Information Technology Co., Ltd.
Defendant 6: Guangzhou Jianye Network
Technology Co., Ltd.
Defendant 1: Delta Video Display System
(Wujiang) Limited
Defendant 2: WANG Yuhai
Defendant 3: Hunan Dehao Cultural and RMB 14.00
Infringement on Appotronics Creative Co., Ltd. million and right
(2020) Yue 73 Zhi Min
patent for Corporation Defendant 4: Delta Electronics (Shanghai) ZL200880107739.5 protection In trial of the first instance
Chu No. 1341
invention Limited Co., Ltd. expenses of RMB
Defendant 5: Guangdong Jianye Display 0.50 million
Information Technology Co., Ltd.
Defendant 6: Guangzhou Jianye Network
Technology Co., Ltd.
Defendant 1: Delta Electronics (Shanghai)
Co., Ltd. RMB 0.75 million
Infringement on Appotronics Defendant 2: WANG Yuhai and right
(2020) Yue 73 Zhi Min
patent for Corporation Defendant 3: Hunan Dehao Cultural and ZL200880107739.5 protection In trial of the first instance
Chu No. 1361
invention Limited Creative Co., Ltd. expenses of RMB
Defendant 4: Guangdong Jianye Display 0.50 million
Information Technology Co., Ltd.
315 / 337
Annual Report 2021
Defendant 5: Guangzhou Jianye Network
Technology Co., Ltd.
Defendant 1: Delta Electronics (Shanghai)
Co., Ltd.
Defendant 2: WANG Yuhai RMB 0.75 million
Infringement on Appotronics Defendant 3: Hunan Dehao Cultural and and right
(2020) Yue 73 Zhi Min
patent for Corporation Creative Co., Ltd. ZL200810065225.X protection In trial of the first instance
Chu No. 1339
invention Limited Defendant 4: Guangdong Jianye Display expenses of RMB
Information Technology Co., Ltd. 0.50 million
Defendant 5: Guangzhou Jianye Network
Technology Co., Ltd.
Defendant 1: Delta Video Display System
(Wujiang) Limited
Defendant 2: WANG Yuhai
Defendant 3: Hunan Dehao Cultural and RMB 14.00
Infringement on Appotronics Creative Co., Ltd. million and right
(2020) Yue 73 Zhi Min
patent for Corporation Defendant 4: Delta Electronics (Shanghai) ZL200810065225.X protection In trial of the first instance
Chu No. 1353
invention Limited Co., Ltd. expenses of RMB
Defendant 5: Guangdong Jianye Display 0.50 million
Information Technology Co., Ltd.
Defendant 6: Guangzhou Jianye Network
Technology Co., Ltd.
Defendant 1: Delta Video Display System
(Wujiang) Limited
Defendant 2: WANG Yuhai
Defendant 3: Hunan Dehao Cultural and RMB 6.00 million
Infringement on Appotronics Creative Co., Ltd. and right
(2020) Yue 73 Zhi Min
patent for Corporation Defendant 4: Digital Projection (Beijing) ZL200810065225.X protection In trial of the first instance
Chu No. 1355
invention Limited Electronics Technology Co., Ltd. expenses of RMB
Defendant 5: Guangdong Jianye Display 0.50 million
Information Technology Co., Ltd.
Defendant 6: Guangzhou Jianye Network
Technology Co., Ltd.
316 / 337
Annual Report 2021
Defendant 1: Delta Video Display System
(Wujiang) Limited
Defendant 2: WANG Yuhai
Defendant 3: Hunan Dehao Cultural and RMB 6.50 million
Infringement on Appotronics Creative Co., Ltd. and right
(2020) Yue 73 Zhi Min
patent for Corporation Defendant 4: Delta Electronics (Shanghai) ZL200810065225.X protection In trial of the first instance
Chu No. 1356
invention Limited Co., Ltd. expenses of RMB
Defendant 5: Guangdong Jianye Display 0.50 million
Information Technology Co., Ltd.
