Stock Code: 688007 Stock Short Name: Appotronics
Appotronics Corporation Limited
Hold Fast to Long-term Value Whenever to Change or Persevere
Dear Shareholders
Like many other companies Appotronics has experienced an extraordinary year of
2020. Our performance has inevitably been affected under the circumstances of the
pandemic.The good news is that most of our business sectors were advancing steadily in the first
half of the year and the cinema sector quickly rebounded in the second half of the year.
And the overall annual revenue was basically the same as the previous year which is more
than RMB100 million demonstrating good resilience.Instead of the figures in the annual report I would like to share with you where such
strong resilience comes from what we have done to seek a breakthrough in those days
when we were “besieged” by the pandemic and what we have done to prepare for the next
year and even longer term.Insist on Technology Innovation for Long-term Value
In 2020 the pandemic brought tremendous uncertainty to the world. For companies
like Appotronics who pursues long-term values we experienced unprecedented pressure to
adhere to our original goal which is insisting on technology innovation and striving to
continuous evolution. We believe that only by meeting basic needs of customers and
creating long-term profits for investors can we go through the ups and downs in this
turbulent market.Since the original invention of ALPD? fluorescent laser display technology in 2007
Appotronics has never stopped the evolution of this technology. We launched the world’s
first laser TV in 2013 installed the world’s first ALPD? laser cinema projector in 2014
introduced the world’s first laser TV priced under RMB10000 in 2017 became the first
company in China to manufacture laser digital cinema projectors with DCI certification in
2019 and launched the world’s first highly profitable Fresnel flexible screen in 2020 all of
which cannot materialize without the long-term technology innovation that we have been
pursuing.While completing a number of “0 to 1” technological breakthroughs we also
promoted the market applications such as in the fields of cinema engineering education
and household markets thus creating new fast-growing tracks.Our efforts in technology innovation can be evidenced by the following figures: From
2016 to 2019 Appotronics invested RMB70.12 million RMB93.30 million RMB136
million and RMB201 million in R&D respectively. Even in 2020 we still invested
RMB204 million in R&D accounting for 10.49% of our annual revenue despite the
performance pressure.
By the end of 2020 Appotronics had a total of 2191 patent applications worldwide of
which about 70% are invention patents. The original ALPD? technology has been regarded
as the development direction of new-generation laser display by the international industry
and has been cited by the industry and domestic and foreign enterprises more than 600
times.
From ALPD? 1.0 to ALPD? 4.0 Appotronics has continuously iterated and upgraded
the technology not only by significantly improving visual effects such as brightness
contrast ratio and color gamut but also by achieving high efficiency in many areas such as
safety energy saving and environmental protection and industrialization. We are
developing ALPD?5.0 and ALPD?6.0 technologies which will strengthen the laser
display effect and further reduce the cost of laser display truly realizing the value creation
for users through continuous technology innovation.
All of the above builds up the confidence that we can maintain our profitability
fundamentals adjust quickly in the crisis and find a new growth curve in the midst of the
major changes brought about by the pandemic in 2020.
Capture Industry Trends and Explore New Growth Curves
In the first half of 2020 we kept an eye on the changes in the market. With the rise of
the “In-house Economy” large-screen displays such as laser TVs and smart pico-projectors
begun to attract public attentions although the laser projection business which has always
been our advantage was greatly affected by the pandemic and the global economic
downturn caused by the pandemic also affected our overseas business.
From this perspective we continued to strengthen our advantages in core devices
actively adjusted our business structure and focused on TO C business recording revenue
of more than RMB1 billion from our consumer business during the year accounting for
more than 50% of our total revenue for the first time.We adopted the business division system for our operation. On the one hand we
implemented separate accounting for each business unit which can strengthen internal
competition enhance the ability of independent management and decision-making and
speed up our market response improve our business resilience and flexibility under the
pandemic. On the other hand we realized the interconnection of information systems
improving the coordination efficiency between supply production and sales within the
business divisions.In the meantime we have completed the optimization of the R&D organizational
structure. While retaining the research institute that continues to focus on long-term
technology development we have established R&D centers that correspond to business
units which have been divided into TO B TO C and Solution Departments to integrate the
operation of R&D product and sales thus forming a two-wheel-driven management model
of upgrading R&D driven by market demand and promoting sales with R&D.We are striving to establish a dynamic and entrepreneurial team. In the past year we
continued to attract and retain young talents and teams that would support the long-term
development of our core business and enhanced their sense of ownership through equity
incentives and other means. In addition we consciously improved the structure of our
management layer by attracting more young talents to stimulate its vitality.In the context of “De-globalization” catalyzed by the pandemic we realize that
professional IP operation will be an effective means to protect our own products which has
prompted us to pay more attention to IP protection and management. The year of 2020 has
also witnessed a breakthrough in IP operation. We look forward to working with more
partners to make the industry bigger and stronger.It has to be admitted that the pandemic has slowed down the momentum of our rapid
development in the past few years. However we have also further optimized our
organizational structure improved our operational efficiency and adjusted our
development direction as we move forward under pressure. And we adjusted the
development direction improved the strategic position of TO C business and find a new
growth curve based on our judgment of future market trends.Time tells everything
Although the pandemic hit the macro economy badly it also gave rise to many new
growth oppotunities in the field of technology innovation. The pandemic was more like an
“accelerator” for Appotronics pushing us to transform strategically in pain.We are effectively executing the strategic transformation of our consumer business
with productization and commercialization at the core. We are working harder than ever to
identify opportunities in overseas markets and we are placing the highest priority on market
growth as we believe that a certain level of scale is the most central foundation for realizing
our business model.Looking ahead to 2021 innovation and change will remain the key words of our
development while technology and commercialization will be the main focus of our
development.We will continue to devote ourselves to the breakthrough innovation productization
and industrialization promotion of laser display technology so as to develop a technology
reserve and patent layout of the whole technology chain of laser display from key system
structure core devices to key algorithms.We will focus on technology development and services that can bring long-term usage
value to users provide more excellent products and applications for our consumers
promote the expansion of application scenarios of ALPD? technology in the household
field and enhance our profitability.We will continue to increase our IP asset-based operations combine IP layout IP
protection IP licensing with disruptive innovation to maintain our innovation edge and
conduct IP operations with an open mind and seek cooperation with head companies in
various fields worldwide. Meanwhile we will work with more partners to explore overseas
markets and look for the next growth curve.
As a corporate citizen we will also optimize our corporate governance improve our
technology innovation make adequate information disclosure and assume our social
responsibility to our investors customers and other stakeholders.
We believe that the stock market should be a weighing machine instead of air-blower
for a company that pursues long-termism which means the stock market can weigh the real
value of a company worthy of investment sooner or later. We have been working hard to
make us “a heavier company” that can maintain vitality and continuous progress despite the
ever-changing external environment.
After more than a decade of development Appotronics has developed a complete
corporate governance system and has an excellent management team led by Mr. Bo
Lianming. As the leader of R&D I will devote more energy to R&D and lead the technical
team to promote industrial development with continuous enthusiasm for innovation in the
future.It would be a great honor for us to continue to create more value for our company for
our shareholders and for the world!
Last but not least I would like to thank all shareholders and friends who have been
caring for Appotronics! Please believe that when you are optimistic about a track and a
company time will prove it.Time tells everything!
Li Yi
April 2021
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. Alert of significant risks
The Company has described in detail the risks that may exist in the production and operation of the
Company. Please refer to “Section IV Discussion and Analysis of Business Situations - Risk factors” for
the relevant risks. We draw the attention of investors to such risks in making investments.III. All directors of the Company attended the meeting of the Board of Directors.IV. Pan-China Certified Public Accountants (Special General Partnership) issued a standard
unqualified auditor’s report to the Company.
V. BO Lianming Principal of the Company ZHAO Ruijin Person in Charge of the Accounting
Body and LIU Jie Chief Accountant hereby represent that the financial statements contained
in this Annual Report are true accurate and complete.VI. Profit distribution proposal or proposal for capitalization of capital reserve approved by the
Board of Directors during the reporting period
Upon consideration at the 31st meeting of the 1st 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 - the
Company proposed to distribute to all shareholders a cash dividend of RMB 0.55 (tax inclusive) for
every 10 shares. As of December 31 2020 the Company has a total of 452756901 shares leading to
the total cash dividend of RMB 24901629.56 (tax inclusive). The cash dividends proposed by the
Company for this year account for 21.87% 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.The preliminary plan for profit distribution is still subject to approval at the general meeting of
shareholders of the Company.VII. Is there any material event concerning any special arrangement of corporate governance?
□ Applicable√ N/A
VIII. 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. The investors should be aware of the risk of investment.
IX. Is there any non-operating occupation of funds by the controlling shareholder or its affiliates?
No
X. Is there any external guarantee provided in contravention of the stipulated decision-making
procedure?
No
XI. Whether more than half of the directors unable to guarantee the truthfulness accuracy and
completeness of the Annual Report disclosed by the Company
No
XII. Other information
□ Applicable√ N/A
Table of Contents
Section I Definitions ....................................................................................................................... 10
Section II Company Profile and Main Financial Indicators............................................................... 11
Section III Business Overview...... ...................................................................................................... 16
Section IV Discussion and Analysis of Business Situations ............................................................... 34
Section V Significant Matters ...... ...................................................................................................... 53
Section VI Changes in Shares and Shareholders ................................................................................. 95
Section VII Preferred Shares........... ................................................................................................... 109
Section VIII Directors Supervisors Senior Officers and Employees ................................................. 110
Section IX Corporate Governance .................................................................................................... 126
Section X Corporate Bonds.......... .................................................................................................... 131
Section XI Financial Report........... ................................................................................................... 132
Section XII List of Documents Available for Inspection .................................................................... 311
Section I Definitions
I. Definitions
For purpose of this report unless the context otherwise requires the following terms shall have the
meanings indicated below:
Definitions of frequently-used terms
Company or
Appotronics
means Appotronics Corporation Limited
Appotronics
Ltd.means Appotronics Corporation Ltd. the former name of the Company
CINEAPPO means CINEAPPO Laser Cinema Technology (Beijing) Co. Ltd.
Formoive means Formoive (Beijing) 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
Hongye
means Shenzhen Appotronics Hongye Investment Partnership (LP)
Blackpine means Blackpine Investment Corp. Ltd.
Jinleijing means Shenzhen Jinleijing Investment Limited Partnership (LP)
Appotronics
Chengye
means Shenzhen Appotronics Chengye Consulting Partnership (LP)
Appotronics
Holdings
means Shenzhen Appotronics Holdings Limited
Jiayuan I means
Huatai Appotronics Employee Stock Ownership Plan - Jiayuan I
Collective Asset Management Plan
CINIONIC means Cinionic Limited (previously known as Barco Cineappo Limited)
GDC means GDC Technology Limited (British Virgin Islands)
IMB means Integrated Media Block embedded inside a digital projector
FDP means
Feng Dynamic Page dynamic page architecture developed
independently by Appotronics
DCI means Digital Cinema Initiatives of the United States
Section II Company Profile and Main Financial Indicators
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 BO Lianming
Registered address
20-22/F Hi-tech Zone Union Tower No. 63 Xuefu Road Yuehai
Street Nanshan District Shenzhen
Postal code of registered address 518052
Office address
20-22/F Hi-tech Zone Union Tower No. 63 Xuefu Road Yuehai
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 representative for
information disclosure)
Securities affairs representative
Name YAN Li CHEN Yasha
Address
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 Street Nanshan
District Shenzhen
Telephone 0755-32950536 0755-32950536
Facsimile 0755-86186299 0755-86186299
Email ir@appotronics.cn ir@appotronics.cn
III. Information disclosure and place of reports prepared for inquiry
Designated media for information disclosure China Securities Journal Shanghai Securities News
Securities Times Securities Daily
Websites designated by the China Securities
Regulation Commission for publishing the
annual reports
www.sse.com.cn
Place for keeping the annual reports Office of the Board of Directors
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
and board
Stock short name Stock code
Former stock short
name
A-shares
Shanghai Stock
Exchange STAR
Market
Appotronics 688007 N/A
(II) Depository receipts of the Company
□ Applicable√ N/A
V. Other related information
Domestic accounting firm
appointed by the Company
Name
Pan-China Certified Public Accountants
(Special General Partnership)
Office address
9/F No. 128 Xixi Road Xihu District
Hangzhou Zhejiang
Accountants
signing the report
YANG Kejing NIU Chunjun
Sponsor performing the duty of
continuous supervision within
the reporting period
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
Building Central Plaza Futian District
Shenzhen
Sponsor
representatives
signing the report
ZHANG Guanfeng QIN Lin
Period of
continuous
supervision
From July 22 2019 to December 31 2022
VI. Main accounting data and financial indicators in the past three years
(I) Main accounting data
In RMB
Main accounting data 2020 2019
% Change
(2020 v
2019)
2018
Operating income 1948884176.83 1979148918.89 -1.53 1385727211.09
Net profit attributable to
shareholders of the
listed company
113847873.06 186457276.71 -38.94 176971092.49
Net profit attributable to
shareholders of the
listed company after
deduction of
non-recurring profit or
loss
40289988.80 134218640.96 -69.98 165011362.18
Net cash flow from
operating activities
52390430.42 243000903.71 -78.44 117773454.30
December 31
2020
December 31 2019
% Change
(2020 v
2019)
December 31 2018
Net assets attributable
to shareholders of the
listed company
2091599671.75 1974559837.64 5.93 715913478.56
Total assets 3226204326.69 3099508090.85 4.09 2073471490.56
(II) Main financial indicators
Main financial indicators 2020 2019 % Change (2020 v 2019) 2018
Basic earnings per share
(RMB/share)
0.25 0.45 -44.44 0.73
Diluted earnings per share
(RMB/share)
0.25 0.45 -44.44 0.73
Basic earnings per share after 0.09 0.33 -72.73 0.68
deduction of non-recurring
profit or loss (RMB/share)
Weighted average return on net
assets (%)
5.62 14.84 -9.22 percentage points 41.25
Weighted average return on net
assets after deduction of
non-recurring profit or loss (%)
1.99 10.68 -8.69 percentage points 38.49
Proportion of R&D investments
to operating income (%)
10.49 10.19 +0.30 percentage points 9.79
Explanation about the main accounting data and main financial indicators in the past three years
√ Applicable□ N/A
1. 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 decreased by 38.94% and 69.98% 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 44.44%
44.44% and 72.73% primarily due to the following:
(1) Under the impact of COVID-19 revenues from the cinema business with a higher profit margin
decreased despite the substantial increase in revenues from the household business which reduced the
consolidated gross margin. As a result the gross profits decreased although the revenues remained at the
same level due to the changes in the product portfolio of the Company.
(2) During the reporting period the year-on-year increase in non-recurring profit or loss was
primarily due to the gains of RMB 18.6249 million from wealth management products purchased with
temporarily idle funds and the government grants of RMB 40.7508 million recognized in the profit or
loss for the current period.
2. The decrease in the net cash flow from operating activities by 78.44% year on year was primarily
due to the reduction in revenues from the cinema service business under the impact of COVID-19 and
the increase in payments for procurement of risk-based stocks.VII. Differences in accounting data between domestic 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
(III) Explanation about the difference between domestic and overseas accounting standards
□ Applicable√ N/A
VIII. Main financial indicators in 2020 by quarter
In RMB
1st quarter
(Jan. - Mar.)
2nd quarter
(Apr. - Jun.)
3rd quarter
(Jul. - Sep.)
4th quarter
(Oct. - Dec.)
Operating income 306900748.84 409124458.50 522373501.53 710485467.96
Net profit
attributable to
shareholders of the
listed company
13322216.29 1005226.67 29810782.27 69709647.83
Net profit
attributable to
shareholders of the
listed company after
deduction of
non-recurring profit
or loss
-7989708.14 -22242786.99 18410451.42 52112032.51
Net cash flow from
operating activities
-38289185.55 101295247.35 50310681.49 -60926312.87
From the 3rd quarter the cinema projector business recovered gradually and in the 4th quarter the
sales of laser TVs and smart mini projectors among other To C products increased rapidly leading to
substantial increase in both the operating income and gross profits. This resulted in the increase by
133.84% and 183.06% quarter on quarter in the net profit attributable to shareholders of the listed
company and increase in the net profit attributable to shareholders of the listed company after deduction
of non-recurring profit or loss respectively.
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
loss
2020
Note (if
applicable)
2019 2018
Gain or loss on disposal of
non-current assets
-1112121.13 -3214488.06 -1711797.47
Government grants recognized in
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)
40750823.51 25782112.48 24032705.76
Profit or loss on entrusted
investments or assets
management
18624853.96
Net profit or loss of subsidiaries
from the beginning of the period
up to the business combination
date recognized as a result of
business combination of
enterprises involving enterprises
under common control
23593500.83 23321528.06 18765375.86
Profit or loss on changes in the
fair value of held-for-trading
financial assets derivative
financial assets held-for-trading
financial liabilities and derivative
9552990.98
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
238836.00
Other non-operating income and
expenses
2429083.25 2981778.07 1182062.52
Other gains or losses meeting the
definition of non-recurring profit
or loss
323003.17 -22338042.90
Effect of minority interests -1982929.14 -1891481.86 -3860005.15
Effect of income taxes -9068330.19 -4532639.92 -4110568.31
Total 73557884.26 52238635.75 11959730.31
X. Items at fair value
√ Applicable□ N/A
In RMB
Item Opening balance Closing balance Change
Effect on profit
for the current
period
Held-for-trading
financial assets
540000000.00 114000000.00 -426000000.00 18624853.96
Investment in other
equity instruments
11975419.38 11975419.38
Total 551975419.38 125975419.38 -426000000.00 18624853.96
XI. Explanation about performance indicators not under the Accounting Standards for Business
Enterprises
□ Applicable√ N/A
Section III Business Overview
I. 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 leading laser display technology enterprise in the world we mainly engage in the research
development and production of high-end semiconductor display light sources and the provision of solid
light source solutions based on ALPD? laser display technology and architecture.Since our innovative invention of the ALPD? technology in 2007 we have created new laser
display architecture built core intellectual properties and mastered the designing and manufacturing of
core devices. We have upgraded the ALPD? technology continuously and relying on the advanced
ALPD? technology promoted the industrial applications of laser display and gradually extended the
application of laser display from laser cinema projection and other high-end applications to large venue
business education laser TV smart mini projector and other display applications.
2. Main products
Our diversified products may be classified into core laser display devices and complete laser
display equipment wherein the core devices can be further classified into laser light source (cinema light
source and large venue light source) laser TV light generator and laser projection screen and complete
laser display equipment can be further classified into laser cinema projector large venue laser projector
laser video wall laser education projector laser TV and smart mini projector.
(1) Products of core devices
Our core devices including the laser light source and light generator reflect various advantages and
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
Figure 2: Technical effects of the ALFA screen
(2) Products of complete equipment
1) Products for the commercial market
On the basis of laser light source and light generators we have further developed complete
equipment which has been widely used in cinema projection cultural and tourism lighting security and
surveillance education and training and other commercial applications and become the mainstream
choice for high-quality projection display technology.- In the field of cinema projection we have created a product portfolio of laser cinema light sources
covering multiple ranges of lumens from 5000 lumens to 55000 lumens which are compatible with all
projection equipment brands on the market for wide application in large-sized medium-sized 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. We have more than 20000 laser cinema light sources
installed throughout China.
Figure 3: More than 20000 halls chose Appotronics’s ALPD laser projection solutions
- On the large venue display market Appotronics’s DLP large venue projector series covers the
range of 5000-60000 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.
Figure 4: Appotronics’s laser high-brightness S4K series products
- On the education market in line with the national implementation plan of “Internet + education”
the Company has developed a series of solutions for smart classrooms including laser smart all-in-one
teaching device laser synchronous classroom solution laser interconnected dual-board solution
high-definition high-brightness conference system etc. making its contribution to promote the building
of education IT systems with users at the center.
Figure 5: Appotronics multi-screen interactive smart classroom
2) Products for the household market
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. During the
reporting period Formoive laser TV and smart mini projector continue to gain market shares leading to
the rapid growth in our household equipment business.
Figure 6: Formoive household laser cinema
(II) Main business model
We are mainly engaged in the R&D production sale and light source projection of core laser
display devices and complete laser display equipment and provision of customized R&D and
manufacturing services to customers and have an independent and complete procurement sales
production and service system.
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. Our technology development team comprises a large number of creative scientists who
follow up the progress of frontier technology in the industry focus on the key technical problems that
urgently need to be solved in our business development and develop the technologies required for our
products to be launched in the next three years with reference to the prevailing trend of market demands
from the perspective of user requirements on product designing so as to maintain the Company’s core
competitive edge 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.Our product development team is responsible for developing the products that will be put into mass
production within about one year. The product development team is divided into optical structure
software hardware thermal and other technical departments by profession. Such technical departments
share technologies and platforms with each other.Through matrix management we realize flexible allocation and sharing of human operating and
other resources among different products to optimize resource allocation and improve R&D efficiency
and professional and technical capability.
2. Procurement mode
Our Resources Development Department and Supply Chain Center Planning Management
Department are responsible for procurement of which the Resources Development Department is
responsible for the selection of suppliers determination of purchasing prices building of business
system and supplier platform and other front-end procurement affairs and the Planning Management
Department is responsible for the preparation and implementation of procurement plans and other
back-end procurement affairs. We have formulated the Supplier Development Management and Control
Process and other policies to manage the development of suppliers implementation of procurement
plans inspection of incoming materials and other business.
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 sold or used to provide projection services are
manufactured by us. Laser TV and smart mini projector products are assembled by OEMs. Other
complete equipment products are also manufactured by us.With respect to the products manufactured by us we schedule production pursuant to purchase
orders taking into account the requirement of safety stock. The production of standard spare parts is
scheduled according to the requirement of safety stock and relevant production plans.With respect to OEM products we appoint third parties to manufacture PCBA coating and other
semi-finished products and assemble laser TV smart mini projector and other complete equipment.
4. Sales mode
Our sales mode is classified into product sales and provision of projection services as described
below:
(1) Product sales mode
Our products include core laser display devices and complete laser display equipment: the sale of
core devices is implemented in the mode of customized development and direct sale; the sale of
complete equipment has three modes which are customized direct sale non-customized direct sale and
distribution; large venue laser projectors are sold mainly using the off-line direct sale mode; Formoive
branded laser TV and smart mini projector products are sold both at the online retail stores on Tmall JD
Youpin Pinduoduo and other platforms and off-line physical stores; and laser teaching machine
products are sold through distributors.
(2) Mode of 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.(III) Industry in which the Company operates
1. Development stage basic characteristics and main technical barriers of the industry
As an emerging industry laser display is at the early stage of rapid development. The application of
laser display technology in TV and other household products is a wholly new creation.
Currently picture display technologies are mostly implemented by using DLP 3LCD and LCOS
display chips as the picture modulator achieving greatly different actual display effects depending on
the light source. In 2007 the ALPD? technology created by Appotronics’s 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 movie TV business
education and large venue fields.In terms of core technologies certain companies in the industry may face the problems of lack of
R&D capability and core technology and reliance on supply chain for core patents and core devices
rendering them unable to compete with leading domestic or international companies that have their
proprietary IP or core technologies and core devices.In terms of specific applications the technical barriers for To C market are high efficiency small
size and low cost and the technical barriers for To B market are continuous upgrading of performance.
2. Analysis of the position of the Company in the industry and changes therein
At the beginning of the industrialization of laser display technology as one of the leading
companies in the field of laser display Appotronics has mastered core technologies. After multiple
iterations our ALPD? technology architecture has gained relatively solid technical advantages in terms
of performance cost efficiency and size. We have not only created the fundamental key architecture for
laser phosphor display technology but also built a proprietary IP protection system through patent
applications in China the United States Japan Europe and other countries. On the principle of being
open for cooperation and striving for win-win development Appotronics has become a leading supplier
of core devices in the laser display industry based on its intellectual property rights and core devices
hence driving the development of the entire industry and ecology.
According to the Research Report on Chinese Laser Projector Market 2020 issued by AVC blue
laser + phosphor powder technology architecture represented by ALPD? is still the mainstream light
source technical route for the laser display industry at present.
3. Development of new technologies new industries new types of operation and new modes
during the reporting period and future trend
(1) Projectors are expanding into the household consumer market at a rapid growth rate in the
market segment
Given the rapid technical advancement and high household demand on large-screen displays 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. According to AVC despite the impact of pandemic in 2020 the sales of laser TVs increased by
15.5% year on year; laser TVs will become a new product type with “millions” installation in two or
three years. In the Guidelines for Myopia Prevention in Children and Adolescents during COVID-19
pandemic (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. 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.
(2) The accelerated technical upgrade in the smart mini projector industry leads to a promising
prospect for the application of laser light sources
The projector light sources are gradually evolving from bulbs to semiconductor solid light sources.The Report of Market Research and Investment Forecast Analysis of China Projector Industry released
by Forward Industry Research Institute revealed the rapid growth of projectors within the range of
1500-2000 lumens with a rapidly increasing share of smart projectors and the development trend of
high-definition high-brightness and smart projects. With respect to market demands it is expected that
projectors within the range of 1500-2000 lumens will gain increasing shares in projectors which may
further reducing the survival space of low-brightness projectors. 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 will further expand thanks to the greatly improved display performance and use experience of
projector devices technical upgrade and reduced costs.
(3) 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. In the short term 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.
(4) In the recovery of the movie industry the global film industry may transform into an asset-light
operating mode
According to the data of China Film Administration with the box office receipts of USD 2.983
billion and total cinema visits of 548 million in urban cinemas Chinese film market surpassed North
America to become the largest film market on the world. In 2020 despite the impact of the pandemic
China still maintained the growth trend in the total number of screens - with 5794 additional screens
the total number of screens reached 75581 in China up by 8.30% on the basis of the 69787 screens in
2019.
Considering the shut-down of cinemas both in and outside of China during the pandemic more
cinemas realized the importance of cash flow and digitalized management. Appotronics released the
projection service mode of “laser as a service” for which service fees are charged 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).This service mode eases the cinemas’ capital pressure caused by purchasing of cinema equipment hence
driving cinema transformation from input of factors to inherent efficiency.(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 commercialization 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 ALPD?4.0 technology matured and the ALPD? 5.0 and 6.0 technology under
development and trial operation at the same time we constantly maintain our leading advantages
compared with followers and competitors in the industry. In addition as a Leader Level Member of the
Laser Illuminated Projector Association (LIPA) we have participated in and led the preparation of the
international laser display standard.
During the reporting period we have poured substantial R&D resources in the preparation and
processing of thin film materials micro- & nano- optical structure technology light source architecture
dynamic control complete equipment structure machine perception miniaturization of laser display
system and battery-powered high-performance mini laser projector technology. 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.In terms of cutting-edge technologies the Company has started the development of the ALPD 5.0
and 6.0 technology at the same time. The ALPD 5.0 technology will make use of the characteristics of
laser with reference to the creation of content to achieve high dynamic range display and improve visual
experience. The ALPD 6.0 is planned to make breakthrough in the existing display architecture to
further reduce the cost of laser display systems. By now with the prototype developed successfully the
Company is conducting further optimization. This technology has the prospect of entering the stage of
product development.
2. R&D achievements during the reporting period
During the reporting period the Company made the following achievements in product innovation:
1. Core devices
The Company independently developed the advanced light shaping and light absorption ALFA
technology and with the micro- & nano- structure and nanometer coating released Fabulus series
products - the first 100-inch flexible Fresnel anti-light screen on the world. Being made with multiple
layers of nanometer optical films the screen has superior performance and greatly improves display
effects. Thanks to its foldable design and small size it solves the transportation difficulty of large-screen
laser TVs in the industry; moreover we offer the integrated DIY installation solution to make household
cinema more light-weighted and more convenient. We are far ahead of conventional products of flexible
anti-ambient light screens in terms of costs and performance; being combined with our core devices the
screen can further improve the space for reducing the costs of the complete equipment. We have filed a
total of 138 domestic and foreign patent applications (including PCT applications) for the ALFA screen
technology including 87 Chinese patent applications 12 overseas patent applications and 39 PCT
international patent applications of which 24 have been granted covering multiple fields including
optical designing structure process and materials.
During the reporting period we completed the product development for the ALPD RGB+
technology based on ALPD 4.0 including the trichromatic laser cinema light source platform and the
trichromatic laser TV light generator platform hence providing more abundant and more competitive
solutions of core devices for the cinema industry and the laser TV industry. Meanwhile in an effort to
create the track of smart mini projectors we developed various laser smart mini projection light
generators embedded with the ALPD technology which greatly upgrade the brightness and energy
efficiency while improving color effects.We developed a new-generation cinema RGB+ light source suitable for almost all cinema
application scenarios from small-sized projection halls to giant screens. The latest heat radiation
technology integrated not only reduced the size and costs of the light source but also reduced the
maintenance and use costs of the light source helping cinema customers reduce operating costs and
enhance profitability.
2. Software
Our independently developed projector integrated media block (DCMB/IMB) which has passed the
DCI certification has the capabilities of the independently developed cinema media block and media
server.
Formoive a controlled subsidiary of the Company released the Feng OS operating system which
upgraded the experience in page performance by employing the independently developed browser and
core standard components on the basis of the independently developed Feng Dynamic Page (FDP)
technical architecture and provided modular professional and customized function experience hence
enhanced the flexibility in content operation improved the capability of continuous delivery in agile
operation and realized more complex interaction functions.
3. 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 4000 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.On the commercial market we developed the ultra-high bright large venue projector S4K60 which
can reach the highest brightness of 60000 lumens in the industry; we continuously improved the
performance of ultra short throw business education projector devices on the basis of the previous
generation of light generators and developed the 4K resolution ultra short throw business education
projector equipment with the brightness improved by 50% and screen size increased from 100 inch to
150 inch which further improved the application scope and competitiveness of the products.
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
invention
183 113 1352 601
Patent for utility
model
71 72 429 396
Patent for design 31 36 153 139
Software
copyright
40 33 88 81
Others 157 97 868 654
Total 482 351 2890 1871
Note: 1. “Others” in the table above refer to trademarks of the Company; 2. During the reporting period
the Company filed 257 PCT international patent applications.
3. R&D investments
In RMB
Current year Last year Change (%)
R&D investments expensed 204443369.10 201697766.26 1.36
R&D investments capitalized 0.00 0.00 N/A
Total R&D investments 204443369.10 201697766.26 1.36
Proportion of R&D investments to
operating income (%)
10.49 10.19 0.30
Proportion of R&D investments
capitalized (%)
0.00 0.00 N/A
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 projects
√ Applicable□ N/A
In RMB
N
o.Item
Estimated total
investment
Investment in the
current period
Aggregate
investment
Progress
or
interim
results
Goals
Technological
level
Specific
application
scenario
1
Trichromati
c Laser
Display
Complete
Equipment
Production
Demonstrati
on Line
102840000.00 15131388.57 24535107.34
Laborato
ry test
This project will research the
industrialization of the
technology of RGB
trichromatic laser with
phosphor to satisfy the market
demands for RGB trichromatic
laser display build a mass
production line for
trichromatic laser display
complete equipment acquire
proprietary IP and realize
large-scale application of
trichromatic laser display
products.This project will
greatly promote
the industrial
upgrading of
trichromatic laser
display
technology and
gain international
competitive edge
for proprietary
trichromatic laser
display
technology.This project will
build a
demonstration
production line for
trichromatic laser
display complete
equipment with an
annual production
capacity of
200000 sets of
trichromatic laser
display complete
equipment.
2 Laser TV 49770000.00 46460846.84 46460846.84
Mass
producti
on
4K laser TV with a new
generation of light generator
technologies with the
independently developed Feng
OS system achieves great
improvement in color gamut
brightness cost effectiveness
and ease of use.Take the lead in
the industry
Household market
3
Core
devices
40890000.00 38765825.33 38765825.33
Mass
producti
on
By employing the fourth
generation of light generator
technologies and making use
of the advantages of the APLD
technology create a new
generation of high-end but
Take the lead in
the industry; the
cost
effectiveness
color gamut
light effect and
Upgrading of light
source for
small-sized cinema
projectors laser
TV and other
fields.
N
o.Item
Estimated total
investment
Investment in the
current period
Aggregate
investment
Progress
or
interim
results
Goals
Technological
level
Specific
application
scenario
inexpensive light generator
products so as to reduce the
cost improve the color gamut
and brightness hence improve
the cost effectiveness of
cinema light sources.other
performance are
greatly
improved to
better satisfy the
demands of
customers.
4
Other
complete
equipment
(large venue
+ business
education)
41920000.00 36629898.45 36629898.45
Mass
producti
on
30000-lumen large-size and
wide-color gamut large venue
projectors and S4 business
projectors with higher
brightness and cost
effectiveness which are
models for expanding the
high-end market in the large
venue and business education
fields.The high-end
large venue
projector and
business
education
projector take the
lead in the
industry.High-end large
venue projector
business education
projector and other
fields.
5
Laser
cinema
projector
35060000.00 31533935.11 31533935.11
Mass
producti
on
DCI-compliant overseas small
cinema projector meeting
overseas standards.The first
proprietary
DCI-compliant
cinema projector
in China.
Expand to overseas
markets.
6
Key
Enterprise
Laboratory
for Laser
Display in
Guangdong
Province
34000000.00 9815926.16 16040897.81 Pilot test
Development of laser
phosphor display optical
engine high-performance
fluorescent materials and
fluorescent components
portable laser display
technology and laser display
technology with high contrast
and high color reproduction.Take the lead in
the industry.Through
transformation of
lab R&D results
develop multiple
laser display
terminal products
and promote the
development of the
entire display
N
o.Item
Estimated total
investment
Investment in the
current period
Aggregate
investment
Progress
or
interim
results
Goals
Technological
level
Specific
application
scenario
industry chain.
7
High-perfor
mance mini
projector
18540000.00 17661161.77 17661161.77
Mass
producti
on
New generation of mini
projector products with greatly
improved cost effectiveness by
employing a new generation of
platform display technology.Smart mini
projector with
the highest
brightness-to-siz
e ratio to take the
lead in the
industry.Smart mini
projector market.
8 Screen 8830000.00 8444386.87 8444386.87
Mass
producti
on
Low cost high reflection
efficiency anti-ambient light
TV screen the first flexible
Fresnel anti-light screen for
laser TV on the world
Take the lead in
the industry.
Applied in
household laser
products in
combination with
existing laser
display.T
ot
al
/ 331850000.00 204443369.10 220072059.52 / / / /
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 Formoive 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.
5. R&D staff
In RMB 0’000
Basic information
Current period Previous period
Number of R&D staff (persons) 369 387
Proportion of R&D staff to total employees of
the Company (%)
31.54 31.06
Total compensation of R&D staff 12090.48 11805.40
Average compensation of R&D staff 32.77 30.50
Education background
Academic background Number (persons) Percentage (%)
Doctor 19 5.15
Master 98 26.56
Undergraduate 202 54.74
College or below 50 13.55
Total 369 100.00
Age structure
Age range Number (persons) Percentage (%)
30 years of age or below 153 41.46
30-40 years of age 177 47.97
40 years of age or above 39 10.57
Total 369 100.00
6. Other issues
□ Applicable√ N/A
II. Material changes in the main assets during the reporting period
√ Applicable□ N/A
The total assets of the Company increased by 4.09% during the reporting period. For specificchanges refer to “Section IV Discussion and Analysis of Business Situations - III. Main businessactivities during the reporting period - (III) Analysis of assets and liabilities”.Where: overseas assets RMB 387072800.58 representing 12.00% of the total assets.III. Analysis of core competitiveness during the reporting period
(I) Analysis of core competitiveness
√ Applicable□ N/A
1. Advantage in proprietary technologies
Since we invented the ALPD? technology the fundamental key technology architecture has been
gradually formed and improved. On the basis of this technology we have established rich product lines
which have a remarkable substitution effect on the traditional products in cinema TV business
education large venue and other fields. The ALPD? technology has become the mainstream technical
route for laser display. By relying on fundamental research and original innovation rather than
consumption of resources we have realized rapid development continuously improved the performance
and cost-performance ratio of our products and maintained the competitive advantages in the industry.
2. Sound IP protection system
With our core patents covering laser phosphor display technologies we have gradually built up a
patent system containing the largest number of patents covering the widest scope with the highest
quality in the industry. This patent system safeguards our fundamental research and original innovation.With key core patents at the center we have built a united whole patent system and is hard to be
simulated fully or broken by the competitors.
3. Advantage in full coverage of laser display scenarios
Our ALPD technology has certain demonstration effect in the field of laser display and its
application covers professional market and mass market and high-end market and low-end market. Our
multiple product series can satisfy the demands of various scenarios. In addition we adopted the
differential development strategy and upgraded ALPD? technology from multiple angles so as to
provide solutions to satisfy the demands of different market segments and applications.
4. Advantage in layout in the whole industry chain
We have layout in the whole laser display industry - from the development and manufacturing of
independently developed core devices and complete equipment to laser display solutions. For core
devices we have released the cinema light source large venue light source laser light generator and
laser projection screen; for complete equipment we have products for laser cinema projector large
venue laser projector laser video wall laser education projector laser TV and smart mini projector; our
solutions are widely used in cinemas cultural and tourism lighting security and surveillance education
interaction commercial applications household cinema and consumer electronic products.
5. Advantage in product performance
Through more than ten years of R&D efforts our technical advantages have been given full play in
cinema household large venue and other fields. Our products show superior performance in brightness
service life color gamut removal of speckle and other aspects. Through sufficient validation at R&D
and quality labs and on-site use for a long time our product models have become mature. Since its
installation in June 2014 the first set of ALPD? cinema light source has been stably operating for over
six years. Our products in other fields have also won trust on the market with their outstanding
performance and reliable quality.
6. Advantage in talents and teams
Our founder and Chairman Dr. LI Yi is a well-known expert in the field of laser display. Our
General Manager Dr. BO Lianming is a well-known leader in the display industry. Under the leadership
of our outstanding management team we now have a sound corporate governance system and strong
internal controls and have greatly improved our management level and risk prevention capability. In
addition we have a group of high-quality R&D talents including a lot of doctors and masters graduated
from famous domestic and foreign universities. Our R&D team has taken the lead in the research of laser
display technology in the industry. Through the combination of technology and management we are
able to precisely catch the development trend of the display industry and continuously release new laser
display products with prominent prospects in response to market demands.
7. Advantage in business model
For the cinema projector market based on our advanced technology and stable product
performance we took the lead in releasing the “projection service mode” for cinema laser light sources
in the industry. Under this mode a cinema only needs to pay for the duration in use instead of
purchasing a light source. This not only effectively reduced their fund pressure and maintenance cost of
the cinema but also maintained the long-term and stable revenues for the Company while promoting the
rapid application of the ALPD? technology on the cinema projection market.(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
Section IV Discussion and Analysis of Business Situations
I. Discussion and analysis of business situations
(I) Analysis of the overall business situation during the reporting period
The year 2020 is an extraordinary year - a year of challenge to the Company; however we
achieved the performance better than expectation by making response to the crisis actively.Our projection service business was hit badly by the shut-down of cinemas throughout China for
half a year due to COVID-19. The operating income decreased by 56.85% year on year and the gross
margin rate decreased by 28.76 percentage points compared with last year. In 2020 thanks to the active
adjustment in the operating strategy in an attempt to eliminate the impact of the pandemic we achieved
stable development of the non-cinema business especially the rapid growth in the household business
and core device business which enhanced the Company’s resistance to material risks. The gradual
recovery of the cinema service business resumed the growth of our performance in the 4th quarter.
During the reporting period our operating income was RMB 1.949 billion substantially the same
as that of last year; the total assets of the Company at the end of the reporting period was RMB 3.226
billion up by 4.09% from the beginning of the reporting period; and the equity attributable to owners of
the Parent Company was RMB 2.092 billion up by 5.93% from the beginning of the reporting period. In
the 4th quarter our operating income was RMB 710 million up by 13.25% year on year; the net profit
attributable to the Parent Company was RMB 69.7096 million up by 11.85% year on year and the net
profit attributable to the Parent Company after deduction of non-recurring profit or loss was RMB
52.1120 million up by 18.27% year on year.
The year 2020 was also an important year for the Company to improve our internal strength
and further enhance the foundation in pursuit of a new growth curve.
1. Explore intellectual property operation to scale up and strengthen the ecology of the laser
display industry
Given the enhanced top-level design on the protection of intellectual property rights and emphasis
on technology innovation on the national level the creation protection and exploitation of intellectual
property rights will become normal operating activities of strategic emerging technology enterprises. As
of December 31 2020 Appotronics has obtained 1136 patents throughout the world had 798 domestic
and foreign patents pending (including 751 patent applications for invention) and 257 PCT patents
pending owning a total of 2191 patents pending and granted throughout the world.
As of December 31 2020 a total of 23 cases of petition for invalidation were brought up by
domestic and foreign entities against our core patents. By now we have received the examination results
from China National Intellectual Property Administration (CNIPA) for 22 of the cases in all of which
the validity of our patent rights were maintained. Since 2013 Appotronics initiated a total of 49 patent
lawsuits against domestic and foreign enterprises during the industrialization of our core technologies
and intellectual property rights and received favorable results in the 22 cases that have been decided
involving the total amount of RMB 40.45 million as compensation for infringement settlement fees or
patent license fees.
On the principle of being open for cooperation and striving for win-win development and based on
our intellectual property rights and core devices the Company is exploring the mode of patent operation
to establish and gradually improve the ecology of the laser display industry chain showing the
commercial values of step by step. During the reporting period the Company entered into Patent
License Agreements and Strategic Cooperation Agreements with partners to grant licenses of our patents
and providing such partners with advanced and highly efficient core devices. In addition in response to
the current complicated environment of international trade our strong system of intellectual property
rights safeguards not only our business development but also the overseas business of our partners.In the future we will continue our efforts in building our system of intellectual property rights
enhancing patent operation and management and constantly promoting the formulation of industrial
technical standards to continuously maintain our competitive advantages in the industry drive the
overall development of the industry ecology and scale up and strengthen the laser display industry with
our core devices and technical advantages.
2. Focus on the household business to create new momentum for continuous growth
During the reporting period our household business (laser TV and smart mini projector) realized
the revenue of RMB 1.065 billion up by 60.88% year on year accounting for 54.65% in the total
operating income up by 21.20 percentage points compared with the last year. The smart mini projector
business realized the revenue of RMB 518 million up by nearly 100% year on year with the gross
margin rate improved by 1.80 percentage points showing improved profitability. Formoive a controlled
subsidiary of the Company independently developed the Feng OS operating system to provide users
with innovative and concise large-screen human-machine interaction experience and a variety of
convenient online services; meanwhile Formoive introduced a strategic investor and raised the share
capital of RMB 200 million by issuing additional shares which capital will be used to enhance R&D and
market expansion to promote the overall development of the Company.
3. Continuously improve the R&D strength to promote the development of the core device
business
The pandemic in 2020 accelerated the online transformation of consumption all over the world
hence creating a new development opportunity for cross-border e-commerce business. During the
reporting period the Company realized rapid growth in the core device business through business
cooperation with cross-border e-commerce operators by providing customized development services of
laser TV light generators and complete equipment to build up our experience for the overseas market;
moreover with the help of cross-border e-commerce our products have entered multiple countries and
regions in Europe North America and Southeast Asia in our active layout for overseas markets.
Furthermore during the reporting period we continued to improve our R&D strength and make
breakthroughs in R&D. We independently developed the core technology for the ALFA screen built the
world’s first 100-inch flexible Fresnel anti-light screen with a thickness of only 500 um to facilitate
installation and transportation and solved many pain points in conventional projection screens such as
low gain bright spots “image sticking” transportation of hard screens to greatly improve display
effects and promote the development of the core device business.
