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世界时讯：京东方Ｂ: 2022年年度审计报告（英文版）

2023-04-03 23:46:14 证券之星

BOE Technology Group Co., Ltd. ENGLISH TRANSLATION OF FINANCIAL STATEMENTSFOR THE YEAR 1 JANUARY 2022 TO 31 DECEMBER 2022<img style="display:block;margin:auto;" width="450" src="http://img.9774.com.cn/2022/0923/20220923111824165.jpg" />(资料图片仅供参考) IF THERE IS ANY CONFLICT BETWEEN THE CHINESE VERSION AND ITS ENGLISH TRANSLATION, THE CHINESE VERSION WILL PREVAIL AUDITOR’S REPORT 毕马威华振审字第 2303647 号The Shareholders of BOE Technology Group Co., Ltd.:OpinionWe have audited the accompanying financial statements of BOE Technology Group Co., Ltd.(“BOE”), which comprise the consolidated and company balance sheets as at 31 Decembercash flow statements, the consolidated and company statements of changes in shareholders’equity for the year then ended, and notes to the financial statements.In our opinion, the accompanying financial statements present fairly, in all material respects,the consolidated and company financial position of BOE as at 31 December 2022, and theconsolidated and company financial performance and cash flows of BOE for the year thenended in accordance with Accounting Standards for Business Enterprises issued by theMinistry of Finance of the People’s Republic of China.Basis for OpinionWe conducted our audit in accordance with China Standards on Auditing for Certified PublicAccountants (“CSAs”). Our responsibilities under those standards are further described in theAuditor’s Responsibilities for the Audit of the Financial Statements section of our report. Weare independent of BOE in accordance with the China Code of Ethics for Certified PublicAccountants (“the Code”), and we have fulfilled our other ethical responsibilities inaccordance with the Code. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion. Page 1 of 9 AUDITOR’S REPORT (continued) 毕马威华振审字第 2303647 号Key Audit MattersKey audit matters are those matters that, in our professional judgement, were of mostsignificance in our audit of the financial statements of the current period. These matters wereaddressed in the context of our audit of the financial statements as a whole, and in formingour opinion thereon, and we do not provide a separate opinion on these matters.Revenue recognitionRefer to the accounting policies set out in the notes to the financial statements “III.Significant accounting policies and accounting estimates” 23 and “V. Notes to theconsolidated financial statements” 43. How the matter was addressed in ourThe Key Audit Matter auditThe revenue of BOE and its subsidiaries Our audit procedures to evaluate revenue(“BOE Group”) is mainly derived from the recognition included the following:sales of products relating to display deviceacross the domestic and overseas market.  Evaluate the design and operation effectiveness of key internal controlsThe sales contracts/orders signed between related to revenue recognition;BOE Group and its customers (mainlyelectronic equipment manufacturers) contain  Check key sales contracts/orders on a sampling basis to identify relevant tradingvarious trading terms. BOE Group judgesthe transfer timing of control according to terms, and evaluate whether thethe trading terms, and recognises revenue accounting policies for revenueaccordingly. Depending on the trading recognition of BOE Group meet theterms, the income is usually recognized requirements of the Enterprisewhen the goods are delivered and received, Accounting Standards;or when they are received by the carrier.  On a sampling basis and according toWe identified the recognition of BOE different trading terms, reconcile theGroup’s revenue as a key audit matter revenue recorded in the current year tobecause revenue, as one of BOE Group’s relevant supporting files such as relevantkey performance indicators, involves various orders, shipping orders, sales invoices,trading terms, and there is an inherent risk customs declarations, bills of lading,that revenue may not be recognised in a delivery receipts, etc. to evaluate whethercorrect period. revenue is recognised in accordance with the accounting policy of BOE Group;  On a sampling basis and according to different trading terms, cross check the revenue recorded before and after the balance sheet date against relevant supporting files such as relevant orders, shipping orders, sales invoices, customs declarations, bills of lading, delivery receipts, etc. to evaluate whether revenue is recorded in the appropriate period; Page 2 of 9 AUDITOR’S REPORT (continued) 毕马威华振审字第 2303647 号Key Audit Matters (continued)Revenue recognition (continued)Refer to Note III. 23 of the accounting policy to the financial statements and Note V. 43 to tothe consolidated financial statements. How the matter was addressed in ourThe Key Audit Matter audit  Select a sample based on the characteristics and nature of customer"s transaction, and perform confirmation procedures on the balance of accounts receivable as at the balance sheet date and the sales transaction amount during the current year;  On a sampling basis, check the written- back of revenue after the balance sheet date (including sales discounts and sales returns, etc.) with relevant supporting documents to assess whether revenue is recorded in the appropriate period;  Select revenue accounting entries that meet specific risk criteria and check related supporting documents. Page 3 of 9 AUDITOR’S REPORT (continued) 毕马威华振审字第 2303647 号Key Audit Matters (continued)Book value of fixed assets and construction in progressRefer to the accounting policies set out in the notes to the financial statements “III.Significant accounting policies and accounting estimates” 13, 14 and “V. Notes to theconsolidated financial statements” 14, 15. How the matter was addressed in ourThe Key Audit Matter auditBOE Group continued to invest in building Our audit procedures to assess the bookproduction lines of display device to expand value of fixed assets and construction inits production capacity. As at 31 December progress included the following:construction in progress amounted to RMB  Evaluate the design and operation (including estimating useful life andThe judgement made by the management residual values, etc.) related to theon the following aspects will affect the book integrity, existence and accuracy of fixedvalue of fixed assets and construction in assets and construction in progress;progress, including:  Check the physical status of construction Determine which type of expenditures are in progress and fixed assets on a qualified for capitalisation; sampling basis; Determine the timing for transferring  Check capital expenditures with relevant construction in progress to fixed assets supporting documents (including and making depreciation; purchase agreements/ orders, acceptance orders, engineering Estimate the useful life and residual construction contracts, project progress value of corresponding fixed assets. reports, etc.) on a sampling basis;We identified the book value of fixed assets  Assess whether the capitalisedand construction in progress of BOE Group commissioning expenses for the currentas a key audit matter because the valuation year are in compliance with relevantof the book value of fixed assets and capitalization conditions; check theconstruction in progress involves significant commissioning expenses with relevantjudgement from the management and it is of supporting documents on a samplingimportance to the consolidated financial basis;statements.  On the basis of sampling, assess the timing for transferring construction in progress to fixed assets, through the inspection of commissioning situation and the documents for transferring construction in progress to fixed assets;  Based on our understanding of industry practices and actual operating conditions of assets, we evaluate the management"s estimation of the useful life and residual value of fixed assets. Page 4 of 9 AUDITOR’S REPORT (continued) 毕马威华振审字第 2303647 号Key Audit Matters (continued)Impairment of fixed assets and intangible assetsRefer to the accounting policies set out in the notes to the financial statements “III.Significant accounting policies and accounting estimates” 19 and “V. Notes to theconsolidated financial statements” 14, 16. How the matter was addressed in ourThe Key Audit Matter auditBOE Group principally generates revenue Our audit procedures to evaluatefrom the production and sale of display impairment of fixed assets and intangibledevice. Due to the fluctuation of supply- assets included the following:demand relationship of display device andthe influence of technology upgrading, the  Evaluate management’s identification ofprofit level of different production lines suffer asset groups, assessment of impairment indications, and assess the design anddramatic fluctuation. As at 31 Decemberintangible assets amounted to RMB 214.935 controls for impairment tests;billion, the judgement on impairment  Based on our understanding of BOEindications and impairment test are material Group’s businesses and relevantto BOE Group’s financial statements. accounting standards, evaluateThe management classifies asset groups management’s classification basis of asset groups