Defendant 6: Guangzhou Jianye Network
Technology Co., Ltd.
Defendant 1: Delta Video Display System
(Wujiang) Limited
Defendant 2: WANG Yuhai
Defendant 3: Hunan Dehao Cultural and RMB 2.50 million
Infringement on Appotronics Creative Co., Ltd. and right
(2020) Yue 73 Zhi Min
patent for Corporation Defendant 4: Digital Projection (Beijing) ZL200810065225.X protection In trial of the first instance
Chu No. 1357
invention Limited Electronics Technology Co., Ltd. expenses of RMB
Defendant 5: Guangdong Jianye Display 0.50 million
Information Technology Co., Ltd.
Defendant 6: Guangzhou Jianye Network
Technology Co., Ltd.
Defendant 1: Delta Video Display System
(Wujiang) Limited
Defendant 2: WANG Yuhai
Defendant 3: Hunan Dehao Cultural and RMB 2.00 million
Infringement on Appotronics Creative Co., Ltd. and right
(2020) Yue 73 Zhi Min
patent for Corporation Defendant 4: Delta Electronics (Shanghai) ZL200810065225.X protection In trial of the first instance
Chu No. 1358
invention Limited Co., Ltd. expenses of RMB
Defendant 5: Guangdong Jianye Display 0.50 million
Information Technology Co., Ltd.
Defendant 6: Guangzhou Jianye Network
Technology Co., Ltd.
Defendant 1: Delta Video Display System
(Wujiang) Limited
RMB 3.00 million
Defendant 2: WANG Yuhai
Infringement on Appotronics and right
(2020) Yue 73 Zhi Min Defendant 3: Hunan Dehao Cultural and
patent for Corporation ZL200810065225.X protection In trial of the first instance
Chu No. 1359 Creative Co., Ltd.
invention Limited expenses of RMB
Defendant 4: Delta Electronics (Shanghai)
0.50 million
Co., Ltd.
Defendant 5: Guangdong Jianye Display
317 / 337
Annual Report 2021
Information Technology Co., Ltd.
Defendant 6: Guangzhou Jianye Network
Technology Co., Ltd.
Defendant 1: Delta Video Display System
(Wujiang) Limited
Defendant 2: WANG Yuhai
Defendant 3: Hunan Dehao Cultural and RMB 3.00 million
Infringement on Appotronics Creative Co., Ltd. and right
(2020) Yue 73 Zhi Min
patent for Corporation Defendant 4: Digital Projection (Beijing) ZL200810065225.X protection In trial of the first instance
Chu No. 1360
invention Limited Electronics Technology Co., Ltd. expenses of RMB
Defendant 5: Guangdong Jianye Display 0.50 million
Information Technology Co., Ltd.
Defendant 6: Guangzhou Jianye Network
Technology Co., Ltd.
Maliciously
Appotronics
(2021) Yue 73 Zhi Min initiate an RMB 10.00
Corporation Defendant: Delta Electronics, Inc. N/A In trial of the first instance
Chu No. 1860 intellectual million
Limited
property litigation
2. Civil litigation and arbitration where the Company acted as the defendant
As of December 31, 2021, there are 7 civil litigation cases where the Company was a defendant, specifically including:
Cause of
Case No. Plaintiff Defendant Patents involved Amount involved Progress
action
Loss compensation of
Infringement Appotronics Corporation Limited;
(2019) Yue 73 Zhi Min Delta RMB 16.00 million + In trial of the
Chu No. 662 on patent for Futian SPN Projector & Video ZL201610387831.8
Electronics, Inc. litigation costs of RMB first instance
invention System Firm of Shenzhen
145,343
318 / 337
Annual Report 2021
Cause of
Case No. Plaintiff Defendant Patents involved Amount involved Progress
action
The judgment of
Loss compensation of the first instance
Fengmi (Beijing) Technology Co.,
(2019) Jing 73 Min Chu RMB 15.00 million + in January 2022
No. 1275 Ltd.; ZL201410249663.7
litigation costs of RMB held that no
Appotronics Corporation Limited
1.01 million infringement is
constituted
The judgment of
Loss compensation of the first instance
Fengmi (Beijing) Technology Co.,
(2019) Jing 73 Min Chu RMB 15.00 million + in January 2022
No. 1276 Ltd.; ZL201610387831.8
litigation costs of RMB held that no
Appotronics Corporation Limited
1.01 million infringement is
constituted
Loss compensation of
Appotronics Corporation Limited
(2021) Hu 73 Zhi Min RMB 15.00 million + In trial of the
Chu No. 1070 and Shanghai Haichi Digital ZL201110041436.1
litigation costs of RMB first instance
Technology Co., Ltd.