4. Enhance the management and control over period expenses to maintain the overall profits
in large venue and business education fields
During the reporting period we actively and rapidly adjusted our services improved operation
quality implemented the scheme of “broadening sources of incomes and reducing expenses” improved
operating efficiency and enhanced expense management and control. The sales expense ratio is 6.85%
down by 0.81 percentage points year on year; the administration expense ratio is 6.97% down by 0.75
percentage points year on year and the financial expense ratio is 0.47% down by 1.02 percentage points
year on year.We rapidly caught the opportunity of the recovery on the commercial market and actively adjusted
our product portfolio to maintain the overall profitability. With the revenues from business education
and large venue services of RMB 370 million down by 5.46% year on year we achieved the gross
profits of RMB 130 million up by 8.98% year on year leading to the consolidated gross margin of
34.81% up by 4.61 percentage points year on year.
(II) Completion of other key tasks during the reporting period
During the reporting period we achieved favorable results in R&D innovation operation
management production operation and capability building:
1. Insist on making investments in R&D to enhance innovations in product application
Technical innovation is the foundation of an enterprise as well as the industry. Given the adverse
situation in which the cinema business was shut down due to the pandemic we still insisted on making
investments in R&D - invested RMB 204 million in R&D this year up by 1.36% year on year. We
continuously upgraded the ALPD technology stably increased our patents and released multiple new
products for the household business education and large venue portfolio to continuously improve our
sales and market shares.
2. The operation in the form of business units went on well and the information-based
corporate operation became more healthy
During the reporting period all the business units operated well with improved independent
decision-making and accelerated market response capabilities. Our business gradually expanded via the
online channel by enhancing online promotion training and channel certification; we constantly
released industrial standards and solutions to build our position as a professional expert; and proactively
took opportunities of recovery to show the resilience of our business under the impact of COVID-19.Meanwhile we optimized our procedures and systems to intensify informatization efforts. On the basis
of the further upgraded ERP system we implemented the sales management system CRM improved the
product life cycle management system PLM and connected the various information systems to eliminate
information islands hence laying the ground for reflecting the true operating conditions in our financial
data and management data and improving the operating efficiency of the overall business procedures.
3. Build the supply chain profit center to reduce costs while improving efficiency and build
the quality information system
We built an agile and efficient supply chain system in pursuit of high standards high quality and
high efficiency. We implemented balanced production scheduling to ensure product delivery; carried out
full lean production to involve every employee in fine improvement; and built a quality information
system to create a platform-based information-oriented visualized and IT-based quality system so as
to stably improve customer satisfaction and enhance the competitiveness of our supply chain.II. 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
1. Risk related to the supply of important raw materials
The key components of our products include laser devices chips and lenses which are mainly
purchased from some key suppliers of the United States and Japan. If such suppliers significantly change
the prices for such components or are unable to supply such components in a timely manner with both
quality and quantity guaranteed or fall into difficulties in operation or are unable to supply such
components in a normal manner due to trade dispute between the relevant countries or any other reason
it may have an adverse effect on our production and operation.
2. Risks related to government grants
During the reporting period we have received certain government grants pursuant to the applicable
policies of the country. Along with the growth of our operating performance though the effect of
government grants on our current net profit decreases year by year and our operating results do not rely
on government grants the decrease in our revenue from government grants may affect our profit.
3. Risk of unsustainability of rapid growth driven by the mode of cooperation
We adopt the business strategy of joint venture and cooperation which combines the advantages
and resources of all partners. If our technical and product innovations slow down and cannot satisfy the
market demands or our innovation capability decreases continuously as a result of which our products
are surpassed by our competitors such cooperation may bring lower benefits or become unable to drive
our rapid growth or unable to continue.
4. Risk related to the management of cinema light source
In our light source service 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.
5. Risk of impairment of inventories
Our inventories mainly comprise raw materials and goods in stock. At the end of the reporting
period the carrying amount of our inventories was RMB 418.8121 million accounting for 12.98% of
our assets where 33.91% of the inventories are finished goods on hand. 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.
6. Risk of impairment of accounts receivable
Our products are generally delivered after receiving the payment therefor. We give certain credit
period to some major customers. At the end of the reporting period the carrying amount of our accounts
receivable was RMB 341.6608 million accounting for 10.59% of our total assets. 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.
7. Management risks from rapid operating scale expansion
The increase of sales revenue and rapid growth of assets and number of employees put forward
challenges for our management level structure of corporate governance and effective implementation of
internal controls. In the future if our management fails to effectively overcome the difficulties in
management caused by continuous expansion of the scale of operation or to effectively implement
internal controls we may face management risks during rapid business development such as
out-of-control in management loss of assets brain drain and decrease in operating performance.
8. Risk of IP litigation
IP protection and management includes protection of our proprietary and core technologies and
prevention of infringement on third-party IP. On the one hand the process of patent application often
lasts a long time and requires continuous and huge investment. If any proprietary IP in the process of
patent application is infringed by any third party it may have an adverse effect on our production and
operation. On the other hand due to the increasingly fierce competition in the industry many
manufacturers wish to gain competitive advantages through developing core laser phosphor display
technology. If we fail to effectively prevent infringement on our proprietary IP or inadvertently infringe
on any IP of others during the development of products we may face IP litigations or disputes which
may have an adverse effect on our business development and financial condition.
9. Risk of business development on the overseas market
As the outbreak of Covid-19 has not been effectively put under control in the world the stagnation
of economic activities abroad will have certain effect on our export the business development of
Cinionic and GDC on the overseas market and the efficient operation and marketing of our subsidiaries
in Hong Kong and the United States as a result of which our business development abroad may fall
short of expectations.(V) 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.(VI) Risk of macro-environment
√ Applicable□ N/A
By now the pandemic in China has been alleviated. Given the successful development of the
vaccine the domestic economic condition will be further stabilized and improved. However the
prevention and control of the pandemic on the world remain grim which increased the uncertainty in our
production and operation.(VII) Risk related to depository receipts
□ Applicable√ N/A
(VIII) Other significant risks
√ Applicable□ N/A
1. Risk of outflow of key technical personnel
The laser display industry is a technology intensive industry. Along with the rapid development of
the laser display industry the competition for high-end technical personnel has been increasingly fierce.If we cannot maintain the stability of the existing R&D staff continuously train technical personnel and
attract outstanding talents in the world we may be unable to maintain our technical advantages in the
industry and the stability and sustainability of our business operation. The outflow of key technical
personnel may cause disclosure of know-how slow-down of R&D process weakening of competitive
advantage and other risks which may have an adverse effect on our ability to operate continuously.
2. Risk of loss on external investments
We attempt to expand the business operation through merger acquisition or otherwise according to
the development situation of the industry to improve our overall competitiveness. If the environments or
policies in respect of the industry in which the investee operates undergo any material change or the
technological level and market expansion of the investee falls short of our expectation or the operating
performance of the investee decreases sharply due to poor management the profits on investment in the
investee may fall short of expectation and we may need to recognize an impairment loss on the
long-term equity investment. If we fail to achieve a synergy effect through acquisition of the investee
our strategic plan may be unable to be implemented as scheduled.III. Main business activities during the reporting period
During the reporting period our operating income was RMB 1.949 billion substantially the same
as that of last year; the net profits attributable to the shareholders of the listed company was RMB 114
million down by 38.94% year on year; the total assets of the Company at the end of the reporting period
was RMB 3.226 billion up by 4.09% from the beginning of the reporting period; and the net assets
attributable to shareholders of the listed company was RMB 2.092 billion up by 5.93% 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
Current period
Corresponding
period in prior
year
Changes (%)
Operating income 1948884176.83 1979148918.89 -1.53
Operating costs 1393075043.93 1183650635.25 17.69
Selling expenses 133588234.60 151760111.00 -11.97
Administrative expenses 135757276.26 152626530.61 -11.05
R&D expenses 204443369.10 201697766.26 1.36
Financial expenses 9224974.20 29491223.42 -68.72
Net cash flow from operating
activities
52390430.42 243000903.71 -78.44
Net cash flows from investment
activities
205906256.46 -772857910.07 N/A
Net cash flows from financing
activities
-99126552.86 884616830.77 -111.21
2. Analysis of revenue and costs
√ Applicable□ N/A
During the reporting period our operating income was RMB 1.949 billion substantially the same
as that of last year. Except for the cinema business all other business achieved stable growth.
(1). Main business by sector product and region
In RMB 0’000
Main business by sector
Sector
Operating
income
Operating costs
Gross
margin
Change in
operating
Change in
operating
Change in
gross
(%) income (%) cost (%) margin (%)
Laser
display 194888.42 139307.50 28.52 -1.53 17.69
-11.67
percentage
points
Main business by product
Product
Operating
income
Operating costs
Gross
margin
(%)
Change in
operating
income (%)
Change in
operating
cost (%)
Change in
gross
margin (%)
1. Sales
174412.32 128143.44 26.53 12.27 24.96
-7.46
percentage
points
(1) Laser
optical
engine
20270.75 8152.95 59.78 -38.44 -21.79
-8.56
percentage
points
(2)
Complete
laser
projector
146519.56 115178.71 21.39 31.39 35.85
-2.58
percentage
points
Laser
cinema
projector
2969.46 1536.48 48.26 -51.57 -40.26
-9.80
percentage
points
Laser TV
54742.37 39860.14 27.19 35.97 35.01
+0.52
percentage
points
Laser
business
education
projector
26867.45 19271.26 28.27 -10.85 -14.83
+3.35
percentage
points
Laser large
venue
projector
10172.23 4875.04 52.08 12.50 3.22
+4.31
percentage
points
Smart mini
projector 51768.06 49635.79 4.12 99.54 95.87
+1.80
percentage
points
(3) Other
products 7622.01 4811.78 36.87 -30.08 -34.38
+4.14
percentage
points
2. Lease
service 17173.26 10775.31 37.26 -56.85 -20.34
-28.76
percentage
points
3. Other
business
3302.83 388.75 88.23 19.17 -83.06
+71.01
percentage
points
Total 194888.42 139307.50 28.52 -1.53 17.69
-11.67
percentage
points
Main business by region
Region
Operating
income
Operating costs
Gross
margin
(%)
Change in
operating
income (%)
Change in
operating
cost (%)
Change in
gross
margin (%)
Domestic 185561.99 135605.70 26.92 4.23 21.88
-10.59
percentage
points
Overseas 9326.43 3701.80 60.31 -53.07 -47.89
-3.95
percentage
points
Total 194888.42 139307.50 28.52 -1.53 17.69
-11.67
percentage
points
Explanation about main business by sector product and region
1. Our laser display products have been applied in cinema projection home entertainment
education interaction commercial applications outdoor exhibition and other fields. Under the impact of
COVID-19 the cinema service business decreased by 56.85% year on year. However due to the strong
consumer demands on the domestic market and driven by the sales of household To C products our
operating income in 2020 substantially the same as that of the last year.
2. Our overall gross margin rate was 28.52% in 2020 a decrease of 11.67 percentage points
compared with 2019. The decrease was primarily caused by the change in the product portfolio - To C
products with lower gross margin rates increased greatly in terms of both incomes and proportion;
meanwhile under the impact of COVID-19 there was no income from the cinema service business
despite the high fixed costs such as depreciation reducing the gross margin rate by 28.76 percentage
point.
3. Other business mainly covers the patent license fees received in this year.
4. Our business was mostly operated in China with the incomes from China and outside China
accounting for 95.21% and 4.79% respectively. For the overseas business the sales of laser optical
engine products decreased year on year under the impact of COVID-19.
(2). Analysis of output and sales volume
√ Applicable□ N/A
Main
products
Unit Output
Sales
volume
Stock
Change in
output (%)
Change in
sales
volume
(%)
Change in
stock (%)
Optical
engine
and
complete
equipment
Set 354890.00 360152.00 26861.00 41.16 52.42 -16.38
Explanation about output and sales volume
We supplied part of laser light source produced under operating leases which was not included in
the sales volume and stock and used part of laser TV light generators produced to manufacture laser TV
products which were not included in the production and sales volume.
(3). Analysis of costs
In RMB 0’000
Costs by sector
Sector
Component
s of cost
Amount for
the current
period
Ratio in
total costs
for the
current
period (%)
Amount for
the prior
period
Ratio in
total costs
for the
prior
period
Change
in
amount
(%)
Situa
tion
Desc
riptio
n
(%)
Laser
display
Operating
costs
139307.50 100 118365.06 100 17.69
Costs by product
Produc
t
Component
s of cost
Amount for
the current
period
Ratio in
total costs
for the
current
period (%)
Amount for
the prior
period
Ratio in
total costs
for the
prior
period
(%)
Change
in
amount
(%)
Situa
tion
Desc
riptio
n
1.
Sales
Direct
materials
114782.91 89.57 89655.34 87.43 28.03
Direct labor 3144.71 2.45 2673.66 2.61 17.62
Manufacturi
ng expenses
10215.82 7.98 10215.69 9.96 0.00
Subtotal 128143.44 100 102544.69 100 24.96
2.
Lease
service
Depreciatio
n of light
source
7484.65 69.46 6759.98 49.98 10.72
Software
license fee
844.05 7.83 2399.51 17.74 -64.82
Technical
service fee
2070.54 19.22 3917.01 28.96 -47.14
Labor cost 376.07 3.49 449.53 3.32 -16.34
Subtotal 10775.31 100 13526.03 100 -20.34
3.
Other
busines
s
388.75 100 2294.34 100 -83.06
Total 139307.50 100 118365.06 100 17.69
Explanation about cost analysis
1. Sales costs mainly comprise direct materials direct labor and manufacturing expenses of which
the costs of direct materials account for 89.57%. Compared with the prior period the proportion of
manufacturing expenses decreased while the proportion of direct materials increased mainly due to the
change in the product portfolio for the sales business.
2. The lease service business was hit by COVID-19. In 2020 cinema operating hours decreased
compared with the prior year leading to corresponding decrease in variable cost items such as technical
service fees and software license fees.
(4). Main customers and main suppliers
A. The Company's major customers of the sales
The sales to top 5 customers were RMB 1088.2434 million representing 55.84% of the total
annual sales of which the sales to related parties were RMB 778.7607 million representing 39.96% of
the total annual sales.Top 5 customers
√ Applicable□ N/A
In RMB 0’000
No. Customer Sales of total annual sales (%)
1 Customer 1 65054.20 33.38
2 Customer 2 14340.69 7.36
3 Customer 3 11189.20 5.74
4 Customer 4 9251.20 4.75
5 Customer 5 8989.05 4.61
Total / 108824.34 55.84
Description of the change in the constitution of top 5 customers
Customer 2 and customer 3 were newly counted in the top 5 customers.
B. Information on major suppliers of the Company
The purchases from top 5 suppliers were RMB 653.4916 million representing 38.97% of the total
annual purchase cost of which the purchases from related parties were RMB 205.8851 million
representing 12.28% of the total annual purchase cost.Top 5 suppliers
√ Applicable□ N/A
In RMB 0’000
No. Supplier
Procurement
cost
of total annual purchase cost
(%)
1 Supplier 1 20588.51 12.28
2 Supplier 2 13943.93 8.31
3 Supplier 3 13191.79 7.87
4 Supplier 4 12164.36 7.25
5 Supplier 5 5460.57 3.26
Total / 65349.16 38.97
Description of the change in the constitution of top 5 suppliers
Supplier 4 and supplier 5 were newly counted in the top 5 suppliers.
3. Expenses
√ Applicable□ N/A
Unit: In RMB
Item
Current period
Corresponding period
in prior year
Change (%)
Selling
expenses
133588234.60 151760111.00 -11.97
Administrative
expenses
135757276.26 152626530.61 -11.05
R&D expenses 204443369.10 201697766.26 1.36
Financial
expenses
9224974.20 29491223.42 -68.72
(1) The total selling expenses were RMB 133.5882 million in 2020 decreased by 11.97% year on
year because the advertising and business promotion expenses travel expenses and business
entertainment expenses decreased due to the pandemic and the after-sale repair expenses provided for
product warranty decreased year on year;
(2) The total administrative expenses were RMB 135.7573 million in 2020 decreased by 11.05%
year on year in which rent expenses and travel expenses decreased greatly due to the pandemic the
amortization of land use rights meeting the capitalization criteria was recognized as construction in
progress the amortization of expenses decreased year on year and the share-based payment expenses
increased in 2020 because such expenses were recognized from October 2019.
(3) The total R&D expenses were RMB 204.4434 million in 2020 increased by 1.36% year on year
primarily due to the increase in the depreciation and amortization of the equipment and software in use
for R&D;
(4) The total financial expenses were RMB 9.2250 million in 2020 decreased by 68.72% year on
year primarily because the decrease in loans and capital costs led to the reduction in interest expenses
by 39.41% while the interests on deposits increased.
4. Cash flow
√ Applicable□ N/A
Unit: In RMB
Item Current period
Corresponding period
in prior year
Change (%)
Net cash flow from operating
activities
52390430.42 243000903.71 -78.44
Net cash flows from investment
activities
205906256.46 -772857910.07 N/A
Net cash flows from financing
activities
-99126552.86 884616830.77 -111.21
Description of reasons for changes in the net cash flows from operating activities: the net cash flow
from operating activities was RMB 52.3904 million decreased by RMB 190.6105 million compared
with last year. This was primarily due to the reduction in revenues from the cinema service business
under the impact of COVID-19 and the increase in payments for procurement of risk-based stocks.
Description of reasons for changes in the net cash flows from investment activities: the net cash
flow from investing activities was RMB 205.9063 million increased by RMB 978.7642 million
compared with last year primarily because the structural deposits purchased became mature and were
recovered in the current period.
Description of reasons for changes in the net cash flow from financing activities: the net cash flow
from financing activities activities was RMB -99.1266 million decreased by RMB 983.7434 million
compared with last year primarily due to the proceeds from the IPO of the Company on the STAR
Market in the previous reporting period.(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
Item
Balance at the
end of the period
Proport
ion of
total
assets
at the
end of
the
period
(%)
Balance as at
December 31
2019
Proportio
n of total
assets as
at
Decembe
r 31
2019 (%)
Change
in
amount
(%)
Explanation
Item
Balance at the
end of the period
Proport
ion of
total
assets
at the
end of
the
period
(%)
Balance as at
December 31
2019
Proportio
n of total
assets as
at
Decembe
r 31
2019 (%)
Change
in
amount
(%)
Explanation
Held-f
or-tradi
ng
financi
al
assets
114000000.00 3.53 540000000.00 17.42 -78.89
Primarily due to
the wealth
management
products purchased
with idle funds
Accou
nts
receiva
ble
341660832.43 10.59 176035155.24 5.68 94.09
Primarily due to
the impact of the
relocation and
changes in
business and tax
registration of
Formoive which
resulted in the
great increase in
the closing balance
Receiv
ables
financi
ng
11959000.00 0.37 1980500.00 0.06 503.84
Primarily due to
the increase in
bank's acceptance
bills received
during this period
Prepay
ments
47447601.43 1.47 35070999.13 1.13 35.29
Primarily due to
the increase in
advance payments
for goods during
the reporting
period
Other
receiva
bles
12534062.15 0.39 9618750.08 0.31 30.31
Primarily due to
the increase in
compensation
receivable in
connection with
patent litigations
during the
reporting period
Invent
ories
418812140.80 12.98 299966170.35 9.68 39.62
Primarily due to
the increase in the
risk stock and the
increase in the
inventories
prepared for the
growing household
business
Contra
ct
assets
3744655.50 0.12 - - N/A
Primarily due to
the implementation
of the new revenue
standard
Other 13002195.46 0.40 44405513.30 1.43 -70.72 Primarily due to
Item
Balance at the
end of the period
Proport
ion of
total
assets
at the
end of
the
period
(%)
Balance as at
December 31
2019
Proportio
n of total
assets as
at
Decembe
r 31
2019 (%)
Change
in
amount
(%)
Explanation
current
assets
the decrease in the
reclassified input
VAT to be
deducted
Long-t
erm
accoun
ts
receiva
ble
13196087.78 0.41 - - N/A
Primarily due to
the increase in
patent license fees
by installment
during the
reporting period
Long-t
erm
equity
invest
ment
262744772.48 8.14 139534371.94 4.50 88.30
Primarily due to
the investment in
GDC
Constr
uction
in
progres
s
51576850.72 1.60 20132004.07 0.65 156.19
Primarily due to
the increase in the
investment for the
construction in
progress of the
headquarters
building during the
reporting period
Long-t
erm
prepaid
expens
es
11572346.79 0.36 16908070.34 0.55 -31.56
Primarily due to
the amortization of
long-term prepaid
expenses during
the reporting
period
Other
non-cu
rrent
assets
6299781.06 0.20 11420185.94 0.37 -44.84
Primarily due to
the settlement of
some advanced
payments for fixed
assets from the
prior period
Notes
payabl
e
116822674.67 3.62 37335841.79 1.20 212.90
Primarily due to
the increase in
settlement by
bank's acceptance
bills during the
reporting period
Contra
ct
liabiliti
es
31518312.59 0.98 - - N/A
Primarily due to
the reclassification
of receipts in
advance to contract
liabilities under the
implementation of
the new revenue
Item
Balance at the
end of the period
Proport
ion of
total
assets
at the
end of
the
period
(%)
Balance as at
December 31
2019
Proportio
n of total
assets as
at
Decembe
r 31
2019 (%)
Change
in
amount
(%)
Explanation
standard
Taxes
payabl
e
19871846.94 0.62 42924647.79 1.38 -53.71
Primarily due to
the decreased
payment of
enterprise income
tax for the prior
period and the
decline in taxes in
the current period
Other
payabl
es
59848053.83 1.86 14364076.43 0.46 316.65
Primarily due to
the funds borrowed
by the subsidiary
CINEAPPO from a
minority
shareholder and the
increase in the
share transfer
amount pending
payment
Non-cu
rrent
liabiliti
es due
within
one
year
181417412.46 5.62 64968795.02 2.10 179.24
Primarily due to
the increase in the
long-term
borrowings due
within one year
Other
current
liabiliti
es
3045831.07 0.09 - - N/A
Primarily due to
the increase in the
output taxes
corresponding to
contract liabilities
under the
implementation of
the new revenue
standard
Long-t
erm
borrow
ings
64845281.53 2.01 279615107.27 9.02 -76.81
Primarily due to
the reclassification
of long-term
borrowings to
non-current
liabilities due
within one year
Other information
None
2. Encumbrances on assets as of the end of the reporting period
√ Applicable□ N/A
In RMB
Item Amount Reason
Other monetary funds 14057949.58 Margins
Bank deposits 40000000.00 Term deposits
Land use rights 303077499.90 Loan mortgage
3. Other issues
□ Applicable√ N/A
(IV) Analysis of operation information of the industry
□ Applicable√ N/A
(V) Analysis of investments
1. Overall analysis of external equity investments
√ Applicable□ N/A
At the end of the reporting period the balance of long-term equity investments was RMB
262744772.48. During the reporting period the Company acquired 36% equity interests in GDC
Technology Limited (British Virgin Islands) at about USD 18.11 million. The transaction has been
completed by the end of the reporting period.
(1) Material equity investments
√ Applicable□ N/A
In the 20th session of the First Board of Directors held on December 6 2019 the Proposal on
Proposed Additional Capital Contribution to the Wholly-owned Subsidiary and Foreign Investments in
GDC was discussed and approved according to which it was agreed to make additional capital
contribution of USD 18.2 million to the Company’s wholly-owned subsidiary APPOTRONICS HONG
KONG LIMITED for acquisition of 36% shares of GDC Technology Limited (British Virgin Islands).Please refer to the Announcement No. 2019-029 issued by the Company on www.sse.com.cn and the
designated media for information disclosure on December 7 2019.In March 2020 the Company completed the approval and filing procedures for overseas
investments by National Development and Reform Commission and Ministry of Commerce. After
meeting the precedent closing conditions of this acquisition on April 9 2020 the Company paid the
total consideration of approximately USD 18.11 million by its own funds. During the reporting period
the Company holds 36% equity interests in GDC BVI namely 93071822 ordinary shares of GDC BVI.
According to the Share Transfer Agreement GDC BVI made the the following performance
covenants: the audited net profit after deduction of non-recurring profit or loss in 2020 shall be no less
than USD 9.35 million; if it fails to achieve the performance objective above GDC Cayman the
shareholder of GDC BVI shall make compensation within 15 working days from the submission date of
GDC BVI’s annual auditor’s report within the limit of USD 5.60 million or 46535911 ordinary shares
of GDC BVI.
According to the 2020 auditor’s report of GDC BVI issued by Deloitte GDC BVI achieved the net
profit of USD 926800 in 2020 and failed to achieve the performance covenant for the year 2020 hence
triggering the performance compensation provisions.
By now we have officially required GDC Cayman to make performance compensation in
accordance with the provisions. As of the disclosure date of this report we have reached no consensus
with GDC Cayman on this matter.
(2) Material non-equity investments
□ Applicable√ N/A
(3) Financial assets at fair value
√ Applicable□ N/A
As of December 31 2020 the balance of held-for-trading financial assets was RMB
114000000.00 which was structured deposits.
The balance of investment in other equity instruments was RMB 11975419.38 which was
investment in two investee companies with zero change in the fair value during the reporting period.(VI) Sales of significant assets and equity interests
□ Applicable√ N/A
(VII) Analysis of significant controlled and investee companies
√ Applicable□ N/A
In RMB 0’000
Company Main business
Registered
capital
Shareholding
percentage
Total
assets
Net
assets
Operating
income
Net
profit
CINEAPPO
Provision of
cinema laser light
source lease
service and sales
of projectors
10000.00 63.20% 93130.04 37858.00 28869.92 335.81
Formoive
R&D and sale of
household display
products
5000.00 55% 61940.36 -7804.64 100677.01 -4974.48
Appotronics
HK
R&D and sale of
laser light source
16357.75 100% 37604.45 32377.48 7925.27 -2550.72
The operating income and net profit of CINEAPPO decreased by 51.32% and 97.68% year on year
respectively primarily because under the impact of COVID-19 there was no income from the cinema
service business despite the high fixed costs such as depreciation.The operating income of Formoive increased by 43.71% year on year primarily due to the high
demands on the household market and the rapid growth in the sales of To C products.The operating income and net profit of Appotronics HK decreased by 58.16% and 178.09% year on
year respectively primarily because the overseas sales of laser light source products decreased under
the impact of COVID-19.(VIII) Structured entities under control of the Company
□ Applicable√ N/A
IV. Discussion and analysis of future development of the Company
(I) Structure and trend of the industry
√ Applicable□ N/A
(1) Main market spaces
1. A promising prospect for the household market
In the household field the application scenarios for home drawing room are of great value and
have remarkable advantages in large-screen content and human-machine interaction. At present there
are more and more ultra high definition TV programs; some films have their premiere on line; some
online TV plays and entertainment programs are exclusively broadcast on streaming media and there’s
rich content available. According to AVC the sales volume of laser TV will exceed 1 million sets on the
Chinese market so the outlook for the market is promising.Smart projector is becoming a new information access terminal. Through this “entertainmentcenter” users can search all kinds of network resources hold remote meetings watch online videos and
carry out other operations. At present young consumers are the main users of smart projectors. The
market is still at the blue sea growth period and has great potentials.
2. Further expansion space for the cinema industry
We will continue to promote the penetration of laser projection to further improve the market
shares of laser projection. With respect to the overseas market considering the 130000 existing markets
we will promote the new mode of Cinema as a Service (CaaS) through CINIONIC to provide customers
with a comprehensive digital projection solution hence effectively reducing the pressure on cash flows
caused by the pandemic and improving the profitability of cinemas. This helps to achieve rapid
development after the pandemic. Furthermore besides the growth space on the urban cinema market the
digital cinema projector C5 we released is also suitable for non-urban cinemas such as new application
scenarios including household cinemas and community cinemas.
(2) Development trend of the industry
The laser display industry is developing along the trend of using laser being smart being
content-oriented and being solution-based:
1. As an emerging technology laser display technology is upgrading and substituting the traditional
projection industry on cinema large venue education business and other markets. Laser light source has
become increasingly popular. All projector manufacturers have entered the era of laser.
2. The smart products have become more and more practical and now can provide rapid data
transmission; the Internet of Things realized via wireless connection and smart hi-fi system provide
perfect audio & video experience. In addition such products are embedded with app stores. The smart
products also provide video conference systems online education and other functions so they have
gradually become popular consumer electronic products.
3. The software and hardware integration and cross boundary have become the trend. Simple
product functions cannot satisfy the demands of consumers and must provide content support. A
channel from the content side to the technology side will provide core competitiveness for a company.
4. The industrial solutions have been well accepted. As experience economy has become popular in
the world the outlook for the high-quality image solutions is promising.(II) Development strategy of the Company
√ Applicable□ N/A
For the future Appotronics is committed to becoming a promoter of the display industry and under
our mission of “New light New life” with our persistence on the orientation of customer demands and
persistence on dual-drivers of “technology + market” we will make use of disruptive technical
innovations to create new consumption demands and a new growth curve hence creating value for users
and promoting in-depth industrialization of laser display technologies.We will intensify efforts on the household market and the layout of the overseas business with a
focus on providing users with products and services capable of creating long-term value and based on
the innovation of core technologies and IP operation build an open operating platform for the
development of the core device business to scale up and strengthen the ecology of the laser display
industry.(III) Business plan
√ Applicable□ N/A
With the adjustment and preparation made in 2020 the year 2021 is a key year for the Company to
achieve leapfrog development in the next three years. As a result an essential task of the Company for
2021 is to take the opportunity of the economy recovery of the world and work along the development
trend of the industry hence achieving rapid growth in all businesses.We will focus on the following aspects:
1. Continue to increase the R&D investments in core devices to enhance our leading advantages in
technology to establish leading advantages in products centering on customers and to create a new
product field to become a leading supplier of core devices in the laser display industry; insist on patent
layout and IP operation to further explore and realize the value of patents hence establishing and
gradually improving the ecology of the laser display industry.
2. Intensify efforts on the household market by developing and releasing new products accelerating
product upgrade and iteration and improving product and service experience; take the opportunity on
the emerging market to create a new product field and release new product models including laser TVs
smart mini projectors and anti-ambient light screens in consideration of layered consumption to cover
more consumers.
3. Improve and enhance our competitive advantages in the field of cinema services intensify
cooperation with partners make full use of the synergy effects between domestic and foreign cinema
markets and the technology team to release more cost-effective cinema light source products while
actively exploring community cinema and household cinema markets to accelerate the trend of laser
projection.
4. Steadily promote the layout of the overseas business. By now our products have penetrated into
many countries and regions in Europe North America and Southeast Asia. We plan to further enhance
the efforts of channel building and marketing for overseas markets to take the opportunity of rapid
development on overseas markets.
5. Continue to build an agile and efficient supply chain system in response to the risks of tension
supply of upstream raw materials hence guaranteeing product delivery and optimizing the stock
structure.(IV) Other information
□ Applicable√ N/A
V. 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
Section V Significant Matters
I. Proposals for profit distribution on ordinary shares 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 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;
(3) If we are at the growth stage and have 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 2020
According to our consolidated financial statements 2019 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 86657198.57 in the consolidated financial statements
for 2020 including the net profit attributable to the shareholders of the listed company of RMB
113847873.06 and the distributable profit of the parent company is RMB 289684566.58.
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 0.55 (tax inclusive) per 10 shares to all shareholder. As of
December 31 2020 the Company has a total of 452756901 shares leading to the total cash dividend of
RMB 24901629.56 (tax inclusive). The cash dividends proposed by the Company for this year account
for 21.87% 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.If prior to the record date of interest distribution changes are caused to the total shares of the
Company due to conversion of convertible bonds/repurchase of shares/granting of share incentives/share
repurchase and cancellation/share repurchase and cancellation for material assets restructuring the
Company intends to maintain the total distribution amount unchanged and correspondingly adjust the
distribution ratio per 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 retained 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 2020 has been approved at the 31st meeting of the
first Board of Directors and the 18th meeting of the first 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 annual general meeting of shareholders of the
Company.
3. Implementation of the policy on cash dividend distribution
During the reporting period we have 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) Proposals for profit distribution on ordinary shares and capitalization of the capital reserve in
the past three years (including the reporting period)
In RMB
Distribution
year
Number
of bonus
shares
distributed
per 10
shares
Cash
dividends
distributed
per 10
shares
(inclusive
of tax)
Number
of shares
distributed
out of the
capital
reserve
Amount of
cash dividends
(Tax inclusive)
Net profit
attributable to
the
shareholders of
ordinary shares
of the listed
company
reported in the
consolidated
financial
statements for
the year
Proportion of
the net profit
attributable
to the
shareholders
of ordinary
shares of the
listed
company
reported in
the
consolidated
financial
statements
(%)
2020 0 0.55 0 24901629.56 113847873.06 21.87
2019 0 0.75 0 33866580.83 186457276.71 18.16
2018 0 0 0 0 176971092.49 0
(III) Repurchase of shares by cash included in cash dividends
□ Applicable√ N/A
(IV) If the Company made a profit in the reporting period and there’s profit distributable by the
parent company to the shareholders of its ordinary shares but the Company does not propose
to distribute profits on ordinary shares in cash the Company shall explain the reason in detail
and use of the undistributed profit.
□ Applicable√ N/A
II. 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
Background of covenant
Covenant
Type
Covenantor
Covenant
Content
Validity
period of
covenant
Whether
there’s a
time limit
for the
fulfillment
of the
covenant
Whether
the
covenant
has been
strictly
fulfilled
on time
Reason for
failure to fulfill
the covenant on
time (if
applicable)
Action plan
if failing to
fulfill the
covenant on
time
Covenant relating to IPO
Restriction
on the sale
of shares
Covenant by the
controlling
shareholder
regarding restriction
on the sale of shares
held by him
voluntary lock-up of
such shares
extension of lock-up
period intention to
hold and dispose of
shares and other
issues
Refer to IPO
Prospectus
36 months
after
completion of
the IPO and
the extended
period stated
below
Yes Yes N/A N/A
Covenant relating to IPO
Restriction
on the sale
of shares
Covenant by the
actual controller
regarding restriction
on the sale of shares
held by him
voluntary lock-up of
such shares
extension of lock-up
period intention to
hold and dispose of
Refer to IPO
Prospectus
36 months
after
completion of
the IPO and
the extended
period stated
below and 6
months after
termination of
employment
Yes Yes N/A N/A
shares and other
issues
with the
Company
Covenant relating to IPO
Restriction
on the sale
of shares
Covenant by the
concert parties of the
actual controller
regarding restriction
on the sale of shares
held by them
voluntary lock-up of
such shares
extension of lock-up
period intention to
hold and dispose of
shares and other
issues
Refer to IPO
Prospectus
36 months
after
completion of
the IPO and
the extended
period stated
below
Yes Yes N/A N/A
Covenant relating to IPO
Restriction
on the sale
of shares
Covenant by the
directors regarding
restriction on the sale
of shares held by
them voluntary
lock-up of such
shares extension of
lock-up period
intention to hold and
dispose of shares and
other issues
Refer to IPO
Prospectus
12 months
after
completion of
the IPO and
the extended
period stated
below
Yes Yes N/A N/A
Covenant relating to IPO
Restriction
on the sale
of shares
Covenant by the
supervisors regarding
restriction on the sale
of shares held by
them voluntary
lock-up of such
shares extension of
lock-up period
intention to hold and
Refer to IPO
Prospectus
12 months
after
completion of
the IPO
Yes Yes N/A N/A
dispose of shares and
other issues
Covenant relating to IPO
Restriction
on the sale
of shares
Covenant by HU Fei
as a senior officer
and member of key
technical staff
regarding restriction
on the sale of shares
held by him
voluntary lock-up of
such shares
extension of lock-up
period intention to
hold and dispose of
shares and other
issues
Refer to IPO
Prospectus
12 months
after
completion of
the IPO and
the extended
period stated
below and 6
months after
termination of
employment
with the
Company
Yes Yes N/A N/A
Covenant relating to IPO
Restriction
on the sale
of shares
Covenant by the
senior officers BO
Lianming WU Bin
LI Lu ZHAO Ruijin
and XIAO Yangjian
regarding restriction
on the sale of shares
held by them
voluntary lock-up of
such shares
extension of lock-up
period intention to
hold and dispose of
shares and other
issues
Refer to IPO
Prospectus
12 months
after
completion of
the IPO and
the extended
period stated
below
Yes Yes N/A N/A
Covenant relating to IPO
Restriction
on the sale
of shares
Covenant by the key
technical staff YU
Xin WU Xiliang
WANG Lin and
Refer to IPO
Prospectus
12 months
after
completion of
the IPO and
Yes Yes N/A N/A
GUO Zuqiang
regarding restriction
on the sale of shares
held by them
voluntary lock-up of
such shares
extension of lock-up
period intention to
hold and dispose of
shares and other
issues
listing of
stock and the
extended
period stated
below
Covenant relating to IPO
Restriction
on the sale
of shares
Covenant by the
holders of more than
5% shares regarding
restriction on the sale
of shares held by
them voluntary
lock-up of such
shares extension of
lock-up period
intention to hold and
dispose of shares and
other issues
Refer to IPO
Prospectus
12 months
after
completion of
the IPO and
listing of
stock
Yes Yes N/A N/A
Covenant relating to IPO
Restriction
on the sale
of shares
Covenant by the
other shareholders
regarding restriction
on the sale of shares
held by them
voluntary lock-up of
such shares
extension of lock-up
period intention to
hold and dispose of
shares and other
issues
Refer to IPO
Prospectus
12 months
after
completion of
the IPO and
listing of
stock
Yes Yes N/A N/A
Covenant relating to IPO
Restriction
on the sale
of shares
Covenant by senior
officers and core
employees
participating in
strategic allotment
regarding restriction
on the sale of shares
held by him
voluntary lock-up of
such shares
extension of lock-up
period intention to
hold and dispose of
shares and other
issues
Refer to IPO
Prospectus
At least 12
months after
completion of
the IPO and
listing of
stock
Yes Yes N/A N/A
Covenant relating to IPO Others
Issuer’s plan for
stabilizing the
Company’s stock
price and covenant
regarding share
repurchase measures
within three years
after the listing
Refer to IPO
Prospectus
36 months
after
completion of
the IPO and
listing of
stock
Yes Yes N/A N/A
Covenant relating to IPO Others
Controlling
shareholder and the
actual controller’s
plan for stabilizing
the Company’s stock
price and covenant
regarding share
repurchase measures
within three years
after the listing
Refer to IPO
Prospectus
36 months
after
completion of
the IPO and
listing of
stock
Yes Yes N/A N/A
Covenant relating to IPO Others
Directors and senior
officers’ plan for
Refer to IPO
Prospectus
36 months
after
Yes Yes N/A N/A
stabilizing the
Company’s stock
price and covenant
regarding share
repurchase measures
within three years
after the listing
completion of
the IPO and
listing of
stock
Covenant relating to IPO Others
Issuer’s covenant
regarding measures
against fraud in IPO
Refer to IPO
Prospectus
Permanent No Yes N/A N/A
Covenant relating to IPO Others
Controlling
shareholder actual
controller and their
concert parties’
covenant regarding
measures against
fraud in IPO
Refer to IPO
Prospectus
Permanent No Yes N/A N/A
Covenant relating to IPO Others
Directors
supervisors and
senior officers’
covenant regarding
measures against
fraud in IPO
Refer to IPO
Prospectus
Permanent No Yes N/A N/A
Covenant relating to IPO Others
Issuer’s covenant
regarding remedial
measures for diluted
earnings in the
current period
Refer to IPO
Prospectus
Permanent No Yes N/A N/A
Covenant relating to IPO Others
Controlling
shareholder actual
controller and their
concert parties’
covenant regarding
remedial measures
for diluted earnings
Refer to IPO
Prospectus
Permanent No Yes N/A N/A
in the current period
Covenant relating to IPO Others
Directors
supervisors and
senior officers’
covenant regarding
remedial measures
for diluted earnings
in the current period
Refer to IPO
Prospectus
Term of
office
No Yes N/A N/A
Covenant relating to IPO Others
Issuer’s covenant
regarding profit
distribution policy
Refer to IPO
Prospectus
Permanent No Yes N/A N/A
Covenant relating to IPO Others
Issuer’s covenant
regarding restraint
measures and
liability for
compensation in the
event of failure to
fulfill its covenants
Refer to IPO
Prospectus
Permanent No Yes N/A N/A
Covenant relating to IPO Others
Controlling
shareholder actual
controller and their
concert parties’
covenant regarding
restraint measures
and liability for
compensation in the
event of failure to
fulfill their covenants
Refer to IPO
Prospectus
Permanent No Yes N/A N/A
Covenant relating to IPO Others
Directors
supervisors and
senior officers’
covenant regarding
restraint measures
and liability for
compensation in the
Refer to IPO
Prospectus
Term of
office
No Yes N/A N/A
event of failure to
fulfill their covenants
Covenant relating to IPO
Resolve
horizontal
competition
issues
Controlling
shareholder’s
covenant on avoiding
horizontal
competition and
regulating and
reducing
related-party
transactions
Refer to IPO
Prospectus
Permanent No Yes N/A N/A
Covenant relating to IPO
Resolve
related-party
transaction
issues
Actual controller’s
covenant on avoiding
horizontal
competition and
regulating and
reducing
related-party
transactions
Refer to IPO
Prospectus
Permanent No Yes N/A N/A
Covenant related to share
incentives
Others
Covenant by the
grantee of share
incentives regarding
information
disclosure documents
Refer to the 2019
Restricted Share
Incentive Plan
(Draft) of the
Company
Permanent No Yes N/A N/A
Others
Company’s covenant
on refraining from
providing financial
assistance
Refer to the 2019
Restricted Share
Incentive Plan
(Draft) of the
Company
Permanent No Yes N/A N/A
(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
□ Reached√ Not reached□ N/A
According to the Share Transfer Agreement GDC made the the following performance covenants:
The net profit after deduction of non-recurring profit or loss shall be no less than USD 9.35 million in
2020. According to the 2020 auditor’s report of GDC issued by Deloitte GDC achieved the net profit of
USD 0.9268 million in 2020 and failed to achieve the performance covenant for the year 2020.
(III) Fulfillment of performance covenant and the relevant effect on goodwill impairment test
√ Applicable□ N/A
According to the 2020 auditor’s report of GDC issued by Deloitte GDC achieved the net profit of
USD 0.9268 million in 2020 and failed to achieve the performance covenant for the year 2020.
The Company holds 36% equity interests in GDC which were recognized as long-term equity
investments. At the beginning of 2021 the Company made impairment test on the long-term equity
investment in the GDC asset group. According to the Assets Evaluation Report issued by Shenzhen
Pengxin Assets Land and Real Estate Appraisal Co. Ltd. (Peng Xin Zi Ping Bao [2021] No. S064) the
evaluation of the 36% equity interests held by the Company in GDC was USD 21.06 million. Therefore
the Company made no provision for impairment with respect to the long-term equity investment in the
GDC asset group.
III. Occupation of funds during the reporting period and return of such funds
□ Applicable√ N/A
IV. Explanation 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/ARefer to “Section XI. Financial Report - V. Significant accounting policies and accountingestimates - 44 Changes in significant accounting policies and accounting estimates”.(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
Current accounting firm
Name of domestic accounting firm Pan-China Certified Public Accountants (Special
General Partnership)
Fee payable to domestic accounting firm 950000
Audit period of domestic accounting firm 5 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 2019 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 2020 for a term of one year. Pan-China Certified Public
Accountants (Special General Partnership) has issued auditor’s reports for the Company between 2016
to 2019.
Explanation about re-appointment of accounting firm during the audit period
□ Applicable√ N/A
VII. Risk of delisting and the reason
□ Applicable√ N/A
VIII. Matters relating to bankruptcy and reorganization
□ Applicable√ N/A
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. Cases of dispute over infringement on patents for invention [2019] Yue 03 Min Chu No.
In July 2019 the Company initiated a civil litigation on the ground that Delta Electronics Inc
infringed the patent for invention ZL200810065225.X and ZL200880107739.5 owned by the
Company requesting the court to order to stop the acts of infringing the Company’s patent right
and the damages for infringement in the amount of RMB 56.00 million.Refer to the Announcement on Litigation disclosed on July 31
2019 (No. 2019-006).