and judgement basis ofbased on the smallest identifiable group ofassets that generates cash inflows that are impairment indications;independent, and continuously monitors the  For asset groups with impairmenttrend of market of supply and demand as indications, based on our understandingwell as the technology evolution; of the industry, compare the keycomprehensively judges impairment assumptions in the calculation ofindications of each asset group in recoverable amounts used byaccordance with market trends, operating management with external available dataconditions of production lines and and historical analysis, including futuretechnological advanced performance, and selling prices, sales volume and discountperforms impairment test on asset groups if rate used by management, evaluate theany impairment indication exists. key assumptions and estimations used by the management;For asset groups with impairmentindications, the management assesses  For asset groups with significantwhether the book value of fixed assets and impairment risk, assess the competence,intangible assets as at 31 December 2022 professional quality and objectivity ofwere impaired by calculating the present experts hired by the management; andvalue of expected future cash flows. adopt our own valuation experts’ work,Calculating the present value of expected assess if discount rates used forfuture cash flows requires management to estimating the present value of futuremake significant judgements, especially for cash flows by management are within thethe estimation of future selling prices, sales range used by other companies in thevolume and applicable discount rate. same industry; Page 5 of 9 AUDITOR’S REPORT (continued) 毕马威华振审字第 2303647 号Key Audit Matters (continued)Impairment of fixed assets and intangible assets (continued)Refer to the accounting policies set out in the notes to the financial statements “III.Significant accounting policies and accounting estimates” 19 and “V. Notes to theconsolidated financial statements” 14, 16. How the matter was addressed in ourThe Key Audit Matter auditWe identified the impairment of fixed assets Our audit procedures to evaluateand intangible assets as a key audit matter impairment of fixed assets and intangiblebecause the book value of fixed assets and assets included the following:intangible assets is significant to thefinancial statements; management’s  Compare estimations used for calculatingsignificant judgements and estimations are the present value of expected future cashinvolved in assessing the classification basis flows in the previous year by theof asset groups, existence of impairment management with the actual situation inindications and impairment test of asset this year to consider the historicalgroups with impairment indications, which accuracy of management’s forecastmay exist errors or potential management results;bias.  Perform sensitivity analysis on key assumptions, including future selling prices, sales volume and discount rates, used in the calculation of recoverable amount by the management; assess how changes in key assumptions (individually or collectively) will lead to different results and assess whether there are indications of management bias in the selection of key assumptions;  Consider whether the disclosure of impairment of fixed assets and intangible assets in the financial statements is consistent with relevant accounting policy. Page 6 of 9 AUDITOR’S REPORT (continued) 毕马威华振审字第 2303647 号Other InformationBOE’s management is responsible for the other information. The other information comprisesall the information included in 2022 annual report of BOE, other than the financial statementsand our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistentwith the financial statements or our knowledge obtained in the audit or otherwise appears tobe materially misstated.If, based on the work we have performed, we conclude that there is a material misstatementof this other information, we are required to report that fact. We have nothing to report in thisregard.Responsibilities of Management and Those Charged with Governance for the FinancialStatementsManagement is responsible for the preparation and fair presentation of the financialstatements in accordance with the Accounting Standards for Business Enterprises, and forthe design, implementation and maintenance of such internal control necessary to enablethat the financial statements are free from material misstatement, whether due to fraud orerror.In preparing the financial statements, management is responsible for assessing BOE’s abilityto continue as a going concern, disclosing, as applicable, matters related to going concernand using the going concern basis of accounting unless management either intends toliquidate BOE or to cease operations, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing BOE’s financial reportingprocess. Page 7 of 9 AUDITOR’S REPORT (continued) 毕马威华振审字第 2303647 号Auditor’s Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements asa whole are free from material misstatement, whether due to fraud or error, and to issue anauditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordance with CSAs will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with CSAs, we exercise professional judgement andmaintain professional scepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on BOE’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause BOE to cease to continue as a going concern.• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Page 8 of 9 AUDITOR’S REPORT (continued) 毕马威华振审字第 2303647 号Auditor’s Responsibilities for the Audit of the Financial Statements (continued)• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within BOE 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, theplanned scope and timing of the audit and significant audit findings, including any significantdeficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied withrelevant ethical requirements regarding independence, and communicate with them allrelationships and other matters that may reasonably be thought to bear on our independenceand, where applicable, related safeguards.From the matters communicated with those charged with governance, we determine thosematters that were of most significance in the audit of the financial statements of the currentperiod and are therefore the key audit matters. We describe these matters in our auditor’sreport unless law or regulation precludes public disclosure about the matter or when, inextremely rare circumstances, we determine that a matter should not be communicated inour report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.KPMG Huazhen LLP Certified Public Accountants Registered in the People’s Republic of China Su Xing (Engagement Partner)Beijing, China Chai Jing Page 9 of 9BOE Technology Group Co., Ltd.Consolidated balance sheetas at 31 December 2022(Expressed in Renminbi Yuan) Note 2022 2021Assets Current assets Cash at bank and on hand V.1 68,800,307,369 80,986,835,088 Financial assets held for trading V.2 17,187,993,936 10,028,172,853 Bills receivable V.3 211,792,061 217,734,298 Accounts receivable V.4 28,203,647,569 35,503,414,820 Prepayments V.5 589,764,680 1,112,880,007 Other receivables V.6 975,809,236 1,922,828,378 Inventories V.7 22,787,814,225 27,805,161,436 Contract assets V.8 71,636,461 75,698,324 Non-current assets due within one year 8,561,307 7,700,735 Other current assets V.9 3,394,036,919 3,578,919,710Total current assets 142,231,363,763 161,239,345,649The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated balance sheetas at 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021Assets (continued) Non-current assets Long-term receivables 28,637,449 29,918,542 Long-term equity investments V.10 12,421,878,851 6,040,948,317 Investments in other equity instruments V.11 483,060,306 519,088,146 Other non-current financial assets V.12 2,022,967,681 606,895,447 Investment properties V.13 1,122,025,138 1,158,365,401 Fixed assets V.14 205,987,050,430 227,141,366,884 Construction in progress V.15 43,386,134,668 32,099,711,879 Right-of-use assets V.60 687,120,946 753,164,237 Intangible assets V.16 8,948,327,143 11,209,498,406 Goodwill V.17 660,823,651 1,130,006,987 Long-term deferred expenses V.18 556,941,377 636,530,502 Deferred tax assets V.19 70,250,425 190,335,524 Other non-current assets V.20 1,955,521,384 7,477,427,483Total non-current assets 278,330,739,449 288,993,257,755Total assets 420,562,103,212 450,232,603,404The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated balance sheetas at 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021Liabilities and shareholders’ equity Current liabilities Short-term loans V.21 2,373,938,871 2,072,057,332 Bills payable V.22 870,221,538 827,958,031 Accounts payable V.23 29,834,720,464 32,455,830,694 Advance payments received V.24 79,848,977 146,140,084 Contract liabilities V.25 2,411,717,792 3,765,081,554 Employee benefits payable V.26 2,818,532,823 5,133,155,237 Taxes payable V.27 1,331,401,188 2,200,249,305 Other payables V.28 19,632,223,269 23,835,374,942 Non-current liabilities due within one year V.29 22,703,750,744 28,874,958,714 Other current