1.01 million
Loss compensation of
(2021) Chuan 01 Zhi RMB 15.00 million + In trial of the
Min Chu No. 684 ZL201410249663.7
litigation costs of RMB first instance
1.01 million
Loss compensation of
Appotronics Corporation Limited
(2021) Chuan 01 Zhi RMB 15.00 million + In trial of the
Min Chu No. 685 Chengdu Jinxi Guangxian ZL201610387831.8
litigation costs of RMB first instance
Information Technology Co., Ltd.
1.01 million
Loss compensation of
(2021) Chuan 01 Zhi RMB 15.00 million + In trial of the
Min Chu No. 686 ZL201110041436.1
litigation costs of RMB first instance
1.01 million
(2). Description shall also be provided even if the Company has no significant contingencies to be disclosed:
□ Applicable √ N/A
319 / 337
Annual Report 2021
3. Others
□ Applicable √ N/A
XV. Events after the balance sheet date
1. Material non-adjusting event
√ Applicable □ N/A
In RMB
Effects on the financial position and Reasons for not being able to
Item Content
operating results estimate such effects
Issuance of stocks and bonds
Significant external investments
Significant debt restructuring
Natural disaster
Significant change in foreign exchange
rate
Arbitration In January 2022, GDC Cayman According to professional
proposed to terminate several opinions of attorneys, the claims
important equity provisions, raised by GDC Cayman and GDC
including the veto right of BVI in the arbitration request are not
Appotronics HK with respect to supported by fact. The Company has
GDC BVI, on the ground of getting engaged a professional attorney team
listed. GDC Cayman and GDC BVI and taken relevant legal measures to
raised arbitration claims to the safeguard the legitimate rights and
American Arbitration Association interests of the Company and all
against the Company and shareholders in accordance with law.
Appotronics HK on the ground that Since this case was just accepted and
the Company failed to assist them in the trial has not been started, the
getting listed, hence constituting impact of such case on the profit or
320 / 337
Annual Report 2021
violation of agreement, requesting loss of the Company cannot be
compensation in the amount of USD determined at present; the eventual
38.00 million. actual impact depends on the award
The Company disagreed with of the arbitration tribunal or the
the termination of the important negotiation between the parties.
equity provisions, including the veto
right of Appotronics HK with respect
to GDC BVI, and raised counter-
claims against GDC BVI and the
actual controller ZHANG Wanneng
and the management team thereof on
the ground that GDC Cayman, GDC
BVI, Mr. ZHANG Wanneng, and the
management team violated the
provisions of the Shareholders’
Agreement and Settlement
Agreement, requesting the
compensation of no less than USD
40.00 million for the Company and
Appotronics HK.
As of the date when the
financial statements are approved for
321 / 337
Annual Report 2021
release, this case is in the stage of
appeal initiated by the plaintiffs.