II. Case for changing the inventor of patent 19-cv-00466-RGD-LRL in the United States District
Court for the Eastern District of Virginia
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 appropriation of the
technical solutions actually invented by the Company’s employees 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 US 9024241 shall be changed from WANG Bo ZHANG
Kesu and HUA Jianhao into LI Yi and HU Fei.Refer to the Announcement on Litigation disclosed on
September 9 2019 (No. 2019-012).III. Cases of dispute over infringement on patents for invention [2019] Jing 73 Min Chu No.
1275 1276 and 1278
In September 2019 Delta Electronics Inc. initiated a civil litigation on the ground that the
Company and its controlled subsidiary Formoive infringed the patent for invention
ZL201410249663.7 ZL201610387831.8 and ZL201010624724.5 requesting the court to order
to stop the acts of infringing the patent rights and the damages for infringement in the amount of
RMB 48.03 million.
Refer to the Announcement on Litigation disclosed on
September 21 2019 (No. 2019-014) and the Announcement
on Litigation disclosed on June 13 2020 (No. 2020-022).IV. Case of dispute over title to patents [2019] Yue 03 Min Chu No. 4309
In November 2019 the Company initiated a civil litigation alleging that the Delta Electronics
Inc. filed a patent application in respect of the technical solution owned by the Plaintiff and
named WANG Bo ZHANG Kesu and HUA Jianhao as the inventors of such technical solution
without authorization thereby infringed on the technical achievements made by the Plaintiff and
the right of authorship of LI Yi and HU Fei the actual inventors and petitions the court todeclare that the patent ZL201610387831.8 “phosphor color wheel and its applicable light sourceRefer to the Announcement on Litigation disclosed on
November 8 2019 (No. 2019-028).
system” is owned by the Company.V. (2020) Yue 73 Min Chu No. 1335-1341 1353 1355-1361
In July 2019 the Company initiated a civil litigation on the ground that Delta Electronics Inc
infringed the patent for invention ZL200880107739.5 and ZL200810065225.X owned by the
Company requesting the court to order to stop the acts of infringing the Company’s patent right
and the damages for infringement in the amount of RMB 80.00 million.Refer to the Announcement on Litigation Against Delta
Electronics (Shanghai) Co. Ltd. and Other Entities disclosed
on August 11 2020 (No. 2020-037).
(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:
Plaintiff/cla
imant
Defendant/res
pondent
Party jointly and
severally liable
Type of
litigation/arbi
tration
Background
Amount
claimed
Whethe
r any
provisio
n is
recogni
zed and
the
amount
Status
Result and
effect
Enforcement
of
judgment/aw
ard
Delta
Electronics
Inc.
Appotronics
Corporation
Limited
Futian SPN Projector
& Video System
Firm of Shenzhen
Infringement
on patent for
invention
[2019] Yue 73 Zhi Min
Chu No. 662 the
Plaintiff alleges that it
is the owner of the
patent for invention
ZL201610387831.8
and the Defendant
infringed such patent
for invention of the
Plaintiff and caused
economic losses to the
Plaintiff.
1614.53 No
RMB 10.00
million
released
and trial
suspended
Stayed
Delta
Electronics
Inc.
Appotronics
Corporation
Limited
Futian SPN Projector
& Video System
Firm of Shenzhen
Infringement
on patent for
invention
[2019] Yue 73 Zhi Min
Chu No. 663 the
Plaintiff alleges that it
is the owner of the
1614.53 No
Trial of the
first
instance
completed
Judgment
of first
instance:
All claims
patent for invention
ZL201310017478.0
and the Defendant
infringed such patent
for invention of the
Plaintiff and caused
economic losses to the
Plaintiff.made by
the
Plaintiff
were
dismissed.
Delta
Electronics
Inc.
Appotronics
Corporation
Limited
Futian SPN Projector
& Video System
Firm of Shenzhen
Infringement
on patent for
invention
[2019] Yue 73 Zhi Min
Chu No. 664 the
Plaintiff alleges that it
is the owner of the
patent for invention
ZL20310625063.1 and
the Defendant
infringed such patent
for invention of the
Plaintiff and caused
economic losses to the
Plaintiff.
1614.53 No
Trial of the
first
instance
completed
Judgment
of first
instance:
All claims
made by
the
Plaintiff
were
dismissed.
Delta
Electronics
Inc.
Formoive
(Beijing)
Technology
Co. Ltd.
Appotronics
Corporation Limited
Infringement
on patent for
invention
[2019] Jing 73 Min
Chu No. 1277 the
Plaintiff alleges that it
is the owner of the
patent for invention
ZL201310017478.0
and the Defendant
infringed such patent
for invention of the
Plaintiff and caused
economic losses to the
Plaintiff.
1601.00 No
Trial of the
first
instance
completed
Ruling of
the first
instance
The case
of the
Plaintiff
was
rejected.
Chengdu
Jimi
Technology
Chengdu
Jingying
Times
Formoive (Beijing)
Technology Co. Ltd.Infringement
on patent for
invention
[2020] Chuan 01 Zhi
Min Chu No. 252 the
Plaintiff alleges that the
5000.00 No Settled
The
Plaintiff
withdraw
Co. Ltd. Communicatio
n Device Co.
Ltd.
Defendant infringed
such patent for
invention of the
Plaintiff and caused
economic losses to the
Plaintiff.its case
and the
court has
issued a
civil
ruling
Chengdu
Jimi
Technology
Co. Ltd.
Appotronics
Corporation
Limited
Formoive (Beijing)
Technology Co. Ltd.Unfair
competition
[2020] Chuan 01 Min
Chu No. 4391 unfair
competition case the
Plaintiff alleged that
the Defendant
conducted unfair
competition and caused
economic losses to the
Plaintiff.
1000.00 No Settled
The
Plaintiff
withdraw
its case
and the
court has
issued a
civil
ruling
Haining
Ningjia
Electronics
Technology
Co. Ltd.
Shenzhen
Appotronics
Xiaoming
Technology
Co. Ltd.
Appotronics
Corporation Limited;
Zhejiang Tmall
Network Co. Ltd.Infringement
on patent for
invention
[2020] Zhe 01 Zhi Min
Chu No. 540 the
Plaintiff alleges that it
is the owner of the
patent for invention
ZL200710037859X
and the Defendant
infringed such patent
for invention of the
Plaintiff and caused
economic losses to the
Plaintiff.
205.00 No
The
Plaintiff
withdraw
its case
The
Plaintiff
withdraw
its case
and the
court has
issued a
civil
ruling
Casio
Computer
Co. Ltd.
Appotronics
Corporation
Limited
AV Design (Beijing)
Technology
Development Co.
Ltd.Infringement
on patent for
invention
In the cases of dispute
over infringement on
patents for invention
[2016] Jing 73 Min
Chu No. 59-60 the
Plaintiff alleges that it
is the owner of the
patents for invention
2049.95 No Settled
The
Plaintiff
withdraw
its case
and the
court has
issued a
civil
201210334155.X and
201010293730.7 and
the production sale
and offer for sale of
Laser TV APUS-20(S)
by Defendant 1 and
Defendant 2 for
purpose of production
and operation has
infringed on such
patents for invention of
the Plaintiff and caused
economic losses to the
Plaintiff.ruling
Appotronic
s
Corporatio
n Limited
Dehao
Electronic
Technology
Ltd.Shenzhen Super
Network Technology
Co. Ltd.
Infringement
on patent for
invention
In the cases of dispute
over infringement on
patents for invention
[2018] Yue 03 Min
Chu No. 1899-1907
the Plaintiff alleges that
the production sale
and offer for sale of a
variety of projector
products by Defendant
1 and Defendant 2 for
purpose of production
and operation has
infringed on the
Plaintiff’s patent for
invention and caused
economic losses to the
Plaintiff.
2081.52 No
Trial of the
second
instance
completed
Judgment
of second
instance:
The
Defendant
should
stop its act
of
infringem
ent and
pay the
Plaintiff
for the
economic
losses and
reasonable
expenses
RMB
3577279.
61 in total.
In March
2021 the
Company
received the
compensatio
n and
reasonable
expenditures
paid by the
Defendant in
the amount
of RMB
3577279.61.
Appotronic Dehao Shenzhen Super Infringement In the cases of dispute 2081.52 No Trial of the The
s
Corporatio
n Limited
and
Shenzhen
YLX
Technology
Developme
nt Co. Ltd.
Electronic
Technology
Ltd.Network Technology
Co. Ltd.
on patent for
invention
over infringement on
patents for invention
[2018] Yue 03 Min
Chu No. 1891-1898
and 1940 the Plaintiff
alleges that the
production sale and
offer for sale of a
variety of projector
products by Defendant
1 and Defendant 2 for
purpose of production
and operation has
infringed on the
Plaintiff’s patent for
invention and caused
economic losses to the
Plaintiff.second
instance
completed
Plaintiff
withdraw
its case
and the
court has
issued a
civil
ruling
Appotronic
s
Corporatio
n Limited
Casio
Computer Co.
Ltd.
Casio (China) Co.
Ltd. and Beijing
Hongyang Jiye
Technology Co. Ltd.Infringement
on patent for
invention
[2018] Jing 73 Min
Chu No. 1239 and
1240 the Plaintiff
alleges that it is the
owner of the patent for
invention
ZL200810065225.X
and the Defendant
infringed such patent
for invention of the
Plaintiff and caused
economic losses to the
Plaintiff.
760.00 No Settled
The
Plaintiff
withdraw
its case
and the
court has
issued a
civil
ruling
Formoive
(Beijing)
Technology
Co. Ltd.
Chengdu
XGIMI Vision
E-commerce
Co. Ltd.
Chengdu Jimi
Technology Co. Ltd.Infringement
on patent for
invention
(2020) Jin 03 Zhi Min
Chu No. 159 case of
dispute over
infringement on patents
4600.00 No Settled
The
Plaintiff
withdraw
its case
Tianjin
Second
Branch
for invention the
Plaintiff alleges that the
Defendant infringed
rights of the Plaintiff
and caused economic
losses to the Plaintiff.and the
court has
issued a
civil
ruling
Formoive
(Beijing)
Technology
Co. Ltd.
Chengdu Jimi
Technology
Co. Ltd.
Fuding Juqiyi
Electronic Product
Operation
Infringement
on patent for
invention
(2020) Min 01 Min
Chu No. 1312 case of
dispute over
infringement on patents
for invention the
Plaintiff alleges that the
Defendant infringed
rights of the Plaintiff
and caused economic
losses to the Plaintiff.
200.00 No Settled
The
Plaintiff
withdraw
its case
and the
court has
issued a
civil
ruling
(III) Other issues
√ Applicable□ N/A
A total of 14 invalidation petitions has been raised against the Company’s patent for invention ZL200880107739.5 and a total of 9 invalidation petitions has
been raised against the Company’s patent for invention ZL200810065225.X. At the end of the reporting period 22 invalidation cases with the Company as the
patentee 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. At the end of the reporting period there was 1 invalidation case 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.
X. Penalties imposed on the listed company and its directors supervisors senior officers
controlling shareholder actual controller and acquirer 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. 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
Name of
plan
Type of
incentive
Number of
target
shares
Proportion of
target shares
(%)
Number of
grantees
Proportion of
grantees (%)
Price of
target shares
granted
2019
Restricted
Share
Incentive
Plan
Type II
restricted
shares
5500000 1.21 206 17.61% 17.425
Note: The proportion of grantees is calculated with the total number of employees of the Company
as of December 31 2020 as the denominator.
2. Implementation progress of the share incentive during the reporting period
√ Applicable□ N/A
1. 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.
(1) Considering that the 2019 profit distribution plan of the Company has been completely
implemented in accordance with the relevant provisions of the incentive plan the Company made
corresponding adjustment to the grant price of restricted shares to adjust the grant price from RMB 17.5
to RMB 17.425.
(2) The vesting conditions for reserved restricted shares have been met; therefore October 13 2020
was determined as the grant date to grant 1.10 million restricted shares to 38 grantees of share
incentives.
2. On October 27 2020 the Company held the 28th meeting of the first Board of Directors and the
15th meeting of the first Board of Supervisors at which the Proposal on Invalidating Partial Granted but
Not Vested 2019 Restricted Shares and the Proposal on Vesting Criteria for the First Vesting Period in
the Initial Grant under 2019 Restricted Share Incentive Plan were reviewed and passed.
(1) Considering that 13 grantees of share incentives in the initial grant under the 2019 Restricted
Share Incentive Plan have left the Company in accordance with the relevant provisions of the incentive
plan 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. The grantees of restricted shares
in the initial grant are adjusted from 169 to 156 the number of restricted shares in the initial grant is
adjusted from 4.40 million to 4.1283 million with 0.2717 million invalidated.
(2) Substantial vesting conditions for the first vesting period with respect to the 156 grantees in the
initial grant under the 2019 incentive plan have been met. Therefore the Company vested 1.23849
million restricted shares to the 156 qualified grantees.
3. As of November 11 2020 the Company has received the subscription amount of RMB
20953388.25 paid in cash by 147 grantees including RMB 1202490.00 recognized as the share
capital and RMB 19750898.25 recognized as the capital reserve. On November 24 2020 the share
registration formalities for the first vesting period of the initial grant under the 2019 Restricted Share
Incentive Plan have been completed and China Securities Depository and Clearing Corporation Limited
Shanghai Branch has issued the Certificate of Securities Change Registration. After the vesting of the
restricted share the total shares of the Company increased from 451554411 to 452756901 with
1202490 additional tradable shares.
3. Share-based payment recognized due to the share incentive during the reporting period
In RMB
Total share-based payment recognized for the
current period
20581939.14
(II) Incentives already disclosed in the interim announcements about which no new information
is available
√ Applicable□ N/A
Summary Reference
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.Refer to the relevant announcement
issued by the Company on
www.sse.com.cn and the designated
media for information disclosure on
October 14 2020.On October 27 2020 the Company held the 28th meeting of
the first Board of Directors and the 15th meeting of the first
Board of Supervisors at which the Proposal on Invalidating
Partial Granted but Not Vested 2019 Restricted Shares and
the Proposal on Vesting Criteria for the First Vesting Period
in the Initial Grant under 2019 Restricted Share Incentive
Plan were reviewed and passed.Refer to the relevant announcement
issued by the Company on
www.sse.com.cn and the designated
media for information disclosure on
October 29 2020.On November 24 2020 the share registration formalities for
the first vesting period of the initial grant under the 2019
Restricted Share Incentive Plan have been completed and
China Securities Depository and Clearing Corporation
Limited Shanghai Branch has issued the Certificate of
Refer to the relevant announcement
issued by the Company on
www.sse.com.cn and the designated
media for information disclosure on
November 25 2020.
Securities Change Registration. After the vesting of the
restricted share the total shares of the Company increased
from 451554411 to 452756901.Other information
□ Applicable√ N/A
Employee stock ownership plan
□ Applicable√ N/A
Other incentives
□ Applicable√ N/A
XIII. 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
Summary Reference
On April 28 2020 the Company held the 21st
meeting of the first Board of Directors at which
the Proposal on Daily Related-party Transactions
in 2020 was reviewed and passed. This proposal
has been reviewed and passed on May 22 2020 at
the annual general meeting of shareholders in
2019. It’s expected that the Company will have
daily related-party transactions in the amount of
RMB1.2531 billion in 2020.
Refer to the Announcement No. 2020-014
“Announcement on expected routine related-partytransactions in 2020” issued by the Company on
www.sse.com.cn and the designated media for
information disclosure on April 29 2020.On October 27 2020 the Company held the 28th
meeting of the first Board of Directors and the 15th
meeting of the first Board of Supervisors at which
the Proposal on Increasing the Amount of Daily
Related-party Transactions in 2020 was reviewed
and passed. This proposal has been reviewed and
passed on November 13 2020 at the third interim
general meeting of shareholders in 2020
approving to increase the amount of related-party
transactions by RMB 40.00 million for 2020.Refer to the Announcement No. 2020-059
“Announcement on increasing the amount ofrelated-party transactions in 2020” issued by the
Company on www.sse.com.cn and the designated
media for information disclosure on October 29
2020.
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
(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
In RMB
Related
party
Relatio
nship
Ty
pe
Subj
ect
matt
er
Pricing
princip
le
Carryi
ng
amoun
t of
assets
transfe
rred
Evalu
ation
of
assets
transf
erred
Transf
er
price
Meth
od of
settle
ment
Inco
me
fro
m
the
tran
sfer
of
asse
ts
Impac
t of
the
transa
ction
on the
operat
ing
results
and
financ
ial
condit
ions
of the
Comp
any
Reaso
n for
great
differe
nce
betwe
en the
transa
ction
price
and
the
carryi
ng
amou
nt
evalua
tion
or
marke
t fair
value
Shenzh
en YLX
Technol
ogy
Develo
pment
Co.
Ltd.Related
person
(same
Chairm
an as
the
Compa
ny)
Sal
es
of
ass
ets
exc
ept
for
goo
ds
Fixe
d
asse
ts
Negoti
ation
74061
7.73
N/A
74061
7.73
Cash 0
Revita
lize
the
assets
N/A
Description of related-party transactions involving acquisition or sale of assets
In December 2020 the Company sold idle fixed assets in the amount of RMB 740617.73 to its
related party Shenzhen YLX Technology Development Co. Ltd. whose actual controller is Mr. Li Yi.In accordance with Article 132 of the Articles of Association this transaction did not reach the
disclosure standard and was not subject to the approval by the Board of Directors or general meeting
and may be implemented with the internal approval of the Company.
4. Fulfillment of performance covenants (if any) during the reporting period
□ Applicable√ N/A
(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
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
Formoive to introduce a strategic investor.
Refer to the Announcement No. 2020-038
“Announcement on Increasing the Capital of a
Controlled Subsidiary by Issuing AdditionalShares & Related-party Transaction” issued by
the Company on www.sse.com.cn on August 18
2020.
2. Matters already disclosed in the interim announcements about which there’s new information
available
√ Applicable□ N/A
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 tothe Announcement No. 2021-002 “Announcement on Adjusting the Plan for Increasing the Capital of a
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) Others
□ Applicable√ N/A
XIV. Material contracts and performance thereof
(I) Trusteeship contracting and lease
1. Trusteeship
□ Applicable√ N/A
2. Contracting
□ Applicable√ N/A
3. Lease
√ Applicable□ N/A
In RMB 0’000
Name
of
lessor
Name
of
lessee
Lease
d
assets
Amo
unt of
lease
d
assets
Lease
start
date
Lease
end
date
Leas
e
inco
me
Basis
for
determi
ning
lease
income
Impac
t of
lease
incom
e on
the
Comp
any
Related-
party
transacti
on or not
Relation
ship
Shenz
hen
Meish
eng
Indust
ry
Co.
Ltd.
Appotro
nics
Corpora
tion
Limited
Office
R&D
factor
y
emplo
yee
dormit
ory
1265
.96
Dece
mber
1
2018
Nove
mber
30
2022
/ / / No None
Description of lease
None
(II) Guarantees
√ Applicable□ N/A
In RMB 0’000
Total amount of guarantees provided during the
reporting period (excluding those provided for
the subsidiaries)
0
Balance of guarantees at the end of the
reporting period (excluding those provided for
the subsidiaries) (A)
0
Guarantees provided by the Company or its subsidiaries for the subsidiaries of the Company
Guara
ntor
Relatio
nship
betwee
n the
guaran
tor and
the
listed
compa
ny
Oblig
or
Relati
onship
betwe
en the
obligo
r and
the
listed
compa
ny
Guara
nteed
amou
nt
Commen
cement
date of
guarante
e
(signing
date of
agreeme
nt)
Ince
ption
date
of
guar
antee
Expir
y date
of
guara
ntee
Type
of
guar
ante
e
Whet
her
the
oblig
ation
guara
nteed
has
been
disch
arged
Whet
her
the
oblig
ation
guara
nteed
has
beco
me
overd
ue
Amo
unt of
the
overd
ue
oblig
ation
guara
nteed
Whe
ther
there
’s a
coun
ter
guar
ante
e
Appot
ronics
Corpo
ration
Limite
Headq
uarters
CINE
APPO
Laser
Cinem
a
Contro
lled
subsid
iary
7000
0
May 31
2020
May
31
2020
Three
years
after
the
due
Joint
and
seve
ral
liabil
No No No
d Techn
ology
(Beiji
ng)
Co.
Ltd.date
for
the
oblig
ations
under
the
maste
r
contr
act
ity
Appot
ronics
Corpo
ration
Limite
d
Headq
uarters
CINE
APPO
Laser
Cinem
a
Techn
ology
(Beiji
ng)
Co.
Ltd.
Contro
lled
subsid
iary
6000
June 27
2019
June
27
2019
June
26
2023
Joint
and
seve
ral
liabil
ity
No No No
Appot
ronics
Corpo
ration
Limite
d
Headq
uarters
Formo
ive
(Beiji
ng)
Techn
ology
Co.
Ltd.
Contro
lled
subsid
iary
1650
0
October
21 2019
Octo
ber
21
2019
Two
years
after
the
due
date
for
the
oblig
ations
Joint
and
seve
ral
liabil
ity
No No No
Appot
ronics
Corpo
ration
Limite
d
Headq
uarters
Formo
ive
(Beiji
ng)
Techn
ology
Co.
Ltd.
Contro
lled
subsid
iary
1000
0
Decembe
r 1 2020
Initia
l
utiliz
ation
date
or
actua
l date
of
utiliz
ation
unde
r the
finan
cing
letter
Two
years
after
the
latest
due
date
of the
loans
under
the
finan
cing
letter
Joint
and
seve
ral
liabil
ity
No No No
Appot
ronics
Corpo
ration
Limite
d
Headq
uarters
Formo
ive
(Beiji
ng)
Techn
ology
Co.
Ltd.
Contro
lled
subsid
iary
1000
0
July 1
2020
July
1
2020
Three
years
after
the
due
date
for
the
oblig
Joint
and
seve
ral
liabil
ity
No No No
ations
under
the
maste
r
contr
act
Total amount of guarantees provided for the
subsidiaries during the reporting period
42030
Balance of guarantees provided for the
subsidiaries at the end of the reporting period
(B)
39938
Total amount of guarantees provided by the Company (including those provided for the subsidiaries)
Total amount guaranteed (A+B) 39938
Proportion of total amount guaranteed to the
net assets of the Company (%)
19.09
Where:
Total amount of guarantees provided for the
shareholders actual controller and their
affiliates (C)
0
Total amount of debt guarantees directly or
indirectly provided for the obligors whose
equity-debt ratio exceeds 70% (D)
36500
Total amount guaranteed in excess of 50% of
the net assets of the Company (E)
0
Total amount guaranteed (C+D+E) 36500
Explanation about outstanding guarantees for
which the Company may assume joint and
several liability
N/A
Explanation about guarantees N/A
(III) Entrusted cash asset management
1. Entrusted wealth management
(1) Overall situation of entrusted wealth management
√ Applicable□ N/A
In RMB
Type Source of funds Total amount
Outstanding
amount
Overdue amount
Bank wealth
management
amount
Offering
proceeds
584000000 114000000 0
Bank wealth
management
amount
Self-funded
capital
50000000 0 0
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
XV. Use of offering proceeds
√ Applicable□ N/A
In RMB 0’000
Total offering proceeds 106247.08
Total offering proceeds used in this
year
12624.40
Total offering proceeds with the
purpose changed
0
Cumulative total offering proceeds
used
45223.24
Proportion of total offering proceeds
with the purpose changed (%)
0
Investment
project
promised
Change
d
project
includin
g partial
change
(if any)
Total
offering
proceeds
committe
d
Post-adjustme
nt total
investment
Committe
d
investmen
t amount
by the end
of the
period①
Amount
invested
in this
year
Cumulativ
e amount
invested
by the end
of the
period②
Differenc
e between
the
cumulativ
e amount
invested
and the
committe
d
investmen
t amount
by the end
of the
period
③=②-
①
Investme
nt
progress
by the
end of the
period
(%)
④=②/
①
Date for
the
project
to reach
the
working
conditio
n for its
intended
use
Benefit
s
realize
d in the
current
year
Whethe
r
exceed
expecte
d
benefits
Material
changes
in the
project
feasibilit
y
R&D and
industrializatio
n of new
generation of
laser display
products
No
change
31300.00 31300.00 31300.00 5725.36 8871.47
-22428.5
3
28.34
March
2022
- N/A No
R&D center at
the head office
of
Appotronics
No
change
28400.00 28400.00 28400.00 1044.70 1307.10
-27092.9
0
4.6
August
2022
N/A N/A No
Information
system
upgrade and
building
No
change
7000.00 7000.00 7000.00 750.61 1505.17 -5494.83 21.5
March
2022
N/A N/A No
Supplementar
y working
capital
No
change
33300.00 33300.00 33300.00 5103.73 33539.50 100.72 N/A N/A N/A No
Total -
100000.0
0
100000.00
100000.0
0
12624.4
0
45223.24
-55016.2
6
- - - -
Reason for not reaching the planned progress (by
specific investment project)
1. The head office of the Company is still in construction; as a result the R&D center at the head office
and the information system upgrade and building cannot be implemented in a large scale.
2. Under the impact of COVID-19 during the implementation of the R&D and industrialization of new
generation of laser display products based on the principle of ensuring quality controlling costs and
reducing risks the Company acted more diligently in the specific planning and use of funds for the
projects which delayed the overall implementation progress expected.
Description of material changes in project feasibility No material change
Early investment and replacement of offering proceeds
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 RMB 18.9584 million as of July 19 2019 with the offering proceeds and replace the
offering expenses paid in the amount of RMB 3.1056 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).
Supplement the working capital with idle offering
proceeds
None
Cash management of idle offering proceeds and
investment in relevant products
On July 29 2019 the Proposal on Cash Management of Temporarily Idle Offering Proceeds was
reviewed and passed at the 16th meeting of the first Board of Directors. It was approved that without
affecting the normal implementation of the investment plan for offering proceeds a maximum of RMB
900 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
RMB 200 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 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. It was approved that without affecting the normal
implementation of the investment plan for offering proceeds a maximum of RMB 670 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 RMB 200 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.Supplement working capital or repay bank loans with
excess offering proceeds
None
Balance of offering proceeds and reasons thereof N/A
Other use of offering proceeds None
[Note] During the project the total wealth management returns of RMB 2.3950 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 RMB 1418.11 incurred after the project has been paid to the
basic account of the Company to be used as supplementary working capital.
XVI. Other significant matters
□ Applicable√ N/A
XVII. Active performance of social responsibilities
(I) Poverty alleviation of listed companies
□ Applicable√ N/A
(II) Performance of social responsibilities
1. Protection of the rights and interests of shareholders and creditors
√ Applicable□ N/A
1. Welcome regulations and make compliant disclosure to respond to concerns of
shareholders
The Board Secretary of the Company is responsible for external information disclosure. The
Company has designated Shanghai Securities News China Securities Journal Securities Times and
Securities Daily as the newspaper and website for information disclosure. During the reporting period
we have always 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
Guidelines on the Application of Self-Regulation Rules for Companies Listed on the STAR Market No. 1
- Regulated Operation 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. In 2020 we disclosed 4 true accurate and complete regular reports; promptly disclosed 147
interim announcements on the resolutions of the general meeting and use of offering proceeds and
voluntarily disclosed the English version of our regular reports announcement on the recovery of the
cinema business and social responsibility report. We performed the information disclosure obligations
in accordance with law to promptly notify investors of significant operating updates of the Company and
progress of major matters hence protecting the legitimate rights of investors.
2. Innovate channels for communicating with investors to deliver the investment value of the
company from multiple perspectives
In 2020 we made 30+ roadshows in the form of strategy meetings with securities companies
on-site reception at the Company teleconferences online Q&A etc. and communicated with 110+
buyer and seller institutions and over 240 person-times. We held performance briefings via video or
telephone for the annual report semiannual report and third quarter report to build the bridge for
communication between the management of the Company and the capital market. We communicated
with and answered the queries of 190+ investors via the investor hotline. We received 30+ queries in
SSE E-Interaction and replied to all the queries. Meanwhile in consideration of the video dissemination
we opened a WeChat video account to deliver performance interpretation business progress
management interview and other updates of the Company to investors more vividly.
3. Improve the profit distribution policy and enhance the mechanism of returns to investors
The Company reviews the shareholder returns plan at least once every three years make
appropriate and necessary amendments to its profit distribution policy and decide on the shareholder
returns plan for the giving period according to the opinions of the shareholders (in particular holders of
public shares) the independent directors and supervisors subject to the applicable laws rules
regulations and normative documents.
2. Protection of the rights and interests of employees
√ Applicable□ N/A
2.1 Employee structure
At the end of 2020 we have a total of 1170 employees at the average age of 32 including 456
employees below 30 representing 44% of the total employees. The ratio of male to female employees is
7:3. Male employees are slightly more than female employees which is in line with the characteristics of
the technology industry.The company has 369 R&D persons accounting for 31.54% of the total number of employees.
31.71% R&D persons hold a master or doctor degree while nearly 90% R&D persons hold a bachelor’s
or higher degree. The core R&D team is led by the internationally leading talent in the laser display field
and attracted R&D staff graduated from well-known domestic and foreign universities covering optical
electronics materials physics mechanical designing fine manufacturing etc.
2.2 Compensation and benefits of employees
Based on the development objective and talent policy of the Company we regulate theremuneration management on the basic idea of “matching the market environment reflecting the valueof talents and achieving incentive effects”. We combine guaranteed benefits with incentives in balancedconsideration of internal fairness and market competitiveness to achieve “consistency betweenresponsibilities and rights consistency between capabilities and value and consistency betweenperformance and benefits” in the allotment of employee remunerations.
With reference to the operating conditions objective achievement and business characteristics of
the Company we have formulated a corresponding incentive plan focusing on performance to inspire
teams and individuals with outstanding performance containing profit sharing bonus patent rewards
major innovation rewards sales commissions sales rewards ranking rewards (outstanding employee
quarterly/annual honour awards) and talent spotter rewards.
2.3 Career development of employees
We classified all positions into 5 position groups according to the position contribution nature of
work and the professional knowledge and skills required - management group technology group
professional group marketing group and operation group set separate career development channels for
different position groups and formulated the Provisions on Employee Promotion Management to
provide effective guidelines for the development of employees.Meanwhile we make every effort for resource building helping talents to achieve rapid
development on the Appotronics platform. After the efforts for years we have gradually established a
sound talent training system: the “Star Light Program” for the development of college graduates the
“Sharp Light Program” for the development of grassroots managers and the “Polar Light Program” for
the development of middle managers. The continuous talent input and intensive culture inheritance in
the training at both the primary and middle level effectively support the stable development of the
Company.
2.4 Diversified training mechanisms
We comprehensively implement the three-level training management system - training programs at
the Company level universal capability training at the central level and field-specific capability training
at the department level. The layered and multiple-perspective trainings provide a learning and exchange
platform for employees hence cultivating all-round talents required by our business and achieving
win-win results of corporate development and personal development. In 2020 we organized 608 training
sessions for a total of 16500 training hours which effectively meet the demands for employee personal
capability development and organization capability improvement which received the employee
satisfaction of 9 out of 10 scores.
2.5 Other employee benefits
2.5.1 Elect employee representatives to participate in the governance of the Company
The trade union started the registration of representative candidates for the “Second Meeting of
Employee Representatives” on April 29 2020 and carried out the election on May 7 2020 to elect 100
employee representatives and 27 representative candidates. During the term of three years employee
representatives exercise democratic management rights and participate in the review of policies and
rules involving employee interests. All regular employees are qualified for the election.
2.5.2 Safeguarding the travel safety at night
We have enabled the Didi corporate version so that all employees may call for cars free of charge
by using the Didi corporate version; this solves the safety concerns of employees after overtime work at
night. To ensure equal benefits for employees driving to work the Company negotiated with the
property management company to provide employees leaving at night with the benefit of free parking
for the day.
2.5.3 Annual physical examination for all employees
We cooperate with physical examination institutions to provide all employees with health physical
examination. In 2020 under the impact of COVID-19 the physical examination of all employees is
planned between the middle of December to the middle of March 2021. All employees who have joined
the Company for three months are qualified for this benefit.
2.5.4 Free dinner
We provide free dinners for all employees. Employees may claim for a dinner ticket after 6:30 in
the evening to take the free dinner at the designated dining hall with the ticket.
3. Protection of the rights and interests of suppliers customers and consumers
√ Applicable□ N/A
1. Implement strict quality control to ensure quality output
We are committed to providing the customers with high-quality products through strict quality
control. Our production base has passed ISO9001 quality management system certification. The
contracts executed by us with the customers generally contain quality assurance clauses pursuant to
which we have the obligation to repair the products sold by us that are found to have quality problems
during the warranty period (which is 1-3 years generally) free of charge.
2. Continuously optimize services to improve customer experience
Our service team implements the service idea of “customer foremost” and abide by the national
standard Evaluation System for After-sales Service of Commodity and our internal after-sales service
management requirements to carryout internal inspection and management review constantly optimize
the service procedure enhance monitoring and management and continuously improve the service
system. We safeguard the legitimate rights and interests of the suppliers customers and consumers
through the measures stated above.
3. Innovate the service mode to support customers in reducing costs and improving efficiency
For the cinema projector market we took the lead in releasing “Laser as a Service” for cinema laser
light sources in the industry. The cinemas just need to pay rents according to the length of use without
needing to purchase light sources which will help the cinemas not only effectively reduce equipment
purchase costs labor costs and maintenance costs but also improve their market competitiveness
through the high luminance wide color gamut high contrast and good picture quality and othertechnical advantages provided by the laser light source of Appotronics therefore truly achieve “costreduction and efficiency improvement”.
4. Product safety
√ Applicable□ N/A
We attach great importance to ensuring safety of products and have passed the following product
safety certifications in the manufacturing field at home and abroad which provides assurance for the
safety of our products.
Abbr
eviati
on
Description
CCC
China Compulsory Certification a compulsory safety certification required by the
Certification and Accreditation Administration of the People’s Republic of China for the
products covered.
ETL
Electrical Testing Laboratories a generally accepted product safety certification in the
North America.
CE Conformite Europeenne a compulsory certification required by EU.
FCC
Federal Communications Commission a certification required by the Federal
Communications Commission for the radio products communication products and digital
products entering the American market.
CB
Certification Bodies a global system established by the International Electrotechnical
Commission (IECEE). CB test reports and CB test certificates are recognized in all member
states of IECEE.TUV
Technischer überwachungs-Verein a generally accepted safety certification of electronic
components in Germany and Europe.
4. Public relations and public welfare activities
√ Applicable□ N/A
1. Good faith in operation
We insist on good faith in our operation. During the reporting period neither the Company nor any
director supervisor or senior officer was subject to investigation by a competent authority enforcement
by a judicial or disciplinary authority or transferred to judicial authority or investigated for criminal
liabilities.
2. Actively perform the duties as a corporate citizen
2.1 Compliant operation and tax payment. We abide by the relevant national laws and
regulations operate in compliance with requirements obey the management of the local government
accept the supervision of local regulatory authorities and strictly fulfill our obligations as a taxpayer.
2.2 Continuously promote employment. We strictly abide by relevant provisions of the Labor
Law and the Labor Contract Law attach importance to the protection of employee rights and interests
follow the principles of equality voluntariness and coordination to provide employees with equal
employment opportunities in accordance with law so as to establish a regulated and orderly mutually
beneficial harmonious and stable relationship to make our contributions for the national objective of
“stable employment”.
3. Healthcare for employees in prevention of COVID-19
At the beginning of COVID-19 we made quick judgement to establish the “pandemic-fightingPanel” to implement preventive measures such as environment sterilization issuance of facial masks etc.We implemented comprehensive control and prevention measures on an ongoing basis as normal
activities so as to provide employees with prevention instructions materials and mental care to
safeguard the health and lives of all employees. None of our employees were verified or suspected of
being infected in 2020.
4. Take the lead in resume production to facilitate economy recovery
With a series of prevention measures and preparation made Appotronics duly resumed production
on February 10 as one of the first high-tech enterprises resuming production in Shenzhen hence setting
an exemplary role in resuming production and promoting economy recovery with safety guaranteed. On
March 3 2020 European Pressphoto Agency (EPA) took a picture of Appotronics’s cinema product
shop depicting our employees inspecting products carefully with text description. After being forwarded
by Wall Street Journal the Guardian Bajapress ShuttersStock The Top 10 News and other
authoritative media this picture was widely disseminated in the western world as the “Chinese power”
amid the pandemic.
5. Donate materials to empower scientific pandemic prevention and controlling
After the occurrence of the pandemic we immediately offered our support to the front line by
providing large laser display screens to Shenzhen Disease Control Center to facilitate visualization of
medical data hence offering our help in releasing pandemic information patient diagnosis and tracking
of suspected patients and traces in real time and in video conferences with governments at various
levels and medical institutions.Meanwhile we donated customized laser smart projectors equipped with keyboards and mouse for
interaction to medical teams went to Wuhan. Such mobile portable high-definition and high-brightness
smart mini projectors adopt the principle of reflection display hence generating no direct lights to eyes
and no blue lights to avoid visual fatigue after viewing for a long period of time. During the period of
preventing and controlling the pandemic smart mini projectors may be used as auxiliary devices for
online education to help children of those went to Wuhan take “online lessons” in a safe way solving
the concerns of the medical staff so that they may focus on fighting COVID-19 without worrying about
their home and being a reassuring and hart-warming “rear area” for the frontline soldiers fighting the
pandemic.
6. Care eyes with laser display to protect the vision of teenagers
At the beginning of 2020 student learning never stopped despite the shut down of schools. Parents
were worried about the eyes of children since children had to take lessons using display screens. The
People’s Daily Health Times and many ophthalmology professions and education experts advocated
high-definition projector for taking online lessons and recommended in order projectors liquid crystal
TVs and LED displays. Formoive a subsidiary of Appotronics intensified efforts on smart mini
projector products to release Formoive projector Smartpro Voguepro and other products. Such products
have the features of reflection light and diffuse reflection for eyes hence protecting teenagers from blue
light damages from mobile phones tablet computers liquid crystal display screens helping children take
lessons effectively while caring for eyes so parents are more reassured.
7. Innovate application scenarios for laser display to care about the mental health of children
In 2020 Appotronics cooperated with Shenzhen Children’s Hospital to build a creative anesthesia
induction room with laser display technologies. The integrated solution created a virtual 3D dynamic
space for children to achieve the natural and immersive effects hence realizing “no physical pain” and
“no mental hurt” in children anesthesia. Children may be accompanied by their parents through a
“underwater world” before entering the operating room and go into sleep step by step. Such drugless
anesthesia induction effectively relieves the anxiety of children to protect their mental health.
8. Establish a system to support social welfare as normal activities
By combining the strategic objectives with the actual requirements for social development the
Company made a plan for social welfare to support industry development environment protection
education grants charity donation and employee care. We make the plan and budget for social welfare
activities every year which activities will be implemented and organized by the trade union and the
Human Resources Department.
9. Be awarded as the “Most Socially Responsible Listed Company”
In November 2020 National Business Daily released the 10th ranking of Chinese listed companies
covering companies listed on Chinese mainland Hong Kong and US stock markets. Appotronics
distinguished itself as the “Most Socially Responsible Listed Company” on the ranking of Chinese listed
companies. Moreover at the Second Social Responsibility Forum of Shenzhen Enterprises & Award
Ceremony sponsored by Nanfang Daily Appotronics was granted the “Award of Social Responsibility”.
(III) Environment
1. Environmental protection information of the Company and its major subsidiaries that are
identified as major polluters by the environmental protection authority
□ Applicable√ N/A
2. Environmental protection information of the Company that is not identified as a major
polluter
√ Applicable□ N/A
We have not been identified as a major polluter during the reporting period. We attach importance
to environmental protection and have taken the following environmental protection measures to fulfill
our social responsibility:
Disposal of solid wastes
Our solid wastes include consumer wastes general industrial solid wastes and hazardous wastes.The consumer wastes are collected and then handed over to the environmental sanitation entity for
centralized treatment. The general industrial solid wastes mainly consist of leadless waste scruff and
waste packing materials generated in the production process which are collected by category and then
handed over to the relevant resource recycling entities for recycling. The hazardous wastes mainly
consist of waste active carbon generated in the waste gas treatment process and wastes containing
industrial alcohol and waste packing materials containing cleaning agents that are generated in the
production process which are collected and then handed over to the qualified entities for treatment.Sewage treatment
Our sewage includes domestic sewage and industrial sewage. The domestic sewage is pre-treated
through septic tank or otherwise and after meeting the relevant standard discharged to the municipal
sewage treatment pipelines and sewage treatment plant. The industrial sewage is handed over to the
qualified entities for treatment. In addition we have optimized the technologies currently used to reduce
the sewage discharged. We appoint a third party to inspect our domestic sewage every year.Waste gas treatment
Our waste gas mainly includes waste gas containing tin and organic waste gas generated in the
production process. We have built a waste gas treatment system comprising UV photolysis active
carbon adsorption plant air purification equipment and other equipment. After the treatment the
concentration of tin and NmHc in the waste gas discharged by us to the air meets the local standard for
Atmospheric Pollutant Emission Limit. In addition we appoint a third party to conduct the relevant
inspections every year.
Certifications relating to environmental protection
We passed ISO14001 environmental management system certification in 2008 and has maintained
such certification to date. In 2019 we passed QC080000 hazardous substance process management
system certification. All of our products are green products and have passed RoHS REACH and China
environmental labeling product certification among others.
3. Reason for failure to disclose environmental protection information of the Company that is
not identified as a major polluter
□ Applicable√ N/A
4. New information about the environmental protection information disclosed during the
reporting period
□ Applicable√ N/A
(IV) Other information
□ Applicable√ N/A
XVIII Convertible corporate bonds
□ Applicable√ N/A
Section VI Changes in Shares and Shareholders
I. Changes in ordinary shares
(I) Statement of changes in ordinary shares
1. Statement of changes in ordinary shares
Unit: Share
Before the change +/- After the change
Number
Percentage
(%)
New
shares
Bonus
shares
Capitalization
of capital
reserve
Others Subtotal Number
Percentage
(%)
I. Non-tradable shares 394361498 87.33 -224904732 -224904732 169456766 37.43
1. Shares held by the State
2. Shares held by State-owned
corporations
3. Shares held by other
domestic investors
243665462 53.96 -78202707 -78202707 165462755 36.55
Where: Shares held by
domestic non-stated-owned
corporations
233615923 51.73 -68153168 -68153168 165462755 36.55
Shares held by
domestic natural persons
10049539 2.23 -10049539 -10049539 0 0.00
4. Shares held by foreign
investors
150696036 33.37 -146702025 -146702025 3994011 0.88
Where: Shares held by foreign
corporations
135203427 29.94 -131209416 -131209416 3994011 0.88
Shares held by foreign 15492609 3.43 -15492609 -15492609 0 0.00
natural persons
II. Tradable shares 57192913 12.67 1202490 224904732 226107222 283300135 62.57
1. RMB-denominated
ordinary shares
57192913 12.67 1202490 224904732 226107222 283300135 62.57
2. Foreign
currency-denominated shares
listed domestically
3. Foreign
currency-denominated shares
listed overseas
4. Others
III. Total ordinary shares 451554411 100 1202490 1202490 1202490 452756901 100
2. Explanation about changes in ordinary shares
√ Applicable□ N/A
During the reporting period we completed the share registration for the first vesting period in the
initial grant of the restricted share incentive plan 2019. On November 27 2020 147 grantees of share
incentives completed vesting registration with 1.20249 million shares eligible for trading on the market
representing 0.27% of the Company total shares prior to the vesting. After this vesting was completed
the total shares of the Company changed from 451554411 shares to 452756901 shares. For details
refer to the Announcement of Appotronics Corporation Limited on the Vesting Result for the First
Vesting Period in the Initial Grant of the Restrict Share Incentive Plan 2019 and Listing of Shares
published on www.sse.com.cn on November 25 2020 (No. 2020-067).
1. Effect of the changes in ordinary 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
During the reporting period we completed the share registration for the first vesting period in the
initial grant of the restricted share incentive plan 2019 which increased the share capital by RMB
1202490 and the capital reserve by RMB 19750898.25.