liabilities V.30 3,613,967,673 4,051,532,509Total current liabilities 85,670,323,339 103,362,338,402The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated balance sheetas at 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021Liabilities and shareholders’ equity (continued) Non-current liabilities Long-term loans V.31 123,143,479,690 116,078,666,587 Debentures payable V.32 - 359,586,437 Lease liabilities V.60 538,586,010 669,130,264 Long-term payables V.33 229,587,077 906,592,838 Deferred income V.34 5,156,347,332 6,416,089,611 Deferred tax liabilities V.19 1,274,406,833 1,525,622,873 Other non-current liabilities V.35 2,499,075,805 3,535,809,876Total non-current liabilities 132,841,482,747 129,491,498,486Total liabilities 218,511,806,086 232,853,836,888The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated balance sheetas at 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021Liabilities and shareholders’ equity (continued) Shareholders’ equity Share capital V.36 38,196,363,421 38,445,746,482 Other equity instruments V.37 8,176,366,808 14,146,997,427 Capital reserve V.38 55,218,504,392 53,917,609,094 Less: Treasury shares V.39 3,508,201,911 3,415,768,207 Other comprehensive income V.40 (1,073,768,030) 113,551,147 Surplus reserve V.41 3,241,063,934 2,889,590,205 Retained earnings V.42 35,839,081,781 37,106,514,799 Total equity attributable to shareholders of the Company 136,089,410,395 143,204,240,947 Non-controlling interests 65,960,886,731 74,174,525,569Total shareholders’ equity 202,050,297,126 217,378,766,516Total liabilities and shareholders’ equity 420,562,103,212 450,232,603,404These financial statements were approved by the Board of Directors of the Company on 31March 2023.Chen Yanshun Gao Wenbao Yang Xiaoping Teng Jiao (CompanyChairman of the Chief Executive Chief Financial The head of the stamp)Board Officer Officer accounting department(Signature and (Signature and (Signature and (Signature andstamp) stamp) stamp) stamp)The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Company balance sheetas at 31 December 2022(Expressed in Renminbi Yuan) Note 2022 2021Assets Current assets Cash at bank and on hand 7,121,641,234 5,609,364,822 Accounts receivable XV.1 4,863,665,269 4,828,855,275 Prepayments 7,045,311 12,669,107 Other receivables XV.2 19,878,145,375 15,449,830,610 Inventories 15,065,947 15,853,238 Other current assets 57,226,515 167,179,023Total current assets 31,942,789,651 26,083,752,075Non-current assets Long-term equity investments XV.3 214,308,953,020 210,945,821,235 Investments in other equity instruments 60,434,464 63,458,868 Other non-current financial assets 1,416,072,234 - Investment properties 251,870,591 261,526,129 Fixed assets 921,510,043 961,944,766 Construction in progress 616,247,335 551,352,449 Right-of-use assets 126,373,643 170,173,793 Intangible assets 1,122,230,564 1,243,806,868 Long-term deferred expenses 384,123,386 441,560,097 Other non-current assets 1,080,322,988 1,744,751,520Total non-current assets 220,288,138,268 216,384,395,725Total assets 252,230,927,919 242,468,147,800The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Company balance sheetas at 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021Liabilities and shareholders’ equity Current liabilities Accounts payable 312,100,258 61,519,244 Advance payments received 14,819,929 20,038,334 Contract liabilities 19,200 - Employee benefits payable 282,792,422 640,728,285 Taxes payable 139,166,672 244,586,957 Other payables XV.5 4,249,391,146 2,880,884,768 Non-current liabilities due within one year 2,704,607,119 10,909,326,195 Other current liabilities 20,283,257 29,190,783Total current liabilities 7,723,180,003 14,786,274,566Non-current liabilities Long-term loans XV.6 39,557,500,000 32,208,500,000 Lease liabilities 85,830,813 129,343,868 Deferred income 1,933,587,746 2,906,951,707 Deferred tax liabilities XV.4 111,987,272 225,816,218 Other non-current liabilities XV.7 96,394,661,805 74,506,661,805Total non-current liabilities 138,083,567,636 109,977,273,598Total liabilities 145,806,747,639 124,763,548,164The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Company balance sheetas at 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021Liabilities and shareholders’ equity (continued) Shareholders’ equity Share capital V.36 38,196,363,421 38,445,746,482 Other equity instruments V.37 8,176,366,808 14,146,997,427 Capital reserve XV.8 53,693,627,213 53,598,033,152 Less: Treasury shares V.39 3,508,201,911 3,415,768,207 Other comprehensive income XV.9 340,345 89,024,650 Surplus reserve V.41 3,241,063,934 2,889,590,205 Retained earnings XV.10 6,624,620,470 11,950,975,927Total shareholders’ equity 106,424,180,280 117,704,599,636Total liabilities and shareholders’ equity 252,230,927,919 242,468,147,800These financial statements were approved by the Board of Directors of the Company on 31March 2023.Chen Yanshun Gao Wenbao Yang Xiaoping Teng Jiao (CompanyChairman of the Chief Executive Chief Financial The head of the stamp)Board Officer Officer accounting department(Signature and (Signature and (Signature and (Signature andstamp) stamp) stamp) stamp)The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated income statementfor the year ended 31 December 2022(Expressed in Renminbi Yuan) Note 2022 2021I. Operating income V.43 178,413,731,179 221,035,718,012II. Less: Operating costs V.43 157,530,566,152 157,298,825,781 Taxes and surcharges V.44 1,275,171,339 1,424,205,826 Selling and distribution expenses V.45 4,233,290,297 5,484,589,978 General and administrative expenses V.46 6,247,637,006 6,693,373,589 Research and development expenses V.47 11,100,768,677 10,616,426,327 Financial expenses V.48 2,445,130,575 3,682,379,202 Including: Interest expenses 3,572,211,438 4,866,778,333 Interest income 1,483,022,892 1,050,431,325 Add: Other income V.49 5,485,529,324 2,092,765,728 Investment income V.50 6,094,267,884 1,347,489,345 Including: Income from investment in associates and joint ventures 528,103,680 1,245,036,895 Gains from changes in fair value V.51 159,344,584 84,966,963 Credit losses V.52 (51,577,226) (28,409,869) Impairment losses V.53 (7,304,471,630) (4,478,251,852) Gains from asset disposals V.54 10,965,556 153,505,791III. Operating (loss) / profit (24,774,375) 35,007,983,415 Add: Non-operating income V.55 163,242,857 131,607,946 Less: Non-operating expenses V.55 87,249,543 55,215,102The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated income statementfor the year ended 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021IV. Profit before income tax 51,218,939 35,084,376,259 Less: Income tax expenses V.56 1,788,394,107 4,187,971,404V. Net (loss) / profit for the year (1,737,175,168) 30,896,404,855 Shareholders of the Company 7,550,877,790 25,960,751,646 Non-controlling interests (9,288,052,958) 4,935,653,209 The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated income statementfor the year ended 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021VI. Other comprehensive income, net of tax V.40 (1,158,016,792) 155,717,231 Other comprehensive income (net of tax) attributable to owners of the Company (1,164,537,236) 190,988,004 (1) Items that will not be reclassified to profit or loss income recognised under equity method (53,367,649) 68,869,497 investments in other equity instruments (79,547,426) (40,618,274) (2) Items that may be reclassified to profit or loss income recognised under equity method 127,867 (296,553) arising from translation of foreign currency financial statements (1,031,750,028) 163,033,334 Other comprehensive income (net of tax) attributable to non-controlling interests 6,520,444 (35,270,773)The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated income statementfor the year ended 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021VII. Total comprehensive income for the year (2,895,191,960) 31,052,122,086 Attributable to shareholders of the Company 6,386,340,554 26,151,739,650 Attributable to non-controlling interests (9,281,532,514) 4,900,382,436VIII. Earnings per share: (1) Basic earnings per share V.57 0.19 0.71 (2) Diluted earnings per share V.57 Not applicable 0.71 These financial statements were approved by the Board of Directors of the Company on 31March 2023.Chen Yanshun Gao Wenbao Yang Xiaoping Teng Jiao (CompanyChairman of the Chief Executive Chief Financial The head of the stamp)Board Officer Officer accounting department(Signature and (Signature and (Signature and (Signature andstamp) stamp) stamp) stamp)The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Company income statementfor the year ended 31 December 2022(Expressed in Renminbi Yuan) Note 2022 2021I. Operating income XV.11 4,873,328,715 5,716,998,034II. Less: Operating costs 10,080,268 16,459,454 Taxes and surcharges XV.11 55,342,015 36,630,410 General and administrative expenses 1,348,187,653 1,577,032,602 Research and development expenses 2,046,032,751 2,330,865,497 Financial expenses 574,596,105 798,736,264 Including: Interest expenses 631,737,202 892,768,026 Interest income 96,658,931 93,003,346 Add: Other income 948,637,354 948,922,174 Investment income XV.12 1,934,087,931 2,755,668,691 Including: Income from investment in associates