2. Profit distribution
√ Applicable □ N/A
322 / 337
Annual Report 2021
In RMB
Proposed distributions of profits or 47,539,474.61
dividends
Profits or dividends declared for
distribution upon discussion and
approval
3. Sales return
□ Applicable √ N/A
4. Description of other events after the balance sheet date
□ Applicable √ N/A
XVI. Other significant events
1. Corrections of prior period errors
(1). Retrospective application
□ Applicable √ N/A
(2). Prospective application
□ Applicable √ N/A
2. Debt restructuring
□ Applicable √ N/A
3. Asset swap
(1). Exchange of non-monetary assets
□ Applicable √ N/A
(2). Other asset swap
□ Applicable √ N/A
4. Annuity plan
□ Applicable √ N/A
5. Discontinued operations
□ Applicable √ N/A
6. Segment reporting
(1). Determination basis and accounting policies of reporting segments
□ Applicable √ N/A
(2). Financial information of reporting segments
□ Applicable √ N/A
(3). If the Company has no reporting segments, or cannot disclose the total assets and liabilities of
reporting segments, specify the reasons
√ Applicable □ N/A
The Company has no reporting segments due to absence of diversified operations. A breakdown of
the Company’s principal activity incomes and costs categorized by businesses, products and regions is
disclosed as below:
323 / 337
Annual Report 2021
Categorized by businesses and products:
In RMB 0’000
Amount of the current period Amount of the prior period
Item Principal activity Principal activity Principal activity Principal activity
income cost income cost
Sales 211,933.18 149,589.02 174,412.33 128,143.43
Projection services 36,062.20 14,312.88 17,173.26 10,775.31
Other businesses 1,827.46 1,207.06 3,302.83 388.76
Subtotal 249,822.84 165,108.96 194,888.42 139,307.50
Categorized by regions:
In RMB 0’000
Amount of the current period Amount of the prior period
Item Principal activity Principal activity Principal activity Principal activity
income cost income cost
Domestic 231,854.75 155,390.51 185,561.99 135,605.70
Overseas 17,968.09 9,718.45 9,326.43 3,701.80
Subtotal 249,822.84 165,108.96 194,888.42 139,307.50
(4). Other information
□ Applicable √ N/A
7. Other significant transactions and matters having an impact on the decisions of investors
□ Applicable √ N/A
8. Others
√ Applicable □ N/A
1. The Company as the lessee
(1) Right-of-use assets are described in detail in VII.25 of Section X;
(2) The accounting policies of the Company with respect to short-term leases and low-value assets
leases are described in detail in V.42 of Section X. The table below shows the amounts of expenses related
to short-term leases and expenses related to low-value assets leases that are recognized in the profit or loss
for the current period:
Amount of the Amount of the prior
Item
current period period
Expenses related to short-term leases 8,445,152.88
Expenses related to low-value assets leases (except for
390,717.29
short-term leases)
Total 8,835,870.17
(3) Profit or loss and cash flow for the current period related to leases
324 / 337
Annual Report 2021
Amount of the Amount of the prior
Item
current period period
Interest expenses of lease liabilities 1,670,889.26
Total cash outflow for leases 32,622,777.04 23,680,875.05
(4) For the maturity analysis of lease liabilities and corresponding liquidity risk management, refer
to the description in X.(II) of Section X.
(5) Nature of leasing activities
Categories of leased With option for renewal
Number Lease Term
assets of lease or not
Property 35 Within 5 years No
Computer 426 Within one year No
2. The Company as the lessor
(1) Operating lease
1) Lease incomes
Amount of the Amount of the prior
Item
current period period
Income from projection services 360,622,008.82 171,732,614.66
Where: Income related to variable lease payments not
recognized as lease payments
2) Assets of operating leases
Item Closing balance Closing of last year
Fixed assets 367,726,844.90 364,423,283.10
Subtotal 367,726,844.90 364,423,283.10
Fixed assets leased out under operating leases are described in detail in VII.21 of Section X.