In RMB
Item 2020 2020 (calculated on the same
basis) (Note)
Basic earnings per share 0.25 0.25
Diluted earnings per share 0.25 0.25
Net assets per share attributable
to the shareholders of ordinary
shares of the listed company
4.62 4.59
Note: The basic earnings per share diluted earnings per share and net assets per share attributable
to the shareholders of ordinary shares of the listed company in 2020 calculated on the same basis are
calculated supposing that the ordinary shares remained unchanged in 2020.
2. 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
Shareholder
Balance of
non-tradable
shares as at
January 1
2020
Number of
non-tradable
shares
unlocked in
2020
Numbe
r of
non-tra
dable
shares
increas
ed in
2020
Balance of
non-tradab
le shares
as at
December
31 2020
Reason for
restriction
Unlock
date
SAIF IV Hong
Kong (China
Investments)
Limited
62980676 62980676 0 0
Non-tradabl
e pre-IPO
shares
July 22
2020
CITIC PE
Investment (Hong
Kong) 2016
Limited
41774562 41774562 0 0
Non-tradabl
e pre-IPO
shares
July 22
2020
Fuzhou Haixia
Appotronics
Investment
Partnership (LP)
25064737 25064737 0 0
Non-tradabl
e pre-IPO
shares
July 22
2020
Green Future
Holdings Limited
16504518 16504518 0 0
Non-tradabl
e pre-IPO
shares
July 22
2020
Changzhou
Lisheng Equity
Investment
Partnership (LP)
11667635 11667635 0 0
Non-tradabl
e pre-IPO
shares
July 22
2020
Shenzhen
Guochuang
Chenggu Capital
Management Co.Ltd. - Shenzhen
Chengguhui
Equity Investment
Partnership (LP)
10443640 10443640 0 0
Non-tradabl
e pre-IPO
shares
July 22
2020
CAI Kunliang 10049539 10049539 0 0
Non-tradabl
e pre-IPO
shares
July 22
2020
CUI Jingtao 9658792 9658792 0 0
Non-tradabl
e pre-IPO
shares
July 22
2020
Smart Team
Investment
Limited
6799660 6799660 0 0
Non-tradabl
e pre-IPO
shares
July 22
2020
ZHENG Yongshi 5833817 5833817 0 0
Non-tradabl
e pre-IPO
shares
July 22
2020
Shenzhen
Liansong Capital
Management
Partnership (LP)
5833817 5833817 0 0
Non-tradabl
e pre-IPO
shares
July 22
2020
Shenzhen
Shanqiao Capital
Management
Partnership (LP)
5320000 5320000 0 0
Non-tradabl
e pre-IPO
shares
July 22
2020
Huatai
Appotronics
Employee Stock
Ownership Plan -
Jiayuan I
Collective Asset
Management Plan
4548685 4548685 0 0
Non-tradabl
e strategic
allotted
shares in
IPO
July 22
2020
LIGHTZONE
LIMITED
3150000 3150000 0 0
Non-tradabl
e pre-IPO
shares
July 22
2020
Shenzhen Hongtu
Kongque Venture
Capital Investment
Co. Ltd.
1736252 1736252 0 0
Non-tradabl
e pre-IPO
shares
July 22
2020
Off-line allotment
plan
3538402 3538402 0 0
Non-tradabl
e off-line
allotted
shares in
IPO
January
22
2020
Total 224904732 224904732 0 0 / /
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 ordinary shares shareholding structure and structure of assets
and liabilities of the Company
√ Applicable□ N/A
During the reporting period we completed the share registration for the first vesting period in the
initial grant of the restricted share incentive plan 2019. On November 27 2020 147 grantees of share
incentives completed vesting registration with 1.20249 million shares eligible for trading on the market
representing 0.27% of the Company total shares prior to the vesting. After this vesting was completed
the total shares of the Company changed from 451554411 shares to 452756901 shares. For details
refer to the Announcement of Appotronics Corporation Limited on the Vesting Result for the First
Vesting Period in the Initial Grant of the Restrict Share Incentive Plan 2019 and Listing of Shares
published on www.sse.com.cn on November 25 2020 (2020-067).III. Shareholders and actual controller
(I) Total number of shareholders
Total number of shareholders of ordinary shares as of the end of the
reporting period
15616
Total number of shareholders of ordinary shares as of the end of the
month immediately prior to the issue date of this annual report
13653
Total number of shareholders of preferred shares whose voting right
has been restituted as of the end of the reporting period
0
Total number of shareholders of preferred shares whose voting right
has been restituted as of the end of the month immediately prior to the
issue date of this annual report
0
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
Unit: Share
Shares held by top 10 shareholders
Shareholder
(Full name)
Change
during the
reporting
period
Balance of
shares held
as at the end
of the
reporting
period
Percent
age
(%)
Number of
non-tradable
shares held
Number of
non-tradable
shares held
including
the shares
lent out
under the
refinancing
arrangement
Shares
pledged or
frozen Share
holde
r
natur
e
Share
status
N
u
m
be
r
Shenzhen
Appotronics
Holdings
Limited
0 79762679 17.62 79762679 79762679 None 0
Dom
estic
non-s
tated
owne
d
corpo
ration
SAIF IV
Hong Kong
(China
Investments)
Limited
-9066941 53913735 11.91 0 0 None 0
Forei
gn
corpo
ration
CITIC PE
Investment
(Hong
Kong) 2016
Limited
-4361530 37413032 8.26 0 0 None 0
Forei
gn
corpo
ration
Nantong
Strait
Appotronics
Investment
Partnership
(LP)
0 25064737 5.54 0 0 None 0
Dom
estic
non-s
tated
owne
d
corpo
ration
Shenzhen
Yuanshi
Laser
Industrial
Investment
Consulting
Partnership
(LP)
0 24139500 5.33 24139500 24139500 None 0
Dom
estic
non-s
tated
owne
d
corpo
ration
Shenzhen
Appotronics
Daye
Investment
Partnership
(LP)
0 20430250 4.51 20430250 20430250 None 0
Dom
estic
non-s
tated
owne
d
corpo
ration
GREEN
FUTURE
HOLDINGS
LIMITED
0 16504518 3.65 0 0 None 0
Forei
gn
corpo
ration
Shenzhen
Appotronics
Hongye
Investment
Partnership
(LP)
0 15662374 3.46 15662374 15662374 None 0
Dom
estic
non-s
tated
owne
d
corpo
ration
Shenzhen
Jinleijing
Investment
Limited
Partnership
(LP)
0 12353106 2.73 12353106 12353106 None 0
Dom
estic
non-s
tated
owne
d
corpo
ration
Shenzhen
Chengguhui
Equity
Investment
Partnership
(LP)
0 10443640 2.31 0 0 None 0
Dom
estic
non-s
tated
owne
d
corpo
ration
Shares held by top 10 holders of tradable shares
Shareholder Number of tradable shares held
Type and number of shares
Category Number
SAIF IV Hong Kong (China
Investments) Limited
53913735
RMB-denominated
ordinary share
53913735
CITIC PE Investment
(Hong Kong) 2016 Limited
37413032
RMB-denominated
ordinary share
37413032
Nantong Strait Appotronics
Investment Partnership (LP)
25064737
RMB-denominated
ordinary share
25064737
GREEN FUTURE
HOLDINGS LIMITED
16504518
RMB-denominated
ordinary share
16504518
Shenzhen Chengguhui
Equity Investment
Partnership (LP)
10443640
RMB-denominated
ordinary share
10443640
Smart Team Investment
Limited
6799660
RMB-denominated
ordinary share
6799660
CAI Kunliang 6096243
RMB-denominated
ordinary share
6096243
ShenZhen Xiaoxiang Junyi
Asset Management Co.
Ltd. - Junyi Hongcheng
Private Securities
Investment Fund
5849872
RMB-denominated
ordinary share
5849872
Shenzhen Liansong Capital
Management Partnership
(LP)
5833817
RMB-denominated
ordinary share
5833817
Huaxia SSE STAR Market
50 Constituent Trading
Open-end Index Securities
Investment Fund
4713113
RMB-denominated
ordinary share
4713113
Affiliates or concert parties
among the shareholders
stated above
1. As of December 31 2020 among our top 10 shareholders Appotronics
Holdings Yuanshi Appotronics Daye Appotronics Hongye and Jinleijing
are concert parties. We have not received any notice about affiliates or
concert parties among other shareholders stated above.
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
restituted and the number of
shares held by them
N/A
Top 10 holders of non-tradable shares and lock-up period
√ Applicable□ N/A
Unit: Share
No. Holder of non-tradable shares
Number of
non-tradable
shares held
Unlocking of non-tradable
shares
Lock-up
period
Unlock date
Number of
shares newly
unlocked
1
Shenzhen Appotronics
Holdings Limited
79762679 July 22 2022 0
36 months
after the
listing date
2
Shenzhen Yuanshi Laser
Industrial Investment
Consulting Partnership (LP)
24139500 July 22 2022 0
36 months
after the
listing date
3
Shenzhen Appotronics Daye
Investment Partnership (LP)
20430250 July 22 2022 0
36 months
after the
listing date
4
Shenzhen Appotronics
Hongye Investment
Partnership (LP)
15662374 July 22 2022 0
36 months
after the
listing date
5
Shenzhen Jinleijing
Investment Limited
Partnership (LP)
12353106 July 22 2022 0
36 months
after the
listing date
6
Shenzhen Appotronics
Chengye Consulting
Partnership (LP)
10394846 July 22 2022 0
36 months
after the
listing date
7
BLACKPINE Investment
Corp. Limited
3994011 July 22 2022 0
36 months
after the
listing date
8
Huatai Venture Capital
Investment Co. Ltd.
2720000 July 22 2021 0
24 months
after the
listing date
Affiliates or concert parties among
the shareholders stated above
As of December 31 2020 among the shareholders of the
restricted shares above Appotronics Holdings Yuanshi
Appotronics Daye Appotronics Hongye Jinleijing
Appotronics Chengye and 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
(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
Shareholder
Number of
shares/depository
Unlock date
Changes during the
reporting period
Closing number
of non-tradable
receipts allotted shares held
including the
shares/depository
receipts lent out
under the
refinancing
arrangement
Huatai
Appotronics
Employee
Stock
Ownership
Plan - Jiayuan I
Collective
Asset
Management
Plan
4548685
July 22
2020
0 4548685
2. Participation by any subsidiary of the sponsor in the strategic allotment in IPO
√ Applicable□ N/A
Unit: Share
Shareholder
Relationship
with the
sponsor
Number of
shares/depository
receipts allotted
Unlock date
Changes
during the
reporting
period
Closing number
of non-tradable
shares held
including the
shares/depository
receipts lent out
under the
refinancing
arrangement
Huatai
Venture
Capital
Investment
Co. Ltd.
Subsidiary
of the
sponsor
2720000 July 22 2021 0 2720000
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 companies during the
reporting period
None
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 Reference to and date of 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
(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 in any other country or
region
Yes
Main occupation and title Chairman of Appotronics
Whether or not control any domestic
or foreign listed company in the past
10 years
None
Appotronics
Appotronics
Holdings
3 Special explanation if the Company does not have an actual controller
□ Applicable√ N/A
4 Reference to and date of change in the actual controller 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
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. Other corporate shareholders holding more than 10% shares
√ Applicable□ N/A
In RMB
Corporate shareholder
Principal or legal
representative
Date of
establishme
nt
Organizati
on code
Regis
tered
capita
l
Main
business or
management
activity
SAIF IV Hong Kong (China
Investments) Limited
YAN Yan
PakTaoWan
August 9
2013
N/A N/A
Equity
investment
Explanation N/A
VI. Restrictions on the disposal of shares/depository receipts
□ Applicable√ N/A
VII. Implementation of and changes in arrangements relating to depository receipts during the
reporting period
□ Applicable√ N/A
Jinleijing Appotronics
Daye
Appotronics
Chengye
Appotronics
Hongye
Yuanshi Appotronics
Holdings
LI Yi
Appotronics
VIII. Shares with special voting rights
□ Applicable√ N/A
Section VII Preferred Shares
□ Applicable√ N/A
Section VIII Directors Supervisors Senior Officers and Employees
I. Changes in shareholding and remunerations
(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
Name
Title
(Note)
Whether key
technical
staff
Gend
er
Age
Beginning
date of
term of
office
Expiry
date of
term of
office
Number
of shares
held as
at
January
1 2020
Number
of shares
held as
at
Decembe
r 31
2020
Change in
shareholdi
ng
Cause of
change
Total
remuneratio
n (inclusive
of tax)
received
from the
Company
during the
reporting
period (in
RMB 0’000)
Whether or
not receive
any
remuneration
from any
affiliate of
the Company
LI Yi
Chairman
of the
Board of
Directors
& key
technical
staff
Yes Male 50
July 18
2018
July 17
2021
/ / / / 319.39 No
YAN
Yan
Director No Male 64
July 18
2018
July 17
2021
/ / / / 10.00 Yes
WU Bin Director No Male 50
July 18
2018
July 17
2021
/ / / / 0.00 Yes
BO
Lianmin
g
Director
&
General
Manager
No Male 58
July 18
2018
July 17
2021
0 30000 30000
Share
incentive
332.40 No
NING
Xiangdo
Independ
ent
No Male 55
July 18
2018
July 17
2021
/ / / / 17.00 No
ng director
TANG
Guliang
Independ
ent
director
No Male 58
July 18
2018
July 17
2021
/ / / / 17.00 No
ZHANG
Wei
Independ
ent
director
No Male 45
July 18
2018
July 17
2021
/ / / / 17.00 No
WU Bin
Deputy
General
Manager
No Male 56
July 18
2018
July 17
2021
0 30000 30000
Share
incentive
100.05 No
HU Fei
Deputy
General
Manager
& key
technical
staff
Yes Male 40
July 18
2018
July 17
2021
0 30000 30000
Share
incentive
157.68 No
LI Lu
Deputy
General
Manager
No Male 50
July 18
2018
July 18
2021
0 30000 30000
Share
incentive
142.56 No
ZHAO
Ruijin
Financial
Director
No Male 43
July 18
2018
July 17
2021
0 15000 15000
Share
incentive
70.27 No
YAN Li
Board
Secretary
No
Fema
le
37
May 19
2020
July 17
2021
0 15000 15000
Share
incentive
58.29 No
GAO
Lijing
Chairman
of the
Board of
Superviso
rs
No
Fema
le
41
July 18
2018
July 17
2021
/ / / / 96.99 No
LIANG
Rong
Superviso
r
No Male 50
July 18
2018
July 17
2021
/ / / / 52.35 No
WANG
Yanyun
Superviso
r
No
Fema
le
44
July 18
2018
July 17
2021
/ / / / 39.40 No
YU Xin
Key
technical
staff
Yes Male 41 / / 0 15000 15000
Share
incentive
76.96 No
WU
Xiliang
Key
technical
staff
Yes Male 46 / / 0 9000 9000
Share
incentive
53.74 No
WANG
Lin
Key
technical
staff
Yes Male 40 / / 0 15000 15000
Share
incentive
58.03 No
GUO
Zuqiang
Key
technical
staff
Yes Male 31 / / 0 12000 12000
Share
incentive
64.10 No
ZENG
Luhai
Former
Deputy
General
Manager
No Male 45
April 16
2019
January
23 2020
/ / / / 9.89 No
XIAO
Yangjian
Former
Board
Secretary
& Deputy
General
Manager
No Male 37
July 18
2018
May 19
2020
/ / / / 22.84 No
Total / / / / / / / 201000 201000 / 1715.94 /
Note: The table above shows shares directly held by the directors supervisors senior officers and key technical staff personally in the Company.
At the end of the reporting period indirect shareholding is as follows: LI Yi holds shares as described in “Section VI IV (II) Actual controller”; YAN Yan
holds shares in the Company indirectly through Light Zone; 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 and WU Xiliang 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. No change occurred to the indirect shareholding above during the reporting
period. During the reporting period LI Yi BO Lianming WU Bin LI Lu and GAO Lijing participated in the IPO strategic allotment through “Jiayuan I”.Name Main work experience
LI Yi
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
was previously CTO of O-Net Communications (HK) Limited. In October 2006 LI Yi founded Appotronics Corporation Ltd. He has served as
Chairman of the Company since December 2010.
YAN Yan
Mr. YAN Yan holds a master’s degree from Princeton University. He was previously Economist of Washington Headquarter of the World Bank
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 has been a Director of the
Company since December 2016.
WU Bin
Mr. WU BIN holds a master’s degree from Stanford University. He was previously Global Associate Director of McKinsey & Company and Chief
Inspector of Legend Holdings Corporation. He has served as Managing Director of CITIC Private Equity Funds since 2010. He has been a Director
of the Company since December 2016.
BO Lianming
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 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 a Director and General Manager of the Company since July 2018 and Legal Representative of the
Company since December 2018.
NING
Xiangdong
Mr. NING Xiangdong holds a doctor’s degree from Tsinghua University. He previously served as teaching assistant lecturer and associate
professor at Tsinghua University and Executive Deputy Director of National Center for Economic Research Tsinghua University and currently is a
professor and doctoral tutor of Tsinghua University School of Economic and Management. He has been an independent director of the Company
since July 2018.
TANG
Guliang
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
doctoral tutor of the Business School University of International Business and Economics. He has been an independent director of the Company
since July 2018.
ZHANG Wei
Mr. ZHANG Wei holds a doctor’s degree from Indiana University. He was previously Legal Director of Legend Holdings Corporation and General
Manager of the Legal Affairs Department of China Vanke Co. Ltd. He has served as Vice President Legal Affairs of Qifei International
Development Co. Limited since February 2019. He has been an independent director of the Company since July 2018.
WU Bin
Mr. WU Bin holds a master’s degree from Party School of the CPC. He was previously a non-executive director of Shenzhen Gotonly Investment
Ltd. and Vice President of Shenzhen Lighting Institute. He has been Deputy General Manager of the Company since October 2018.
HU Fei
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. 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.LI Lu
Mr. LI Lu holds a master’s degree from Cheung Kong Graduate School of Business. He was previously Deputy President of TCL Multimedia
Technology Holdings Limited. General Manager of TCL (China) Sales Company and General Manager of White Goods Business Division of TCL
Technology Group Corporation. He has been Deputy General Manager of the Company since October 2018 and Legal Representative and
Chairman of Formoive since December 2018.
ZHAO Ruijin
Mr. ZHAO Ruijin holds a master’s degree from Peking University. He was previously Financial Manager of ZTE Corporation Financial Director
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 and has been Financial Director of the Company since July 2018.
YAN Li
Ms. YAN Li Chinese holding no overseas permanent residence rights holds a bachelor’s degree. She previously worked as the securities affairs
representative at Midea Appliances (000527) and Midea Group (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.
GAO Lijing
Ms. GAO Lijing holds a bachelor’s degree from Tianjin University of Technology and Education. She previously worked at Southern China IP
Office of Foxconn Technology Group and Center for IP and Legal Affairs of Netac Technology Co. Ltd. She has served as a supervisor of Netac
Technology Co. Ltd. from 2008 to 2020 and Director of IP and Legal Department of the Company since May 2017 and a Supervisor of the
Company since July 2018.
LIANG Rong
Mr. LIANG Rong holds a master’s degree from Shanghai University of Finance and Economics. He joined the Company in 2013 and served as
Assistant to Chairman of Appotronics Ltd. He has been Director of Public Affairs of the Company since March 2018 and a Supervisor of the
Company since November 2017.
WANG
Yanyun
Ms. WANG Yanyun holds a bachelor’s degree from Tianjin University of Commerce. She has been a senior manager of the Company since July
2013 and a Supervisor of the Company since July 2018.
YU Xin
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 has been a senior researcher and Software Director of the R&D Center of the Company since February
2018.
WU Xiliang
Mr. WU Xiliang holds a bachelor’s degree from Huazhong University of Science and Technology. He served as R&D Manager and Technology
Director of the Company between 2007 and 2016 and has been Deputy General Manager of Formoive since 2016.
WANG Lin
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
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.GUO
Zuqiang
Mr. GUO Zuqiang holds a master’s degree from Tsinghua University. He was previously an optical engineer at Shenzhen YLX Technology
Development Co. Ltd. He has been R&D Manager of the Company since March 2017.
Other information
□ Applicable√ N/A
(II) 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
3. Type II restricted shares
√ Applicable□ N/A
Unit: Share
Name Title
Number of
restricted shares
already granted
as at the
beginning of
the reporting
period
Number of
restricted shares
granted during
the reporting
period
Exercise price of
the restricted
shares granted
(RMB per share)
Number of
restricted
shares that
could be
vested in the
reporting
period
Number of
restricted
shares
actually
vested in the
reporting
period
Number of
restricted shares
already granted as
of the end of the
reporting period
Market price
as of the end
of the
reporting
period (RMB
per share)
BO
Lianming
Director &
General
Manager
100000 0 17.425 30000 30000 70000 18.55
WU Bin
Deputy General
Manager
100000 0 17.425 30000 30000 70000 18.55
HU Fei
Deputy General
Manager &
CTO
100000 0 17.425 30000 30000 70000 18.55
LI Lu
Deputy General
Manager
100000 0 17.425 30000 30000 70000 18.55
ZHAO
Ruijin
Financial
Director
50000 0 17.425 15000 15000 35000 18.55
YAN Li Board Secretary 50000 100000 17.425 15000 15000 135000 18.55
YU Xin
Key technical
staff
50000 0 17.425 15000 15000 35000 18.55
WANG Lin
Key technical
staff
50000 0 17.425 15000 15000 35000 18.55
GUO
Zuqiang
Key technical
staff
40000 0 17.425 12000 12000 28000 18.55
WU
Xiliang
Key technical
staff
30000 0 17.425 9000 9000 21000 18.55
Total / 670000 100000 / 201000 201000 569000 /
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
(I) Posts held at corporate shareholders of the Company
√ Applicable□ N/A
Name Corporate shareholder Posts held at corporate Beginning date of Expiry date of
shareholder term of office term of office
LI Yi Shenzhen Appotronics Holdings Limited
Executive Director & General
Manager
January 2014 /
LI Yi Shenzhen Appotronics Daye Investment Partnership (LP)
Representative of Managing
Partner
October 2016 /
LI Yi Shenzhen Appotronics Hongye Investment Partnership (LP)
Representative of Managing
Partner
December 2015 /
LI Yi Shenzhen Jinleijing Investment Limited Partnership (LP)
Representative of Managing
Partner
October 2016 /
LI Yi
Shenzhen Yuanshi Laser Industrial Investment Consulting
Partnership (LP)
Representative of Managing
Partner
June 2016 /
LI Yi Shenzhen Appotronics Chengye Consulting Partnership (LP)
Representative of Managing
Partner
July 2017 /
LI Yi Blackpine Investment Corp. Limited Director September 2018 /
YAN Yan SAIF IV Hong Kong (China Investments) Limited Director August 2013
YAN Yan Light Zone Limited Director March 2017
WU Bin Beijing Panmao Consulting Co. Ltd. Managing Director January 2010
Explanation about
the posts held at
corporate
shareholders of the
Company
None
(II) Posts held at other entities
√ Applicable□ N/A
Name Other entity Posts held at other entity
Beginning date of
term of office
Expiry date of
term of office
LI Yi Shenzhen Appotronics Deye Consulting Partnership (LP)
Representative of Managing
Partner
May 2018
LI Yi CINIONIC Director November 2018
LI Yi Shenzhen Appotronics Technical Consulting Co. Ltd.
Executive Director & General
Manager
October 2017
LI Yi Jiangsu Yisheng Technology Co. Ltd. Chairman September 2017
LI Yi Shenzhen YLX Technology Development Co. Ltd. Chairman January 2007
LI Yi Shenzhen Qingda Yifeng Equity Investment Fund General Manager & Executive January 2017
Management Enterprise (LP) Director
LI Yi
Shenzhen Qingda Yifeng Investment Consulting Partnership
(LP)
Managing Partner October 2016
LI Yi Shenzhen Lighting Institute Director & Sponsor November 2016 October 2019
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
YAN Yan SAIF Partners Founding Managing Partner October 2001
YAN Yan Atria Light Ltd. Director May 2018
YAN Yan
SAIF Investment Management Consulting (Shanghai) Co.
Ltd.General Manager June 2002
YAN Yan
Beijing Daotong Changjing Investment Management Center
(LP)
Representative of Managing
Partner
July 2011
YAN Yan Beijing SAIF Chuangyuan Investment Center (LP)
Representative of Managing
Partner
August 2010
YAN Yan Beijing SAIF Hongyuan Investment Center (LP)
Representative of Managing
Partner
October 2010
YAN Yan Beijing SAIF Ruiyi Investment Management Center (LP)
Representative of Managing
Partner
July 2012 August 2019
YAN Yan Beijing SAIF Ruizhi Investment Center (LP)
Representative of Managing
Partner
July 2012 August 2019
YAN Yan Beijing SAIF Xiangrui Investment Center (LP)
Representative of Managing
Partner
April 2010
YAN Yan Changzhou SAIF High-Tech Venture Capital Center (LP)
Representative of Managing
Partner
December 2009
YAN Yan
Guangzhou SAIF Guangdong Fortune Radio and Television
Network Investment Limited Partnership (LP)
Representative of Managing
Partner
December 2011
YAN Yan Hefei SAIF Heyuan Venture Capital Center (LP)
Representative of Managing
Partner
January 2011
YAN Yan
Qingdao Haier-Saifu Intelligent Family Venture Capital
Center (LP)
Representative of Managing
Partner
October 2014
YAN Yan
SAIF Songyuan (Shanghai) Equity Investment Fund
Partnership (LP)
Representative of Managing
Partner
September 2012
YAN Yan Xiamen SAIF Equity Investment Partnership (LP)
Representative of Managing
Partner
August 2012
YAN Yan Xiamen SAIF Keyuan Equity Investment Partnership (LP)
Representative of Managing
Partner
August 2012
YAN Yan Xiamen SAIF Xiayuan Equity Investment Partnership (LP)
Representative of Managing
Partner
November 2013 May 2019
YAN Yan Tianjin SAIF Venture Capital Fund (LP)
Representative of Managing
Partner
July 2008
YAN Yan Tianjin SAIF Composite Equity Investment Center (LP)
Representative of Managing
Partner
May 2010
YAN Yan Tianjin SAIF Hanyuan Equity Investment Partnership (LP)
Representative of Managing
Partner
June 2010
YAN Yan Tianjin SAIF Shengyuan Investment Management Center (LP)
Representative of Managing
Partner
July 2008
YAN Yan Hefei SAIF Venture Capital Management Co. Ltd.
Legal Representative &
Executive Director & General
Manager
November 2010
YAN Yan Nanjing SAIF Hengzhun Venture Capital Fund (LP)
Representative of Managing
Partner
July 2017
YAN Yan China Resources Land Limited
Independent Non-executive
Director
July 2006
YAN Yan Shanghai SAIF Yanyuan Equity Fund Management Co. Ltd.
Legal Representative &
Executive Director & General
Manager
January 2013
YAN Yan Tianjin Himalaya Investment Consulting Co. Ltd.
Legal Representative &
Executive Director & Manager
June 2008
YAN Yan Shanghai SAIF Xinpai Investment Management Co. Ltd.
Legal Representative &
Executive Director
March 2014
YAN Yan Qingdao SAIF Investment Management Co. Ltd.
Legal Representative &
Chairman & General Manager
September 2014
YAN Yan
Changzhou SAIF High-Tech Venture Capital Management
Co. Ltd.
Legal Representative &
Chairman
October 2009
YAN Yan Tianjin SAIF Zhongyuan Investment Advisory Co. Ltd. Legal Representative & July 2008
Chairman
YAN Yan
Shenzhen SAIF Qianyuan Equity Investment Fund
Management Co. Ltd.Legal Representative &
Chairman
August 2013
YAN Yan TCL Technology Group Corporation Independent director March 2015 November 2020
YAN Yan Beijing Blue Focus Brand Management Co. Ltd. Independent director March 2014 May 2020
YAN Yan Beijing Softbank SAIF Investment Advisory Co. Ltd. Chairman February 2001
YAN Yan Huangshan SAIF Fund Management Co. Ltd. Chairman November 2016
YAN Yan Youth Happy (Beijing) Business Management Co. Ltd. Chairman July 2012
YAN Yan Shanghai TopxGun Robotics Co. Ltd. Chairman September 2015
YAN Yan CYPA (Beijing) Investment Management Co. Ltd. Chairman June 2012
YAN Yan
Foreign Tribes (Beijing) Business Management Consulting
Co. Ltd.
Chairman September 2012 September 2019
YAN Yan Leqicheng Technology (Beijing) Co. Ltd. Vice Chairman June 2015 May 2019
YAN Yan Suzhou Beiang Technology Co. Ltd. Vice Chairman October 2013
YAN Yan Xi’an Maike Metal International Group Co. Ltd. Vice Chairman April 2014
YAN Yan Anqing SAIF Huanxin Auto Parts Co. Ltd. Director August 2015
YAN Yan SAIF IV Mauritius (China Investment) Ltd. Director July 2010
YAN Yan ATA Creativity Global Director March 2005
YAN Yan
Anqing SAIF Huanxin Enterprise Management Consultant
Co. Ltd.
Director November 2014
YAN Yan Beijing Hanyuan Capital Management Co. Ltd. Director December 2015
YAN Yan Beijing Xiaodu Entertainment Technology Co. Ltd. Director January 2018
YAN Yan Guangdong Cable Co. Ltd. Director February 2017
YAN Yan Guangzhou SAIF Heyin Asset Management Co. Ltd. Director August 2013
YAN Yan
Guodian Technology & Environmental Protection Group Co.Ltd.Non-executive Director June 2012 August 2020
YAN Yan
Heilongjiang Dazheng Derun Investment Management Co.Ltd.
Director February 2017
YAN Yan
Heilongjiang Dazheng SAIF Investment Management Co.Ltd.
Director November 2009
YAN Yan Pacoo (Beijing) Technology Co. Ltd. Director September 2016
YAN Yan Xiamen SAIF Venture Capital Management Co. Ltd. Director February 2012
YAN Yan Shanghai Wenxi Enterprise Management Co. Ltd. Director June 2017
YAN Yan Shanghai Yingxun Technology Co. Ltd. Director August 2017
YAN Yan Shenzhen Orbbec Technology Co. Ltd. Director May 2018 August 2020
YAN Yan
Xinyong Computing Information Technology (Shanghai) Co.Ltd.
Director September 2017
YAN Yan Zhejiang Daily Interaction Network Technology Co. Ltd. Director December 2015 May 2019
YAN Yan COFCO Haiyou Trading Co. Ltd. Director July 2013
YAN Yan COFCO Womai Investment Co. Ltd. Director November 2018
YAN Yan Khorgos Big Color Information Technology Co. Ltd. Director November 2018 July 2019
YAN Yan Shenzhen Digital Media Technology Co. Ltd. Director October 2018
YAN Yan Yinda International Holding Company Limited Director August 2014
YAN Yan Wisers Information Holdings Company Limited Director May 2016
YAN Yan Haier Smart Home Co. Ltd. Director June 2019 November 2020
YAN Yan Shanghai Welltech Automation Co. Ltd. Director June 2019 October 2020
YAN Yan 360 Finance Inc. Independent director July 2019
YAN Yan COFCO Haiyou (Beijing) Co. Ltd. Director November 2018
YAN Yan COFCO Youcai Kitchen Food (Shanghai) Co. Ltd. Director November 2018
WU Bin Shaanxi Xifeng Liquor Co. Ltd. Director 2012 July 2020
WU Bin
Shaanxi Xifeng 15-Year and 6-Year Liquor Marketing Co.Ltd.
Director 2013
WU Bin Hangzhou BroadLink Electronic Technology Co. Ltd. Director 2018
WU Bin Pine Medical Limited Director 2019
WU Bin Hong Kong Excellence Limited Director 2019
NING
Xiangdong
Tsinghua University Professor & Doctoral Tutor 1990
NING
Xiangdong
Weichai Power Co. Ltd. Independent director June 2018
NING
Xiangdong
Sinopec Sales Co. Ltd. Independent director December 2018
NING
Xiangdong
China Life Asset Management Co. Ltd. Independent director March 2018
NING
Xiangdong
Sinochem Energy Co. Ltd. Independent director August 2018
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
ZHANG Wei Qifei International Development Co. Limited Deputy President Legal Affairs February 2019
ZHANG Wei AVIC Vanke Co. Ltd. Director January 2018
ZHANG Wei Hengqin Vanke Cloudland Commercial Services Co. Ltd. Director & General Manager May 2017
ZHANG Wei Shenzhen Yingda Investment Fund Management Co. Ltd. Director April 2016 August 2020
ZHANG Wei Tian’an Xincheng Development (Hengqin) Co. Ltd. Director July 2017
ZHANG Wei Shenzhen Wanhu Management Consulting Co. Ltd. Supervisor November 2017
ZHANG Wei
Shenzhen Wanhu Quanyuan Management Consulting Co.Ltd.Supervisor November 2017
ZHANG Wei Shenzhen Wanshuzhimiao Management Consulting Co. Ltd. Supervisor November 2017
ZHANG Wei Shenzhen Wanqing Management Consulting Co. Ltd. Supervisor November 2017
ZHANG Wei Shenzhen Wanmazhengxian Management Consulting Co. Ltd. Supervisor November 2017
ZHANG Wei Dongguan Vanke Real Estate Co. Ltd. Supervisor October 2015
ZHANG Wei Lijiang Banyan Tree Property Services Co. Ltd. Director May 2018
ZHANG Wei Lijiang Banyan Tree Hotel Co. Ltd. Director March 2018
ZHANG Wei Lijiang Banyan Tree International Travel Agency Co. Ltd. Director March 2018
ZHANG Wei Lijiang Angsana Real Estate Development Co. Ltd. Director July 2018
ZHANG Wei Huangshan Banyan Tree Property Management Co. Ltd. Director September 2018
ZHANG Wei Huangshan Banyan Tree Tourism Development Co. Ltd. Director September 2018
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 Beijing 6.cn Technology Co. Ltd. Director December 2019 August 2020
ZHANG Wei 360 Security Technology Inc. Vice President February 2019
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
ZHANG Wei Shanghai Jiehu Network Technology Co. Ltd.
Executive Director & Manager
& Legal Representative
January 2021
ZHANG Wei Shanghai 360 Changfeng Technology Co. Ltd. Director & Legal Representative November 2020
ZHANG Wei Shenzhen Zhuoying Technology Co. Ltd. Director June 2020
ZHANG Wei Lida Lianma (Zhuhai) Equity Investment Management Co. Director July 2020
Ltd.
ZHANG Wei Dongguan Vanke City Development Co. Ltd. Supervisor October 2015
ZHANG Wei Yangshuo Banyan Tree Hotel Co. Ltd. Director September 2018
ZHANG Wei Zhenro Services Group Co. Ltd. Director June 2020
GAO Lijing Netac Technology Co. Ltd. Supervisor January 2008 July 2020
LIANG Rong Shanghai QianKun Photoelectric Technology Co. Ltd. Supervisor May 2015 April 2019
WU Bin Shenzhen Shangzuo Charity Foundation Secretary-General November 2015
WU Bin Shenzhen Lighting Institute Director November 2016
Explanation
about the posts
held at other
entities
None
III. Remunerations of directors supervisors senior officers and key technical staff
√ Applicable□ N/A
In RMB 0’000
Decision-making procedure regarding the
remunerations of directors supervisors and
senior officers
Pursuant to the Company’s Articles of Association the Compensation and Performance Assessment Committee
consider and review the compensation policy and proposal for directors and senior officers; the compensation
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
directors supervisors and senior officers
The Company’s directors and supervisors who hold posts in the Company shall receive remunerations for such
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
supervisors and senior officers
During the reporting period the remunerations actually paid to directors supervisors and senior officers are
consistent with the relevant information disclosed by the Company.Total remunerations paid to directors 1463.12
supervisors and senior officers as of the
end of the reporting period
Total remunerations paid to key technical staff
as of the end of the reporting period
729.91
Note: Dr. LI Yi Chairman of the Company and Dr. HU Fei Deputy General Manager of the Company are key technical staff of the Company and the
remunerations actually paid to key technical staff at 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
ZENG Luhai Deputy General Manager Left the Company Personal career development
XIAO Yangjian Board Secretary & Deputy General
Manager
Left the Company Personal reason
V. Penalties imposed by the securities regulatory authorities in the past three years
□ Applicable√ N/A
VI. Employees of the parent company and major subsidiaries
(I) Employees
Number of active employees of the parent company 858
Number of active employees of major subsidiaries 312
Total number of active employees 1170
Number of retired employees for whom the parent
company and major subsidiaries need to pay certain
expenses
2
Profession
Category Current period Previous period
Production staff 492 473
Sales staff 138 166
R&D staff 369 387
Financial staff 35 33
Management staff and
administrative staff
136 187
Total 1170 1246
Education
Level of education Current period Previous period
Doctor 24 29
Master 158 154
Undergraduate 458 486
College or below 530 577
Total 1170 1246
(II) Compensation policy
√ Applicable□ N/A
In order to ensure the market competitiveness externally and fairness internally of our
remunerations on the principle of performance-based distribution to create and share corporate value
and improve the effectiveness of employee incentives we have designed a compensation system based
on post capability and performance according to the design concept and approaches of international
compensation system and by reference to the compensation level on the market. Our compensation
system is based on position hierarchy wherein different positions and ranks correspond to different
levels of compensation so that the employees’ compensation corresponds to the value of their position
and their capability and experience. The employees’ overall compensation is linked to their performance
and contribution to the Company thereby establishing a performance-based compensation and incentive
system. In addition to fixed salaries and bonuses our employees enjoy a variety of benefits. We adjust
the salaries of all employees or promote certain employees to higher ranks or positions or adjust the
salaries of certain employees every year according to the compensation level on the market changes in
the ranks of employees performance and other relevant factors.(III) Training programs
√ Applicable□ N/A
We gradually improved the talent development system including the “Star Light Program” for the
development of college graduates the “Sharp Light Program” for the development of grassroots
managers and the “Polar Light Program” for the development of middle managers. The continuous
talent input and intensive culture inheritance in the training at both the primary and middle level
effectively support the stable development of the Company.
In 2020 the pandemic stimulated online learning and sharing internally. By applying the online
learning platform combining various training forms and integrating theory with practice in training we
further enhance the three-level training and management system to integrate training programs at the
Company level universal capability training at the central level and field-specific capability training at
the department level which received the employee satisfaction of 9 out of 10 scores. We organized 608
training sessions for a total of 16500 training hours this year which effectively meet the demands for
employee personal capability development and organization capability improvement. In 2020 we
intensified the efforts of improving the lecturer system - nearly 300 internal lecturers presented training
sessions for their departments or for other departments. 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.
In 2021 we will further improve the training system - with the core objective of improving the
organization performance and product development intended for solving problems we will empower
key personnels with capabilities to solve actual problems and develop various professional
knowledge/skill courses for backbone elites in various fields. With project-based capability development
and professional skill-based course learning we will build a complete ecology chain of internal talent
provision within 2 years. With backbone talents trained internally combined with elites attracted
externally we can build a hierarchical system consisting of outstanding talents with a reasonable
structure to promote the sustainable rapid development of the Company.(IV) Outsourced workers
√ Applicable□ N/A
Total man-hours of outsourced workers 35299 hours
Total remunerations paid to outsourced workers RMB 784381.85
VII. Other information
□ Applicable√ N/A
Section IX Corporate Governance
I. Corporate governance
√ Applicable□ N/A
We have continuously improved our corporate governance structure and operated in strict
accordance with the requirement of the Company Law the Securities Law and the relevant rules and
regulations of the CSRC and the SSE 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 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
Articles of Association (“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 fully 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 number of directors and the composition of the Board of Directors comply with the
requirements of the applicable laws and regulations and the AOA; 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 trainings. In order to improve the objectivity and scientificness 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
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.
Control structure by agreement and other special arrangements in respect of corporate
governance
□ Applicable√ N/A
Explanation about the material deviations (if any) of the Company’s corporate governance from the
relevant requirements of the CSRC
□ Applicable√ N/A
II. General meetings of shareholders held
Session Date of meeting
Reference to
resolutions
published on the
designated website
Date of disclosure of
resolutions
Annual general meeting of
shareholders in 2019
May 22 2020 www.sse.com.cn May 23 2020
1st extraordinary general August 7 2020 www.sse.com.cn August 8 2020
meeting of shareholders in
2020
2nd extraordinary general
meeting of shareholders in
2020
September 3 2020 www.sse.com.cn September 4 2020
3rd extraordinary general
meeting of shareholders in
2020
November 13 2020 www.sse.com.cn November 14 2020
Explanation about the general meetings of shareholders
√ Applicable□ N/A
All proposals submitted to the general meeting have been reviewed and passed.
III. Performance of duties by the directors
(I) Attendance by the directors of the meetings of the Board of Directors and shareholders
Director
Name
Whether
or not an
independe
nt director
Attendance of the meetings of the Board of Directors
Attendanc
e of the
general
meetings
of
sharehold
ers
Meetin
gs the
director
should
have
attende
d in
2020
Meetin
gs
attende
d in
person
Meetings
attended
through
communicati
on
equipment
Meetin
gs
attende
d by
proxy
Absen
ce
times
Whether
the
director
has been
absent
from two
consecuti
ve
meetings
General
meetings
of
sharehold
ers
attended
LI Yi No 8 2 6 0 0 No 4
YAN
Yan
No 8 0 8 0 0 No 4
WU Bin No 8 1 7 0 0 No 4
BO
Lianmin
g
No 8 2 6 0 0 No 4
NING
Xiangdo
ng
Yes 8 0 8 0 0 No 4
TANG
Guliang
Yes 8 1 7 0 0 No 4
ZHANG
Wei
Yes 8 1 7 0 0 No 4
Explanation about absence from two consecutive meetings of the Board of Directors
□ Applicable√ N/A
Meetings of the Board of Directors held in 2020 8
Where: Face-to-face meetings 0
Meeting held through communication equipment 6
Meetings held both in the form of face-to-face
meeting and through communication equipment
2
(II) Objections raised by the independent directors to matters of the Company
□ Applicable√ N/A
(III) Others
□ Applicable√ N/A
IV. Important opinions and suggestions put forward by the committees of the Board of Directors
during the reporting period and objections thereto (if any)
√ Applicable□ N/A
The Board of Directors has set up the Strategy Committee the Audit Committee the Compensation
and Performance Assessment Committee and the Nomination Committee. Each committee has duly
exercised its functions in strict accordance with the AOA the Rules of Procedure of the Board of
Directors the rules of procedure of such committee and other relevant regulations. During the reporting
period the Strategy Committee has held one meeting; the Audit Committee has held three meetings; the
Compensation and Performance Assessment Committee has held one meeting and the Nomination
Committee has held one meeting. The members of each committee have actively attended the meetings
of such committee been assiduous in their duties duly exercised the functions and powers delegated by
the Board of Directors to such committee put forward guidance and advice for the proper functioning of
such committee and the long-term development of the Company and played active roles in improving
the corporate governance structure and promoting the development of the Company.
During the reporting period the members of the Strategy Committee have seriously performed their
duties fully communicated with the management of the Company with respect to the future
development direction external investments and other affairs of the Company from the prospective of
their profession and put forward reasonable suggestions on the basis of the actual operations of the
company; the Audit Committee has duly exercised its functions and played an active role in the
appointment of the auditor review of regular financial reports examination of related-party transactions
establishment of internal controls and other relevant affairs of the Company; the Compensation and
Performance Assessment Committee has assessed the performance of the senior officers of the Company
examined the compensation proposal for the senior officers and reviewed and expressed its opinions on
the 2019 restrictive share incentive plan of the Company; and the Nomination Committee has examined
the qualifications of the senior officers of the Company and reviewed and expressed its opinions on the
criteria and procedures in respect of the appointment of the senior officers. Each committee of the Board
of Directors has duly performed the duty of care.
V. Risks of the Company identified by the Board of Supervisors
□ Applicable√ N/A
VI. Give an explanation if the Company cannot guarantee its dependence 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
Solutions to horizontal competition with the Company (if any) and the relevant progress and subsequent
action plans
□ Applicable√ N/A
VII. 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
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.