and joint ventures 328,861,860 864,640,400 Credit losses (18,126,642) (5,247,340) Losses from asset disposals - (773,327)III. Operating profit 3,703,688,566 4,655,844,005 Add: Non-operating income 6,873,424 7,424,220 Less: Non-operating expenses 26,617,581 5,915,655IV. Profit before income tax 3,683,944,409 4,657,352,570 Less: Income tax expenses XV.13 202,080,897 260,856,004V. Net profit for the year 3,481,863,512 4,396,496,566The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Company income statementfor the year ended 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021VI. Other comprehensive income, net of tax XV.9 (55,810,525) 53,550,302 (1) Items that will not be reclassified to profit or loss recognised under equity method (53,367,649) 68,869,497 investments in other equity instruments (2,570,743) (15,073,903) (2) Items that may be reclassified to profit or loss 127,867 (245,292)VII. Total comprehensive income for the year 3,426,052,987 4,450,046,868These financial statements were approved by the Board of Directors of the Company on 31March 2023.Chen Yanshun Gao Wenbao Yang Xiaoping Teng Jiao (CompanyChairman of the Chief Executive Chief Financial The head of the stamp)Board Officer Officer accounting department(Signature and (Signature and (Signature and (Signature andstamp) stamp) stamp) stamp)The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated cash flow statementfor the year ended 31 December 2022(Expressed in Renminbi Yuan) Note 2022 2021I. Cash flows from operating activities: Proceeds from sale of goods and rendering of services 193,327,661,415 221,840,098,206 Refund of taxes 17,259,338,469 13,173,129,922 Proceeds from other operating activities 7,397,264,096 5,925,158,408 Sub-total of cash inflows 217,984,263,980 240,938,386,536 Payment for goods and services (142,617,274,685) (146,642,673,111) Payment to and for employees (19,821,022,609) (17,908,235,464) Payment of various taxes (5,394,897,972) (5,149,971,194) Payment for other operating activities (7,129,101,409) (8,538,818,211) Sub-total of cash outflows (174,962,296,675) (178,239,697,980) Net cash flows generated from operating activities V.58(1) 43,021,967,305 62,698,688,556The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated cash flow statementfor the year ended 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021II. Cash flows from investing activities: Proceeds from disposal of investments 83,038,823,137 33,071,343,623 Investment returns received 461,543,173 180,030,588 Net proceeds from disposal of fixed assets, intangible assets and other long-term assets 26,645,620 69,111,303 Net proceeds from disposal of subsidiaries 936,758,922 - Proceeds from other investing activities 1,311,942,470 3,438,995,631 Sub-total of cash inflows 85,775,713,322 36,759,481,145 Payment for acquisition of fixed assets, intangible assets and other long-term assets (29,398,245,045) (36,098,078,337) Payment for acquisition of investments (92,205,577,385) (41,638,460,294) Net payment for acquisition of subsidiaries - (2,815,535) Net payment for disposal of subsidiaries (144,689,766) (160,887,997) Sub-total of cash outflows (121,748,512,196) (77,900,242,163) Net cash flows used in investing activities (35,972,798,874) (41,140,761,018)The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated cash flow statementfor the year ended 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021III. Cash flows from financing activities: Proceeds from investors 2,301,848,242 31,519,607,755 Including: Proceeds from non- controlling shareholders of subsidiaries 2,301,848,242 11,187,003,325 Proceeds from issuance of debentures 2,000,000,000 - Proceeds from borrowings 49,812,750,352 31,028,727,811 Proceeds from other financing activities 771,327,623 1,106,689,881 Sub-total of cash inflows 54,885,926,217 63,655,025,447The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated cash flow statementfor the year ended 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021III. Cash flows from financing activities (continued): Repayments of borrowings (51,681,667,124) (48,435,579,182) Payment for redeeming bonds (8,000,000,000) - Payment for dividends or interest (13,828,515,479) (10,261,666,002) Including: Profits paid to non- controlling shareholders of subsidiaries (39,388,061) (34,862,550) Payment for other financing activities (2,548,995,476) (17,139,649,816) Sub-total of cash outflows (76,059,178,079) (75,836,895,000) Net cash flow used in financing activities (21,173,251,862) (12,181,869,553)IV. Effect of foreign exchange rate changes on cash and cash equivalents 1,882,635,112 (817,308,273)V. Net (decrease) / increase in cash and cash equivalents V.58(1) (12,241,448,319) 8,558,749,712 Add: Cash and cash equivalents at the beginning of the year 76,623,486,083 68,064,736,371VI. Cash and cash equivalents at the end of the year V.58(3) 64,382,037,764 76,623,486,083These financial statements were approved by the Board of Directors of the Company on 31March 2023.Chen Yanshun Gao Wenbao Yang Xiaoping Teng Jiao (CompanyChairman of the Chief Executive Chief Financial The head of the stamp)Board Officer Officer accounting department(Signature and (Signature and (Signature and (Signature andstamp) stamp) stamp) stamp)The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Company cash flow statementfor the year ended 31 December 2022(Expressed in Renminbi Yuan) Note 2022 2021I. Cash flows from operating activities: Proceeds from sale of goods and rendering of services 5,650,186,755 5,868,891,208 Proceeds from other operating activities 2,005,413,901 406,266,493 Sub-total of cash inflows 7,655,600,656 6,275,157,701 Payment for goods and services (1,161,216,577) (1,038,043,873) Payment to and for employees (1,681,332,214) (1,532,937,459) Payment of various taxes (676,007,600) (495,289,004) Payment for other operating activities (452,287,489) (2,504,787,813) Sub-total of cash outflows (3,970,843,880) (5,571,058,149) Net cash flows generated from operating activities XV.14(1) 3,684,756,776 704,099,552II. Cash flows from investing activities: Proceeds from disposal of investments 330,944,027 890,504,898 Proceeds from disposal of subsidiaries - 230,142,095 Investment returns received 1,257,584,843 2,129,623,919 Net proceeds from disposal of fixed assets 241,034 13,445,008 Proceeds from other investing activities 10,546,180,253 2,075,919,565 Sub-total of cash inflows 12,134,950,157 5,339,635,485The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Company cash flow statementfor the year ended 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021II. Cash flows from investing activities (continued): Payment for acquisition of fixed assets, intangible assets and other long-term assets (405,565,299) (715,641,262) Payment for acquisition of investments (3,989,687,433) (30,498,556,648) Payment for other investing activities (14,117,701,133) (825,000,000) Sub-total of cash outflows (18,512,953,865) (32,039,197,910) Net cash flows used in investing activities (6,378,003,708) (26,699,562,425)III. Cash flows from financing activities: Proceeds from investors - 20,332,604,430 Proceeds from issuance of debentures 2,000,000,000 - Proceeds from borrowings 25,000,000,000 14,303,000,000 Proceeds from other financing activities 24,936,039,463 20,888,483,038 Sub-total of cash inflows 51,936,039,463 55,524,087,468 Repayments of borrowings (25,827,547,455) (17,355,376,312) Payment for redeeming bonds (8,000,000,000) - Payment for dividends and interest (9,842,819,608) (5,524,312,554) Payment for other financing activities (4,136,747,868) (5,389,705,939) Sub-total of cash outflows (47,807,114,931) (28,269,394,805) Net cash flows generated from financing activities 4,128,924,532 27,254,692,663The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Company cash flow statementfor the year ended 31 December 2022 (continued)(Expressed in Renminbi Yuan) Note 2022 2021IV. Effect of foreign exchange rate changes on cash and cash equivalents 76,264,084 (19,357,657)V. Net increase in cash and cash equivalents XV.14(1) 1,511,941,684 1,239,872,133 Add: Cash and cash equivalents at the beginning of the year 5,599,937,349 4,360,065,216VI. Cash and cash equivalents at the end of the year XV.14(2) 7,111,879,033 5,599,937,349These financial statements were approved by the Board of Directors of the Company on 31March 2023.Chen Yanshun Gao Wenbao Yang Xiaoping Teng Jiao (CompanyChairman of the Chief Executive Chief Financial The head of the stamp)Board Officer Officer accounting department(Signature and (Signature and (Signature and (Signature andstamp) stamp) stamp) stamp)The notes on pages 30 to 175 form part of these financial statements. BOE Technology Group Co., Ltd. Consolidated statement of changes in shareholders’ equity for the year ended 31 December 2022 (Expressed in Renminbi Yuan) Attributable to shareholders of the Company Other Other equity Less: Treasury comprehensive Retained Non-controlling Note Share capital instruments Capital reserve shares income Surplus reserve earnings Sub-total interests Total I. Balance at the beginning of the year 38,445,746,482 14,146,997,427 53,917,609,094 3,415,768,207 113,551,147 2,889,590,205 37,106,514,799 