3) According to the lease contract with the lessee, undiscounted lease payments that will be
received in the future for irrevocable leases
Remaining period Closing balance
Within 1 year 10,144,456.99
Total 10,144,456.99
(3) Other information
Nature of leasing activities
Category of assets With option for renewal
Number Lease Term
leased out of lease or not
Light source and device 20,584 N/A No
325 / 337
Annual Report 2021
XVII. Notes to key items in the parent company’s financial statements
1. Accounts receivable
(1). Disclosure by aging
√ Applicable □ N/A
In RMB
Aging Closing balance of carrying amount
Within 1 year
Where: Subitems within 1 year
Subtotal of items within 1 year 604,865,151.23
1 to 2 years 12,611,059.16
2 to 3 years 2,802,495.00
Over 3 years 1,420,575.02
3 to 4 years
4 to 5 years
Over 5 years
Total 621,699,280.41
326 / 337
Annual Report 2021
(2). Disclosure by categories of provision for bad debts
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Category Percentage Percentage
Book Book
Percentage of Percentage of
Amount Amount value Amount Amount value
(%) provision (%) provision
(%) (%)
Provision
for bad
debts made
individually
Where:
Provision
for bad
621,699,280.41 100 5,483,110.45 0.88 616,216,169.96 569,449,754.94 100.00 1,910,248.15 0.34 567,539,506.79
debts made
by group
Where:
Total 621,699,280.41 100 5,483,110.45 0.88 616,216,169.96 569,449,754.94 100.00 1,910,248.15 0.34 567,539,506.79
327 / 337
Annual Report 2021
Provision for bad debts made individually:
□ Applicable √ N/A
Provision for bad debts made by group:
√ Applicable □ N/A
Item by group: Group of aging
In RMB
Closing balance
Name Proportion of provision
Accounts receivable Bad debt provision
(%)
Group of aging 109,178,209.03 5,483,110.45 5.02
Group of receivables 512,521,071.38
from related parties
in the scope of
consolidation
Total 621,699,280.41 5,483,110.45 0.88
Recognition criterion to make the bad debt provision by group and explanation:
□ Applicable √ N/A
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,
please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables:
□ Applicable √ N/A
(3). Provision for bad debts
√ Applicable □ N/A
In RMB
Changes for the current period
Opening Recovery Write-off Closing
Category Other
balance Provision or or balance
changes
reversal cancellation
Provision 1,910,248.15 3,653,392.48 80,530.18 5,483,110.45
for bad
debts made
by group
Total 1,910,248.15 3,653,392.48 80,530.18 5,483,110.45
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
(4). Accounts receivable actually canceled in the current period
√ Applicable □ N/A
In RMB
Item Cancellation amount
Accounts receivable actually canceled 80,530.18
In which significant amounts canceled are described as below:
□ Applicable √ N/A
(5). Top five closing balances of accounts receivable categorized by debtors
√ Applicable □ N/A
In RMB
328 / 337
Annual Report 2021
Proportion to the total
closing balance of Closing balance of bad
Entity Closing balance
accounts receivable debt provision
(%)
Fengmi (Beijing) 344,220,587.60 55.37
Technology Co., Ltd.
Appotronics Hong 79,483,856.31 12.78
Kong Limited
CINEAPPO Laser 56,716,137.48 9.12
Cinema Technology
(Beijing) Co., Ltd.
Guangdong SACA 31,829,748.05 5.12 1,591,487.40
Precision
Manufacturing Co.,
Ltd. and its affiliates
Appotronics 24,393,777.25 3.92
Technology
(Changzhou) Co.,
Ltd.