VIII. Whether a self-assessment report on internal controls has been disclosed
√ Applicable□ N/A
For details refer to the 2020 Assessment Report on Internal Controls of Appotronics Corporation
Limited disclosed on www.SSE.com.cn on April 24 2021.
Explanation about material loopholes in internal controls during the reporting period
□ Applicable√ N/A
IX. Explanation about the auditor’s report on internal controls
√ Applicable□ N/A
For details refer to the Audit Report on Internal Controls of Appotronics Corporation Limited
disclosed on www.SSE.com.cn on April 24 2021.Whether an auditor’s report on internal controls has been disclosed: Yes
Opinions in the audit report on internal controls: Standard unqualified opinion
X. Others
□ Applicable√ N/A
Section X Corporate Bonds
□ Applicable√ N/A
Section XI Financial Report
I. Auditor's report
√ Applicable□ N/A
I. Opinion
We have audited the financial statements of Appotronics Corporation Limited
(hereinafter referred to as “Appotronics”) which comprise the consolidated and the Parent
Company's balance sheets as at December 31 2020 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 2020 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 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 VII.61 and XVI.6 of Section XI.
Appotronics Corporation is mainly engaged in research development production
sales and leasing of laser display core devices and complete equipment. In 2020 the
operating income of Appotronics Corporation amounted to RMB 1948884176.83 of
which sales and other incomes were RMB 1777151562.17 representing 91.19% of the
total operating income and lease incomes were RMB 171732614.66 representing 8.81%
of the total operating income.The specific methods for revenue recognition in the current period 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 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 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 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
The Company recognizes rents in profit or loss for the current period over the whole
lease term on a straight line basis. Contingent rents are recognized in profit or loss in the
period in which they are incurred.
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;
(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;
(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 XI.
As of December 31 2020 the carrying amount of inventories of Appotronics
amounted to RMB 449109297.76 and provisions for decline in value of inventories
amounted to RMB 30297156.96 hence the book value of inventories amounted to RMB
418812140.80.
At the balance sheet date inventories are measured at the lower of cost and net
realisable value. If the net realisable 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
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.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’s ability to continue as a going concern disclosing as applicable matters
related to going concern and using the going concern basis of accounting unless the
management either intends to liquidate 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’s 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.(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 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 22 2021
II. Financial statements
Consolidated Balance Sheet
December 31 2020
Prepared by: Appotronics Corporation Limited
In RMB
Item Note December 31 2020 December 31 2019
Current Assets:
Cash and bank balances 1 1037760573.27 875858784.58
Balances with clearing
agencies
Placements with banks and
other financial institutions
Held-for-trading financial
assets
2 114000000.00 540000000.00
Derivative financial assets
Notes receivable 3 3726328.91 4042559.63
Accounts receivable 4 341660832.43 176035155.24
Receivables financing 5 11959000.00 1980500.00
Prepayments 6 47447601.43 35070999.13
Premiums receivable
Amounts receivable under
reinsurance contracts
Reinsurer’s share of
insurance contract reserves
Other receivables 7 12534062.15 9618750.08
Where: Interest receivable
Dividend receivable
Financial assets purchased
under resale agreements
Inventories 8 418812140.80 299966170.35
Contract assets 9 3744655.50
Assets held for sale
Non-current assets due within
one year
Other current assets 10 13002195.46 44405513.30
Total current assets 2004647389.95 1986978432.31
Non-current Assets:
Loans and advances
Debt investments
Other debt investments
Long-term accounts
receivable
11 13196087.78
Long-term equity investment 12 262744772.48 139534371.94
Investment in other equity
instruments
13 11975419.38 11975419.38
Other non-current financial
assets
Investment property
Fixed assets 14 447571328.91 471204340.95
Construction in progress 15 51576850.72 20132004.07
Productive biological assets
Oil and gas assets
Use right assets
Intangible assets 16 320488235.60 332331324.07
Development expenditure
Goodwill
Long-term prepaid expenses 17 11572346.79 16908070.34
Deferred tax assets 18 96132114.02 109023941.85
Other non-current assets 19 6299781.06 11420185.94
Total non-current assets 1221556936.74 1112529658.54
Total assets 3226204326.69 3099508090.85
Current Liabilities:
Short-term borrowings 20 88778852.86 76765319.05
Loans from the central bank
Taking from banks and other
financial institutions
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 21 116822674.67 37335841.79
Accounts payable 22 226494815.90 176624445.46
Advance from customers 23 153258189.88 184444643.33
Contract liabilities 24 31518312.59
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 25 46105566.15 50586932.71
Taxes payable 26 19871846.94 42924647.79
Other payables 27 59848053.83 14364076.43
Where: Interest payable
Dividend payable
Fees and commissions
payable
Amounts payable under
reinsurance contracts
Liabilities held for sale
Non-current liabilities due
within one year
28 181417412.46 64968795.02
Other current liabilities 29 3045831.07
Total current liabilities 927161556.35 648014701.58
Non-current Liabilities:
Insurance contract reserves
Long-term borrowings 30 64845281.53 279615107.27
Bonds payable
Where: Preferred shares
Perpetual bonds
Leasing liabilities
Long-term payables 31 3262450.00 3488100.00
Long-term employee benefits
payable
Estimated liabilities 32 28799354.65 27072676.49
Deferred income 33 16723257.15 17108361.69
Deferred tax liabilities
Other non-current liabilities
Total non-current
liabilities
113630343.33 327284245.45
Total liabilities 1040791899.68 975298947.03
Owners’ Equity
(Shareholders’ Equity):
Paid-in capital (or share
capital)
34 452756901.00 451554411.00
Other equity instruments
Where: Preferred shares
Perpetual bonds
Capital reserve 35 1249020991.15 1207942318.37
Less: Treasury shares
Other comprehensive income 36 -3214291.93 3287063.85
Special reserve
Surplus reserve 37 35242179.57 22800224.13
General risk reserve
Undistributed profit 38 357793891.96 288975820.29
Total owners’ (or
shareholders’) equity
attributable to owners of the
parent company
2091599671.75 1974559837.64
Minority interests 93812755.26 149649306.18
Total owners’ (or
shareholders’) equity
2185412427.01 2124209143.82
Total liabilities and
owners’ (or shareholders’)
equity
3226204326.69 3099508090.85
Legal representative: BO Lianming
Chief Accountant: ZHAO Ruijin
Person in Charge of the Accounting Body: LIU Jie
Balance Sheet of the Parent Company
December 31 2020
Prepared by: Appotronics Corporation Limited
In RMB
Item Note December 31 2020 December 31 2019
Current Assets:
Cash and bank balances 709932686.71 570479390.49
Held-for-trading financial
assets
114000000.00 540000000.00
Derivative financial assets
Notes receivable 2314628.91 3542559.63
Accounts receivable 1 567539506.79 299315776.44
Receivables financing 100000.00 442500.00
Prepayments 11001439.23 6410257.48
Other receivables 2 71654117.57 67227575.21
Where: Interest receivable
Dividend receivable
Inventories 169022971.44 135617379.22
Contract assets 3720160.50
Assets held for sale
Non-current assets due within
one year
Other current assets 1297388.01 12280164.39
Total current assets 1650582899.16 1635315602.86
Non-current Assets:
Debt investments
Other debt investments
Long-term accounts
receivable
13196087.78
Long-term equity investment 3 421648284.99 257795276.13
Investment in other equity
instruments
7075419.38 7075419.38
Other non-current financial
assets
Investment property
Fixed assets 57409189.33 60391512.92
Construction in progress 37982329.74 1385496.59
Productive biological assets
Oil and gas assets
Use right assets
Intangible assets 319438893.42 330796423.87
Development expenditure
Goodwill
Long-term prepaid expenses 9562162.36 12771126.83
Deferred tax assets 6680188.67 9545438.20
Other non-current assets 5411561.28 6744453.85
Total non-current assets 878404116.95 686505147.77
Total assets 2528987016.11 2321820750.63
Current Liabilities:
Short-term borrowings 11410560.27 10217738.36
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 32313678.21 37335841.79
Accounts payable 210885240.65 162596838.45
Advance from customers 2688210.54 11116659.11
Contract liabilities 20609190.34
Employee benefits payable 28514763.09 26985668.92
Taxes payable 5830858.89 1534242.70
Other payables 23058804.83 42599703.36
Where: Interest payable
Dividend payable
Liabilities held for sale
Non-current liabilities due
within one year
1001024.66
Other current liabilities 1918391.60
Total current liabilities 338230723.08 292386692.69
Non-current Liabilities:
Long-term borrowings 29029715.07
Bonds payable
Where: Preferred shares
Perpetual bonds
Leasing liabilities
Long-term payables 3262450.00 3488100.00
Long-term employee benefits
payable
Estimated liabilities 16345891.60 14631273.00
Deferred income 14450411.10 15724174.30
Deferred tax liabilities
Other non-current liabilities
Total non-current
liabilities
63088467.77 33843547.30
Total liabilities 401319190.85 326230239.99
Owners’ Equity
(Shareholders’ Equity):
Paid-in capital (or share
capital)
452756901.00 451554411.00
Other equity instruments
Where: Preferred shares
Perpetual bonds
Capital reserve 1351261718.84 1310939867.82
Less: Treasury shares
Other comprehensive income
Special reserve
Surplus reserve 33964638.84 21522683.40
Undistributed profit 289684566.58 211573548.42
Total owners’ (or
shareholders’) equity
2127667825.26 1995590510.64
Total liabilities and
owners’ (or shareholders’)
equity
2528987016.11 2321820750.63
Legal representative: BO Lianming
Chief Accountant: ZHAO Ruijin
Person in Charge of the Accounting Body: LIU Jie
Consolidated Income Statement
January to December 2020
In RMB
Item Note 2020 2019
I. Total operating income 1 1948884176.83 1979148918.89
Where: Operating income 1 1948884176.83 1979148918.89
Interest income
Premiums earned
Fee and commission income
II. Total operating costs 1882807642.88 1726836417.68
Where: Operating costs 1 1393075043.93 1183650635.25
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
Taxes and additions 2 6718744.79 7610151.14
Selling expenses 3 133588234.60 151760111.00
Administrative expenses 4 135757276.26 152626530.61
R&D expenses 5 204443369.10 201697766.26
Financial expenses 6 9224974.20 29491223.42
Where: Interest expense 20066451.02 33120484.94
Interest income 10322478.28 4079231.03
Add: Other income 7 45255000.90 34124614.12
Investment income (loss is
indicated by “-”)
8 17945571.02 9549063.05
Where: Income from investments
in associates and joint ventures
-679282.94 -3927.93
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 values
(loss is indicated by “-”)
Losses of credit impairment (loss
is indicated by “-”)
9 -9121278.95 -3771572.38
Impairment losses of assets (loss
is indicated by “-”)
10 -11590694.43 -12623251.67
Gains from disposal of assets (loss
is indicated by “-”)
11 281040.26 41420.84
III. Operating profit (loss is indicated by
“-”)
108846172.75 279632775.17
Add: Non-operating income 12 4638435.10 3926066.73
Less: Non-operating expense 13 2063172.96 4200197.56
IV. Total profits (total losses are indicated
by “-”)
111421434.89 279358644.34
Less: Income tax expenses 14 24764236.32 54982221.63
V. Net profits (net losses are indicated by 86657198.57 224376422.71
“-”)
(I) Categorized by the continuity of operation
1. Net profits from continuing
operations (net losses are indicated by
"-")
86657198.57 224376422.71
2. Net profits from discontinued
operations (net losses are indicated by
“-”)
(II) Categorized by the ownership
1. Net profits attributable to
shareholders of the Parent Company (net
losses are indicated by "-")
113847873.06 186457276.71
2. Profits or losses attributable to
minority shareholders (net losses are
indicated by “-”)
-27190674.49 37919146.00
VI. Other comprehensive income net of
tax
15 -6496909.69 2311885.81
(I) Other comprehensive income that
can be attributable to owners of the Parent
Company net of tax
-6501355.78 2242360.85
1. 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
2. Other comprehensive income that
will be reclassified to profit or loss
-6501355.78 2242360.85
(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
-6501355.78 2242360.85
(7) Others
(II) Other comprehensive income that
can be attributable to minority
shareholders net of tax
4446.09 69524.96
VII. Total comprehensive income 80160288.88 226688308.52
(I) Total comprehensive income that
can be attributable to owners of the Parent
Company
107346517.28 188699637.56
(II) Total comprehensive income that
can be attributable to minority
shareholders
-27186228.40 37988670.96
VIII. Earnings per share:
(I) Basic earnings per share
(RMB/share)
0.25 0.45
(II) Diluted earnings per share
(RMB/share)
0.25 0.45
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: BO Lianming
Chief Accountant: ZHAO Ruijin
Person in Charge of the Accounting Body: LIU Jie
Income Statement of the Parent Company
January to December 2020
In RMB
Item Note 2020 2019
I. Operating income 1 1064149969.51 1070365243.34
Less: Operating costs 1 720452860.84 728135468.64
Taxes and additions 4809443.68 4961497.25
Selling expenses 68169938.33 82052362.77
Administrative expenses 94065391.84 104579027.77
R&D expenses 104873635.92 113795005.25
Financial expenses -16982053.25 -5955117.03
Where: Interest expense 432518.40 4340274.90
Interest income 16041306.76 10208837.58
Add: Other income 34560094.28 13016565.69
Investment income (loss is
indicated by “-”)
2 18624853.96 55488448.65
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
values (loss is indicated by “-”)
Losses of credit impairment
(loss is indicated by “-”)
-627070.09 -1682540.09
Impairment losses of assets
(loss is indicated by “-”)
-7565039.37 -11985107.53
Gains from disposal of assets
(loss is indicated by “-”)
1318.53
II. Operating profit (loss is indicated
by “-”)
133754909.46 97634365.41
Add: Non-operating income 4409022.52 3686726.20
Less: Non-operating expense 1228453.52 2291107.75
III. Total profits (total losses are
indicated by “-”)
136935478.46 99029983.86
Less: Income tax expenses 12515924.03 -2015128.17
IV. Net profits (net losses are indicated
by “-”)
124419554.43 101045112.03
(I) Net profits from continuing
operations (net losses are indicated by
“-”)
124419554.43 101045112.03
(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 124419554.43 101045112.03
VII. Earnings per share:
(I) Basic earnings per share
(RMB/share)
(II) Diluted earnings per share
(RMB/share)
Legal representative: BO Lianming
Chief Accountant: ZHAO Ruijin
Person in Charge of the Accounting Body: LIU Jie
Consolidated Cash Flow Statement
January to December 2020
In RMB
Item Note 2020 2019
I. Cash Flows from Operating
Activities:
Cash receipts from the sale of goods
and the rendering of services
1974492309.02 2141322935.57
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 6524647.54 9567790.75
Other cash receipts relating to
operating activities
1 140364333.47 78562934.95
Subtotal of cash inflows from
operating activities
2121381290.03 2229453661.27
Cash payments for goods purchased
and services received
1450758815.22 1318597298.92
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
Cash payments for insurance
policyholder dividends
Cash payments to and on behalf of
employees
294069230.11 285393667.92
Payments of various types of taxes 79174713.78 125550662.05
Other cash payments relating to
operating activities
2 244988100.50 256911128.67
Subtotal of cash outflows from 2068990859.61 1986452757.56
operating activities
Net cash flow from operating
activities
52390430.42 243000903.71
II. Cash Flows from Investing
Activities:
Cash receipts from disposals and
recovery of investments
2704000000.00 1312700000.00
Cash receipts from investment income 18624853.96 9552990.98
Net cash receipts from disposals of
fixed assets intangible assets and other
long-term assets
1365554.96 257846.73
Net cash receipts from disposals of
subsidiaries and other business units
Other cash receipts relating to investing
activities
Subtotal of cash inflows from
investing activities
2723990408.92 1322510837.71
Cash payments to acquire or construct
fixed assets intangible assets and other
long-term assets
66273509.36 243918747.78
Cash payments to acquire investments 2436196580.78 1851450000.00
Net increase in pledged loans
receivables
Net cash payments for acquisitions of
subsidiaries and other business units
15614062.32
Other cash payments relating to
investing activities
Subtotal of cash outflows from
investing activities
2518084152.46 2095368747.78
Net cash flows from investment
activities
205906256.46 -772857910.07
III. Cash Flows from Financing
Activities:
Cash receipts from capital
contributions
20953388.25 1094215094.34
Where: Cash receipts from capital
contributions from minority shareholders
of subsidiaries
Cash receipts from borrowings 205991111.29 405787875.56
Other cash receipts relating to
financing activities
3 19320000.00
Subtotal of cash inflows from
financing activities
246264499.54 1500002969.90
Cash repayments of borrowings 290953213.70 541704799.90
Cash payments for distribution of
dividends or profits or settlement of
interest expenses
54437838.70 34285290.48
Where: Payments for distribution of
dividends or profits to minority
shareholders of subsidiaries
Other cash payments relating to
financing activities
4 39396048.75
Subtotal of cash outflows from
financing activities
345391052.40 615386139.13
Net cash flows from financing
activities
-99126552.86 884616830.77
IV. Effect of Foreign Exchange Rate
Changes on Cash and Cash
Equivalents
-5434532.44 2521113.05
V. Net Increase in Cash and Cash
Equivalents
153735601.58 357280937.46
Add: Opening balance of cash and cash
equivalents
829789487.86 472508550.40
VI. Closing Balance of Cash and Cash
Equivalents
983525089.44 829789487.86
Legal representative: BO Lianming
Chief Accountant: ZHAO Ruijin
Person in Charge of the Accounting Body: LIU Jie
Cash Flow Statement of the Parent Company
January to December 2020
In RMB
Item Note 2020 2019
I. Cash Flows from Operating Activities:
Cash receipts from the sale of goods and the
rendering of services
919034315.48 1084739304.57
Receipts of tax refunds 3108523.77 4102468.55
Other cash receipts relating to operating
activities
125185112.12 76574005.12
Subtotal of cash inflows from operating
activities
1047327951.37 1165415778.24
Cash payments for goods purchased and
services received
776294426.96 722868487.80
Cash payments to and on behalf of
employees
175144803.35 180775409.02
Payments of various types of taxes 28453770.47 46036572.76
Other cash payments relating to operating
activities
120311024.70 180658173.58
Subtotal of cash outflows from operating
activities
1100204025.48 1130338643.16
Net cash flow from operating activities -52876074.11 35077135.08
II. Cash Flows from Investing Activities:
Cash receipts from disposals and recovery
of investments
2704000000.00 1313635457.67
Cash receipts from investment income 18624853.97 55552990.98
Net cash receipts from disposals of fixed
assets intangible assets and other long-term
assets
844985.38 117985.66
Net cash receipts from disposals of
subsidiaries and other business units
Other cash receipts relating to investing
activities
71725375.54 124900000.00
Subtotal of cash inflows from investing
activities
2795195214.89 1494206434.31
Cash payments to acquire or construct fixed
assets intangible assets and other long-term
assets
40725074.65 227902344.94
Cash payments to acquire investments 2464734756.73 1886364000.00
Net cash payments for acquisitions of
subsidiaries and other business units
Other cash payments relating to investing
activities
75345631.45 166020000.00
Subtotal of cash outflows from investing
activities
2580805462.83 2280286344.94
Net cash flows from investment
activities
214389752.06 -786079910.63
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions 20953388.25 1094215094.34
Cash receipts from borrowings 82259570.15 132000000.00
Other cash receipts relating to financing
activities
114000000.00
Subtotal of cash inflows from financing
activities
103212958.40 1340215094.34
Cash repayments of borrowings 50000000.00 246440000.00
Cash payments for distribution of dividends 34374706.92 5416064.64
or profits or settlement of interest expenses
Other cash payments relating to financing
activities
39403824.29 110396048.75
Subtotal of cash outflows from financing
activities
123778531.21 362252113.39
Net cash flows from financing
activities
-20565572.81 977962980.95
IV. Effect of Foreign Exchange Rate
Changes on Cash and Cash Equivalents
1031900.06 2638810.20
V. Net Increase in Cash and Cash
Equivalents
141980005.20 229599015.60
Add: Opening balance of cash and cash
equivalents
524648100.62 295049085.02
VI. Closing Balance of Cash and Cash
Equivalents
666628105.82 524648100.62
Legal representative: BO Lianming
Chief Accountant: ZHAO Ruijin
Person in Charge of the Accounting Body: LIU Jie
Consolidated Statement of Changes in Owners’ Equity
January to December 2020
Item
2020
Equity attributable to owners of the Parent Company
Minority
interests
Total owner’s
equity
Paid-in capital
(or share capital)
Other equity instruments
Capital
reserve
Less:
Treasur
y shares
Other
comprehens
ive income
Special
reserve
Surplus
reserve
General
risk
reserve
Undistribute
d profit
Other
s
Subtotal
Preferre
d shares
Perpetu
al bonds
Others
I. Closing
balance
of last
year
451554411.00 1207942318
.37
3287063.8
5
22800224
.13
288975820.
29
1974559837
.64
149649306
.18
212420914
3.82
Add:
Changes
in
accountin
g policies
1278734.88 1278734.88 -646507.57 632227.31
Corr
ections of
prior
period
errors
Busi
ness
combinati
on
involving
enterprise
s under
common
control
Othe
rs
II.Opening
balance
of the
current
year
451554411.00 1207942318
.37
3287063.8
5
22800224
.13
290254555.
17
1975838572
.52
149002798
.61
212484137
1.13
III.
Changes
1202490.00 41078672.78 -6501355.
78
12441955
.44
67539336.7
9
115761099.2
3
-55190043.
35
60571055.8
8
for the
year
(decrease
is
indicated
by “-”)
(I) Total
comprehe
nsive
income
-6501355.
78
113847873.
06
107346517.2
8
-27186228.
40
80160288.8
8
(II)
Owners’
contributi
ons and
reduction
in capital
1202490.00 41078672.78 42281162.78 -28003814.
95
14277347.8
3
1.
Ordinary
shares
contribute
d by
owners
1202490.00 19750898.25 20953388.25 20953388.2
5
2. Capital
contributi
on from
holders of
other
equity
instrumen
ts
3.
Share-bas
ed
payment
recognize
d in
owners’
equity
18783763.38 18783763.38 1787189.3
8
20570952.7
6
4. Others 2544011.15 2544011.15 -29791004.
33
-27246993.1
8
(III)
Profit
distributi
on
12441955
.44
-46308536.
27
-33866580.8
3
-33866580.8
3
1.
Transfer
to surplus
12441955
.44
-12441955.
44
reserve
2.
Transfer
to general
reserve
3.
Distributi
ons to
owners
(or
sharehold
ers)
-33866580.
83
-33866580.8
3
-33866580.8
3
4. Others
(IV)
Transfers
within
owners’
equity
1.
Capitaliza
tion of
capital
reserve
2.
Capitaliza
tion of
capital
reserve
3. Loss
offset by
surplus
reserve
4.
Retained
earnings
carried
forward
from
changes
in defined
benefit
plans
5.
Retained
earnings
carried
forward
In RMB
Item
2019
Equity attributable to owners of the Parent Company
Minority
interests
Total owner’s
equity Paid-in capital
(or share
capital)
Other equity instruments
Capital reserve
Less:
Treasury
shares
Other
comprehensive
income
Special
reserve
Surplus
reserve
General
risk
reserve
Undistributed
profit
Others Subtotal
Preferred
shares
Perpetual
bonds
Others
I. Closing
balance of last
year
383554411.00 205995596.85 1044703.00 12695712.93 112623054.78 715913478.56 110985548.13 826899026.69
Add: Changes in
accounting
policies
Corrections
of prior period
errors
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.
Closing
balance
of the
current
year
452756901.00 1249020991
.15
-3214291.
93
35242179
.57
357793891.
96
2091599671
.75
93812755.
26
218541242
7.01
Business
combination
involving
enterprises under
common control
Others
II. Opening
balance of the
current year
383554411.00 205995596.85 1044703.00 12695712.93 112623054.78 715913478.56 110985548.13 826899026.69
III. Changes for
the year (decrease
is indicated by
“-”)
68000000.00 1001946721.52 2242360.85 10104511.20 176352765.51 1258646359.08 38663758.05 1297310117.13
(I) Total
comprehensive
income
2242360.85 186457276.71 188699637.56 37988670.96 226688308.52
(II) Owners’
contributions and
reduction in
capital
68000000.00 1001946721.52 1069946721.52 675087.09 1070621808.61
1. Ordinary
shares
contributed by
owners
68000000.00 994470797.73 1062470797.73 1062470797.73
2. Capital
contribution from
holders of other
equity
instruments
3. Share-based
payment
recognized in
owners’ equity
7475923.79 7475923.79 675087.09 8151010.88
4. Others
(III) Profit
distribution
10104511.20 -10104511.20
1. Transfer to
surplus reserve
10104511.20 -10104511.20
2. Transfer to
general reserve
3. Distributions
to owners (or
shareholders)
4. Others
(IV) Transfers
within owners’
equity
1. Capitalization
of capital reserve
2. Capitalization
of capital 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
current year
451554411.00 1207942318.37 3287063.85 22800224.13 288975820.29 1974559837.64 149649306.18 2124209143.82
Legal representative: BO Lianming Chief Accountant: ZHAO Ruijin Person in Charge of the Accounting Body: LIU Jie
Statement of Changes in Owners’ Equity of the Parent Company
January to December 2020
In RMB
Item
2020
Paid-in capital (or
share capital)
Other equity instruments
Capital
reserve
Less:
Treasury
shares
Other
comprehensiv
e income
Special
reserve
Surplus reserve
Undistributed
profit
Total
owner’s
equity
Preferred
shares
Perpetual
bonds
Others
I. Closing balance of last year 451554411.00 1310939
867.82
21522683.40 211573548.42 19955905
10.64
Add: Changes in accounting
policies
Corrections of prior
period errors
Others
II. Opening balance of the
current year
451554411.00 1310939
867.82
21522683.40 211573548.42 19955905
10.64
III. Changes for the year
(decrease is indicated by “-”)
1202490.00 4032185
1.02
12441955.44 78111018.16 132077314
.62
(I) Total comprehensive
income
124419554.43 124419554
.43
(II) Owners’ contributions
and reduction in capital
1202490.00 4032185
1.02
41524341.
02
1. Ordinary shares contributed
by owners
1202490.00 1975089
8.25
20953388.
25
2. Capital contribution from
holders of other equity
instruments
3. Share-based payment
recognized in owners’ equity
2057095
2.77
20570952.
77
4. Others
(III) Profit distribution 12441955.44 -46308536.27 -33866580.
83
1. Transfer to surplus reserve 12441955.44 -12441955.44
2. Distributions to owners (or
shareholders)
-33866580.83 -33866580.
83
3. Others
(IV) Transfers within owners’
equity
1. Capitalization of capital
reserve
2. Capitalization of capital
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
current year
452756901.00 1351261
718.84
33964638.84 289684566.58 21276678
25.26
Item
2019
Paid-in capital (or
share capital)
Other equity instruments
Capital reserve
Less:
Treasury
shares
Other
comprehensive
income
Special
reserve
Surplus
reserve
Undistributed
profit
Total
owner’s
equity
Preferred
shares
Perpetual
bonds
Others
I. Closing balance of last year 383554411.00 308318059.21 11418172
.20
120632947.
59
823923590.
00
Add: Changes in accounting
policies
Corrections of prior
period errors
Others
II. Opening balance of the
current year
383554411.00 308318059.21 11418172
.20
120632947.
59
823923590.
00
III. Changes for the year
(decrease is indicated by “-”)
68000000.00 1002621808.6
1
10104511
.20
90940600.8
3
117166692
0.64
(I) Total comprehensive
income
101045112.
03
101045112.
03
(II) Owners’ contributions
and reduction in capital
68000000.00 1034366105.2
2
110236610
5.22
1. Ordinary shares contributed
by owners
68000000.00 1026215094.3
4
109421509
4.34
2. Capital contribution from
holders of other equity
instruments
3. Share-based payment
recognized in owners’ equity
8151010.88 8151010.88
4. Others
(III) Profit distribution 10104511
.20
-10104511.2
0
1. Transfer to surplus reserve 10104511
.20
-10104511.2
0
2. Distributions to owners (or
shareholders)
3. Others
(IV) Transfers within owners’
equity
1. Capitalization of capital
reserve
2. Capitalization of capital
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 -31744296.61 -31744296.
61
IV. Closing balance of the
current year
451554411.00 1310939867.8
2
21522683
.40
211573548.
42
199559051
0.64
Legal representative: BO Lianming Chief Accountant: ZHAO Ruijin Person in Charge of the Accounting Body: LIU Jie
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 Municipality on October 24
2006 with the business license numbered in 4403011245637. Upon establishment the registered capital
of Appotronics Inc. was RMB 100000. 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 Municipality
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
452756901.00 divided into 452756901 shares (RMB 1 Yuan per share) including 169456766
outstanding shares subject to sale restrictions and 283300135 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.This financial statements have been approved by the Company’s 31st session of the first board of
directors on April 22 2021 for public disclosure.
2. Scope of consolidated financial statements
√ Applicable□ N/A
The Company has included 21 subsidiaries into the consolidated financial statements for the current
period including Appotronics Timewaying (Beijing) Technology Co. Ltd. Shenzhen Appotronics
Software Technology Co. Ltd. Shenzhen City Appotronics Xiaoming Technology Co. Ltd. Beijing
Orient Appotronics Technology Co. Ltd. Formoive (Beijing) Technology Co. Ltd. CINEAPPO Laser
Cinema Technology (Beijing) Co. Ltd. Shenzhen Appotronics Laser Display Technology Co. Ltd.
Shenzhen Appotronics Laser Technology Co. Ltd. Qingda Appotronics (Xiamen) Technology Co. Ltd.Shenzhen Appotronics Home Line Technology Co. Ltd. Appotronics Hong Kong Limited Appotronics
USA Inc. Fabulus Technology Hong Kong Limited JoveAI Limited JoveAI Innovation Inc.
FORMOVIE TECHNOLOGY INC WEMAX LLC Shenzhen Appotronics Display Device Co. Ltd.
JoveAI Asia Company Limited Tianjin Bonian Film Partnership (LP) and other subsidiaries. Refer to
descriptions in VIII and IX of Section XI 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
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.
4. Functional currency
The Company adopts RMB as its functional currency.
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 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 represented in the statement of cash flows comprises cash on hand and deposits that can be
readily withdrawn on demand. 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 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 atthe 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 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
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 ② 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
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
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 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 accounts receivable and contract assets that are formed from transactions under the
Accounting Standards for Business Enterprises No.14 - Revenue and 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 the Company uses the simple
measurement method and recognizes a loss allowance equal to the lifetime expected credit loss.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 and contain
significant financing component 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
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
determining
a group
Method for measuring expected credit losses
Other receivables
- group of deposit
and security
receivable Nature of
receivables
By reference to historic credit loss experience and taking into
account the current situations and prediction of future economic
conditions calculate the expected credit losses according to the
default risk exposure and 12-month or rate of lifetime expected
credit loss.Other receivables-
group of
withholding
receivable
Other receivables
- group of
receivables from
related parties in
the scope of
consolidation
Receivables
from related
parties in the
scope of
consolidatio
n
Other receivables
- grouping by
aging
Aging
Long-term
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
Type of notes
By reference to historic credit
loss experience and taking into
account the current situations and
prediction of future economic
conditions calculate the
expected credit losses according
to the default risk exposure and
rate of lifetime expected credit
loss.
Commercial acceptance bills
receivable
Accounts receivable - group of
receivables from related parties
in the scope of consolidation
Receivables from related parties
in the scope of consolidation
Accounts receivable - grouping
by aging
Aging
By reference to historic credit
loss experience and taking into
account the current situations and
prediction of future economic
conditions prepare a comparison
table of the aging of accounts
receivable and rate of lifetime
expected credit loss and
calculate the expected credit
losses.
Contract assets - group of
receivables from related parties
in the scope of consolidation
Receivables from related parties
in the scope of consolidation
By reference to historic credit
loss experience and taking into
account the current situations and
prediction of future economic
conditions calculate the
expected credit losses according
to the default risk exposure and
rate of lifetime expected credit
loss.
Contract assets - group of aging Aging
By reference to historic credit
loss experience and taking into
account the current situations and
prediction of future economic
conditions prepare a comparison
table of the aging of contract
assets 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
expected credit loss
Aging
Accounts receivable
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 XI 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 XI in details.
13. Receivables financing
√ Applicable□ N/A
The Company's accounting policies on receivables financing are disclosed in V. 10 of Section XI in
details.
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 XI 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. Valuation method of inventories upon delivery
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 realisable value. If
the net realisable 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 count 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.
(2) Packaging materials
Low cost and short-lived consumable items are amortized using the immediate write-off method.
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
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 XI 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 V10 of Section XI 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 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
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 forsuch transactions as one transaction to acquire control. If such transactions do not constitute “a packagedeal” 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.
4. Disposal of investment in a subsidiary through multiple transactions by steps until loss of control
over the subsidiary
(1) Separate financial statements
The difference between the carrying amount of the equity disposed of and the proceeds of disposal
actually received is recognized in profit or loss for the current period. If the remaining equity empowers
the Company to exercise significant influence or joint control over the investee the remaining equity is
accounted for using the equity method; if the remaining equity does not empower the Company to
exercise control joint control or significant influence over the investee the remaining equity is
accounted for in accordance with the Accounting Standards for Business Enterprises No. 22 --
Recognition and Measurement of Financial Instruments.
(2) Consolidated financial statements
1) Disposal of investment in a subsidiary through multiple transactions by steps until loss of control
over the subsidiary which does not constitute “a package deal”
Prior to the loss of control the difference between the proceeds from disposal and the share owned
by the Company in the net assets of the subsidiary in relation to the long-term equity investment
disposed of that is calculated continuously from the date of acquisition or combination is adjusted
against the capital reserve (capital premium). In case the capital premium is not sufficient to absorb the
difference the remaining balance is adjusted against the retained earnings.When losing control over a subsidiary the remaining equity is re-measured at its fair value at the
date of loss of control. The sum of the consideration received from the disposal of the equity and the fair
value of the remaining equity net of the share owned by the Company in the net assets of the subsidiary
in relation to the long-term equity investment disposed of as calculated continuously from the date of
acquisition or combination according to the previous shareholding ratio is recognized in the investment
income for the period in which the control is lost and the goodwill is reduced accordingly. Other
comprehensive income relating to the equity investment in the subsidiary is transferred to the investment
income for the current period in which the control is lost.
2) Disposal of investment in a subsidiary through multiple transactions by steps until loss of control
over the subsidiary which constitutes a package deal
The Company accounts for such transactions as one transaction to dispose of and lose its control
over the subsidiary. However the difference between the proceeds from each disposal before loss of
control and the share owned by the Company in the net assets of the subsidiary in relation to the
investment disposed of is recognized in other comprehensive income in the consolidated financial
statements which is wholly transferred to the profit or loss in the current period in which the control is
lost.
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 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
Category Depreciation
Depreciation
period (years)
Residual value rate
(%)
Annual
depreciation rate
(%)
Machinery and
equipment
Straight line
method
5 5.00 19.00
Transportation
equipment
Straight line
method
5 5.00 19.00
Electronic
equipment and
others
Straight line
method
3-5 5.00 19.00-31.67
Operating leased
equipment
Straight line
method
3 7 5.00 31.67 13.57
(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
26. Biological assets
□ Applicable√ N/A
27. Oil and gas assets
□ Applicable√ N/A
28. Use right assets
□ Applicable√ N/A
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
30. Impairment of long-term assets
√ Applicable□ N/A
For long-term equity investments fixed assets construction in progress 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
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.
(3). Accounting treatment of termination benefits
√ Applicable□ N/A
When the Company can no longer withdraw the offer of termination benefits as a result of
termination of employment or redundancy or recognizes the restructuring costs or expenses relating to
payment of termination benefits whichever the earlier the employee benefit liabilities arising from
recognition of termination benefits are recognized in profit or loss for the current period.
(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
35. Provisions
√ Applicable□ N/A
1. An obligation arising from any external guarantee litigation 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 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 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. Income
(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 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 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 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
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 income. Government grants
related to assets recognized as deferred income 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 income 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 incurred in subsequent periods are recognized as deferred income 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 income taxes are included in profit or loss for the current period
as income 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
If the Company is a lessee the rents paid by the Company are included in the costs of the relevant
assets or in profit or loss for the current period over the whole lease term on a straight line basis. The
initial direct cost incurred by the Company is directly recognized in profit or loss for the current period.
Contingent rents are recognized in profit or loss in the period in which they are incurred.
If the Company is a lessor the rents received by the Company are recognized in profit or loss for
the current period over the whole lease term on a straight line basis. The initial direct cost incurred by
the Company is directly recognized in profit or loss for the current period. However if such initial direct
cost is of a large amount the initial direct cost is capitalized and recognized in profit or loss by
installments. Contingent rents are recognized in profit or loss in the period in which they are incurred.
(2). Accounting treatment of finance leases
√ Applicable□ N/A
If the Company is a lessee the lower of the fair value of the leased asset at the inception of the
lease and the present value of the minimum lease payments is recorded as the carrying amount of the
rented assets with the minimum lease payments as the carrying amount of long-term payables and the
difference charged to unrecognized financing fees at the commencement date of the lease term. The
initial direct cost incurred by the Company is directly recognized in the value of the rented assets. In
each period of the lease term the financing fees for the period is recognized by using the effective
interest method.If the Company is a lessor the aggregate of the minimum lease receivable at the inception of the
lease and the initial direct costs is recognized as the carrying amount of the finance lease receivable and
the unguaranteed residual value is recorded at the same time at the commencement date of the lease term;
the difference between the aggregate of the minimum lease receivable the initial direct costs and the
unguaranteed residual value and the aggregate of their present values is recognized as unearned
financing income. In each period of the lease term the financing income for the period is recognized by
using the effective interest method.
(3). Method for determination and accounting treatments of lease under new lease standards
□ Applicable√ N/A
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
Changes in accounting policies
and associated reasons
Approval procedures
Remarks (name and amount of
line items in financial statements
that have been materially
affected)
Implement the Accounting
Standards for Business
Enterprises No. 14 - Revenue
amended and released by the
Ministry of Finance
Approved by the management Refer to the table below for
details
Implement the Interpretation of
the Accounting Standards for
Business Enterprises No. 13
Approved by the management None
Other information
(1) Changes in accounting policies caused by changes in the Accounting Standards for Business
Enterprises
1) The Company has implemented the Accounting Standards for Business Enterprises No. 14 -
Revenue (hereinafter referred to as the New Revenue Standard) revised by the Ministry of Finance since
January 1 2020. As required by transition provisions to adopt the New Revenue Standard information
in the comparative period cannot be adjusted but the opening balances of retained earnings in the report
or other relevant amounts in the financial statements shall be adjusted retrospectively for any cumulative
impact of the new standards at the first implementation date.The New Revenue Standard mainly causes the following influences to the Company’s financial
statements as at January 1 2020:
Item
Balance sheet
December 31 2019 Adjustment influence of
the New Revenue
Standard
January 1 2020
Accounts
receivable
176035155.24 15587556.77 191622712.01
Inventories 299966170.35 -16355310.22 283610860.13
Contract assets 3740605.96 3740605.96
Other current
assets
44405513.30 -2340625.20 42064888.10
Advance from
customers
184444643.33 -16910443.03 167534200.30
Contract
liabilities
15777305.81 15777305.81
Other current
liabilities
1133137.22 1133137.22
Undistributed
profit
288975820.29 1278734.88 290254555.17
Total equity
attributable to
owners of the
parent company
1974559837.64 1278734.88 1975838572.52
Minority
interests
149649306.18 -646507.57 149002798.61
2) The Company has implemented the Interpretation of the Accounting Standards for Business
Enterprises No. 13 released in 2019 by the Ministry of Finance since January 1 2020. This change in the
accounting policy is handled by using the prospective application method.
(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 first implementation of the New Revenue Standard and new lease standard
since 2020
√ Applicable□ N/A
Consolidated Balance Sheet
In RMB
Item December 31 2019 January 1 2020 Adjusted amount
Current Assets:
Cash and bank balances 875858784.58 875858784.58
Balances with clearing agencies
Placements with banks and
other financial institutions
Held-for-trading financial assets 540000000.00 540000000.00
Derivative financial assets
Notes receivable 4042559.63 4042559.63
Accounts receivable 176035155.24 191622712.01 15587556.77
Receivables financing 1980500.00 1980500.00
Prepayments 35070999.13 35070999.13
Premiums receivable
Amounts receivable under
reinsurance contracts
Reinsurer’s share of insurance
contract reserves
Other receivables 9618750.08 9618750.08
Where: Interest receivable
Dividend receivable
Financial assets purchased under
resale agreements
Inventories 299966170.35 283610860.13 -16355310.22
Contract assets 3740605.96 3740605.96
Assets held for sale
Non-current assets due within
one year
Other current assets 44405513.30 42064888.10 -2340625.20
Total current assets 1986978432.31 1987610659.62 632227.31
Non-current Assets:
Loans and advances
Debt investments
Other debt investments
Long-term accounts receivable
Long-term equity investment 139534371.94 139534371.94
Investment in other equity
instruments
11975419.38 11975419.38
Other non-current financial
assets
Investment property
Fixed assets 471204340.95 471204340.95
Construction in progress 20132004.07 20132004.07
Productive biological assets
Oil and gas assets
Use right assets
Intangible assets 332331324.07 332331324.07
Development expenditure
Goodwill
Long-term prepaid expenses 16908070.34 16908070.34
Deferred tax assets 109023941.85 109023941.85
Other non-current assets 11420185.94 11420185.94
Total non-current assets 1112529658.54 1112529658.54
Total assets 3099508090.85 3100140318.16 632227.31
Current Liabilities:
Short-term borrowings 76765319.05 76765319.05
Loans from the central bank
Taking from banks and other
financial institutions
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 37335841.79 37335841.79
Accounts payable 176624445.46 176624445.46
Advance from customers 184444643.33 167534200.30 -16910443.03
Contract liabilities 15777305.81 15777305.81
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 50586932.71 50586932.71
Taxes payable 42924647.79 42924647.79
Other payables 14364076.43 14364076.43
Where: Interest payable
Dividend payable
Fees and commissions payable
Amounts payable under
reinsurance contracts
Liabilities held for sale
Non-current liabilities due
within one year
64968795.02 64968795.02
Other current liabilities 1133137.22 1133137.22
Total current liabilities 648014701.58 648014701.58
Non-current Liabilities:
Insurance contract reserves
Long-term borrowings 279615107.27 279615107.27
Bonds payable
Where: Preferred shares
Perpetual bonds
Leasing liabilities
Long-term payables 3488100.00 3488100.00
Long-term employee benefits
payable
Estimated liabilities 27072676.49 27072676.49
Deferred income 17108361.69 17108361.69
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 327284245.45 327284245.45
Total liabilities 975298947.03 975298947.03
Owners’ Equity (Shareholders’ Equity):
Paid-in capital (or share capital) 451554411.00 451554411.00
Other equity instruments
Where: Preferred shares
Perpetual bonds
Capital reserve 1207942318.37 1207942318.37
Less: Treasury shares
Other comprehensive income 3287063.85 3287063.85
Special reserve
Surplus reserve 22800224.13 22800224.13
General risk reserve
Undistributed profit 288975820.29 290254555.17 1278734.88
Total owners’ (or shareholders’)
equity attributable to owners of the
parent company
1974559837.64 1975838572.52 1278734.88
Minority interests 149649306.18 149002798.61 -646507.57
Total owners’ (or
shareholders’) equity
2124209143.82 2124841371.13 632227.31
Total liabilities and
owners’ (or shareholders’) equity
3099508090.85 3100140318.16 632227.31
Description of adjustments on each line item:
√ Applicable□ N/A
In accordance with the Accounting Standards for Business Enterprises No. 14 - Revenue (Cai Kuai
[2017] No. 2) issued by the Ministry of Finance on July 5 2017 for enterprises listed in domestic and
oversea stock exchange concurrently and enterprises listed overseas with the financial statements
prepared under international financial reporting standards or accounting standards for business
enterprises the New Revenue Standard shall be implemented from January 1 2018; and for other
enterprises listed in domestically the New Revenue Standard shall be implemented from January 1
2020. As a domestic listed company the Company adopted the New Revenue Standard as at January 1
2020 and made adjustment on the opening balance of relevant item recognized in the financial
statements but the data in comparable period can be unadjusted: (1) the goods payments received in
advance originally qualified for conditions of “receipts in advance” were charged to the line item of
“contract liability”; (2) the rights of the Company for collecting the considerations for goods that have
been transferred to customers which rights depend on factors other than the lapse of time were
presented as “contract assets”; and (3) in the goods sales mode of “profit sharing” the revenue that has
been received by the customer but has not been recognized at the beginning of the period was
recognized according to the New Revenue Standard.