143,204,240,947 74,174,525,569 217,378,766,516 II. Changes in equity during the year income - - - - (1,164,537,236) - 7,550,877,790 6,386,340,554 (9,281,532,514) (2,895,191,960) contributions of capital (1) Contribution by non- controlling interests - - - - - - - - 2,301,848,242 2,301,848,242 (2) Repurchase of treasury shares V.39 - - - 1,048,154,539 - - - (1,048,154,539) - (1,048,154,539) (3) Cancellation of treasury shares V.36/38/39 (249,383,061) - (641,811,942) (891,195,003) - - - - - - (4) Equity-settled share- based payments XI - - 654,336,707 (64,525,832) - - - 718,862,539 44,728,854 763,591,393 (5) Contribution by holders of other equity instruments V.37 - 1,989,320,755 - - - - - 1,989,320,755 - 1,989,320,755 (6) Payment for capital of holders of other equity instruments V.37 - (7,957,047,264) (42,952,736) - - - - (8,000,000,000) - (8,000,000,000) (1) Appropriation for surplus reserve V.41 - - - - - 348,186,351 (348,186,351) - - - (2) Accrued interest on holders of other equity instruments V.37 - 530,695,890 - - - - (530,695,890) - - - (3) Payment for interest on holders of other equity instruments V.37 - (533,600,000) - - - - - (533,600,000) - (533,600,000) (4) Distributions to shareholders V.42 - - - - - - (7,958,923,130) (7,958,923,130) (54,411,212) (8,013,334,342) The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated statement of changes in shareholders’ equityfor the year ended 31 December 2022 (continued)(Expressed in Renminbi Yuan) Attributable to shareholders of the Company Other Other equity Less: Treasury comprehensive Non-controlling Note Share capital instruments Capital reserve shares income Surplus reserve Retained earnings Sub-total interests Total (1) Transfer of other comprehensive income to retained earnings V.40/41/42 - - - - (22,781,941) 3,287,378 19,494,563 - - - (1) Other movements in equity of associates V.10 - - 274,685,689 - - - - 274,685,689 845,261 275,530,950 (2) Disposal of equities in subsidiaries V.38 - - - - - - - - (1,154,255,778) (1,154,255,778) (3) Others V.38 - - 1,056,637,580 - - - - 1,056,637,580 (70,861,691) 985,775,889III. Balance at the end of the year 38,196,363,421 8,176,366,808 55,218,504,392 3,508,201,911 (1,073,768,030) 3,241,063,934 35,839,081,781 136,089,410,395 65,960,886,731 202,050,297,126These financial statements were approved by the Board of Directors of the Company on 31 March 2023.Chen Yanshun Gao Wenbao Yang Xiaoping Teng Jiao (CompanyChairman of the Chief Executive Chief Financial The head of the stamp)Board Officer Officer accounting department(Signature and (Signature and (Signature and (Signature andstamp) stamp) stamp) stamp)The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated statement of changes in shareholders’ equityfor the year ended 31 December 2021 (continued)(Expressed in Renminbi Yuan) Attributable to shareholders of the Company Other Other equity Less: Treasury comprehensive Retained Non-controlling Note Share capital instruments Capital reserve shares income Surplus reserve earnings Sub-total interests TotalI. Balance at the beginning of the year 34,798,398,763 14,146,997,427 37,435,655,934 1,036,298,508 (22,198,072) 2,444,416,669 15,509,794,622 103,276,766,835 70,120,967,879 173,397,734,714Add: Changes in accounting policies - - - - - - 35,577,201 35,577,201 5,309,967 40,887,168Adjusted balance at the beginning of the year 34,798,398,763 14,146,997,427 37,435,655,934 1,036,298,508 (22,198,072) 2,444,416,669 15,545,371,823 103,312,344,036 70,126,277,846 173,438,621,882II. Changes in equity during the year (1) Contribution by ordinary shareholders V.36 3,650,377,019 - 16,219,134,815 - - - - 19,869,511,834 - 19,869,511,834 (2) Contribution by non-controlling interests - - - - - - - - 11,187,003,325 11,187,003,325 (3) Decrease of capital by non- controlling interests - - 322,947 - - - - 322,947 (8,482,947) (8,160,000) (4) Repurchase of treasury shares V.39 - - - 2,428,003,419 - - - (2,428,003,419) - (2,428,003,419) (5) Cancellation of treasury shares V.36/38/39 (3,029,300) - (14,270,384) (17,299,684) - - - - - - (6) Equity-settled share-based payments XI - - 598,701,862 (31,234,036) - - - 629,935,898 41,990,775 671,926,673 (1) Appropriation for surplus reserve V.41 - - - - - 439,649,657 (439,649,657) - - - (2) Accrued interest on holders of other equity instruments V.37 - 533,600,000 - - - - (533,600,000) - - - (3) Payment for interest on holders of other equity instruments V.37 - (533,600,000) - - - - - (533,600,000) - (533,600,000) (4) Distributions to shareholders V.42 - - - - - - (3,476,073,919) (3,476,073,919) (34,862,550) (3,510,936,469)The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Consolidated statement of changes in shareholders’ equityfor the year ended 31 December 2021 (continued)(Expressed in Renminbi Yuan) Attributable to shareholders of the Company Other Other equity Less: Treasury comprehensive Retained Non-controlling Note Share capital instruments Capital reserve shares income Surplus reserve earnings Sub-total interests Total (1) Transfer of other comprehensive income to retained earnings V.40/42 - - - - (55,238,785) 5,523,879 49,714,906 - - - (1) Other movements in equity of associates V.10 - - 51,030,550 - - - - 51,030,550 - 51,030,550 (2) Acquisition of non-controlling interests V.38 - - (658,923,890) - - - - (658,923,890) (12,180,161,432) (12,839,085,322) (3) Disposal of equities in subsidiaries V.38 - - 288,039,797 - - - - 288,039,797 146,828,923 434,868,720 (4) Others V.38 - - (2,082,537) - - - - (2,082,537) (4,450,807) (6,533,344)III. Balance at the end of the year 38,445,746,482 14,146,997,427 53,917,609,094 3,415,768,207 113,551,147 2,889,590,205 37,106,514,799 143,204,240,947 74,174,525,569 217,378,766,516These financial statements were approved by the Board of Directors of the Company on 31 March 2023.Chen Yanshun Gao Wenbao Yang Xiaoping Teng Jiao (CompanyChairman of the Chief Executive Chief Financial The head of the stamp)Board Officer Officer accounting department(Signature and (Signature and (Signature and (Signature andstamp) stamp) stamp) stamp)The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Company statement of changes in shareholders’ equityfor the year ended 31 December 2022(Expressed in Renminbi Yuan) Less: Other Other equity Treasury comprehensive Surplus Retained Note Share capital instruments Capital reserve shares income reserve earnings TotalI. Balance at the beginning of the year 38,445,746,482 14,146,997,427 53,598,033,152 3,415,768,207 89,024,650 2,889,590,205 11,950,975,927 117,704,599,636II. Changes in equity during the year capital (1) Repurchase of treasury shares V.39 - - - 1,048,154,539 - - - (1,048,154,539) (2) Cancellation of treasury V.36/38/ shares 39 (249,383,061) - (641,811,942) (891,195,003) - - - - (3) Equity-settled share-based payments XI - - 699,065,561 (64,525,832) - - - 763,591,393 (4) Contribution by holders of other equity instruments V.37 - 1,989,320,755 - - - - - 1,989,320,755 (5) Payment for capital of holders of other equity instruments V.37/38 - (7,957,047,264) (42,952,736) - - - - (8,000,000,000) (1) Appropriation for surplus reserve V.41 - - - - - 348,186,351 (348,186,351) - (2) Accrued interest on holders of other equity instruments V.37 - 530,695,890 - - - - (530,695,890) - (3) Payment for interest on holders of other equity instruments V.37 - (533,600,000) - - - - - (533,600,000) (4) Distributions to shareholders V.42 - - - - - - (7,958,923,130) (7,958,923,130)The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Company statement of changes in shareholders’ equityfor the year ended 31 December 2022 (continued)(Expressed in Renminbi Yuan) Less: Other Other equity Treasury comprehensive Retained Note Share capital instruments Capital reserve shares income Surplus reserve earnings Total (1) Transfer of other comprehensive income to retained earnings XV.9/10 - - - - (32,873,780) 3,287,378 29,586,402 - (1) Other movements in equity of associates XV.3 - - 141,386,796 - - - - 141,386,796 (2) Others - - (60,093,618) - - - - (60,093,618)III. Balance at the end of the year 38,196,363,421 8,176,366,808 53,693,627,213 3,508,201,911 340,345 3,241,063,934 6,624,620,470 106,424,180,280These financial statements were approved by the Board of Directors of the Company on 31 March 2023.Chen Yanshun Gao Wenbao Yang Xiaoping Teng Jiao (CompanyChairman of the Chief Executive Chief Financial The head of the stamp)Board Officer Officer accounting department(Signature and (Signature and (Signature and (Signature andstamp) stamp) stamp) stamp)The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Company statement of changes in shareholders’ equityfor the year ended 31 December 2021 (continued)(Expressed in Renminbi Yuan) Other Other equity Less: Treasury comprehensiv Retained Note Share capital instruments Capital reserve shares e income Surplus reserve earnings TotalI. Balance at the beginning of the year 34,798,398,763 14,146,997,427 36,696,079,366 1,036,298,508 90,713,133 2,444,416,669 11,954,088,031 99,094,394,881II. Changes in equity during the year capital (1) Contribution by ordinary shareholders V.36 3,650,377,019 - 16,219,134,815 - - - - 19,869,511,834 (2) Repurchase of treasury shares V.39 - - - 2,428,003,419 - - - (2,428,003,419) (3) Cancellation of treasury V.36/38/ shares 39 (3,029,300) - (14,270,384) (17,299,684) - - - - (4) Equity-settled share-based payments XI - - 640,692,637 (31,234,036) - - - 671,926,673 (1) Appropriation for surplus reserve V.41 - - - - - 439,649,657 (439,649,657) - (2) Accrued interest on holders of other equity instruments V.37 - 533,600,000 - - - - (533,600,000) - (3) Payment for interest on holders of other equity instruments V.37 - (533,600,000) - - - - - (533,600,000) (4) Distributions to shareholders V.42 - - - - - - (3,476,073,919) (3,476,073,919)The notes on pages 30 to 175 form part of these financial statements.BOE Technology Group Co., Ltd.Company statement of changes in shareholders’ equityfor the year ended 31 December 2021 (continued)(Expressed in Renminbi Yuan) Other Other equity Less: Treasury comprehensive Retained Note Share capital instruments Capital reserve shares income Surplus reserve earnings Total (1) Transfer of other comprehensive income to retained earnings XV.9/10 - - - - (55,238,785) 5,523,879 49,714,906 - (1) Other movements in equity of associates XV.3 - - 53,544,976 - - - - 53,544,976 (2) Others - - 2,851,742 - - - - 2,851,742III. Balance at the end of the year 38,445,746,482 14,146,997,427 53,598,033,152 3,415,768,207 89,024,650 2,889,590,205 11,950,975,927 117,704,599,636These financial statements were approved by the Board of Directors of the Company on 31 March 2023.Chen Yanshun Gao Wenbao Yang Xiaoping Teng Jiao (CompanyChairman of the Chief Executive Chief Financial The head of the stamp)Board Officer Officer accounting department(Signature and (Signature and (Signature and (Signature andstamp) stamp) stamp) stamp)The notes on pages 30 to 175 form part of these financial statements. BOE Technology Group Co., Ltd. Notes to the financial statements (Expressed in Renminbi Yuan unless otherwise indicated)I. Company status BOE Technology Group Company Limited (the “Company”) is a company limited by shares established on 9 April 1993 in Beijing, with its head office located at Beijing. The parent of the Company and the Company’s ultimate holding company is Beijing Electronics Holdings Co., Ltd. (“Electronics Holdings”). The Company and its subsidiaries (referred to as the “Group”) comprise five main business segments: display business, Internet of Things (IoT) innovation business, sensor business, MLED business and smart medicine & engineering business. For information about the subsidiaries of the Company, refer to Note VII.II. Basis of preparation The financial statements have been prepared on the going concern basis.III. Significant accounting policies and accounting estimates The financial statements have been prepared in accordance with the requirements of Accounting Standards for Business Enterprises or referred to as China Accounting Standards (“CAS”) issued by the MOF. These financial statements present truly and completely the consolidated financial position and financial position of the Company as at 31 December 2022, and the consolidated financial performance and financial performance and the consolidated cash flows and cash flows of the Company for the year then ended. These financial statements also comply with the disclosure requirements of “Regulation on the Preparation of Information Disclosures by Companies Issuing Securities, No. 15: General Requirements for Financial Reports” as revised by the China Securities Regulatory Commission (“CSRC”) in 2014. The accounting period is from 1 January to 31 December. The Company takes the period from the acquisition of assets for processing to until the ultimate realisation of cash or cash equivalents as a normal operating cycle. The operating cycle of the Company is usually less than 12 months. The Company’s functional currency is Renminbi and these financial statements are presented in Renminbi. Functional currency is determined by the Company and its subsidiaries on the basis of the currency in which major income and costs are denominated and settled. Some of the Company’s subsidiaries have functional currencies that are different from the Company’s functional currency. Their financial statements have been translated based on the accounting policy set out in Note III.8. and not under common control A transaction constitutes a business combination when the Group obtains control of one or more entities (or a group of assets or net assets). Business combination is classified as either business combinations involving enterprises under common control or business combinations not involving enterprises under common control. For a transaction not involving enterprises under common control, the acquirer determines whether acquired set of assets constitute a business. The Group may elect to apply the simplified assessment method, the concentration test, to determine whether an acquired set of assets is not a business. If the concentration test is met and the set of assets is determined not to be a business, no further assessment is needed. If the concentration test is not met, the Group shall perform the assessment according to the guidance on the determination of a business. When the set of assets the group acquired does not constitute a business, acquisition costs should be allocated to each identifiable assets and liabilities at their acquisition date fair values. It is not required to apply the accounting of business combination described as below.(1) Business combinations involving entities under common control A business combination involving entities under common control is a business combination in which all of the combining entities are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory. The assets acquired and liabilities assumed are measured based on their carrying amounts in the consolidated financial statements of the ultimate controlling party at the combination date. The difference between the carrying amount of the net assets acquired and the consideration paid for the combination (or the total par value of shares issued) is adjusted against share premium in the capital reserve, with any excess adjusted against retained earnings. Any costs directly attributable to the combination are recognised in profit or loss when incurred. The combination date is the date on which one combining entity obtains control of other combining entities.(2) Business combinations involving entities not under common control A business combination involving entities not under common control is a business combination in which all of the combining entities are not ultimately controlled by the same party or parties both before and after the business combination. Where (1) the aggregate of the acquisition-date fair value of assets transferred (including the acquirer’s previously held equity interest in the acquiree), liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of the acquiree, exceeds (2) the acquirer’s interest in the acquisition-date fair value of the acquiree’s identifiable net assets, the difference is recognised as goodwill (see Note III.17). If (1) is less than (2), the difference is recognised in profit or loss for the current period. The costs of issuing equity or debt securities as a part of the consideration for the acquisition are included in the carrying amounts of these equity or debt securities upon initial recognition. Other acquisition-related costs are expensed when incurred. Any difference between the fair value and the carrying amount of the assets transferred as consideration is recognised in profit or loss. The acquiree’s identifiable asset, liabilities and contingent liabilities, if the recognition criteria are met, are recognised by the Group at their acquisition-date fair value. The acquisition date is the date on which the acquirer obtains control of the acquiree. For a business combination involving entities not under common control and achieved in stages, the Group remeasures its previously-held equity interest in the acquiree to its acquisition-date fair value and recognises any resulting difference between the fair value and the carrying amount as investment income or other comprehensive income for the current period. In addition, any amount recognised in other comprehensive income and other changes in the owners’ equity under equity accounting in prior reporting periods relating to the previously-held equity interest that may be reclassified to profit or loss are transferred to investment income at the date of acquisition (see Note III.11(2)(b)); Any previously-held equity interest that is designated as equity investment at fair value through other comprehensive income, the other comprehensive income recognised in prior reporting periods is transferred to retained earnings and surplus reserve at the date of acquisition.