Total 536,644,106.69 86.31 1,591,487.40
Other information
None
(6). Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ N/A
(7). Assets and liabilities arising from transfer of accounts receivable and continued involvement
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
2. Other receivables
Presented by items
√ Applicable □ N/A
In RMB
Item Closing balance Opening balance
Interest receivable
Dividend receivable
Other receivables 6,645,181.15 71,654,117.57
Total 6,645,181.15 71,654,117.57
Other information:
□ Applicable √ N/A
Interest receivable
(1). Categories of interest receivable
□ Applicable √ N/A
(2). Significant interests overdue
□ Applicable √ N/A
(3). Provision for bad debts
□ Applicable √ N/A
329 / 337
Annual Report 2021
Other information:
□ Applicable √ N/A
(4). Dividend receivable
□ Applicable √ N/A
(5). Dividends receivable with significant amounts aged more than 1 year
□ Applicable √ N/A
(6). Provision for bad debts
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
Other receivables
(1). Disclosure by aging
√ Applicable □ N/A
In RMB
Aging Closing balance of carrying amount
Within 1 year
Where: Subitems within 1 year
Subtotal of items within 1 year 856,692.16
1 to 2 years 1,338,752.05
2 to 3 years 3,625,218.00
Over 3 years 1,155,006.40
3 to 4 years
4 to 5 years
Over 5 years
Total 6,975,668.61
(2). Categories by the nature of other receivables
√ Applicable □ N/A
In RMB
Nature of other receivables Closing balance of carrying Opening balance of carrying
amount amount
Deposits/margins/petty cash 5,855,101.09 5,911,673.21
Receivables from related parties 912,569.02 62,284,074.96
in the scope of consolidation
Temporary receivables 207,998.50 374,249.92
Compensation receivable 3,577,279.61
Total 6,975,668.61 72,147,277.70
(3). Provision for bad debts
√ Applicable □ N/A
In RMB
Stage I Stage II Stage III
Bad debt Lifetime ECL Total
12-month ECL Lifetime ECL (with
provision (without credit
in the future credit impairment)
impairment)
Balance as at 493,160.13 493,160.13
330 / 337
Annual Report 2021
January 1, 2021
Balance as at
January 1, 2021 in
the current period
--transferred to -6,833.12 6,833.12
Stage II
--transferred to
Stage III
--reversed to
Stage II
--reversed to
Stage I
Provision -190,005.15 27,332.48 -162,672.67
Reversal
Write-off
Cancellation
Other changes
Balance as at
December 31, 296,321.86 34,165.60 330,487.46
2021
Description of significant changes in the balance of other receivables with changed provisions for losses
in the current period:
□ Applicable √ N/A
Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of financial
instruments has been increased significantly in the current period:
□ Applicable √ N/A
(4). Provision for bad debts
√ Applicable □ N/A
In RMB
Changes for the current period
Opening Recovery Write-off Closing
Category Other
balance Provision or or balance
changes
reversal cancellation
Provision for 493,160.13 -162,672.67 330,487.46
bad debts
made by
group
Total 493,160.13 -162,672.67 330,487.46
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
(5). Other receivables actually canceled in the current period
□ Applicable √ N/A
(6). Top five closing balances of other receivables categorized by debtors
√ Applicable □ N/A
In RMB
331 / 337
Annual Report 2021
Proportion to
the total
Closing
closing
Nature of other Closing balance of
Entity Aging balance of
receivables balance bad debt
other
provision
receivables
(%)
Shenzhen Deposits/margins/petty 3,574,618.00 Over 3 51.24 178,730.90
Meisheng cash years
Industry
Co., Ltd.
Shenzhen Deposits/margins/petty 1,257,075.20 1-2 18.02 62,853.76
High-tech cash years,
Industry 2-3
Promotion years,
Center over 3
years
Fengmi Receivables from 537,139.29 Within 7.70
(Beijing) related parties in the 1 year
Technology scope of consolidation
Co., Ltd.
Qingdao Deposits/margins/petty 500,000.00 1-2 7.17 25,000.00
Haier cash years
Multimedia
Co., Ltd.
Qingda Receivables from 375,429.73 Within 5.38
Appotronics related parties in the 1 year,
(Xiamen) scope of consolidation 1-2
Technology years
Co., Ltd.