Balance Sheet of the Parent Company
In RMB
Item December 31 2019 January 1 2020 Adjusted amount
Current Assets:
Cash and bank balances 570479390.49 570479390.49
Held-for-trading financial
assets
540000000.00 540000000.00
Derivative financial assets
Notes receivable 3542559.63 3542559.63
Accounts receivable 299315776.44 295616359.63 -3699416.81
Receivables financing 442500.00 442500.00
Prepayments 6410257.48 6410257.48
Other receivables 67227575.21 67227575.21
Where: Interest receivable
Dividend receivable
Inventories 135617379.22 135617379.22
Contract assets 3699416.81 3699416.81
Assets held for sale
Non-current assets due within
one year
Other current assets 12280164.39 12280164.39
Total current assets 1635315602.86 1635315602.86
Non-current Assets:
Debt investments
Other debt investments
Long-term accounts receivable
Long-term equity investment 257795276.13 257795276.13
Investment in other equity
instruments
7075419.38 7075419.38
Other non-current financial
assets
Investment property
Fixed assets 60391512.92 60391512.92
Construction in progress 1385496.59 1385496.59
Productive biological assets
Oil and gas assets
Use right assets
Intangible assets 330796423.87 330796423.87
Development expenditure
Goodwill
Long-term prepaid expenses 12771126.83 12771126.83
Deferred tax assets 9545438.20 9545438.20
Other non-current assets 6744453.85 6744453.85
Total non-current assets 686505147.77 686505147.77
Total assets 2321820750.63 2321820750.63
Current Liabilities:
Short-term borrowings 10217738.36 10217738.36
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 37335841.79 37335841.79
Accounts payable 162596838.45 162596838.45
Advance from customers 11116659.11 4387326.61 -6729332.50
Contract liabilities 6485831.14 6485831.14
Employee benefits payable 26985668.92 26985668.92
Taxes payable 1534242.70 1534242.70
Other payables 42599703.36 42599703.36
Where: Interest payable
Dividend payable
Liabilities held for sale
Non-current liabilities due
within one year
Other current liabilities 243501.36 243501.36
Total current liabilities 292386692.69 292386692.69
Non-current Liabilities:
Long-term borrowings
Bonds payable
Where: Preferred shares
Perpetual bonds
Leasing liabilities
Long-term payables 3488100.00 3488100.00
Long-term employee benefits
payable
Estimated liabilities 14631273.00 14631273.00
Deferred income 15724174.30 15724174.30
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 33843547.30 33843547.30
Total liabilities 326230239.99 326230239.99
Owners’ Equity (Shareholders’ Equity):
Paid-in capital (or share
capital)
451554411.00 451554411.00
Other equity instruments
Where: Preferred shares
Perpetual bonds
Capital reserve 1310939867.82 1310939867.82
Less: Treasury shares
Other comprehensive income
Special reserve
Surplus reserve 21522683.40 21522683.40
Undistributed profit 211573548.42 211573548.42
Total owners’ (or
shareholders’) equity
1995590510.64 1995590510.64
Total liabilities and
owners’ (or shareholders’) equity
2321820750.63 2321820750.63
Description of adjustments on each line item:
√ Applicable□ N/A
In accordance with the Accounting Standards for Business Enterprises No. 14 - Revenue (Cai Kuai
[2017] No. 2) issued by the Ministry of Finance on July 5 2017 for enterprises listed in domestic and
oversea stock exchange concurrently and enterprises listed overseas with the financial statements
prepared under international financial reporting standards or accounting standards for business
enterprises the New Revenue Standard shall be implemented from January 1 2018; and for other
enterprises listed in domestically the New Revenue Standard shall be implemented from January 1
2020. As a domestic listed company the Company adopted the New Revenue Standard as at January 1
2020 and made adjustment on the opening balance of relevant item recognized in the financial
statements but the data in comparable period can be unadjusted: (1) the goods payments received in
advance originally qualified for conditions of “receipts in advance” were charged to the line item of
“contract liability”; (2) the rights of the Company for collecting the considerations for goods that have
been transferred to customers which rights depend on factors other than the lapse of time were
presented as “contract assets”.
(4). Description of retrospective adjustments on comparable data in previous periods upon the
first adoption of the New Revenue Standard and new lease standard from 2020
□ Applicable√ N/A
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
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
3% 6% 9% 13%
City maintenance and
construction tax
Turnover tax payable 5% 7%
Education surcharges Turnover tax payable 3%
Local education surcharges Turnover tax payable 2%
Enterprise income tax Taxable income 8.25% 8.70% 8.84% 12.5%
15% 16.5% 20% 21% 25%
Disclosure of taxpayers with different rates of enterprise income tax:
√ Applicable□ N/A
Taxpayer Rate of enterprise income tax (%)
Appotronics Corporation Limited 15.00
Formoive (Beijing) Technology Co. Ltd. 15.00
Shenzhen Appotronics Software Technology Co.Ltd.
12.50
Appotronics Hong Kong Limited 8.25 16.50
Beijing Orient Appotronics Technology Co. Ltd. 20.00
Fabulus Technology HongKong Limited 16.50
JoveAI Innovation Inc. 8.70 8.84 21.00
Appotronics USA Inc. 21.00
FORMOVIE TECHNOLOGY INC 21.00
JoveAI Limited Tax exemption
WEMAXLLC 21.00
Shenzhen Appotronics Display Device Co. Ltd. 20.00
Appotronics Technology (Changzhou) Co. Ltd. 20.00
Appotronics Timewaying (Beijing) Technology
Co. Ltd.
20.00
Qingda Appotronics (Xiamen) Technology Co.Ltd.
20.00
Shenzhen Appotronics Home Line Technology Co.Ltd.
20.00
Shenzhen Appotronics Laser Technology Co. Ltd. 20.00
Shenzhen Appotronics Xiaoming Technology Co.Ltd.
20.00
JoveAI Asia Company Limited 20.00
Tianjin Bonian Film Partnership (LP) Tax exemption
Other taxpayers except above 25.00
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% the California state enterprise income tax rate of 8.84% and the Delaware state
enterprise income tax rate of 8.70%.
5. FORMOVIE 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%.
2. Tax incentives
√ Applicable□ N/A
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 can pay the enterprise income tax at a rate of 15% from 2019 to
2021.
2. On November 30 2018 Formoive (Beijing) Technology Co. Ltd. obtained the High-tech
Enterprise Certificate (Certificate No.: GR201811009590) 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 can pay the enterprise income tax at a rate of 15%
since 2019.
3. In accordance with the Notice of the Ministry of Finance and the State Administration of
Taxation on Enterprise Income Tax Policies for Further Encouraging the Development of Software and
Integrated Circuit Industries (Cai Shui (2012) No. 27) commencing from the first year of earning
profits prior to December 312017 a qualified company can be exempted from the enterprise income tax
for the first two years and enjoy a 50% tax reduction on the statutory tax rate of 25% from the third to
the fifth year until the tax incentive period expires. Therefore Shenzhen Appotronics SoftwareTechnology Co. Ltd. is qualified for the tax incentive policy of “exemption from income tax for the firsttwo years and 50% reduction for next three years” which means it can be exempted from enterprise
income tax from 2016 to 2017 and pay the enterprise income tax at a rate of 12.5% from 2018 to 2020.
4. 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%. Shenzhen Appotronics Software Technology Co.Ltd. is qualified for enjoying such tax incentive from January 1 2015.
5. 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 incentive from January 26
2018.
6. In accordance with the Notice of the Ministry of Finance and the State Administration of
Taxation on Implementing the Inclusive Tax Deduction and Exemption Policies for Micro and Small
Enterprises (Cai Shui [2019] No. 13) 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 25%
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. Appotronics
Timewaying (Beijing) Technology Co. Ltd. Qingda Appotronics (Xiamen) Technology Co. Ltd.Shenzhen Appotronics Home Line Technology Co. Ltd. Shenzhen Appotronics Laser Technology Co.Ltd. and Shenzhen City Appotronics Xiaoming Technology Co. Ltd.
3. Others
□ Applicable√ N/A
VII. Notes to items in the consolidated financial statements
1. Cash and bank balances
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Cash on hand 5858.56 3348.57
Bank deposits 1020747657.62 857708997.58
Other monetary funds 17007057.09 18146438.43
Total 1037760573.27 875858784.58
Where: Total oversea
deposits
78611378.23 132334643.95
Other information
In other monetary funds an amount of RMB 14057949.58 as security deposits is subject to
restriction in use; in bank deposits an amount of RMB 40000000.00 as 3-year term deposits is subject
to restriction in use including the the deposit interests of RMB 177534.25 which have been recognized
yet not matured.
2. Held-for-trading financial assets
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Financial assets at fair value through
profit or loss
114000000.00 540000000.00
Where:
Structural deposits 114000000.00 540000000.00
Total 114000000.00 540000000.00
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 950000.00 3891456.00
Commercial acceptances 2776328.91 151103.63
Total 3726328.91 4042559.63
(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
(4). Notes transferred to accounts receivable due to drawer's failure in cashing at the end of the
period
□ Applicable√ N/A
(5). Disclosure by categories of provision for bad debts
√ Applicable□ N/A
In RMB
Catego
ry
Closing balance Opening balance
Carrying amount
Bad debt
provision
Book
value
Carrying amount
Bad debt
provision
Book
value
Amount
Perce
ntage
(%)
Amount
Pe
rce
nta
ge
of
pr
ov
isi
on
(%
)
Amount
Perce
ntage
(%)
Amoun
t
Per
cent
age
of
pro
visi
on
(%)
Provisi
on for
bad
debts
made
by
group
3872451.48 100.00 146122.57 3.77 3726328.91 4050512.45 100.00 7952.82 0.20 4042559.63
Where:
Bank
accepta
nce
bills
950000.00 24.53 950000.00 3891456.00 96.07 3891456.00
Comm
ercial
accepta
nce
bills
2922451.48 75.47 146122.57 5.00 2776328.91 159056.45 3.93 7952.82 5.00 151103.63
Total 3872451.48 / 146122.57 / 3726328.91 4050512.45 / 7952.82 / 4042559.63
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
Name
Closing balance
Notes receivable Bad debt provision
Proportion of provision
(%)
Commercial
acceptance bills
2922451.48 146122.57 5.00
Bank acceptance bills 950000.00
Total 3872451.48 146122.57 3.77
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
Category
Opening
balance
Changes for the current period
Closing
balance Provision
Recovery or
reversal
Write off or
cancellation
Commercial
acceptance bills
7952.82 138169.75 146122.57
Total 7952.82 138169.75 146122.57
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
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 356184003.08
1 to 2 years 3172319.46
2 to 3 years 1813579.86
Over 3 years 176358.49
Total 361346260.89
(2). Disclosure by categories of provision for bad debts
√ Applicable□ N/A
In RMB
Category
Closing balance Opening balance
Carrying amount Bad debt provision
Book
value
Carrying amount Bad debt provision
Book
value Amount
Percentage
(%)
Amount
Percentage
of
provision
(%)
Amount
Percentage
(%)
Amount
Percentage
of
provision
(%)
Provision
for bad
debts
made by
group
361346260.89 100.00 19685428.46 5.45 341660832.43 203746783.87 100.00 12124071.86 5.95 191622712.01
Where:
Accounts
receivable
for which
the
provision
for bad
debts is
made by
aging
group
361346260.89 100.00 19685428.46 5.45 341660832.43 203746783.87 100.00 12124071.86 5.95 191622712.01
Total 361346260.89 / 19685428.46 / 341660832.43 203746783.87 / 12124071.86 / 191622712.01
Provision for bad debts made individually:
□ Applicable√ N/A
Provision for bad debts made by group:
√ Applicable□ N/A
Item by group: Amounts for which provisions for bad debts are made by aging group
In RMB
Name
Closing balance
Accounts receivable Bad debt provision
Proportion of provision
(%)
Within 1 year 356184003.08 17809200.17 5.00
1-2 years 3172319.46 793079.87 25.00
2-3 years 1813579.86 906789.93 50.00
Over 3 years 176358.49 176358.49 100.00
Total 361346260.89 19685428.46 5.45
Recognition criterion to make the bad debt provision by group and explanation:
√ Applicable□ N/A
[Note]: The difference between the opening balance of the year and the closing balance of the prior year
(as of December 31 2019) can refer to V.44 of Section XI for details.
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
Category
Opening
balance
Changes for the current period
Closing
balance Provision
Recovery
or
reversal
Write off or
cancellation
Other
changes
Provision
for bad
debts made
by group
12124071.86 7932055.78 370699.18 19685428.46
Total 12124071.86 7932055.78 370699.18 19685428.46
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 370699.18
Accounts receivable actually canceled in the current period are RMB 370699.18.
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
Entity Carrying amount
Proportion to
the balance of
accounts
receivable (%)
Bad debt provision
Xiaomi Communications Technologies Co.Ltd. and its affiliates
248915862.75 68.89 12445793.14
Beijing Jingdong Century Trading Co. Ltd. 28421997.22 7.87 1421099.86
Shenzhen Sunvalley Technology Development
Co. Ltd.
22790393.35 6.31 1139519.67
CFEC and its affiliates 6125422.64 1.70 306402.16
BARCO 5797205.70 1.60 289860.29
Subtotal 312050881.66 86.37 15602675.12
The total of top five closing balances of accounts receivable is RMB 312050881.66 representing
86.37% of the total closing balance of accounts receivable; the total provision for bad debts is RMB
15602675.12.
(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 receivable 11959000.00 1980500.00
Total 11959000.00 1980500.00
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
1) Receivables financing for which provision for impairment is made by group
Item
Closing balance
Carrying amount Provision for impairment
Percentage of provision
(%)
Group of bank
acceptance bills
11959000.00
Subtotal 11959000.00
2) Receivables financing which is undue as at the balance sheet date but endorsed or discounted by
the Company at the end of the period
Item Amount derecognized at the end of the
period
Amount not derecognized at the
end of the period
Group of bank acceptance
bills
1014000.00
Subtotal 1014000.00
The acceptors of bank acceptance bills are commercial banks. Because commercial banks 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. 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
Aging
Closing balance Opening balance
Amount Percentage (%) Amount Percentage (%)
Within 1
year
43761018.81 92.23 34948314.45 99.65
1 to 2 years 3686582.62 7.77 122684.68 0.35
Total 47447601.43 100.00 35070999.13 100.00
Reasons for overdue settlement of prepayments with significant amounts aged more than 1 year:
Entity Closing balance Reason for not settled
CFEC and its affiliates 2341035.38 Not mature
Subtotal 2341035.38
(2). Top five closing balances of prepayments categorized by receivers
√ Applicable□ N/A
Entity Carrying amount
Proportion to the
balance of prepayments
(%)
CVTE and its affiliates 22408429.84 47.23
Soraa Laser Diode Inc 5872410.00 12.38
CFEC and its affiliates 3107696.59 6.55
GDC and its affiliates 2883384.53 6.08
Shenzhen Colorwin Optical Technology Co. Ltd. 1263328.23 2.66
Subtotal 35535249.19 74.90
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
Other receivables 12534062.15 9618750.08
Total 12534062.15 9618750.08
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
Dividends receivable
(4). Dividends 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
(7). 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 6425814.44
1 to 2 years 5229091.10
2 to 3 years 551775.00
Over 3 years 967062.60
Total 13173743.14
(8). Categories by the nature of other receivables
√ Applicable□ N/A
In RMB
Nature of other receivables
Closing balance of carrying
amount
Opening balance of carrying
amount
Deposits/margins/petty cash 8832850.67 8772420.22
Withholding 380123.97 1275175.63
Temporary receivables 383488.89 10289.71
Compensation receivable 3577279.61
Total 13173743.14 10057885.56
(9). Provision for bad debts
√ Applicable□ N/A
In RMB
Bad debt
provision
Stage I Stage II Stage III
Total 12-month ECL
in the future
Lifetime ECL
(without credit
impairment)
Lifetime ECL (with
credit impairment)
Balance as at
January 1 2020
439035.48 100.00 439135.48
Balance as at
January 1 2020 in
the current period
--transferred to
Stage II
--transferred to
Stage III
-6300.00 6300.00
--reversed to Stage
II
--reversed to Stage
I
100.00 -100.00
Provision 206845.51 206845.51
Reversal
Write-off
Cancellation 6300.00 6300.00
Other changes
Balance as at
December 31
2020
639680.99 639680.99
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
(10). Provision for bad debts
√ Applicable□ N/A
In RMB
Category
Opening
balance
Changes for the current period
Closing
balance Provision
Recovery
or reversal
Write off or
cancellation
Other
changes
Provision for
bad debts made
by group
439135.48 206745.51 100.00 6300.00 639680.99
Total 439135.48 206745.51 100.00 6300.00 639680.99
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable√ N/A
(11). Other receivables actually canceled in the current period
√ Applicable□ N/A
In RMB
Item Cancellation amount
Other receivables actually canceled 6300.00
In which significant amounts canceled are described as below:
□ Applicable√ N/A
Description of other receivables cancellation:
□ Applicable√ N/A
(12). Top five closing balances of other receivables categorized by debtors
√ Applicable□ N/A
In RMB
Entity
Nature of other
receivables
Closing
balance
Aging
Proportion to
the balance of
other
receivables
(%)
Closing
balance of
bad debt
provision
Creator
Community
(Guangzhou)
Co. Ltd.
Compensation
receivable
3577279.61 Within
1 year
27.15 178863.98
Shenzhen
Meisheng
Industry Co.Ltd.
Deposits/margins/petty
cash
3574618.00 2-3
years
27.13 178730.89
Shenzhen
Science and
Technology
Assessment
Management
Center
Deposits/margins/petty
cash
1310675.20 Within
1 year
years
over 3
years
9.95 65533.76
Hong Kong
Science &
Technology
Parks
Corporation
Deposits/margins/petty
cash
1022956.60 1-2
years
7.77 51147.86
Beijing
Dongsheng
Bozhan
Technology
Development
Co. Ltd.
Deposits/margins/petty
cash
652594.38 Within
1 year
4.95 32629.72
Total / 10138123.79 / 76.95 506906.21
(13). Accounts receivable involving government grants
□ Applicable√ N/A
(14). Other receivables derecognized due to transfer of financial assets
□ Applicable√ N/A
(15). 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
Item
Closing balance Opening balance
Carrying
amount
Provision for
decline in value of
inventories/impair
ment of contract
performance cost
Book
value
Carrying
amount
Provision for
decline in value of
inventories/impair
ment of contract
performance cost
Book
value
Raw
material
s
243262463.
77
12343116.67 230919347.
10
169021593.
23
18901716.15 150119877.
08
Work in
progress
23130163.7
2
533475.37 22596688.3
5
12337519.0
2
686431.07 11651087.9
5
Goods
on hand
152306656.
10
17204698.44 135101957.
66
95889640.2
9
20855142.36 75034497.9
3
Goods
upon
delivery
15345357.0
8
15345357.0
8
40421349.5
1
40421349.5
1
Material
s for
consigne
d
processi
ng
15064657.0
9
215866.48 14848790.6
1
6405637.99 21590.33 6384047.66
Total 449109297.
76
30297156.96 418812140.
80
324075740.
04
40464879.91 283610860.
13
[Note]: The difference between the opening balance of the year and the closing balance of the prior
year (as of December 31 2019) can refer to V.44 of Section XI for details.
(2). Provision for decline in value of inventories and impairment of contract performance cost
√ Applicable□ N/A
In RMB
Item
Opening
balance
Increase Decrease
Closing
balance Provision Others
Reversal or
write-off
Others
Raw materials 18901716.15 1311601.56 7870201.04 12343116.67
Work in progress 686431.07 549183.59 702139.29 533475.37
Goods on hand 20855142.36 8112748.17 11763192.09 17204698.44
Materials for
consigned
processing
21590.33 200516.97 6240.82 215866.48
Total 40464879.91 10174050.29 20341773.24 30297156.96
Specify reasons for specific determination basis of net realizable value and reversal or write-off of the
provision for decline in value of inventories
Item Specific basis for determining the net realizable value
Reason for writing off the
provisions for decline in
value of inventories in the
current period
Raw
materials
The net realizable value of raw materials is determined as the
historical average selling price or actual average 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.The Company has
consumed/sold the
inventories for which a
provision for decline in
value has been made at the
beginning of the current
period.Work in
progress
The net realizable value of work in progress is determined as
the historical average selling price or actual average 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.The Company has consumed
the inventories for which a
provision for decline in
value has been made at the
beginning of the current
period.Goods on
hand
For inventories directly used for sale the net realizable value is
determined as the historical average selling price or actual
average selling price less the estimated costs necessary to make
the sale and relevant taxes.The Company has
consumed/sold the
inventories for which a
provision for decline in
value has been made at the
beginning of the current
period.
(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
In RMB
Item
Closing balance Opening balance
Carrying
amount
Provision for
impairment
Book value
Carrying
amount
Provision
for
impairment
Book value
Warranty
security
receivable
492467.50 181635.38 310832.12 150233.80 7511.69 142722.11
Goods
payment
4842771.16 1408947.78 3433823.38 3787246.16 189362.31 3597883.85
Total 5335238.66 1590583.16 3744655.50 3937479.96 196874.00 3740605.96
[Note]: The difference between the opening balance of the year and the closing balance of the prior
year (as of December 31 2019) can refer to V.44 of Section XI for details.
Amount and reasons of major changes in the book value during the reporting period
□ Applicable√ N/A
(2). Description of provision for impairment made on contract assets during the period
√ Applicable□ N/A
In RMB
Item Provision Reversal Write-off/cancellation Reason
in the period
Provision made by
group
1393709.16
Total 1393709.16 /
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
Contract assets for which provision for impairment is made by aging group
Aging
Closing balance
Carrying amount Bad debt provision Percentage of provision (%)
Within 1 year 163132.50 8156.63 5.00
1-2 years 4014506.16 1003626.53 25.00
2-3 years 1157600.00 578800.00 50.00
Subtotal 5335238.66 1590583.16 29.81
11. Held-for-sale assets
□ Applicable√ N/A
12. Non-current assets due within one year
□ Applicable√ N/A
Debt investments and other debt investments with significant amounts at the end of the period
□ Applicable√ N/A
Other information
None
13. Other current assets
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Cost of returned goods receivable 1381990.01
Input VAT to be deducted 11338961.82 37976562.19
Prepaid enterprise income tax 281243.63 4088325.91
Total 13002195.46 42064888.10
Other information
[Note]: The difference between the opening balance of the year and the closing balance of the prior year
(as of December 31 2019) can refer to V.44 of Section XI for details.
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
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
Item
Closing balance Opening balance Range
of
discount
rate
Carrying
amount
Bad debt
provision
Book value
Carrying
amount
Bad debt
provision
Book
value
Goods sold on
installment payment
15000000.00 750000.00 14250000.00
Less: Financing
income not realized
1053912.22 1053912.22
Total 13946087.78 750000.00 13196087.78 /
(2). Provision for bad debts
√ Applicable□ N/A
In RMB
Bad debt
provision
Stage I Stage II Stage III
Total 12-month ECL
in the future
Lifetime ECL
(without credit
impairment)
Lifetime ECL (with
credit impairment)
Balance as at
January 1 2020
Balance as at
January 1 2020 in
the current period
--transferred to
Stage II
--transferred to
Stage III
--reversed to Stage
II
--reversed to Stage
I
Provision 750000.00 750000.00
Reversal
Write-off
Cancellation
Other changes
Balance as at
December 31
2020
750000.00 750000.00
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
17. Long-term equity investments
√ Applicable□ N/A
In RMB
Investees
Opening
Balance
Changes for the current period
Closing
Balance
Closing
balance of
provision
for
impairmen
t
Additional
investment
Decreased
investmen
t
Investmen
t profit or
loss under
equity
method
Adjustment in
other
comprehensiv
e income
Other
equity
change
s
Declared
cash
dividend
s or
profits
Provision
for
impairmen
t
Others
I. Joint venture
Subtotal
II. Associates
Cinionic
Limited
139534371.9
4
-1301454.86 2313729.34 -9140221.7
8
131406424.6
4
GDC
Technolog
y Limited
(BVI)
118196580.7
8
809247.05 12332520.01 131338347.8
4
Subtotal 139534371.9
4
118196580.7
8
-492207.81 14646249.35 -9140221.7
8
262744772.4
8
Total
139534371.9
4
118196580.7
8
-492207.81 14646249.35 -9140221.7
8
262744772.4
8
Other information
None
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
Co. Ltd.
7075419.38 7075419.38
Shenzhen Bevix Technology Co. Ltd. 4900000.00 4900000.00
Total 11975419.38 11975419.38
(2). Description of equity investments not held for trading
√ Applicable□ N/A
In RMB
Item
Dividends
income
recognize
d for the
current
period
Accumulate
d gains
Accumulate
d losses
Amounts to
retained
earnings from
other
comprehensiv
e income
Reasons for
designating
as financial
assets at fair
value through
other
comprehensiv
e income
Reasons for
transferring
to retained
earnings from
other
comprehensiv
e income
Shen Zhen
Timewayin
g
Technolog
y Co. Ltd.
Subject to the
management'
s intention of
holding
Shenzhen
Bevix
Technolog
y Co. Ltd.
Subject to the
management'
s intention of
holding
Other information:
√ Applicable□ N/A
The Company's equity investments in Shen Zhen Timewaying Technology Co. Ltd. and Shenzhen
Bevix 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:
□ 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 447571328.91 471204340.95
Disposal of fixed assets
Total 447571328.91 471204340.95
Other information:
□ Applicable√ N/A
Fixed assets
(1). Description of fixed assets
√ Applicable□ N/A
In RMB
Item
Machinery and
equipment
Transportation
equipment
Electronic
equipment
and others
Operating leased
equipment
Total
I. Cost
1. Opening
balance
82619598.35 1020400.05 31265315.39 525597112.41 640502426.20
2. Increase 29428206.55 9038415.39 47985469.41 86452091.35
(1) Purchase 28891627.63 8898200.65 37789828.28
(2) Transfer
from
construction in
progress
47985469.41 47985469.41
(3) Transfer
from inventories
536578.92 140214.74 676793.66
3. Decrease 8153090.95 2985169.50 10288683.02 21426943.47
(1) Disposal or
retirement
4074815.63 2830201.69 1728450.18 8633467.50
(2) Transfer to
inventories
4078275.32 154967.81 8560232.84 12793475.97
4. Closing
balance
103894713.95 1020400.05 37318561.28 563293898.80 705527574.08
II. Accumulated
depreciation
1. Opening
balance
29391420.36 292223.86 12083558.96 127530882.07 169298085.25
2. Increase 17784983.00 155448.37 6892606.16 74396648.69 99229686.22
(1) Provision 17784983.00 155448.37 6892606.16 74396648.69 99229686.22
3. Decrease 5647833.21 1866778.03 3056915.06 10571526.30
(1) Disposal or
retirement
3425829.91 1734910.89 545039.96 5705780.76
(2) Transfer to
inventories
2222003.30 131867.14 2511875.10 4865745.54
4. Closing
balance
41528570.15 447672.23 17109387.09 198870615.70 257956245.17
III. Provision for
impairment
1. Opening
balance
2. Increase
(1) Provision
3. Decrease
(1) Disposal or
retirement
4. Closing
balance
IV. Book value
1. Closing
balance
62366143.80 572727.82 20209174.19 364423283.10 447571328.91
2. Opening
balance
53228177.99 728176.19 19181756.43 398066230.34 471204340.95
(2). Temporarily idle fixed assets
□ Applicable√ N/A
(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 364423283.10
Total 364423283.10
(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
22. Construction in progress
Presented by items
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Construction in progress
51576850.72 20132004.07
Materials for construction
Total 51576850.72 20132004.07
Other information:
□ Applicable√ N/A
Construction in progress
(1). Description of construction in progress
√ Applicable□ N/A
In RMB
Item
Closing balance Opening balance
Carrying
amount
Provision
for
impairmen
t
Book value
Carrying
amount
Provision
for
impairmen
t
Book value
Headquarte
r buildings
37982329.7
4
37982329.7
4
1385496.59 1385496.59
Light
sources to
be leased
13594520.9
8
13594520.9
8
18746507.4
8
18746507.4
8
Total
51576850.72 51576850.72 20132004.0
7
20132004.0
7
(2). Changes in significant constructions in progress for the current period
√ Applicable□ N/A
In RMB
Item
Bud
get
amo
unt
Op
eni
ng
bal
anc
e
Incr
ease
Am
ount
tran
sferr
ed
to
fixe
d
asse
ts
Oth
er
dec
reas
es
Clos
ing
bala
nce
Amo
unt
injec
ted
as a
prop
ortio
n of
budg
et
amo
unt
(%)
Const
ructio
n
progr
ess
Amo
unt of
accu
mulat
ed
capita
lized
intere
st
Whe
re:
Capit
alize
d
inter
est
for
the
perio
d
Intere
st
capita
lizatio
n rate
for
the
period
(%)
Sour
ce of
funds
Hea
dqua
rter
build
ings
5346
3520
0.00
1385
496.5
9
3659
6833.
15
3798
2329.
74
7.10 7.10 Self-
fund
ed
capit
al
Ligh
t
sour
ces
to be
lease
d
1874
6507.
48
4283
3482.
91
4798
5469.
41
1359
4520.
98
Self-f
unded
capita
l
Tota
l
5346
3520
0.00
2013
2004.
07
7943
0316.
06
4798
5469.
41
5157
6850.
72
/ / / /
(3). Provision for impairment losses for construction in progress in the current period
□ Applicable√ N/A
Other information
□ Applicable√ N/A
Materials for construction
(4). 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. Use right assets
□ Applicable√ N/A
26. Intangible assets
(1). Description of intangible assets
√ Applicable□ N/A
In RMB
Item Land use rights Patents Software Total
I. Cost
1. Opening
balance
330630000.00 23247800.00 10196548.78 364074348.78
2. Increase 3799807.03 3799807.03
(1) Purchase 3799807.03 3799807.03
3. Decrease
(1) Disposal
4. Closing balance 330630000.00 23247800.00 13996355.81 367874155.81
II. Accumulated
amortization
1. Opening
balance
16531500.06 12535490.06 2676034.59 31743024.71
2. Increase 11021000.04 2324780.04 2297115.42 15642895.50
(1) Provision 11021000.04 2324780.04 2297115.42 15642895.50
3. Decrease
(1) Disposal
4. Closing balance 27552500.10 14860270.10 4973150.01 47385920.21
III. Provision for
impairment
1. Opening
balance
2. Increase
(1) Provision
3. Decrease
(1) Disposal
4. Closing balance
IV. Book value
1. Closing balance 303077499.90 8387529.90 9023205.80 320488235.60
2. Opening
balance
314098499.94 10712309.94 7520514.19 332331324.07
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.
(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
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
balance
Increase Amortization Other
decreases
Closing balance
Renovation
costs
16908070.34 943824.91 6831616.68 11020278.57
Leased
software
844339.62 292271.40 552068.22
Total 16908070.34 1788164.53 7123888.08 11572346.79
Other information:
None
30. Deferred tax assets and deferred tax liabilities
(1). Deferred tax assets that are not offset
√ Applicable□ N/A
In RMB
Item
Closing balance Opening balance
Deductible
temporary
difference
Deferred tax
assets
Deductible
temporary
difference
Deferred tax
assets
Provision for
impairment of assets
28773276.08 4625714.28 35664470.56 5836098.21
Unrealized profits for
insider transactions
343108987.56 85451876.99 382370535.17 95185982.07
Deductible losses 3339193.87 834798.46
Estimated liabilities 24854195.43 4578959.70 25267517.71 4667623.73
Deferred income 15797285.68 2504280.31 16475547.96 2546469.56
Share-based payment
expenses
639138.44 101038.96 4987200.41 787768.28
Total 416512077.06 98096668.70 464765271.81 109023941.85
(2). Deferred tax liabilities that are not offset
√ Applicable□ N/A
In RMB
Item
Closing balance Opening balance
Taxable
temporary
differences
Deferred tax
liabilities
Taxable
temporary
differences
Deferred tax
liabilities
Appreciation from
valuation of assets from
business combination not
involving enterprises
under common control
Changes in fair value of
other debt investments
Changes in fair value of
investments in other
equity instruments
Long-term accounts
receivable
13097031.17 1964554.68
Total 13097031.17 1964554.68
(3). Deferred tax assets and deferred tax liabilities that are presented at the net amount after
offset
√ Applicable□ N/A
In RMB
Item
Closing set-off
amounts of
deferred tax
assets and
liabilities
Closing balance
of deferred tax
assets or
liabilities after
set-off
Opening set-off
amount of
deferred tax
assets and
liabilities
Opening balance
of deferred tax
assets or
liabilities after
set-off
Deferred tax assets 1964554.68 96132114.02 109023941.85
Deferred tax liabilities
(4). Details of unrecognized deferred tax assets
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Deductible temporary
differences
47569632.05 32593450.49
Deductible losses 275961696.98 155147494.11
Total 323531329.03 187740944.60
(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 9487530.31 9487530.31
2022 11900329.00 11900329.00
2023 47115450.59 47115450.59
2024 86745720.01 86644184.21
2025 120712667.07
Total 275961696.98 155147494.11 /
Other information:
□ Applicable√ N/A
31. Other non-current assets
√ Applicable□ N/A
In RMB
Item
Closing balance Opening balance
Carrying
amount
Provision
for
impairmen
t
Book value
Carrying
amount
Provision
for
impairmen
t
Book value
Prepaymen
t for
purchase of
long-term
assets
6299781.0
6
6299781.0
6
11420185.9
4
11420185.9
4
Total
6299781.0
6
6299781.0
6
11420185.9
4
11420185.9
4
Other information:
None
32. Short-term borrowings
(1). Categories of short-term borrowings
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Pledge borrowings
Mortgage borrowings
Guaranteed loans 77223937.39 50000000.00
Credit loans 11299169.33
Credit and pledge borrowings 10000000.00
Guaranteed loans and loans
against collateral
16337875.56
Interest payable 255746.14 427443.49
Total 88778852.86 76765319.05
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
35. Notes payable
Presented by notes payable
√ Applicable□ N/A
In RMB
Category Closing balance Opening balance
Commercial acceptance
bills
Bank acceptance bills 116822674.67 37335841.79
Total 116822674.67 37335841.79
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 purchase 226494815.90 176624445.46
Total 226494815.90 176624445.46
(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
fees and others
153258189.88 167534200.30
Total 153258189.88 167534200.30
(2). Receipts in advance with significant amounts aged more than 1 year
√ Applicable□ N/A
In RMB
Item Closing balance
Reasons for not repaid or
carried-forward
Jiangsu Happy Blue Sea Cinema
Development Co. Ltd.
29654090.00
Lease payments received in
advance
Total 29654090.00
Other information
√ Applicable□ N/A
The difference between the opening balance of the year and the closing balance of the prior year (as of
December 31 2019) can refer to V.44 of Section XI for details.
38. Contract liabilities
(1). Description of contract liabilities
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Goods payment 31518312.59 15777305.81
Total 31518312.59 15777305.81
(2). Amount and reasons of major changes in the book value during the reporting period
□ Applicable√ N/A
Other information:
√ Applicable□ N/A
The difference between the opening balance of the year and the closing balance of the prior year (as of
December 31 2019) can refer to V.44 of Section XI for details.
39. Employee benefits payable
(1). Presented by employee benefits payable
√ Applicable□ N/A
In RMB
Item Opening balance Increase Decrease Closing balance
I. Short-term benefits 50334348.08 281970084.14 286272801.05 46031631.17
II. Post-employment 240147.90 1199173.75 1365386.67 73934.98
benefits-defined
contribution plan
III. Termination
benefits
12436.73 6038236.08 6050672.81
IV. Other benefits due
within one year
Total 50586932.71 289207493.97 293688860.53 46105566.15
(2). Presented by short-term employee benefits
√ Applicable□ N/A
In RMB
Item Opening balance Increase Decrease Closing balance
I. Wages or salaries
bonuses allowances
and subsidies
50091330.65 254103055.46 258237950.81 45956435.30
II. Staff welfare 5629232.83 5629232.83
III. Social security
contributions
60144.93 8164533.26 8170691.67 53986.52
Where: Medical
insurance
46782.99 7934349.77 7927949.68 53183.08
Work injury
insurance
4733.59 18477.01 22424.14 786.46
Maternity
insurance
8628.35 211706.48 220317.85 16.98
IV. Housing funds 2113.00 13279496.28 13280620.28 989.00
V. Union running costs
and employee
education costs
180759.50 793766.31 954305.46 20220.35
VI. Short-term paid
leaves
VII. Short-term profit
sharing plan
Total 50334348.08 281970084.14 286272801.05 46031631.17
(3). Presented by defined contribution plan
√ Applicable□ N/A
In RMB
Item
Opening
balance
Increase Decrease Closing balance
1. Basic pensions 232248.74 1274384.40 1432746.16 73886.98
2. Unemployment
insurance
7899.16 -75210.65 -67359.49 48.00
3. Enterprise annuity
contribution
Total 240147.90 1199173.75 1365386.67 73934.98
Other information:
□ Applicable√ N/A
40. Taxes payable
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Value-added tax (VAT) 12205136.88 776108.18
Enterprise income tax 5477611.87 39874754.97
Individual income tax 1067512.87 1447882.44
City maintenance and
construction tax
478213.88 364569.72
Stamp duty 294612.70 200925.53
Education surcharges 204948.80 156244.17
Local education surcharges 136632.54 104162.78
Annual franchise right tax 7177.40
Total 19871846.94 42924647.79
Other information:
None
41. Other payables
Presented by items
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Interest payable
Dividend payable
Other payables 59848053.83 14364076.43
Total 59848053.83 14364076.43
Other information:
□ Applicable√ N/A
Interest payable
(1). Presented by categories
□ Applicable√ N/A
Dividends payable
(2). 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 110389.10 145265.79
Deposits/margins 6600475.05 2626034.93
Withdrawals in advance 22153008.25 11539286.03
Amount of equity transfer
payable
11548387.32
Borrowings 19343613.33
Temporary receipts payable 92180.78 53489.68
Total 59848053.83 14364076.43
(2). Other payables with significant amounts aged more than 1 year
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
42. Liabilities held for sale
□ 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
within one year
181057099.90 64841740.00
Interest payable 360312.56 127055.02
Total 181417412.46 64968795.02
Other information:
None
44. Other current liabilities
Description of other current liabilities
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Taxes to be written off 3045831.07 1133137.22
Total 3045831.07 1133137.22
Changes in short-term bonds payable:
□ Applicable√ N/A
Other information:
√ Applicable□ N/A
The difference between the opening balance of the year and the closing balance of the prior year (as of
December 31 2019) can refer to V.44 of Section XI for details.
45. Long-term borrowings
(1). Categories of long-term borrowings
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Guaranteed loans 29000000.00
Credit loans 2043500.81
Guaranteed loans and loans
against collateral
33693828.00 279060423.10
Interest payable 107952.72 554684.17
Total 64845281.53 279615107.27
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
48. Long-term payables
Presented by items
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Long-term payables 3262450.00 3488100.00
Special payables
Total 3262450.00 3488100.00
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
installment
3488100.00 3262450.00
Other information:
None
Special payables
(2). Special payables presented by nature
□ Applicable√ N/A
49. Long-term employee benefits payable
□ Applicable√ N/A
(1). Long-term employee benefits payable
□ Applicable√ N/A
(2). Changes in defined benefit plan
Present value of the obligations under the defined benefit plan:
□ Applicable√ N/A
Assets under the plan:
□ Applicable√ N/A
Net liabilities (net assets) under the defined benefit plan
□ Applicable√ N/A
Description of the impact of the content of the defined benefit plan and associated risks on the future
cash flow time and uncertainty of the Company:
□ Applicable√ N/A
Description of major actuarial assumptions and sensitivity analysis result for the defined benefit plan
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
50. Provisions
√ Applicable□ N/A
In RMB
Item Opening balance Closing balance Reason
Product quality
warranty
27072676.49 27240470.53 Expenses for “threeguarantees” services
Amounts payable for
goods returned
1558884.12
Total 27072676.49 28799354.65 /
Other description including significant assumptions and estimates relative to material provisions:
None
51. Deferred income
Description of deferred income
√ Applicable□ N/A
In RMB
Item
Opening
balance
Increase Decrease
Closing
balance
Reason
Government
grants
17108361.69 15736600.00 16121704.54 16723257.15
Total 17108361.69 15736600.00 16121704.54 16723257.15 /
Items relating to government grants:
√ Applicable□ N/A
In RMB
Liabilities
Opening
balance
Increased
governme
nt grants
for the
current
period
Amount
recognized
in
non-operati
ng income
for the
current
period
Amount
recognize
d in other
income
for the
current
period
Other
chang
es
Closing
balance
Related to
assets/inco
me
8K Ultra
High
Definition
Laser
Display
Technology
Engineering
Research
Center
2000000.00 300812.65 1699187.35
Related to
assets
High
Performance
Resin and
Composite
Materials
Preparation
Technique
for Additive
Manufacturin
g
18125.06 18125.06
Related to
income
Key
Enterprise
Laboratory
for Laser
Display in
4820417.3
1
4820417.3
1
Related to
income
Guangdong
Province
Ultra-high
Brightness
Laser Light
Source
Engineering
Technology
Research
Center
2142818.8
7
2250000.0
0
2708945.6
1
1683873.2
6
Related to
income
Trichromatic
Laser
Display
Complete
Equipment
Production
Demonstratio
n Line
7694753.4
3
9901800.0
0
4256356.8
9
13340196.
54
Related to
income
Key
Technology
of
Trichromatic
Laser
Display
Complete
Equipment
Industrializati
on
432247.02
2210000.0
0
2642247.0
2
Related to
income
2019 Special
Funds for the
Development
of Cultural
Industry in
Shunyi
District
1374800.0
0
1374800.0
0
Related to
income
Total
17108361.
69
15736600.
00
16121704.
54
16723257.
15
Other information:
√ Applicable□ N/A
[Note]: Government grants included in the current profit or loss are disclosed in VII.84 of Section XI in
details.
52. Other non-current liabilities
□ Applicable√ N/A
53. Share capital
√ Applicable□ N/A
In RMB
Opening
balance
Changes (+ -)
Closing
balance
Issue
new
shar
e
Bonu
s
share
s
Capitalizatio
n
of capital
reserve
Others Subtotal
Total
share
s
451554411.0
0
1202490.0
0
1202490.0
0
452756901.0
0
Other information:
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 adjust the grant price of restricted shares from RMB 17.5
per share to RMB 17.425 per share. On October 29 2020 the Company held the 28th meeting of the first
Board of Directors and the 15th meeting of the first Board of Supervisors at which the Proposal on
Invalidating Partial Granted but Not Vested 2019 Restricted Shares and the Proposal on Vesting
Criteria for the First Vesting Period in the Initial Grant under 2019 Restricted Share Incentive Plan
were reviewed and passed. On November 11 2020 the Company received the additional investment of
RMB 20953388.25 in total paid by 147 qualified grantees of share incentives including RMB
1202490.00 recognized as share capital and RMB 19750898.25 recognized as capital premium (share
premium). BDO China Shu Lun Pan Certified Public Accountants LLP audited this capital increase and
issued a Capital Verification Report (Xin Kuai Shi Bao Zi [2020] No. ZL10495).