Total 6,244,262.22 89.51 266,584.66
(7). Accounts receivable involving government grants
□ Applicable √ N/A
(8). Other receivables derecognized due to transfer of financial assets
□ Applicable √ N/A
(9). Assets and liabilities arising from transfer of other receivables and continued involvement
□ Applicable √ N/A
Other information:
□ Applicable √ N/A
3. Long-term equity investments
√ Applicable □ N/A
In RMB
Closing balance Opening balance
Provision Provision
Item Carrying Carrying
for Book value for Book value
amount amount
impairment impairment
332 / 337
Annual Report 2021
Investme
nts in 453,386,804. 12,827,792. 440,559,012. 467,533,569. 45,885,284. 421,648,284.
subsidiari 91 79 12 26 27 99
es
Investme
nts in
associates
and joint
ventures
453,386,804. 12,827,792. 440,559,012. 467,533,569. 45,885,284. 421,648,284.
Total
91 79 12 26 27 99
(1). Investments in subsidiaries
√ Applicable □ N/A
In RMB
Closing
Provision
balance of
Opening Closing for
Investee Increase Decrease provision
balance balance impairme
for
nt
impairment
Fabulus 27,000,000 27,000,000.
Display .00 00
(Beijing)
Co., Ltd.
CINEAPPO 32,576,902 7,446,995.4 40,023,897.8
Laser .46 3 9
Cinema
Technology
(Beijing)
Co., Ltd.
Shenzhen 1,647,962. 115,737.79 1,763,700.01
Appotronics 22
Software
Technology
Co., Ltd.
Beijing 5,900,000. 5,900,000.00
Orient 00
Appotronics
Technology
Co., Ltd.
Shenzhen 12,000,000 12,000,000.0 12,000,000.
Appotronics .00 0 00
Xiaoming
Technology
Co., Ltd.
Fengmi 30,014,636 770,901.41 27,500,000. 3,285,537.50
(Beijing) .09 00
Technology
Co., Ltd.
Qingda 5,100,000. 5,100,000.00 827,792.79
Appotronics 00
(Xiamen)
Technology
Co., Ltd.
Shenzhen 18,966,857 18,966,857.2
Appotronics .26 6
333 / 337
Annual Report 2021
Laser
Display
Technology
Co., Ltd.
Appotronics 301,668,68 1,376,533.5 303,045,217.
Hong Kong 3.52 0 02
Limited
JOVE AI 619,184.90 150,593.50 769,778.40
Innovation
Appotronics 2,000,000. 2,000,000.00
Technology 00
(Changzhou)
Co., Ltd.
Shenzhen 3,000,000. 3,000,000.00
Appotronics 00
Display
Device Co.,
Ltd.
WEMAX 24,349.32 -24,349.32
LLC
Appotronics 60,873.29 338,726.72 399,600.01
USA, Inc.
Tianjin 26,954,120 26,954,120.2
Bonian Film .20 0
Partnership
(LP)
(Chongqing)
30,178,096. 30,178,096.6
Innovative
62 2
Technology
Co., Ltd.
467,533,56 40,353,235. 54,500,000. 453,386,804. 12,827,792.