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 premium
(Share premium)
1200466394.58 40736025.50 1241202420.08
Other capital
reserve
7475923.79 18783763.38 18441116.10 7818571.07
Total 1207942318.37 59519788.88 18441116.10 1249020991.15
Other description including changes in the current period and reasons for changes:
1) On November 11 2020 the Company received the additional investment of RMB 20953388.25
in total paid for restricted shares including RMB 1202490.00 recognized as share capital and RMB
19750898.25 recognized as capital premium (share premium). In addition because the first vesting
period meets the vesting criteria for the initial grant under the restricted share incentive plan RMB
18441116.10 was transferred from capital reserve (other capital reserve) to capital premium (share
premium).
2) On December 23 2020 the Company acquired minority interests by paying the consideration of
RMB 27226384.00 for the shares and acquired shares in the fair value of the identifiable net assets in
the amount of RMB 29770395.15 while the difference RMB 2544011.15 was recognized as capital
premium (share premium).
3) On October 14 2019 the Company held the 18th meeting of the first Board of Directors and the
8th meeting of the first Board of Supervisors at which resolutions on matters related to the 2019
Restricted Share Incentive Plan were reviewed and passed; 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 grantees of share incentives 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 adjust the grant price of restricted shares from RMB 17.5 per share to RMB 17.425 per
share. On October 14 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 granted reserved restricted
shares to grantees of share incentives under the 2019 restricted share incentive plan 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 1.1 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. The total expense of equity-settled share-based payments amounted to RMB
20570952.76 in which RMB 18783763.38 was recognized in the capital reserve (other capital reserve)
and RMB 1787189.38 was charged to the amount attributable to minority interests.
56. Treasury shares
□ Applicable√ N/A
57. Other comprehensive income
√ Applicable□ N/A
In RMB
Item
Openin
g
balanc
e
Amount recognized in the current period
Closing
balance
Amou
nt
incurr
ed for
curren
t
period
Less:
Amount
previously
included in
other
comprehen
sive
Less:
Amount
previously
included in
other
comprehen
sive
Less:
Incom
e tax
expens
es
Attributa
ble to
owners
of the
parent
company
after tax
Attributa
ble to
minority
sharehold
ers after
tax
before
tax
income and
transferred
to profit or
loss for the
period
income and
transferred
to retained
earnings
for the
period
I. Other
comprehen
sive
income that
cannot be
reclassified
subsequentl
y to profit
or loss
II. Other
comprehen
sive
income that
will be
reclassified
to profit or
loss
3287063
.85
-6496909
.69
-6501355.7
8
4446.09
-3214291
.93
Where:
Exchange
differences
on
translation
of financial
statements
denominate
d in foreign
currencies
3287063
.85
-6496909
.69
-6501355.7
8
4446.09
-3214291
.93
Total other
comprehen
sive
income
3287063
.85
-6496909.6
9
-6501355.7
8
4446.09
-3214291
.93
Other description including adjustments on transferring effective portion of cash flow hedges to amount
upon initial recognition of the hedged item:
None
58. Special reserve
□ Applicable√ N/A
59. Surplus reserve
√ Applicable□ N/A
In RMB
Item Opening balance Increase Decrease Closing balance
Statutory surplus
reserve
21522683.40 12441955.44 33964638.84
Surplus reserve
recovered through
business
combination
involving entities
under common
control
1277540.73 1277540.73
Total 22800224.13 12441955.44 35242179.57
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.
60. Undistributed profits
√ Applicable□ N/A
In RMB
Item Current period Prior period
Undistributed profits at the end of
prior period before adjustment
288975820.29 112623054.78
Total adjusted undistributed profits at
the beginning of the period (Add: +;
Less: -)
1278734.88
Undistributed profits at the beginning
of the period after adjustment
290254555.17 112623054.78
Add: Net profit attributable to owners
of the parent company for the period
113847873.06 186457276.71
Less: Appropriation to statutory
surplus reserve
12441955.44 10104511.20
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 33866580.83
Undistributed profits at the end of the
period
357793891.96 288975820.29
On May 22 2020 at the 2019 annual general meeting of shareholders the Proposal on Preliminary
Plan on Profit Distribution for 2019 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 0.75 (tax inclusive) for every 10 shares. The total
cash dividend to be paid is RMB 33866580.83.
For the total adjusted undistributed profits at the beginning of the period refer to the description in
V.44 of Section XI.
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
1278734.88.
2. Undistributed profits at the beginning of the period were affected by RMB 0 due to changes in
accounting policies.
3. Undistributed profits at the beginning of the period were affected by RMB 0 due to the correction of
significant accounting errors.
4. Undistributed profits at the beginning of the period were affected by RMB 0 due to changes in the
scope of consolidation resulting from business combination involving entities under common control.
5. Undistributed profits at the beginning of the period were affected by RMB 0 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
Item
Amount for the current period Amount for the prior period
Income Cost Income Cost
Main business 1948884176.83 1393075043.93 1979148918.89 1183650635.25
Total 1948884176.83 1393075043.93 1979148918.89 1183650635.25
(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 by category
Item Subtotal
Principal operation place
Domestic 1683887300.96
Overseas 93264261.21
Subtotal 1777151562.17
By product
Laser optical engine 202707478.10
Complete laser projector 1465195649.90
Others 109248434.17
Subtotal 1777151562.17
Revenue recognition time
Goods (transferred at a time point) 1744123232.35
Services (provided during a specific period of
time)
33028329.82
Subtotal 1777151562.17
Note: The revenue breakdown information presented in the table above is the revenue amount excluding
rents and other amounts not subject to the New Revenue Standard.
62. Taxes and levies
√ Applicable□ N/A
In RMB
Item Amount for the current period Amount for the prior period
City maintenance and
construction tax
2867426.89 3070823.26
Education surcharges 1245187.55 1336864.61
Local education surcharges 830125.05 879366.01
Others 1776005.30 2323097.26
Total 6718744.79 7610151.14
Other information:
None
63. Selling expenses
√ Applicable□ N/A
In RMB
Item Amount for the current period Amount for the prior period
Employee benefits 57290923.11 52472593.05
Marketing fees 39666919.06 36724064.18
Service fees 10032772.59 7249578.52
After-sale repair expenses 6175382.08 17690062.80
Advertising and business promotion
expenses
4839376.53 6865906.71
Travel expenses 2561838.29 6806740.43
Business entertainment expenses 1671853.12 3015283.66
Other expenses 11349169.82 20935881.65
Total 133588234.60 151760111.00
Other information:
None
64. Administrative expenses
√ Applicable□ N/A
In RMB
Item Amount for the current
period
Amount for the prior
period
Employee benefits 59421774.51 70126183.15
Rent expense 7449392.71 15153597.68
Travel expenses 471610.48 3940279.50
Service fees 31845756.88 27332463.20
Depreciation and amortization expenses 9094503.87 14945520.79
Share-based payment expenses 20581939.14 8146719.12
Other expenses 6892298.67 12981767.17
Total 135757276.26 152626530.61
Other information:
None
65. R&D expenses
√ Applicable□ N/A
In RMB
Item Amount for the current
period
Amount for the prior
period
Employee benefits 120904809.23 118054037.18
Material consumption expenses 21280414.59 30630477.60
Rent expense 8983285.74 9706785.26
Service fees 8549326.63 10229627.72
Depreciation and amortization expenses 13073784.95 8883535.17
Testing expenses 5234158.17 4161556.69
Patent fees 6808589.82 11169391.10
Other expenses 19608999.97 8862355.54
Total 204443369.10 201697766.26
Other information:
None
66. Financial expenses
√ Applicable□ N/A
In RMB
Item Amount for the current
period
Amount for the prior
period
Interest expenses 20066451.02 33120484.94
Less: Interest income -10322478.28 -4079231.03
Exchange profit or loss -2227674.26 -799344.64
Bank service charges 1708675.72 1249314.15
Total 9224974.20 29491223.42
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
assets
300812.65 8000000.00
Government grants related to
income
41782494.35 22467052.33
Refund of transaction fees for
withholding individual income
taxes
323003.17
Additional deduction of input
VAT
2848690.73 3657561.79
Total 45255000.90 34124614.12
Other information:
Government grants recognized in other income in the current period are disclosed in VII.84 of Section
XI in details.
68. Investment income
√ Applicable□ N/A
In RMB
Item Amount for the current Amount for the prior period
period
Long-term equity investment accounted
for using the equity method
-679282.94 -3927.93
Investment income from disposal of
held-for-trading financial assets
18624853.96 9552990.98
Total 17945571.02 9549063.05
Other information:
None
69. Gains from net exposure hedges
□ Applicable√ N/A
70. Gains from changes in fair values
□ Applicable√ N/A
71. Losses of credit impairment
√ Applicable□ N/A
In RMB
Item
Amount for the current
period
Amount for the prior period
Bad debt losses -9121278.95 -3771572.38
Total -9121278.95 -3771572.38
Other information:
None
72. Impairment losses of assets
√ Applicable□ N/A
In RMB
Item
Amount for the current
period
Amount for the prior period
I. Decline in value of inventories -10196985.27 -12623251.67
II. Impairment losses of contract
assets
-1393709.16
Total -11590694.43 -12623251.67
Other information:
None
73. Gains from disposal of assets
√ Applicable□ N/A
In RMB
Item Amount for the current period Amount for the prior period
Gains from disposal of fixed
assets
281040.26 41420.84
Total 281040.26 41420.84
Other information:
None
74. Non-operating income
Description of non-operating income
√ Applicable□ N/A
In RMB
Item
Amount for the current
period
Amount for the prior
period
Amount included in
non-recurring profit
or 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 debt
restructuring
Gains from exchange of
non-monetary assets
Donation receipts
Government grants 1539340.28 1539340.28
Amounts not required for
payment
275714.05 1876501.15 275714.05
Indemnity 2793056.81 2005696.00 2793056.81
Others 30323.96 43869.58 30323.96
Total 4638435.10 3926066.73 4638435.10
Government grants included in profit or loss for the period
√ Applicable□ N/A
In RMB
Grant project
Amount for the current
period
Amount for the prior
period
Related to assets/income
Grant from Hong
Kong government for
139340.28 Related to income
the semiconductor
R&D project of Hong
Kong University of
Science and
Technology
Enterprise Listing
Financing Incentive
Program of Shenzhen
Nanshan District
Industry and
Information
Technology Bureau
1400000.00 Related to income
Other information:
□ Applicable√ N/A
75. Non-operating expenses
√ Applicable□ N/A
In RMB
Item
Amount for the current
period
Amount for the prior
period
Amount included in
non-recurring profit
or loss for the period
Total losses from disposal
of non-current assets
Where: Losses from
disposal of fixed assets
Losses from
disposal of intangible assets
Losses from debt
restructuring
Losses from exchange of
non-monetary assets
Losses from damage and
retirement of non-current
assets
1393161.39 3255908.90 1393161.39
Penalties and overdue fines 76700.50 212581.48 76700.50
External donations 593309.76 715387.87 593309.76
Others 1.31 16319.31 1.31
Total 2063172.96 4200197.56 2063172.96
Other information:
None
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
period
11910373.50 64508782.78
Deferred income tax expenses 12853862.82 -9526561.15
Total 24764236.32 54982221.63
(2). Reconciliation of income tax expenses to the accounting profit:
√ Applicable□ N/A
In RMB
Item Amount for the current period
Total profit 111421434.89
Income tax expense calculated based on
statutory/applicable tax rate
16713215.24
Effect of different tax rates of subsidiaries
operating in other jurisdictions
563787.37
Effect of income tax for the period before
adjustment
-178204.59
Effect of non-taxable income -659450.33
Effect of non-deductible cost expense and loss 3210951.55
Effect of utilizing deductible loss not recognized
for deferred tax assets for prior period
-29537.27
Effect of deductible temporary difference or
deductible loss not recognized for deferred tax
assets for the current period
25161016.39
Change in the balance of opening deferred tax
assets caused by tax rate adjustment
88229.77
Effect of additional deduction of R&D expenses -20105771.81
Income tax expenses 24764236.32
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 XI in details.
78. Items in cash flow statement
(1). Other cash receipts relating to operating activities
√ Applicable□ N/A
In RMB
Item Amount for the current period Amount for the prior period
Government grants 40365718.97 28765309.74
Non-operating income 1127368.51 3841224.18
Interest income 10382950.88 2049565.58
Other monetary funds-margins 51523088.26 37531542.28
Receivables and payables 6965206.85 6375293.17
Bank deposits-frozen funds due to
litigation 30000000.00
Total 140364333.47 78562934.95
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 period Amount for the prior period
Selling expenses paid in cash 77288028.15 75178450.72
Administrative and R&D expenses
paid in cash
103583598.35 101950001.38
Financial expenses paid in cash 1708675.72 1249314.15
Non-operating expenses 670011.57 944288.66
Other monetary funds-margins 49749747.97 41702174.11
Bank deposits-frozen funds due to
litigation
30000000.00
Receivables and payables 11988038.74 5886899.65
Total 244988100.50 256911128.67
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 19320000.00
Total 19320000.00
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
Issue expenses 39396048.75
Total 39396048.75
Description of other cash payments relating to financing activities:
None
79. Supplementary information to the cash flow statement
(1). Supplementary information to the cash flow statement
√ Applicable□ N/A
In RMB
Supplemental information Amount for the current period Amount for the prior period
1. Reconciliation of net profit to
cash flow from operating activities:
Net profit 86657198.57 224376422.71
Add: Provision for impairment of
assets
11590694.43 12623251.67
Losses of credit impairment 9121278.95 3771572.38
Depreciation of fixed assets depletion
of oil and gas assets depreciation of
productive biological assets
99229686.22 80539152.68
Amortization of use right assets
Amortization of intangible assets 7377145.47 14703595.57
Amortization of long-term prepaid
expenses
7123888.08 4870707.84
Losses on disposal of fixed assets
intangible assets and other long-term
assets (gains are indicated by “－”)
-281040.26 -41420.84
Losses on retirement of fixed assets
(gains are indicated by “－”)
1393161.39 3255908.90
Losses on changes in fair values
(gains are indicated by “－”)
Financial expenses (income is
indicated by “－”)
17838776.76 33561732.74
Investment losses (income is indicated
by “－”)
-17945571.02 -9549063.05
Decrease in deferred tax assets
(increase is indicated by “-”)
12853862.82 -9530966.11
Increase in deferred tax liabilities
(decrease is indicated by “-”)
Decrease in inventories (increase is
indicated by “－”)
-172605815.49 -101935742.75
Decrease in receivables from
operating activities (increase is
indicated by “－”)
-128184406.23 -73469932.05
Increase in payables from operating
activities (decrease is indicated by
“－”)
96596705.75 51678964.90
Others 21624864.98 8146719.12
Net cash flow from operating
activities
52390430.42 243000903.71
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:
Closing balance of cash 983525089.44 829789487.86
Less: Opening balance of cash 829789487.86 472508550.40
Add: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net increase in cash and cash
equivalents
153735601.58 357280937.46
(2). Net cash paid to acquire subsidiaries for the period
√ Applicable□ N/A
In RMB
Amount
Cash or cash equivalents paid in the period for business
combination occurring in the period
15677996.68
Where: Tianjin Bonian Film Partnership (LP) 15677996.68
Less: Cash and cash equivalents held by subsidiaries at the
acquisition date
63934.36
Where: Tianjin Bonian Film Partnership (LP) 63934.36
Net cash paid for acquiring subsidiaries 15614062.32
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 983525089.44 829789487.86
Where: Cash on hand 5858.56 3348.57
Bank deposits that can be paid at any
time
980570123.37 827470990.73
Other monetary funds that can be
paid at any time
2949107.51 2315148.56
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
III. Closing balance of cash and cash
equivalents
983525089.44 829789487.86
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
amount
Reason
Other monetary funds 14057949.58 Margins
Bank deposits 40000000.00 Term deposits
Land use rights 303077499.90 Mortgage collateral
Total 357135449.48 /
Other information:
None
82. Foreign currency monetary items
(1). Foreign currency monetary items
√ Applicable□ N/A
In RMB
Item
Closing balance of
foreign currency
Exchange rate
Closing balance of
RMB equivalent
balance
Cash and bank balances - - 84403281.41
Where: USD 12801308.81 6.5249 83527259.85
GBP 365.96 8.8903 3253.49
HKD 626935.22 0.84164 527653.76
VND 1215191249.88 0.000284 345114.31
Accounts receivable 7071872.19
Where: USD 1083828.44 6.5249 7071872.19
Short-term borrowings 11410560.27
Where: USD 1748771.67 6.5249 11410560.27
Accounts payable 46949935.01
Where: USD 7195502.61 6.5249 46949935.01
Long-term borrowings 2057124.15
Where: USD 315272.90 6.5249 2057124.15
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
Item
Major overseas
operation place
Functional
currency
Basis of
choice
Appotronics Hong Kong Limited Hong Kong USD
Common
currency
Appotronics USA Inc. USA USD
Common
currency
Fabulus Technology Hong Kong Limited Hong Kong USD
Common
currency
JoveAI Limited
Cayman Islands USD
Common
currency
JoveAI Innovation Inc. USA USD
Common
currency
FORMOVIE TECHNOLOGY INC USA USD
Common
currency
JoveAI Asia Company Limited Vietnam VND
Local
currency
WEMAX LLC USA USD
Common
currency
83. Hedge
□ Applicable√ N/A
84. Government grants
(1). Basic information of government grants
√ Applicable□ N/A
In RMB
Category Amount Item presented
Amount recognized in
current profit or loss
Government grants
related to assets
Deferred income 300812.65
Government grants
related to income and
used for compensation
of the Company’s
relevant costs or losses
in subsequent periods
15736600.00 Other income 15820891.89
Government grants
related to income and
used for compensation
of the Company’s
relevant costs or losses
that have been incurred
26261602.46 Other income 26261602.46
Government grants
related to income and
used for compensation
of the Company’s
relevant costs or losses
that have been incurred
1539340.28 Non-operating income 1539340.28
Interest subsidies 544300.00 Financial expenses 544300.00
Note: The amount refers to government grants actually received in the current period.
1) Government grants related to assets
Item
Opening
deferred
income
Increase Amortization
Closing
deferred
income
Amortization
item
presented
Description
8K Ultra
High
Definition
Laser
Display
Technology
Engineering
Research
Center
2000000.00 300812.65 1699187.35 Other income
Project Contract of 8K
Ultra High Definition
Laser Display
Technology
Engineering Research
Center
(XMHT20190101023)
Development and
Reform Commission
of Shenzhen
Municipality
Subtota
l
2000000.00 300812.65 1699187.35
2) Government grants related to income and used for compensation of the Company’s relevant
costs or losses in subsequent periods
Item
Opening
deferred
income
Increase
Carrying
forward
Closing
deferred
income
Carrying
forward
item
presented
Description
High
Performance
Resin and
Composite
Materials
Preparation
Technique for
Additive
Manufacturing
18125.06 18125.06
Other
income
Research and
Development
Cooperation
Contract
(2016YFB1100802)
Institute of
Chemistry Chinese
Academy of
Sciences
Key Enterprise
Laboratory for
Laser Display
in Guangdong
Province
4820417.31 4820417.31
Other
income
Project Contract for
Science and
Technology Plan of
Key Laboratory of
Laser Display
Enterprises in
Guangdong
Province (Yue Ke
Gui Cai Zi [2018]
No. 233)
Department of
Science and
Technology of
Guangdong
Province; Notice of
Shenzhen Science
Technology and
Innovation
Commission on the
Issuance of Grants
to Provincial Key
Laboratory in 2018
and 2019 (Shen Ke
Ji Chuang Xin
[2019] No. 333)
Science Technology
and Innovation
Commission of
Shenzhen
Municipality
Ultra-high
Brightness
Laser Light
Source
Engineering
Technology
Research
Center
2142818.87 2250000.00 2708945.61 1683873.26
Other
income
Project Contract for
Shenzhen
Municipality Science
and Technology
Plan (Shen Ke Ji
Chuang Xin [2019]
No. 33) Science
Technology and
Innovation
Commission of
Shenzhen
Municipality
Trichromatic
Laser Display
Complete
Equipment
Production
Demonstration
Line
7694753.43 9901800.00 4256356.89 13340196.54
Other
income
Notice on the
Establishment of
2018 Annual
Projects for
Strategic Advanced
Electronic Materials
in the National Key
Research and
Development
Programs (Guo Ke
Gao Fa Ji Zi [2018]
No. 41) High
Technology
Research and
Development
Center Ministry of
Science and
Technology
Key
Technology of
Trichromatic
Laser Display
Complete
Equipment
Industrialization
432247.02 2210000.00 2642247.02
Other
income
Task Statements for
Research and
Development
Program in Key
Fields of
Guangdong
Province
(2019B010926001)
Finance Bureau of
Shenzhen
Municipality
2019 Special
Funds for the
Development of
1374800.00 1374800.00
Other
income
Announcement of
Shunyi Publicity
Department on
Cultural
Industry in
Shunyi District
Candidate Projects
for 2019 Special
Funds for the
Development of
Cultural Industry in
Shunyi District
Shunyi Publicity
Department
Subtotal
15108361.69
15736600.0
0
15820891.89 15024069.80
3) Government grants related to income and used for compensation of the Company’s relevant
costs or losses that have been incurred
Item Amount
Item
presented
Description
Maternity Grants from
Shenzhen Social Security
Bureau
432674.41 Other income
Provisions of Guangdong for Maternity
Insurance of Employees Shenzhen Social
Insurance Fund Administration
2019 Talent Housing Rent
Allowance of the Housing
and Construction Bureau of
Nanshan District Shenzhen
896885.00 Other income
Supplementary Announcement on 2020
Talent Housing Rent Allowance of the
Housing and Construction Bureau of
Nanshan District Shenzhen Nanshan District
Industry and Information Technology Bureau
Level 3 Grants for
High-value Patent Portfolio
from Shenzhen
Administration for Market
Regulation
271428.60 Other income
2020 Special Funds for Building the Service
System of Intellectual Property Operation in
Shenzhen (Batch 1) & Candidate Objects of
Grants for Intellectual Property-Pledged
Financing with Special Funds under
Intellectual Property Authority Delegated by
Guangdong Province to Cities and Counties
Shenzhen Administration for Market
Regulation
Refund of unemployment
insurance by Shenzhen Social
Insurance Fund
Administration
2710583.94 Other income
Announcement on the Refund of
Unemployment Insurance to Participating
Enterprises in Shenzhen (Batch 3) Shenzhen
Social Insurance Fund Administration
Refund of unemployment
insurance by Beijing Social
Insurance Fund
Administration
104409.09 Other income
Announcement on the Refund of
Unemployment Insurance to Participating
Enterprises in Beijing
Grants to the Second Batch
of Patent Application from
3689840.00 Other income
Notice of Shenzhen Administration for
Market Regulation on Claiming the Grants to
Shenzhen Administration for
Market Regulation in 2018
the Second Batch of Patent Application in
2018 Shenzhen Administration for Market
Regulation
2019 Special Funds for
Intellectual Property Rights
of Shenzhen Administration
for Market Regulation
500000.00 Other income
Notice of Shenzhen Administration for
Market Regulation on the Disclosure of 2019
Project List (Batch 2) Proposed to be Funded
by the Intellectual Property Special Funds
under the Approval System and the
Assessment System Shenzhen Administration
for Market Regulation
Plan of Rewards and
Supports for Intellectual
Property Operation of
Shenzhen Nanshan District
Science Technology and
Innovation Bureau
100000.00 Other income
Notice on 2020 Nanshan District Independent
Innovation Industry Development Special
Fund - Science Technology and Innovation
Sub-Fund (Batch 1) (Shen Nan Ke [2020]
No. 35) Shenzhen Nanshan District Science
Technology and Innovation Bureau
2019 Special Funds for
Promoting High-quality
Economy Development of
Shenzhen Administration for
Market Regulation (Batch 3)
300000.00 Other income
2019 Allocation Plan of Special Funds for
Promoting High-quality Economy
Development of Guangdong Administration
for Market Regulation (Batch 3) Shenzhen
Administration for Market Regulation
Patent Support Plan of
Shenzhen Nanshan District
Finance Bureau
3532500.00 Other income
Disclosure of the Second Batch of Entities
that Nanshan District Independent Innovation
Industry Development Special Fund proposes
to support in 2020 Shenzhen Nanshan
District Finance Bureau
Patent Support Plan of
Shenzhen Nanshan District
Finance Bureau
2431500.00 Other income
Nanshan District Independent Innovation
Industry Development Special Fund -
Science Technology and Innovation
Sub-Fund - Patent Support Plan Application
(2020) Shenzhen Nanshan District Finance
Bureau
Grant for Domestic Market
Expansion by Enterprises
from Service Bureau for
Small and Medium-sized
Enterprises of Shenzhen
95430.00 Other income
Notice of the Service Bureau for Small and
Medium-sized Enterprises of Shenzhen on
Paying Grants for Domestic Market
Expansion under the Innovative Development
Cultivation and Support Plan by Private and
Small and Medium-sized Enterprises of
Shenzhen in 2020 Service Bureau for Small
and Medium-sized Enterprises of Shenzhen
2019 Scheme for Grants to
Enterprise Research and
Development of the
High-technology
2043000.00 Other income
Notice of Shenzhen Science Technology and
Innovation Commission on Disclosure of the
First Batch of Enterprises proposed to be
funded under 2019 Enterprise Research and
Department Science
Technology and Innovation
Commission of Shenzhen
Municipality
Development Subsidy Scheme Science
Technology and Innovation Commission of
Shenzhen Municipality
Plan of Shenzhen Nanshan
District Science Technology
and Innovation Bureau on
Support to National
High-tech Enterprises
100000.00 Other income
Disclosure of the Third Batch of Entities that
Nanshan District Independent Innovation
Industry Development Special Fund proposes
to support in 2020 Shenzhen Nanshan
District Science Technology and Innovation
Bureau
Special Funds for Protected
Fields of Shenzhen
Administration for Market
Regulation
500000.00 Other income
Announcement of Shenzhen Administration
for Market Regulation on 2019 Candidate
Entities and Projects for the Intellectual
Property Special Funds for Protected Fields
Shenzhen Administration for Market
Regulation
Plan of Shenzhen Nanshan
District Science Technology
and Innovation Bureau on
Rewards to National
High-tech Enterprises
50000.00 Other income
Notice on Application for the Rewards to
National High-tech Enterprises in Nanshan
District Shenzhen 2019 Shenzhen Nanshan
District Science Technology and Innovation
Bureau
Enterprise Listing Financing
Incentive Program of
Shenzhen Nanshan District
Industry and Information
Technology Bureau
1400000.00
Non-operating
income
Disclosure of the Fourth Batch of Entities
that Nanshan District Independent Innovation
Industry Development Special Fund Proposes
to Support in 2020 Shenzhen Nanshan
District Industry and Information Technology
Bureau
20th Patent Award
(Excellence Award) of
Shenzhen Administration for
Market Regulation
500000.00 Other income
Announcement of Shenzhen Administration
for Market Regulation on Candidate Entities
for Supporting Rewards of Intellectual
Property (20th China Patent Award 2018
Shenzhen Patent Award) Shenzhen
Administration for Market Regulation
2018 Shenzhen Patent Award
of Shenzhen Administration
for Market Regulation
200000.00 Other income
Announcement of Shenzhen Administration
for Market Regulation on Candidate Entities
for Supporting Rewards of Intellectual
Property (20th China Patent Award 2018
Shenzhen Patent Award) Shenzhen
Administration for Market Regulation
Level 1 Grants for
High-value Patent Portfolio
from Shenzhen
Administration for Market
Regulation
108571.40 Other income
Announcement of Shenzhen Administration
for Market Regulation on 2020 Special Funds
for Building the Service System of Intellectual
Property Operation in Shenzhen (Batch 1) &
Candidate Objects of Grants for Intellectual
Property-Pledged Financing with Special
Funds under Intellectual Property Authority
Delegated by Guangdong Province to Cities
and Counties (Shen Shi Jian Tong Gao
(2020) No. 76) Shenzhen Administration for
Market Regulation
2018 12th Settlement for the
Second Batch of Overseas
Trademarks by Shenzhen
Administration for Market
Regulation 571-2178
17000.00 Other income
Notice of Shenzhen Administration for
Market Regulation on Claiming the Grants to
the Second Batch of Overseas Trademarks in
2018 Shenzhen Administration for Market
Regulation
2018 10th Settlement for the
Second Batch of Computer
Software Copyright by
Shenzhen Administration for
Market Regulation 133-1046
1800.00 Other income
Notice of Shenzhen Administration for
Market Regulation on Claiming the Grants to
the Second Batch of Computer Software
Copyright in 2018 Shenzhen Administration
for Market Regulation
Plan of Supports for Science
and Technology Rewards of
Shenzhen Nanshan District
Science Technology and
Innovation Bureau
200000.00 Other income
Project Application under the Plan of
Supports for Science and Technology
Rewards (2020) Shenzhen Nanshan District
Science Technology and Innovation Bureau
Plan of Supports for Science
and Technology Rewards of
Shenzhen Nanshan District
Science Technology and
Innovation Bureau
600000.00 Other income
Notice on 2020 Nanshan District Independent
Innovation Industry Development Special
Fund - Science Technology and Innovation
Sub-Fund (Batch 1) (Shen Nan Ke [2020]
No. 35) Shenzhen Administration for Market
Regulation
Grants for Daily
Expenditures of Post-doctor
Stations in Shenzhen from
Shenzhen Human Resources
and Social Security Bureau
300000.00 Other income
Announcement on Candidate Entities for
Grants for Daily Management Expenditures
of Post-doctor Stations in Shenzhen (Batch 1
for 2020) Shenzhen Human Resources and
Social Security Bureau
SONG Jiali 2019 Central
Special Funds for Foreign
Trade (Supporting Foreign
Trade SMEs to Expand
Markets) Batch 1
495163.00 Other income
Notice of the Commerce Bureau of Shenzhen
Municipality on the Disclosure of Projects on
Matters for Supporting Foreign Trade SMEs
to Expand Markets Funded by Central
Special Funds for Foreign Trade in 2019
Commerce Bureau of Shenzhen
Employment Assurance
Scheme of Hong Kong
Government
188133.62 Other income
List of Enterprises for Grants of Employment
Assurance Hong Kong Government
Refunds of value-added taxes 3416123.77 Other income
Grants for maintaining job 437377.63 Other income
position
2020 Support Funds for Elite
Talents of Airport Economy
under the “Wutong Program”
300000.00 Other income
Application Form for Qualification of Elite
Talents of Shunyi Airport Economy
Organization Department of CPC Shunyi
Committee Beijing
2019 Shunyi District Cultural
and Creativity Fund Awards
1488000.00 Other income
Several Opinions of Shunyi District on
Promoting the Development of the Cultural
and Creative Industry (Shun Zhen Fa 2013]
No. 13) Shunyi People's Government
Beijing
Measures for Administration of Special
Funds for the Development of Cultural and
Creative Industries in Shunyi District
(Revised) (Shun Yi Fa [2016] No. 6)
Publicity Department of CPC Shunyi
Committee Beijing
Science and Technology
Support Funds of Shunyi
Science and Technology
Association
100000.00 Other income
Several Measures of Shunyi District on
Intensifying Efforts to Fight COVID-19 andSupport Enterprises to “Control COVID-19and Stabilize Growth” (Shun Zhen Ban Fa
[2020] No. 3) General Office of Shunyi
People’s Government Beijing
Implementation Measures of Shunyi District
on Accelerating Science and Technology
Innovation and Promoting the
Transformation of Science and Technology
Achievements (Shun Zheng Fa [2019] No. 9)
Shunyi People’s Government Beijing
Patent Promotion and
Protection Funds of Shunyi
9000.00 Other income
Implementation Measures of Shunyi District
on Patent Promotion and Protection (Shun
Zheng Fa [2019] No. 10) Shunyi People’s
Government Beijing
Investment and Loan Award 142182.00 Other income
Administration Measures of Beijing onImplementing Link of “Investment and Loan
Award” in the Cultural and Creative Industry
to Promote Integration between Culture and
Finance (for Trial Implementation) Jing Wen
Ling Ban Wen [2017] No. 3 Beijing Cultural
Reform and Development Leadership Panel
Government refunds for
donation to Hong Kong
government for the
semiconductor R&D project
of Hong Kong University of
139340.28
Non-operating
income
Science and Technology
Subtotal 27800942.74
4) Interest subsidies
Item
Opening
deferred
income
Increase
Carrying
forward
Closing
deferred
income
Carrying
forward
item
presented
Description
Interest
subsidy for
short-term
liquid loans of
listed
enterprises
139900.00 139900.00
Financial
expenses
Disclosure of the Third Batch
of Entities that Nanshan
District Independent Innovation
Industry Development Special
Fund Proposes to Support in
2020 Office of Nanshan
Leadership Panel for Special
Funds
Interest
subsidy for
loans of
micro- small-
and
medium-sized
enterprises
during
COVID-19
200000.00 200000.00
Financial
expenses
Notice of Shenzhen Service
Bureau for Small and
Medium-sized Enterprises of
Shenzhen on the Fifth Grants
for Interest Subsidy for Loans
of Micro- Small- and
Medium-sized Enterprises
during COVID-19 (Shen Zhong
Xiao Qi Zi [2020] No. 91)
Service Bureau for Small and
Medium-sized Enterprises of
Shenzhen
Interest
subsidy for
loans during
COVID-19
204400.00 204400.00
Financial
expenses
Subtotal 544300.00 544300.00
Government grants included in profit or loss for the period amounted to RMB 44166947.28.
(2). Refund of government grants
√ Applicable□ N/A
In RMB
Item Amount Reason
Subsidies for high-tech
qualifications
300000.00 No longer qualified for the
grants due to changes in
business registration
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
(1). Business combinations not involving enterprises under common control in the current period
√ Applicable□ N/A
In RMB
Name of
acquiree
Time
point of
obtaining
equity
Cost of equity
acquisition
Ratio of
acquired
equity
interests
(%)
Method of
obtaining
equity
Acquisition
date
Basis for
determining
the
acquisition
date
Incomes
of the
acquiree
from the
acquisition
date to the
end of the
period
Net profit
of the
acquiree
from the
acquisition
date to the
end of the
period
Tianjin
Bonian
Film
Partnership
(LP)
December
23 2020
27226384.00 100 Acquisition
December
23 2020
Share
Transfer
Agreement
Other information:
None
(2). Combination costs and goodwill
√ Applicable□ N/A
In RMB
Combination costs Tianjin Bonian Film Partnership (LP)
-- Cash 27226384.00
-- Fair value of non-cash assets
-- Fair value of debts issued or undertaken
-- Fair value of equity securities issued
-- Fair value of contingent consideration
-- Fair value at the acquisition date of the equity
interests held prior to the acquisition date
--Others
Total combination costs 27226384.00
Less: Acquired shares in the fair value of the
identifiable net assets
29770395.15
Differences between amounts of
goodwill/combination costs and the acquired shares
in the fair value of the identifiable net assets
-2544011.15
Description of the method for determining the fair value of combination costs and the contingent
considerations and changes thereof:
N/A.
Other information:
During the reporting period the Company acquired Tianjin Bonian Film Partnership (LP) through
business combination not involving enterprises under common control. In essence this transaction is
acquiring the minority interests held by the subsidiary CINEAPPO Laser Cinema Technology (Beijing)
Co. Ltd. The difference above is recognized in capital reserve - share premium.
(3). Identifiable assets and liabilities of the acquiree at the acquisition date
√ Applicable□ N/A
In RMB
Tianjin Bonian Film Partnership (LP)
Fair value at the acquisition date Carrying amount at the acquisition date
Assets: 29854938.69 8310934.36
Cash and bank
balances
63934.36 63934.36
Long-term
equity
investments
29791004.33 8247000.00
Liabilities: 84543.54 84543.54
Other payables 84543.54 84543.54
Net assets 29770395.15 8226390.82
Acquired net
assets
29770395.15 8226390.82
Method for determining the fair value of identifiable assets and liabilities:
Long-term equity investments are determined according to the net assets and shareholding ratio of the
investee and other assets and liabilities are determined according to the carrying amounts.
Contingent liabilities of the acquiree that are taken in the business combination:
None
Other information:
None
(4). Gains or losses from the equity interests held prior to the acquisition date that are remeasured at fair
value
Whether there are transactions for the purpose of implementing business combination via multiple
transactions and obtaining the control during the reporting period
□ Applicable√ N/A
(5). Description about the failure in reasonably determining the combination considerations or the fair
values of the identifiable assets and liabilities of the acquiree at the acquisition date or at the end of
the combination period
□ Applicable√ N/A
(6). Other information
□ Applicable√ N/A
2. Business combination involving enterprises under common control
□ Applicable√ N/A
(7). Business combinations involving enterprises under common control in the current period
□ Applicable√ N/A
(8). Combination costs
□ Applicable√ N/A
(9). 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
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
Company Method of
obtaining
equity
Time point of obtaining equity Capital contribution Proportion of contribution
Shenzhen Appotronics Display Device Co. Ltd. Newly
established
February 13 2020 3000000.00 100%
WEMAX LLC Newly
established
March 17 2020 2050770.00 100%
JoveAI Asia Company Limited Newly
established
April 24 2020 USD 100000 64.29%
6. Others
□ Applicable√ N/A
IX. Equity in other entities
1. Equity in subsidiaries
(1). Composition of enterprise group
√ Applicable□ N/A
Subsidiaries
Principal
operation
place
Registration
place
Business nature
Proportion of
shareholding
(%)
Acquisition
method
Direct Indirect
Appotronics
Timewaying
(Beijing)
Technology Co.Ltd.
Beijing Beijing
Sales;
technology
development
consulting
90.00 Establishment
Shenzhen
Appotronics
Software
Technology Co.Ltd.Shenzhen Shenzhen
Technology
development and
sales of
computer
software and
hardware
100.00 Establishment
Beijing Orient
Appotronics
Technology Co.Ltd.
Beijing Beijing
Technology
promotion;
computer
systems
application
software services
59.00 Establishment
Shenzhen
Appotronics
Xiaoming
Technology Co.Ltd.Shenzhen Shenzhen
Development
consultation and
transfer of laser
display
technology
100.00 Establishment
Formoive (Beijing)
Technology Co.Ltd.
Beijing Beijing
Technology and
software
development
55.00 Establishment
Shenzhen
Appotronics Laser
Display
Technology Co.Ltd.Shenzhen Shenzhen
R&D and sales
of laser display
products
100.00
Business
combination
involving
enterprises
under
common
control
CINEAPPO Laser
Cinema
Technology
(Beijing) Co. Ltd.
Beijing Beijing
Research and
development
production
technical
services sales
and lease of laser
cinema
projection
equipment
24.84 38.36
Business
combination
involving
enterprises
under
common
control
Qingda
Appotronics
(Xiamen)
Technology Co.Ltd.Shenzhen Xiamen
Information
technology
consulting
services
51.00 Establishment
Shenzhen
Appotronics Laser
Shenzhen Shenzhen
Software
development for
100.00 Establishment
Technology Co.Ltd.semiconductor
optoelectronic
devices
Shenzhen
Appotronics Home
Line Technology
Co. Ltd.
Shenzhen Shenzhen
Software
development
related to
semiconductor
optoelectronic
products
100.00 Establishment
Appotronics Hong
Kong Limited
Hong
Kong
Hong Kong
Production
research and
development of
semiconductor
optoelectronic
products sales
and consulting
investment and
video content
value-added
services
100.00 Establishment
Appotronics USA
Inc.
USA USA
R&D
manufacture and
sales of
semiconductor
optoelectronic
products
100.00
Business
combination
involving
enterprises
under
common
control
Fabulus
Technology Hong
Kong Limited
Hong
Kong
Hong Kong
R&D
manufacture and
sales of screens
100.00 Establishment
JoveAI Limited
Cayman
Islands
Cayman
Islands
No specific
business
conducted
64.29 Establishment
JoveAI Innovation
Inc. USA USA
R&D of laser
display software
system
64.29 Establishment
Appotronics
Technology
(Changzhou) Co.
Ltd.
Changzhou Changzhou
Technical
research and
development of
projection
equipment
screen and
electronic
computer
100.00 Establishment
FORMOVIE
TECHNOLOGY
INC
USA USA
No specific
business
conducted
55.00 Establishment
JoveAI Asia
Company Limited
Vietnam Vietnam
Technical
research and
development of
projection
equipment
screen and
electronic
computer
64.29 Establishment
Tianjin Bonian Tianjin Tianjin No specific 99.00 1.00 Business
Film Partnership
(LP)
business
conducted
combination
not involving
enterprises
under
common
control
Shenzhen
Appotronics
Display Device
Co. Ltd.
Shenzhen Shenzhen
Technical
development
sales and
technical
services for
display products;
import and
export business
100.00 Establishment
WEMAX LLC
USA USA
Sales of laser
equipment
100.00 Establishment
Description of the difference between the proportion of shareholding and the proportion of voting rights
in a subsidiary:
None
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:
None
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
Subsidiaries
Shareholding ratio
by minority
shareholders
Profit or loss
attributable to
minority
shareholders for the
current period
Dividends declared
for distribution to
minority
shareholders in the
current period
Closing balance
of minority
interests
Formoive
(Beijing)
Technology
Co. Ltd.
45.00% -22385152.39 -35120901.11
CINEAPPO
Laser Cinema
Technology
(Beijing) Co.
Ltd.
36.80% 1009034.92 139317448.20
Description of the difference between the proportion of shareholding by minority shareholders and their
proportion of voting rights in a subsidiary:
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
(3). Significant financial information of significant non-wholly subsidiaries
√ Applicable□ N/A
In RMB
Subsidiaries
Closing balance Opening balance
Current
assets
Non-curre
nt assets
Total
assets
Current
liabilities
Non-current
liabilities
Total
liabilities
Current
assets
Non-current
assets
Total
assets
Current
liabilities
Non-curr
ent
liabilities
Total
liabilitie
s
Formoive
(Beijing)
Technology
Co. Ltd.
60250064
7.92
16903557.
91
61940420
5.83
69268762
6.41
4763026.34
697450652.7
5
253973931.3
9
7968567.46
26194249
8.85
28818019
1.85
2437972
.51
29061816
4.36
CINEAPPO
Laser Cinema
Technology
(Beijing) Co.
Ltd.
21894234
2.82
71235802
0.45
93130036
3.27
50910672
0.26
43613620.72
552720340.9
8
255777103.2
9
789861645.4
3
10456387
48.72
38308523
1.40
2891414
41.68
67222667
3.08
Subsidiaries
Amount for the current period Amount for the prior period
Operating
income
Net profit
Total
comprehensive
income
Cash flow
from
operating
activities
Operating
income
Net profit
Total
comprehensive
income
Cash flow
from operating
activities
Formoive (Beijing)
Technology Co.Ltd.
1006770096.44 -49744783.09 -49744783.09 81046874.46 700577662.64 -47481133.43 -47481133.43 -99566333.52
CINEAPPO Laser
Cinema Technology
(Beijing) Co. Ltd.
288699197.97 3358107.97 3358107.97 85283246.66 593020861.03 144802587.21 144802587.21 173475022.15
Other information:
None
(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
Subsidiaries Date of change
Shareholding ratio prior to
change
Shareholding ratio after
change
CINEAPPO Laser
Cinema Technology
(Beijing) Co. Ltd.
December 23 2020 55.20% 63.20%
(2). Impact of the transaction on minority interests and owners' interests attributable to owners of the
parent company
√ Applicable□ N/A
In RMB
Item CINEAPPO Laser Cinema Technology (Beijing)
Co. Ltd.
Acquisition cost/disposal consideration 27226384.00
-- Cash 27226384.00
-- Fair value of non-cash assets
Total acquisition cost/disposal consideration 27226384.00
Less: Share in net assets of subsidiaries calculated
based on the acquired/disposed shareholding ratio
29770395.15
Difference -2544011.15
Where: Adjustment to capital reserves -2544011.15
Adjustment to surplus reserves
Adjustment to undistributed profits
Other information
□ Applicable√ N/A
3. Equity in joint ventures or associates
√ Applicable□ N/A
(1). Important joint ventures or associates
√ Applicable□ N/A
In RMB
Associates or joint
ventures
Principal
operation
place
Registration
place
Business
nature
Proportion of
shareholding (%)
Accounting
treatment
method for
investments in
joint ventures or
associates
Direct Indirect
GDC Technology Asia and British R&D 36.00 Accounting for
Limited (BVI) North
America
Virgin
Islands
production
and sales of
digital
cinema
servers and
cinema
management
system
under equity
method
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
(2). Major financial information of significant joint ventures
□ Applicable√ N/A
(3). Major financial information of significant associates
√ Applicable□ N/A
In RMB
Item Closing balance/Amount for
the current period
Opening balance/Amount
for the prior period
Company GDC [Note 1]
Current assets 553504350.37
Non-current assets 72596748.61
Total assets 626101098.98
Current liabilities 379295268.80
Non-current liabilities 41349472.31
Total liabilities 420644741.11
Minority interests
Interests attributable to shareholders
of the parent company
205456357.87
Share of net assets calculated by
ownership percentage
73964288.83
Adjustment 62044191.37
--Goodwill 62560946.33
--Unrealized profits for insider
transactions
-516754.96
--Others
Carrying amount of investment of
associates
131338347.84
Fair values of equity investments in
associates having publicly quoted
prices
Operating income 251049184.00
Net profit 6256577.59
Net profit of discontinued operations
Other comprehensive income 26383768.27
Total comprehensive income 32640345.86
Dividends received from associates in
the current year
Other information
Note 1: During the reporting period the equity investment in GDC Technology Limited (BVI) was made
on April 9 2020. The data disclosed in the table above is the audited data of GDC Technology Limited
(BVI) for 2020.
(4). Summary financial information of insignificant joint ventures and associates
√ Applicable□ N/A
In RMB
Closing balance/Amount for the
current period
Opening balance/Amount for the
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
investments
131406424.64 139534371.94
Total amounts calculated based on shareholding proportions
--Net profit -1179972.05 4011243.08
--Other comprehensive income -5001459.87 -754946.96
--Total comprehensive income -6181431.92 3256296.12
Other information
Main information about associates:
Associates
Principal
operation
place
Registratio
n place
Business nature
Proportion of
shareholding
(%)
Accounting treatment
method for investments in
joint ventures or
associates Direc
t
Indirect
Cinionic Limited
Europe
and
USA
Hong
Kong
Sales of cinema
projectors
20.00
Accounting for under
equity method
(5). Description 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 venture or associates
□ Applicable√ N/A
(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 characteristic
to determine the change of the risk of a default occurring on a financial instrument over the expected
life.
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. Details of reconciliation of the opening balance and the closing balance of provision for
impairment of financial instruments can refer to the description in VII.4 VII.5 and VII.8 of Section XI.
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
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 2020 the
Company is exposed to certain concentration of credit risks as the Company’s accounts receivable from
top 5 customers have accounted for 86.37% of the total balance of accounts receivable (December 31
2019: 70.21%). 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
Item
Closing balance
Carrying amount Undiscounted
contract amount
Within 1 year 1-2 years
Over 2
years
Bank
borrowings
335041546.85 347893031.23 281565349.76 66327681.47
Notes payable 116822674.67 116822674.67 116822674.67
Accounts
payable
226494815.90 226494815.90 226494815.90
Other payables 59848053.83 59848053.83 59848053.83
Long-term
payables
3262450.00 3572382.75 3572382.75
Subtotal 741469541.25 754630958.38 684730894.16 69900064.22
(Continued to above table)
Item
Opening balance
Carrying amount Undiscounted
contract amount
Within 1 year 1-3 years
Over 3
years
Bank
borrowings
421349221.34 444275984.40 159065657.15 285210327.25
Notes payable 37335841.79 37335841.79 37335841.79
Accounts 176624445.46 176624445.46 176624445.46
Item
Opening balance
Carrying amount Undiscounted
contract amount
Within 1 year 1-3 years
Over 3
years
payable
Other payables 14364076.43 14364076.43 14364076.43
Long-term
payables
3488100.00 3488100.00 3488100.00
Subtotal 653161685.02 676088448.08 390878120.83 285210327.25
(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 value 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 2020 the principal of the Company’s floating-rate interest-bearing bank
borrowings amounted to RMB 334317535.43 (December 31 2019: RMB 420240038.66). 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 XI 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
Item
Closing balance of fair value
Level 1 Level 2 Level 3 Total
I. Continuous fair value
measurement
(I) Held-for-trading
financial assets
1. Financial assets at fair
value through profit or
loss
(1) Investment in debt
instrument
(2) Investment in equity
instrument
(3) Derivative financial
assets
(4) Structural deposits 114000000.00 114000000.00
2. Designated as
financial assets at fair
value through profit or
loss
(1) Investment in debt
instrument
(2) Investment in equity
instrument
3. Receivables financing 11959000.00 11959000.00
(II) Other debt
investments
(III) Other equity
instrument investments
11975419.38 11975419.38
(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
Total assets
continuously measured
at fair value
137934419.38 137934419.38
(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
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
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 financial assets at fair value through profit or loss 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
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
Parent
company
Registration
place
Business
nature
Registered
capital
Proportion of the
Company's
shares held by
the parent
company (%)
Proportion of the
Company's voting
right held by the
parent company
(%)
Shenzhen
Appotronics
Holdings
Limited
Shenzhen
R&D and
sales of
semiconductor
products
RMB 10
million
17.62 17.62
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 XI for details about the subsidiaries of the Company
3. Associates and joint ventures of the Company
Information of the significant joint ventures or associates of the Company is disclosed in IX.3 of Section
XI.
□ Applicable√ N/A
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
Associates or joint ventures Relationship with the Company
Cinionic Limited Participating company
GDC Technology Limited (BVI) Participating company
Other information
√ Applicable□ N/A
Refer to the description in IX.3 of Section XI for details about the associates of the Company
4. Other related parties of the Company
√ Applicable□ N/A
Other related party Relationship between other related party and the
Company
Shenzhen Bevix Technology Co. Ltd. Holding more than 5% of shares in the company
Shenzhen YLX Technology Development
Co. Ltd.
Controlled by the same de facto controller
CFEC and its affiliates
Minority shareholders holding more than 10% shares in
the subsidiary and their affiliates
Xiaomi Communications Technologies Co.Ltd. and its affiliates
Minority shareholders holding more than 10% shares in
the subsidiary and their affiliates
Beijing Donview Education Technology
Co. Ltd. and its affiliates
Minority shareholders holding more than 10% shares in
the subsidiary and their affiliates
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
Related party Subject matter
Amount for the current
period
Amount for the prior
period
CFEC and its affiliates Power supply water
cooling and services
27172641.25 75594510.73
Xiaomi Communications
Technologies Co. Ltd.and its affiliates
Electronic components
and services
205885065.38 135947996.69
Beijing Donview
Education Technology
Co. Ltd. and its affiliates
Service 36371.68 70302.92
GDC Technology
Limited(BVI) and its
affiliates
Electronic components 8703704.00
Subtotal 241797782.31 211612810.34
Sales of goods/rendering of services
√ Applicable□ N/A
In RMB
Related party Subject matter
Amount for the current
period
Amount for the prior
period
Shenzhen Bevix
Technology Co. Ltd.Service 4508.85
GDC Technology
Limited(BVI) and its
affiliates
Light generator engine
and software
3740484.98
CFEC and its affiliates Laser cinema projector
light source and lease
service
92512007.78 141777980.65
Xiaomi Communications
Technologies Co. Ltd.and its affiliates
Laser TV smart mini
projector
650541969.04 456486039.21
Beijing Donview
Education Technology
Co. Ltd. and its affiliates
Laser business
education projector
26233035.11 74848453.68
Cinionic Limited Laser light source 35706691.15 125395135.96
Subtotal 808738696.91 798507609.50
Description of sales and purchase of goods rendering and receipt of services
□ Applicable√ N/A
(2). Details of trust with related parties/subcontracting and trust management/ contract-issuing
Details of trust/contracting where a group entity is the trustor/main contractor:
□ Applicable√ N/A
Description of trust/subcontracting with related parties
□ Applicable√ N/A
Details of trust/contracting where a group entity is the trustor/main contractor
□ Applicable√ N/A
Description of 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
Lessor
Type of leased
assets
Lease fees recognized in
the current period
Lease fees recognized in the
prior period
CFEC and its affiliates Property lease 1794184.41 2070494.22
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
affiliates
19320000.00 2020.07.06 2021.7.5
Annual interest
rate of 4.00%
(6). Assets transfer/debt restructuring with related parties
√ Applicable□ N/A
In RMB
Related party Subject matter
Amount for the current
period
Amount for the prior
period
Shenzhen YLX
Technology
Development Co. Ltd.
Transfer of fixed assets 740617.73
(7). Compensation for key management personnel
√ Applicable□ N/A
In RMB 0’000
Item Amount for the current period
Amount for the prior
period
Compensation for key management
personnel
1463.12 1673.11
(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
Item Related party
Closing balance Opening balance
Carrying
amount
Bad debt
provision
Carrying
amount
Bad debt
provision
Accounts
receivable
CFEC and its
affiliates
6125422.64 306402.16 17494326.54 874716.33
Accounts
receivable
Beijing
Donview
Education
Technology Co.Ltd. and its
affiliates
3017.00 150.85 8829840.85 442339.31
Accounts
receivable
Xiaomi
Communications
Technologies
Co. Ltd. and its
affiliates
248915862.75 12445793.14 45679955.49 2283997.77
Accounts
receivable
Cinionic
Limited
452175.57 22608.78 24298258.08 1214912.90
Accounts
receivable
GDC
Technology
Limited (BVI)
and its affiliates
2283483.24 114174.16
Subtotal 257779961.20 12889129.09 96302380.96 4815966.31
Prepayments
CFEC and its
affiliates
3107696.59 3350592.41
Prepayments
GDC
Technology
Limited (BVI)
and its affiliates
2883384.53
Subtotal 5991081.12 3350592.41
Other
receivables
CFEC and its
affiliates
296435.00 14821.75 290866.00 14543.30
Other
receivables
Xiaomi
Communications
Technologies
Co. Ltd. and its
affiliates
100000.00 5000.00 100000.00 5000.00
Subtotal 396435.00 19821.75 390866.00 19543.30
(2). Amounts due to related parties
√ Applicable□ N/A
In RMB
Item Related party Closing balance of
carrying amount
Opening balance of carrying
amount
Accounts payable
CFEC and its
affiliates
11595819.93
Subtotal 11595819.93
Advance from
customers
CFEC and its
affiliates
14032071.28 15893424.21
Subtotal 14032071.28 15893424.21
Contract liabilities
CFEC and its
affiliates
1384955.75
Contract liabilities
GDC Technology
Limited (BVI) and its
affiliates
15108.32
Subtotal 1400064.07
Other payables
CFEC and its
affiliates
19343613.33
Other payables
Xiaomi
Communications
Technologies Co.Ltd. and its affiliates
101668.48
Subtotal 19445281.81
7. Related party commitments
□ Applicable√ N/A
8. Other information
□ Applicable√ N/A
XIII. Share-based payments
1. Summary of share-based payment
√ Applicable□ N/A
Unit: Share in RMB
Total number of the Company's equity instruments
granted during the period
1100000.00
Total number of the Company's equity instruments
executed during the period
1202490.00
Total number of the Company's equity instruments
lapsed during the period
2112970.00
Range of exercise prices and remaining
contractual life of the Company's share options
outstanding at the end of the period
Grant date: October 14 2019; grant price: RMB
17.425/share; remaining period: 22 months
Grant date: October 13 2020; grant price: RMB
17.425/share; remaining period: 22 months
Range of exercise prices and remaining
contractual life of the Company's other equity
instruments outstanding at the end of the period
None
Other information
The Company granted 1.1 million shares of restricted shares during the current period.
2. Equity-settled share-based payments
√ Applicable□ N/A
In RMB
The method of determining the fair value of equity
instruments at the grant date
Open market quotes
The basis of determining the number of equity
instruments expected to be executed
Actual grant amount
Reasons for the significant difference between the
estimate in the current period and that in the prior
period
None
Amounts of equity-settled share-based payments
accumulated in capital reserve
26259687.17
Total expenses recognized arising from equity-settled
share-based payments
20581939.14
Other information
The difference between the the total expenses recognized by equity-settled share-based payments in
the current period and the amount of share-based payments included in owners' equity arises from the
exchange rate translation difference.
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:
No. Rent address
Rent area
(square
meters)
Rent
purpose
Rent period
Rent
expense/year
1
20/F 21/F 22/F United Headquarter
Building High-Tech Zone No. 63
Xuefu Road Nanshan District
Shenzhen
6143.79
Research
and
developmen
t office
administrati
on
2019.8.1-2021.1
2.31
5617179.71
2
23/F United Headquarter Building
High-Tech Zone No. 63 Xuefu Road
Nanshan District Shenzhen
2047.93
Research
and
developmen
t office
administrati
on
2020.2.1-2025.1
.31
1954275.31
3
Yaochuan Industrial Zone Tangwei
Community Fuhai Street Bao'an
District Shenzhen
23765.57 Plant
2018.12.1-2022.
11.30
12659623.09
4
Room101 1/F Building 22E Phase III
of Hong Kong Science and Technology
Park
1138.25
Office
administrati
on
2019.3.20-2022.
3.19
2845286.01
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 2020 there are 27 civil litigation cases where the Company acted as a plaintiff
specifically including:
Case No.
Cause of
action
Plaintiff Defendant Patents involved
Amount
involved
Progress
19-cv-00466-RGD-LR
L
Correcting
the inventor
of the patent
Appotronic
s
Corporation
Limited
Delta
Electronics
Inc.Patent No.
9024241
Accepte
d but not
tried
(2019) Yue 03 Min
Chu No. 4309
Ownership
Appotronic
s
Corporation
Limited
Delta
Electronics
Inc.
ZL201610387831.8
Accepte
d but not
tried
Case No.
Cause of
action
Plaintiff Defendant Patents involved
Amount
involved
Progress
(2019) Yue 03 Min
Chu No. 2942
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Defendant
1: Delta
Electronics
(Shanghai)
Co. Ltd.;
Defendant
2: Delta
Video
Display
System
(Wujiang)
Limited;
Defendant
3: Shenzhen
Super
Network
Technology
Co. Ltd.
ZL200880107739.5
Loss
compensatio
n of RMB
8.00 million
In trial
of the
first
instance
(2019) Yue 03 Min
Chu No. 2945
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Loss
compensatio
n of RMB
8.00 million
(2019) Yue 03 Min
Chu No. 2947
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Loss
compensatio
n of RMB
4.00 million
(2019) Yue 03 Min
Chu No. 2949
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Loss
compensatio
n of RMB
4.00 million
(2019) Yue 03 Min
Chu No. 2950
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Loss
compensatio
n of RMB
4.00 million
(2019) Yue 03 Min
Chu No. 2943
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Defendant
1: Delta
Electronics
(Shanghai)
Co. Ltd.;
Defendant
2: Delta
Video
Display
System
(Wujiang)
Limited;
Defendant
3: Shenzhen
Super
Network
Technology
Co. Ltd.
ZL200810065225.
X
Loss
compensatio
n of RMB
8.00 million
In trial
of the
first
instance
(2019) Yue 03 Min
Chu No. 2944
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Loss
compensatio
n of RMB
8.00 million
(2019) Yue 03 Min
Chu No. 2946
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Loss
compensatio
n of RMB
4.00 million
(2019) Yue 03 Min
Chu No. 2948
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Loss
compensatio
n of RMB
4.00 million
(2019) Yue 03 Min
Chu No. 2951
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Loss
compensatio
n of RMB
4.00 million
(2020) Yue 73 Min
Chu No. 1335
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Defendant
1: Delta
Video
Display
System
(Wujiang)
Limited
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
ZL200880107739.5
Loss
compensatio
n of RMB
3.00 million
+ litigation
costs RMB
0.50 million
In trial
of the
first
instance
(2020) Yue 73 Min
Chu No. 1336
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Loss
compensatio
n of RMB
6.50 million
+ litigation
costs RMB
0.50 million
Case No.
Cause of
action
Plaintiff Defendant Patents involved
Amount
involved
Progress
(2020) Yue 73 Min
Chu No. 1337
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Creative
Co. Ltd.
Defendant
4: Delta
Electronics
Business
Managemen
t (Shanghai)
Co. Ltd.
Defendant
5:
Guangdong
Jianye
Display
Information
Technology
Co. Ltd.
Defendant
6:
Guangzhou
Jianye
Network
Technology
Co. Ltd.
Loss
compensatio
n of RMB
2.50 million
+ litigation
costs RMB
0.50 million
(2020) Yue 73 Min
Chu No. 1338
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Loss
compensatio
n of RMB
2.00 million
+ litigation
costs RMB
0.50 million
(2020) Yue 73 Min
Chu No. 1340
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Loss
compensatio
n of RMB
6.00 million
+ litigation
costs RMB
0.50 million
(2020) Yue 73 Min
Chu No. 1341
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Loss
compensatio
n of RMB
14.00 million
+ litigation
costs RMB
0.50 million
(2020) Yue 73 Min
Chu No. 1361
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Defendant
1: Delta
Electronics
Business
Managemen
t (Shanghai)
Co. Ltd.
Loss
compensatio
n of RMB
0.75 million
+ litigation
costs RMB
0.50 million
Case No.
Cause of
action
Plaintiff Defendant Patents involved
Amount
involved
Progress
(2020) Yue 73 Min
Chu No. 1339
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
Creative
Co. Ltd.
Defendant
4:
Guangdong
Jianye
Display
Information
Technology
Co. Ltd.
Defendant
5:
Guangzhou
Jianye
Network
Technology
Co. Ltd.
ZL200810065225.
X
Loss
compensatio
n of RMB
0.75 million
+ litigation
costs RMB
0.50 million
In trial
of the
first
instance
Case No.
Cause of
action
Plaintiff Defendant Patents involved
Amount
involved
Progress
(2020) Yue 73 Min
Chu No. 1353
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Defendant
1: Delta
Video
Display
System
(Wujiang)
Limited
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
Creative
Co. Ltd.
Defendant
4: Delta
Electronics
Business
Managemen
t (Shanghai)
Co. Ltd.
Defendant
5:
Guangdong
Jianye
Display
Information
Technology
Co. Ltd.
Defendant
6:
Guangzhou
Jianye
Network
Technology
Co. Ltd.
Loss
compensatio
n of RMB
14.00 million
+ litigation
costs RMB
0.50 million
Case No.
Cause of
action
Plaintiff Defendant Patents involved
Amount
involved
Progress
(2020) Yue 73 Min
Chu No. 1355
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Defendant
1: Delta
Video
Display
System
(Wujiang)
Limited
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
Creative
Co. Ltd.
Defendant
4: Digital
Protection
(Beijing)
Electronics
Technology
Co. Ltd.
Defendant
5:
Guangdong
Jianye
Display
Information
Technology
Co. Ltd.
Defendant
6:
Guangzhou
Jianye
Network
Technology
Co. Ltd.
Loss
compensatio
n of RMB
6.00 million
+ litigation
costs RMB
0.50 million
Case No.
Cause of
action
Plaintiff Defendant Patents involved
Amount
involved
Progress
(2020) Yue 73 Min
Chu No. 1356
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Defendant
1: Delta
Video
Display
System
(Wujiang)
Limited
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
Creative
Co. Ltd.
Defendant
4: Delta
Electronics
Business
Managemen
t (Shanghai)
Co. Ltd.
Defendant
5:
Guangdong
Jianye
Display
Information
Technology
Co. Ltd.
Defendant
6:
Guangzhou
Jianye
Network
Technology
Co. Ltd.
Loss
compensatio
n of RMB
6.50 million
+ litigation
costs RMB
0.50 million
Case No.
Cause of
action
Plaintiff Defendant Patents involved
Amount
involved
Progress
(2020) Yue 73 Min
Chu No. 1357
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Defendant
1: Delta
Video
Display
System
(Wujiang)
Limited
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
Creative
Co. Ltd.
Defendant
4: Digital
Protection
(Beijing)
Electronics
Technology
Co. Ltd.
Defendant
5:
Guangdong
Jianye
Display
Information
Technology
Co. Ltd.
Defendant
6:
Guangzhou
Jianye
Network
Technology
Co. Ltd.
Loss
compensatio
n of RMB
2.50 million
+ litigation
costs RMB
0.50 million
(2020) Yue 73 Min
Chu No. 1358
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Defendant
1: Delta
Video
Display
System
(Wujiang)
Limited
Loss
compensatio
n of RMB
2.00 million
+ litigation
costs RMB
0.50 million
Case No.
Cause of
action
Plaintiff Defendant Patents involved
Amount
involved
Progress
(2020) Yue 73 Min
Chu No. 1359
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
Creative
Co. Ltd.
Defendant
4: Delta
Electronics
Business
Managemen
t (Shanghai)
Co. Ltd.
Defendant
5:
Guangdong
Jianye
Display
Information
Technology
Co. Ltd.
Defendant
6:
Guangzhou
Jianye
Network
Technology
Co. Ltd.
Loss
compensatio
n of RMB
3.00 million
+ litigation
costs RMB
0.50 million
Case No.
Cause of
action
Plaintiff Defendant Patents involved
Amount
involved
Progress
(2020) Yue 73 Min
Chu No. 1360
Infringemen
t on patent
for
invention
Appotronic
s
Corporation
Limited
Defendant
1: Delta
Video
Display
System
(Wujiang)
Limited
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
Creative
Co. Ltd.
Defendant
4: Digital
Protection
(Beijing)
Electronics
Technology
Co. Ltd.
Defendant
5:
Guangdong
Jianye
Display
Information
Technology
Co. Ltd.
Defendant
6:
Guangzhou
Jianye
Network
Technology
Co. Ltd.
Loss
compensatio
n of RMB
3.00 million
+ litigation
costs RMB
0.50 million
2. Civil litigation and arbitration where the Company acted as the defendant
As of December 31 2020 there are 7 civil litigations where the Company was a defendant
specifically including:
Case No.
Cause of
action
Plaintiff Defendant Patents involved Amount involved Progress
(2019) Yue
73 Zhi Min
Chu No. 662 Infringement
of patent
rights of
inventions
Delta
Electronics
Inc.
Appotronics
Corporation
Limited;
Futian SPN
Projector &
Video
System
Firm of
ZL201610387831.8
Loss compensation of
RMB 16.00 million +
litigation costs RMB
145343
Stayed
(2019) Yue
73 Zhi Min
Chu No. 663
ZL201310017478.0
Loss compensation of
RMB 16.00 million +
litigation costs RMB
145343
Trial of
the first
instance
completed
Case No.
Cause of
action
Plaintiff Defendant Patents involved Amount involved Progress
(2019) Yue
73 Zhi Min
Chu No. 664
Shenzhen
ZL20310625063.1
Loss compensation of
RMB 16.00 million +
litigation costs RMB
145343
Trial of
the first
instance
completed
(2019) Jing
73 Min Chu
No.1275
Formoive
(Beijing)
Technology
Co. Ltd.;
Appotronics
Corporation
Limited
ZL201610387831.8
Loss compensation of
RMB 15.00 million +
litigation costs RMB
1.01 million
In trial of
the first
instance
(2019) Jing
73 Min Chu
No. 1276
ZL201410249663.7
Loss compensation of
RMB 15.00 million +
litigation costs RMB
1.01 million
In trial of
the first
instance
(2019) Jing
73 Min Chu
No. 1277
ZL201310017478.0
Loss compensation of
RMB 15.00 million +
litigation costs RMB
1.01 million
Trial of
the first
instance
completed
(2019) Jing
73 Min Chu
No. 1278
ZL201010624724.5
Loss compensation of
RMB 15.00 million +
litigation costs RMB
1.01 million
In trial of
the first
instance
(2). Description shall also be provided even if the Company has no significant contingencies to be
disclosed:
□ Applicable√ N/A
3. Others
□ Applicable√ N/A
XV. Events after the balance sheet date
1. Material non-adjusting event
√ Applicable□ N/A
In RMB 0’000
Item Content
Effects on the financial
position and operating
results
Reasons for not being
able to estimate such
effects
Significant external
investments
Acquisition of and
investment in WeCast
The specific amount
depends on the
operating results of
WeCast
Others Mortgage borrowings Cause no impact on the
profit or loss; increase
the assets and
liabilities at the same
time; the borrowing
amount is to be
determined
Others Restricted share
incentives
Increase expenses and
capital reserve; the
specific amount
depends on factors
such as the specific
grant date
(I) External investment
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 at which the Proposal on Capital Increase by Formoive in a
Wholly-owned Subsidiary and Acquisition of 51% Equity Interests in WeCast Technology Corp. and the
Related-party Transaction was reviewed and approved under which the Company would subscribe to
51% equity interests in WeCast Technology Corp. As of the date of approval for issue of the financial
statements the Company has not completed the acquisition.(II) Mortgage borrowings
On August 25 2020 the Company held the 25th meeting of the first Board of Directors at which
the Proposal on Mortgage Loans with Land Use Rights was reviewed and passed approving the
Company to request the fixed assets loans of RMB 700 million for 10 years from the bank syndicate led
by China Construction Bank Co. Ltd. Shenzhen Branch with the land use rights of the Company as the
mortgage by signing relevant loan mortgage contract. The loans are intended merely for the construction
of the head office of the Company. The Company has completed the mortgage registration and handover
formalities for the land use rights by January 20 2021.(III) Share incentive
On March 26 2021 the Company held the 30th meeting of the first Board of Directors and the 17thmeeting of the first Board of Supervisors at which the Proposal on the “2021 Restricted Share IncentivePlan (Draft)” and Summary Thereof was reviewed and passed under which the Company intends to
grant 18.5000 million restricted shares including 17.1000 million shares in the initial grant and 1.4000
million shares reserved. There are 224 grantees of share incentives in the initial grant at the grant prices
of RMB 17.50 per share RMB 18.50 per share and RMB 21.00 per share depending on circumstances
of the grantees of share incentives.
2. Profit distribution
√ Applicable□ N/A
In RMB 0’000
Proposed distributions of profits or
dividends
2490.16
Profits or dividends declared for
distribution upon discussion and
approval
2490.16
The Company’s 2020 preliminary plan for profit distribution is disclosed as below: the Company
proposed to distribute to all shareholders a cash dividend of RMB 0.55 (including tax) for every 10
shares on the basis of the total share capital as at the date of share registration for 2020 annual dividend
distribution according to which the total cash dividends expected to be distributable would be RMB
24.9016 million; the Company would neither capitalize its capital reserve nor grant bonus shares. The
amount for cash dividends in the aforesaid 2020 profit distribution plan is temporarily calculated based
on the Company’s current total share capital of 452756901 shares but the actual amount for cash
dividends in total should be calculated subject to the basis of the total share capital as at the date of share
registration for 2020 annual dividend distribution. The Company’s 2020 preliminary plan for profit
distribution still needs to be approved by the general meeting of shareholders of the Company.
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 information
(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
(4). Other information
√ Applicable□ N/A
The Company has no reporting segments due to absence of diversified operations. A breakdown of
the Company's principal operating incomes and costs categorized by businesses products and regions is
disclosed as below:
Categorized by businesses and products:
In RMB 0’000
Item
Amount for the current period Amount for the prior period
Principal activity
income
Principal activity
cost
Principal activity
income
Principal activity
cost
Item Amount for the current period Amount for the prior period
1. Sales 174412.33 128143.43 155344.15 102544.69
2. Lease service 17173.26 10775.31 39799.12 13526.03
3. Other business 3302.83 388.76 2771.62 2294.34
Subtotal 194888.42 139307.50 197914.89 118365.06
Categorized by regions:
In RMB 0’000
Item
Amount for the current period Amount for the prior period
Principal activity
income
Principal activity
cost
Principal activity
income
Principal activity
cost
Domestic 185561.99 135605.70 178039.72 111260.78
Overseas 9326.43 3701.80 19875.17 7104.28
Subtotal 194888.42 139307.50 197914.89 118365.06
7. Other significant transactions and matters having an impact on the decisions of investors
□ Applicable√ N/A
8. Others
√ Applicable□ N/A
Performance commitment
In the 20th meeting of the first Board of Directors held on December 6 2019 the Proposal on
Proposed Additional Capital Contribution to the Wholly-owned Subsidiary and Foreign Investments in
GDC was reviewed and passed according to which it was agreed to make additional capital contribution
of USD 18.2 million to the Company’s wholly-owned subsidiary APPOTRONICS HONG KONG
LIMITED for acquisition of 36% shares of GDC Technology Limited (British Virgin Islands). On April
9 2020 the Company paid the total consideration of approximately USD 18.11 million by its own funds.
During the reporting period the Company holds 36% equity interests in GDC namely 93071822
shares of GDC.
According to the Share Transfer Agreement GDC made the the following performance covenants: the
audited net profit after deduction of non-recurring profit or loss in 2020 shall be no less than USD 9.35
million; if it fails to achieve the performance objective above GDC Cayman the original shareholder of
GDC shall make compensation or submit a response within 15 working days from the submission date
of GDC’s annual auditor’s report within the limit of USD 5.60 million or 46535911 ordinary shares of
GDC.
According to the 2020 auditor’s report of GDC issued by Deloitte GDC achieved the net profit of USD
0.9268 million in 2020 and failed to achieve the performance covenant for the year 2020 hence
triggering the performance compensation provisions.
By now we have officially required GDC to make performance compensation in accordance with the
provisions. As of the disclosure date of this report we have reached no consensus with the original
shareholder of GDC on this matter.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 450871451.43
1 to 2 years 117087528.49
2 to 3 years 1490775.02
Total 569449754.94
(2). Disclosure by categories of provision for bad debts
√ Applicable□ N/A
In RMB
Category
Closing balance Opening balance
Carrying amount
Bad debt
provision
Book
value
Carrying amount
Bad debt
provision
Book
value
Amount
Perce
ntage
(%)
Amoun
t
Per
cent
age
of
pro
visi
on
(%)
Amount
Perce
ntage
(%)
Amoun
t
Per
cent
age
of
pro
visi
on
(%)
Provision
for bad
debts made
by group
569449754
.94
100.00 1910248
.15
0.34 56753950
6.79
300789821
.26
100.00 1474044
.82
0.49 299315776
.44
Where:
Group of
aging
371028
20.20
6.52 1910248
.15
5.15 35192572.
05
21151263.
98
7.03 1474044
.82
6.97 19677219.
16
Total
569449754
.94
/ 1910248
.15
/ 56753950
6.79
300789821
.26
/ 1474044
.82
/ 299315776
.44
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
Name
Closing balance
Accounts receivable Bad debt provision
Proportion of provision
(%)
Group of aging 37102820.20 1910248.15 5.15
Group of receivables
from related parties in
the scope of
consolidation
532346934.74
Total 569449754.94 1910248.15 0.34
Recognition criterion to make the bad debt provision by group and explanation:
√ Applicable□ N/A
Recognition criterion to make the bad debt provision by group and explanation can refer to V.10 of
Section XI for details.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
Category
Opening
balance
Changes for the current period
Closing
balance Provision
Recovery
or reversal
Write off or
cancellation
Other
changes
Provision for
bad debts
made by
group
1474044.82 436203.33 1910248.15
Total 1474044.82 436203.33 1910248.15
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 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
Entity Carrying amount
Proportion to
the balance of
accounts
receivable (%)
Bad debt
provision
Formoive (Beijing) Technology Co. Ltd. 393022783.43 69.02
CINEAPPO Laser Cinema Technology
(Beijing) Co. Ltd.
71721879.64 12.59
Appotronics Hong Kong Limited 47383360.55 8.32
Shenzhen Sunvalley Technology Development
Co. Ltd.
22790393.35 4.00 1139519.67
Appotronics Technology (Changzhou) Co.
Ltd.
14732081.15 2.59
Subtotal 549650498.12 96.52 1139519.67
(6). Accounts receivable derecognized due to transfer of financial assets
□ Applicable√ N/A
(7). Assets and liabilities arising from transfer of accounts receivables 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 71654117.57 67227575.21
Total 71654117.57 67227575.21
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
(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 53288168.30
1 to 2 years 17561278.00
2 to 3 years 519433.80
Over 3 years 778397.60
Total 72147277.70
(2). Categories by the nature of other receivables
√ Applicable□ N/A
In RMB
Nature of receivables Closing balance of carrying
amount
Opening balance of carrying
amount
Deposits/margins/petty cash 5911673.21 6343792.67
Withholding 650484.24
Receivables from related parties
in the scope of consolidation
62284074.96 60540712.71
Compensation receivable 3577279.61
Temporary receivables 374249.92 10289.71
Total 72147277.70 67545279.33
(3). Provision for bad debts
√ Applicable□ N/A
In RMB
Bad debt
provision
Stage I Stage II Stage III
Total 12-month ECL
in the future
Lifetime ECL
(without credit
impairment)
Lifetime ECL (with
credit impairment)
Balance as at
January 1 2020
317704.12 317704.12
Balance as at
January 1 2020 in
the current period
--transferred to
Stage II
--transferred to
Stage III
-6300.00 6300.00
--reversed to Stage
II
--reversed to Stage
I
Provision 181756.01 181756.01
Reversal
Write-off
Cancellation 6300.00
Other changes
Balance as at
January 12 2020
493160.13 493160.13
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
Category
Opening
balance
Changes for the current period
Closing
balance Provision
Recovery
or
reversal
Write off or
cancellation
Other
changes
Provision
for bad
debts made
by group
317704.12 181756.01 6300.00 493160.13
Total 317704.12 181756.01 6300.00 493160.13
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable√ N/A
(5). Other receivable actually canceled in the current period
□ Applicable√ N/A
(6). Top five closing balances of other receivable categorized by debtors
√ Applicable□ N/A
In RMB
Entity
Nature of other
receivables
Closing
balance
Aging
Proportion to
the balance of
other
receivables
(%)
Bad debt
provision
closing
balance
CINEAPPO
Laser
Cinema
Technology
(Beijing)
Co. Ltd.
Receivables from
related parties in the
scope of consolidation
33220686.40
Within
1 year
46.05
Formoive
(Beijing)
Technology
Co. Ltd.
Receivables from
related parties in the
scope of consolidation
14532924.37
Within
1 year
20.14
Shenzhen
Appotronics
Laser
Display
Technology
Co. Ltd.
Receivables from
related parties in the
scope of consolidation
14169500.00
Within
3 years
19.64
Creator
Community
(Guangzhou)
Co. Ltd.
Compensation
receivable
3577279.61
Within
1 year
4.96 178863.98
Shenzhen
Meisheng
Industry Co.Ltd.
Deposits/margins/petty
cash
3574618.00
years
4.95 178730.89
Total / 69075008.38 / 95.74 357594.87
(7). Accounts receivable involving government grants
□ Applicable√ N/A
(8). Other receivable 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 investment
√ Applicable□ N/A
In RMB
Item
Closing balance Opening balance
Carrying
amount
Provision
for
impairment
Book value
Carrying
amount
Provision
for
impairment
Book value
Investments
in
subsidiaries
467533569.26 45885284.27 421648284.99 303680560.40 45885284.27 257795276.13
Investments
in
associates
and joint
ventures
Total 467533569.26 45885284.27 421648284.99 303680560.40 45885284.27 257795276.13
(10). Investments in subsidiaries
√ Applicable□ N/A
In RMB
Investees
Opening
balance
Increase Decrease
Closing
balance
Provision
for
impairment
Closing
balance of
provision
for
impairment
Appotronics
Timewaying
(Beijing)
Technology Co.Ltd.
27000000.00 27000000.00 27000000.00
Shenzhen
Appotronics
Software
Technology Co.Ltd.
516813.05 1131149.17 1647962.22
Beijing Orient
Appotronics
Technology Co.Ltd.
5900000.00 5900000.00
Formoive
(Beijing)
Technology Co.Ltd.
28203950.93 1810685.16 30014636.09 6057491.48
Shenzhen
Appotronics Laser
Display
Technology Co.Ltd.
18966857.26 18966857.26
Shenzhen
Appotronics
Display Device
Co. Ltd.
3000000.00 3000000.00
CINEAPPO Laser
Cinema
Technology
(Beijing) Co. Ltd.
30767063.78 1809838.68 32576902.46
Qingda
Appotronics
(Xiamen)
Technology Co.Ltd.
5100000.00 5100000.00 827792.79
Shenzhen
Appotronics
Xiaoming
Technology Co.Ltd.
12000000.00 12000000.00 12000000.00
Appotronics Hong
Kong Limited
173225875.38 128442808.14 301668683.52
Appotronics
Technology
(Changzhou) Co.
Ltd.
2000000.00 2000000.00
Tianjin Bonian
Film Partnership
(LP)
26954120.20 26954120.20
WEMAX LLC 24349.32 24349.32
Appotronics USA
Inc.
60873.29 60873.29
JoveAI
Innovation Inc
619184.90 619184.90
Total 303680560.40 163853008.86 467533569.26 45885284.27
(11). Investments in associates and joint ventures
□ Applicable√ N/A
Other information:
None
4. Operating income and operating costs
(12). Description of operating income and operating costs
√ Applicable□ N/A
In RMB
Item
Amount for the current period Amount for the prior period
Income Cost Income Cost
Main business 1064149969.51 720452860.84 1070365243.34 728135468.64
Total 1064149969.51 720452860.84 1070365243.34 728135468.64
(13). Description of incomes from contracts
□ Applicable√ N/A
(14). Description of performance obligations
□ Applicable√ N/A
(15). Description of allocation to remaining performance obligations
□ Applicable√ N/A
Other information:
None
5. Investment income
√ Applicable□ N/A
In RMB
Item
Amount for the
current period
Amount for the prior period
Gains from long-term equity investment accounted
for using the cost method
46000000.00
Long-term equity investment accounted for using
the equity method
Investment income from disposal of long-term
equity investments
-64542.33
Investment income from held-for-trading financial
assets during the holding period
Dividend income from other equity instrument
investments during the holding period
Interest income from debt investments during the
holding period
Interest income from other debt investments during
the holding period
Investment income from disposal of held-for-trading
financial assets
18624853.96 9552990.98
Investment income from disposal of other equity
instrument investments
Investment income from disposal of debt
investments
Investment income from disposal of other debt
investments
Total 18624853.96 55488448.65
Other information:
None
6. Others
√ Applicable□ N/A
R&D expenses
Item
Amount for the current
period
Amount for the prior
period
Employee benefits 57851800.94 55729731.59
Material consumption expenses 15548543.88 17246073.81
Depreciation and amortization fees 10287002.71 7573085.07
Rent expense 7114015.29 8730216.56
Patent fees 6796002.87 9382940.04
Other expenses 7276270.23 15132958.18
Total 104873635.92 113795005.25
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 assets -1112121.13
Tax refunds or reductions with ultra vires
approval or without official approval
documents
Government grants recognized in profit or
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)
40750823.51
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
Profit or loss on exchange of non-monetary
assets
Profit or loss on entrusted investments or
assets management
18624853.96
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
beginning of the period up to the business
combination date recognized as a result of
business combination of enterprises
involving enterprises under common control
23593500.83
Profit or loss arising from contingencies
other than those related to normal operating
business
Profit or loss on changes in the 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 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 2429083.25
Other gains or losses meeting the definition
of non-recurring profit or loss
323003.17
Effect of income taxes -9068330.19
Effect of minority interests -1982929.14
Total 73557884.26
It is required to specify the reason for defining items as non-recurring profit or loss items according to
Information Disclosure and Presentation Rules for Companies Making Public Offering of Securities No.
1－Non-recurring Profit or Loss and reasons for 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
2. Return on net assets and earnings per share
√ Applicable□ N/A
Profit for the reporting period
Weighted average
return on net assets
(%)
Earnings per share
Basic earnings per
share
Diluted earnings per
share
Net profit attributable to
ordinary shareholders of the
Company
5.62 0.25 0.25
Net profit after deduction of
non-recurring profits or losses
attributable to ordinary
shareholders of the Company
1.99 0.09 0.09
2. Calculation process of weighted average return on net assets
Item No. Current period
Net profit attributable to ordinary shareholders of the Company A 113847873.06
Non-recurring profit or loss B 73557884.26
Net profits after deduction of non-recurring profits or losses
attributable to ordinary shareholders of the Company
C=A-B 40289988.80
Opening balance of net assets attributable to ordinary shareholders
of the Company
D 1975838572.51
Net assets increased due to issue of new shares or debt-to-equity
swap that are attributable to ordinary shareholders of the Company
E 20953388.25
Accumulated months from the month following the addition of net
assets to the end of the reporting period
F 2
Net assets reduced by repurchases or cash dividends that are
attributable to ordinary shareholders of the Company
G 33866580.83
Accumulated months from the month following the reduction of
net assets to the end of the reporting period
H 6
Others
Effect of share-based payments on net assets I1 18783763.38
Accumulated months from the month following
the addition or reduction of net assets to the end of
the reporting period
J1 6
Effect of translation of financial statements
denominated in foreign currencies on net assets
I2 -6501355.78
Accumulated months from the month following
the addition or reduction of net assets to the end of
the reporting period
J2 6
Impact of acquisition of minority interests on net
assets
I3 2544011.15
Accumulated months from the month following
the addition or reduction of net assets to the end of
the reporting period
J3 0
Months of reporting period K 12
Weighted average net assets
L=D+A/2+E×F/K-G×H/K
±I×J/K
2025462653.80
Weighted average return on net assets M=A/L 5.62%
Weighted average return on net assets after deduction of
non-recurring profit or loss
N=C/L 1.99%
3. Calculation process of basic and diluted earnings per share
(1) Calculation process of basic earnings per share
Item No. Current period
Net profit attributable to ordinary shareholders of the Company A
113847873
.06
Non-recurring profit or loss B
73557884.
26
Net profits after deduction of non-recurring profits or losses attributable to ordinary
shareholders of the Company
C=A-B
40289988.
80
Total shares at the beginning of the period D
451554411
.00
Shares increased due to issue of new shares or debt-to-equity swap F
1202490.0
0
Accumulated months from the month following the addition of shares to the end of the
reporting period
G 2
Months of reporting period K 12
Weighted average number of outstanding ordinary shares
L=D+F×G/
K
451754826
.00
Basic earnings per share M=A/L 0.25
Basic earnings per share after deduction of non-recurring profit or loss N=C/L 0.09
(2) Calculation process of diluted earnings per share
Item No. Current period
Net profit attributable to ordinary shareholders of the Company A 113847873.06
Effect of diluted potential ordinary shares on net profit B
Net profits after dilution attributable to ordinary shareholders of
the Company
C=A-B 113847873.06
Non-recurring profit or loss D 73557884.26
Net profits after dilution and deduction of non-recurring profits
or losses attributable to ordinary shareholders of the Company
E=C-D 40289988.80
Weighted average number of outstanding ordinary shares F 451754826.00
Weighted average number of ordinary shares added to
warrants share options and convertible bonds etc.
G 454025.28
Weighted average number of outstanding ordinary shares after
dilution
H=F+G 452208851.28
Diluted earnings per share M=C/H 0.25
Diluted earnings per share after deduction of non-recurring
profit or loss
N=E/H 0.09
3. Differences in accounting data under Chinese Accounting Standards and Oversea Accounting
Standards
□ Applicable√ N/A
4. Others
□ Applicable√ N/A
Section XII List of Documents Available for Inspection
List of Documents
Available for Inspection
1. 2020 Financial and Accounting Statements with seals and signatures of the
principal of the Company the person in charge of the accounting body and
the chief accountant.List of Documents
Available for Inspection
2. The Auditor’s Report with seals of Pan-China Certified Public
Accountants (Special General Partnership) and seals and signatures of the
certified public accountant.List of Documents
Available for Inspection
3. All original documents and announcements of the Company publicly
disclosed in the websites designated by the Company as of the reporting
period.List of Documents
Available for Inspection
4. The above-mentioned documents are prepared in: Office of the Board of
Directors of Appotronics Corporation Limited
Chairman: LI Yi
Approval for submission by the Board of Directors: April 22 2021
Revision information
□ Applicable√ N/A
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