Total
9.26 65 00 91 79
(2). Investments in associates and joint ventures
□ Applicable √ N/A
Other information:
None
4. Operating income and operating costs
(1). Description of operating income and operating costs
√ Applicable □ N/A
In RMB
Amount for the current period Amount for the prior period
Item
Income Cost Income Cost
Main business 1,445,208,597.94 951,761,428.41 1,064,149,969.51 720,452,860.84
Other businesses
Total 1,445,208,597.94 951,761,428.41 1,064,149,969.51 720,452,860.84
(2). Description of incomes from contracts
□ Applicable √ N/A
(3). Description of performance obligations
□ Applicable √ N/A
334 / 337
Annual Report 2021
(4). Description of allocation to remaining performance obligations
□ Applicable √ N/A
Other information:
None
5. Investment income
√ Applicable □ N/A
In RMB
Amount for the current
Item Amount for the prior period
period
Gains from long-term equity 18,477,491.48
investment accounted for using the cost
method
Investment income from disposal of 3.00
long-term equity investments
Investment income from disposal of
8,780,960.36 18,624,853.96
held-for-trading financial assets
Fees for acquiring held-for-trading -8,750.05
financial assets
Total 27,249,704.79 18,624,853.96
Other information:
None
6. Others
□ Applicable √ N/A
XVIII. Supplementary information
1. Breakdown of non-recurring profit or loss for the current period
√ Applicable □ N/A
In RMB
Item Amount Description
Gain or loss on disposal of non-current 1,437,535.03
assets
Tax refunds or reductions with ultra vires
approval or without official approval
documents
Government grants recognized in profit or 87,716,471.20
loss (other than grants which are closely
related to the Company’s business and are
either in fixed amounts or determined under
quantitative methods in accordance with the
national standard)
Income earned from lending funds to non-
financial institutions and recognized in
profit or loss
The excess of attributable fair value of
identifiable net assets over the consideration
paid for the acquisition of subsidiaries,
associates and joint ventures
335 / 337
Annual Report 2021
Profit or loss on exchange of non-monetary
assets
Profit or loss on entrusted investments or 9,776,977.44
assets management
Impairment losses on assets due to force
majeure events, e.g. natural disasters
Profit or loss on debt restructuring
Entity restructuring expenses, e.g.,
expenditure for layoff of employees,
integration expenses, etc.
Profit or loss attributable to the evidently
unfair portion of transaction price, being
transacted price in excess of fair transaction
price, of a transaction
Net profit or loss of subsidiaries from the 14,561,407.47
beginning of the period up to the business
combination date recognized as a result of
business combination involving enterprises
under common control
Profit or loss arising from contingencies
other than those related to normal operating
business
Profit or loss on changes in the fair value of 40,127,764.00
held-for-trading financial assets, derivative
financial assets, held-for-trading financial
liabilities and derivative financial liabilities
and investment income on disposal of held-
for-trading financial assets, derivative
financial assets, held-for-trading financial
liabilities, derivative financial liabilities and
other debt investments, other than those
used in the effective hedging activities
relating to normal operating business
Reversal of impairment loss on accounts
receivable and contract assets tested for
impairment individually
Profit or loss on entrusted loans
Profit or loss on changes in the fair value of
investment properties that are subsequently
measured using the fair value model
Effects on profit or loss of one-off
adjustment to profit or loss for the period
according to the requirements of laws and
regulations in respect of tax, accounting,
etc.
Custodian fees earned from entrusted
operation
Other non-operating income and expenses 865,330.69
Other gains or losses meeting the definition -9,823,212.01
of non-recurring profit or loss
Less: Effect of income taxes 7,304,758.42
Effect of minority interests 28,273,002.10
Total 109,084,513.30
It is required to specify the reason for defining items as non-recurring profit or loss items according to
Explanatory Announcement No. 1 on Information Disclosure for Companies Publicly Offering Securities
336 / 337
Annual Report 2021
- Non-recurring Profit or Loss, and reasons for defining non-recurring profit or loss items illustrated in
Explanatory Announcement No. 1 on Information Disclosure for Companies Publicly Offering Securities
- Non-recurring Profit or Loss as recurring profit or loss items.
□ Applicable √ N/A
2. Return on net assets and earnings per share
√ Applicable □ N/A
Weighted average Earnings per share
Profit for the reporting period return on net Basic earnings per Diluted earnings per
assets (%) share share
Net profit attributable to
ordinary shareholders of the 10.26 0.52 0.51
Company
Net profit after deduction of
non-recurring profits or losses
5.46 0.27 0.27
attributable to ordinary
shareholders of the Company
3. Differences in accounting data under Chinese accounting standards and overseas accounting
standards
□ Applicable √ N/A
4. Others
□ Applicable √ N/A
Chairman: LI Yi
Approval for submission by the Board of Directors: April 25, 2022
Revision information
□ Applicable √ N/A
337 / 337