(1) General principles The scope of consolidated financial statements is based on control and the consolidated financial statements comprise the Company and its subsidiaries. Control exists when the investor has all of following: power over the investee; exposure, or rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. When assessing whether the Group has power, only substantive rights (held by the Group and other parties) are considered. The financial position, financial performance and cash flows of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Non-controlling interests are presented separately in the consolidated balance sheet within shareholders’ equity. Net profit or loss attributable to non-controlling shareholders is presented separately in the consolidated income statement below the net profit line item. Total comprehensive income attributable to non-controlling shareholders is presented separately in the consolidated income statement below the total comprehensive income line item. When the amount of loss for the current period attributable to the non-controlling shareholders of a subsidiary exceeds the non-controlling shareholders’ share of the opening owners’ equity of the subsidiary, the excess is still allocated against the non-controlling interests. When the accounting period or accounting policies of a subsidiary are different from those of the Company, the Company makes necessary adjustments to the financial statements of the subsidiary based on the Company’s own accounting period or accounting policies. Intra- group balances and transactions, and any unrealised profit or loss arising from intra-group transactions, are eliminated when preparing the consolidated financial statements. Unrealised losses resulting from intra-group transactions are eliminated in the same way as unrealised gains, unless they represent impairment losses that are recognised in the financial statements.(2) Subsidiaries acquired through a business combination Where a subsidiary was acquired during the reporting period, through a business combination involving entities under common control, the financial statements of the subsidiary are included in the consolidated financial statements based on the carrying amounts of the assets and liabilities of the subsidiary in the financial statements of the ultimate controlling party as if the combination had occurred at the date that the ultimate controlling party first obtained control. The opening balances and the comparative figures of the consolidated financial statements are also restated. Where a subsidiary was acquired during the reporting period, through a business combination involving entities not under common control, the identifiable assets and liabilities of the acquired subsidiaries are included in the scope of consolidation from the date that control commences, based on the fair value of those identifiable assets and liabilities at the acquisition date.(3) Disposal of subsidiaries When the Group loses control over a subsidiary, any resulting disposal gains or losses are recognised as investment income for the current period. The remaining equity interests is re- measured at its fair value at the date when control is lost, any resulting gains or losses are also recognised as investment income for the current period. When the Group loses control of a subsidiary in multiple transactions in which it disposes of its long-term equity investment in the subsidiary in stages, the following are considered to determine whether the Group should account for the multiple transactions as a bundled transaction: - arrangements are entered into at the same time or in contemplation of each other; - arrangements work together to achieve an overall commercial effect; - the occurrence of one arrangement is dependent on the occurrence of at least one other arrangement; - one arrangement considered on its own is not economically justified, but it is economically justified when considered together with other arrangements. If each of the multiple transactions does not form part of a bundled transaction, the transactions conducted before the loss of control of the subsidiary are accounted for in accordance with the accounting policy for partial disposal of equity investment in subsidiaries where control is retained (see Note III.6(4)). If each of the multiple transactions forms part of a bundled transaction which eventually results in the loss of control in the subsidiary, these multiple transactions are accounted for as a single transaction. In the consolidated financial statements, the difference between the consideration received and the corresponding proportion of the subsidiary’s net assets (calculated continuously from the acquisition date) in each transaction prior to the loss of control shall be recognised in other comprehensive income and transferred to profit or loss when the parent eventually loses control of the subsidiary.(4) Changes in non-controlling interests Where the Company acquires a non-controlling interest from a subsidiary’s non-controlling shareholders or disposes of a portion of an interest in a subsidiary without a change in control, the difference between the proportion interests of the subsidiary’s net assets being acquired or disposed and the amount of the consideration paid or received is adjusted to the capital reserve (share premium) in the consolidated balance sheet, with any excess adjusted to retained earnings. Cash and cash equivalents comprise cash on hand, deposits that can be readily withdraw on demand, and short-term, highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of change in value. When the Group receives capital in foreign currencies from investors, the capital is translated to Renminbi at the spot exchange rate at the date of the receipt. Other foreign currency transactions are, on initial recognition, translated to Renminbi at the spot exchange rates on the dates of the transactions. Monetary items denominated in foreign currencies are translated to Renminbi at the spot exchange rate at the balance sheet date. The resulting exchange differences are generally recognised in profit or loss, unless they arise from the re-translation of the principal and interest of specific borrowings for the acquisition and construction of qualifying assets (see Note III.15). Non-monetary items that are measured at historical cost in foreign currencies are translated to Renminbi using the exchange rate at the transaction date. Non-monetary items that are measured at fair value in foreign currencies are translated using the exchange rate at the date the fair value is determined. The resulting exchange differences are recognised in profit or loss, except for the differences arising from the re-translation of equity investments at fair value through other comprehensive income, which are recognised in other comprehensive income. In translating the financial statements of a foreign operation, assets and liabilities of foreign operation are translated to Renminbi at the spot exchange rate at the balance sheet date. Equity items, excluding retained earnings and the translation differences in other comprehensive income, are translated to Renminbi at the spot exchange rates at the transaction dates. Income and expenses of foreign operation are translated to Renminbi at the rates that approximate the spot exchange rates at the transaction dates. The resulting translation differences are recognised in other comprehensive income. The translation differences accumulated in shareholders’ equity with respect to a foreign operation are transferred to profit or loss in the period when the foreign operation is disposed. Financial instruments include cash at bank and on hand, investments in debt and equity securities other than those classified as long-term equity investments (see Note III.11), receivables, payables, loans and borrowings, debentures payable and share capital.(1) Recognition and initial measurement of financial assets and financial liabilities A financial asset or financial liability is recognised in the balance sheet when the Group becomes a party to the contractual provisions of a financial instrument. A financial or financial liability is measured initially at fair value. For financial assets and financial liabilities at fair value through profit or loss, any related directly attributable transaction costs are charged to profit or loss; for other categories of financial assets and financial liabilities, any related directly attributable transaction costs are included in their initial costs. A trade receivable, without significant financing component or practical expedient applied for one year or less contracts, is initially measured at the transaction price in accordance with Note III.20.(2) Classification and subsequent measurement of financial assets (a) Classification of financial assets The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. On initial recognition, a financial asset is classified as measured at amortised cost, at fair value through other comprehensive income (“FVOCI”), or at fair value through profit or loss (“FVTPL”). Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model. A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL: - it is held within a business model whose objective is to hold assets to collect contractual cash flows; and - its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL: - it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and - its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an investment-by-investment basis. The instrument meets the definition of equity from the perspective of the issuer. All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. The business model refers to how the Group manages its financial assets in order to generate cash flows. That is, the Group’s business model determines whether cash flows will result from collecting contractual cash flows, selling financial assets or both. The Group determines the business model for managing the financial assets according to the facts and based on the specific business objective for managing the financial assets determined by the Group’s key management personnel. In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin. The Group also assesses whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition.(b) Subsequent measurement of financial assets - Financial assets at FVTPL These financial assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss unless the financial assets are part of a hedging relationship. - Financial assets at amortised cost These assets are subsequently measured at amortised cost using the effective interest method. A gain or loss on a financial asset that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when the financial asset is derecognised, reclassified, through the amortisation process or in order to recognise impairment gains or losses. - Debt investments at FVOCI These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, impairment and foreign exchange gains and losses are recognised in profit or loss. Other net gains and losses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss. - Equity investments at FVOCI These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss. Other net gains and losses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to retained earnings.(3) Classification and subsequent measurement of financial liabilities Financial liabilities are classified as measured at FVTPL or amortised cost. - Financial liabilities at FVTPL A financial liability is classified as at FVTPL if it is classified as held-for-trading (including derivative financial liability) or it is designated as such on initial recognition. Financial liabilities at FVTPL are subsequently measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss, unless the financial liabilities are part of a hedging relationship. - Financial liabilities at amortised cost These financial liabilities are subsequently measured at amortised cost using the effective interest method.(4) Offsetting Financial assets and financial liabilities are generally presented separately in the balance sheet, and are not offset. However, a financial asset and a financial liability are offset and the net amount is presented in the balance sheet when both of the following conditions are satisfied: - The Group currently has a legally enforceable right to set off the recognised amounts； - The Group intends either to settle on a net basis, or to realise the financial asset and settle the financial liability simultaneously.(5) Derecognition of financial assets and financial liabilities Financial asset is derecognised when one of the following conditions is met: - the Group’s contractual rights to the cash flows from the financial asset expire; - the financial asset has been transferred and the Group transfers substantially all of the risks and rewards of ownership of the financial asset; or； - the financial asset has been transferred, although the Group neither transfers nor retains substantially all of the risks and rewards of ownership of the financial asset, it does not retain control over the transferred asset. Where a transfer of a financial asset in its entirety meets the criteria for derecognition, the difference between the two amounts below is recognised in profit or loss: - the carrying amount of the financial asset transferred measured at the date of derecognition; - the sum of the consideration received from the transfer and, when the transferred financial asset is a debt investment at FVOCI, any cumulative gain or loss that has been recognised directly in other comprehensive income for the part derecognised. The Group derecognises a financial liability (or part of it) only when its contractual obligation (or part of it) is extinguished.(6) Impairment The Group recognises loss allowances for expected credit loss (ECL) on: - financial assets measured at amortised cost; - contract assets; - debt investments at FVOCI; and - lease receivables Financial assets measured at fair value, including debt investments or equity securities at FVTPL, equity securities designated at FVOCI and derivative financial assets, are not subject to the ECL assessment. Measurement of ECLs ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive). The maximum period considered when estimating ECLs is the maximum contractual period (including extension options) over which the Group is exposed to credit risk. Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. within the 12 months after the balance sheet date (or a shorter period if the expected life of the instrument is less than 12 months). Loss allowances for trade receivables, lease receivables and contract assets are always measured at an amount equal to lifetime ECL. ECLs on these financial assets are estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors and an assessment of both the current and forecast general economic conditions at the balance sheet date. Except for trade receivables, lease receivables and contract assets, the Group measures loss allowance at an amount equal to 12-month ECL for the following financial instruments, and at an amount equal to lifetime ECL for all other financial instruments. - If the financial instrument is determined to have low credit risk at the balance sheet date; - If the credit risk on a financial instrument has not increased significantly since initial recognition. Financial instruments that have low credit risk The credit risk on a financial instrument is considered low if the financial instrument has a low risk of default, the borrower has a strong capacity to meet its contractual cash flow obligations in the near term and adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations.Significant increases in credit riskIn assessing whether the credit risk of a financial instrument has increased significantly sinceinitial recognition, the Group compares the risk of default occurring on the financialinstrument assessed at the balance sheet date with that assessed at the date of initialrecognition.When determining whether the credit risk of a financial asset has increased significantlysince initial recognition and when estimating ECL, the Group considers reasonable andsupportable information that is relevant and available without undue cost or effort, includingforward-looking information. In particular, the following information is taken into account:- failure to make payments of principal or interest on their contractually due dates;- an actual or expected significant deterioration in a financial instrument’s external or internal credit rating (if available);- an actual or expected significant deterioration in the operating results of the debtor; and- existing or forecast changes in the technological, market, economic or legal environment that have a significant adverse effect on the debtor’s ability to meet its obligation to the Group.Depending on the nature of the financial instruments, the assessment of a significantincrease in credit risk is performed on either an individual basis or a collective basis. Whenthe assessment is performed on a collective basis, the financial instruments are groupedbased on shared credit risk characteristics, such as past due status and credit risk ratings.The Group assumes that the credit risk on a financial asset has increased significantly if it ismore than 30 days past due.Credit-impaired financial assetsAt each balance sheet date, the Group assesses whether financial assets carried atamortised cost and debt investments at FVOCI are credit-impaired. A financial asset is‘credit-impaired’ when one or more events that have a detrimental impact on the estimatedfuture cash flows of the financial asset have occurred. Evidence that a financial asset iscredit-impaired includes the following observable data:- significant financial difficulty of the borrower or issuer;- a breach of contract, such as a default or delinquency in interest or principal payments;- for economic or contractual reasons relating to the borrower’s financial difficulty, the Group having granted to the borrower a concession that would not otherwise consider;- it is probable that the borrower will enter bankruptcy or other financial reorganisation; or- the disappearance of an active market for that financial asset because of financial difficulties.Presentation of allowance for ECLECLs are remeasured at each balance sheet date to reflect changes in the financialinstrument’s credit risk since initial recognition. Any change in the ECL amount is recognisedas an impairment gain or loss in profit or loss. The Group recognises an impairment gain orloss for all financial instruments with a corresponding adjustment to their carrying amountthrough a loss allowance account, except for debt investments that are measured at FVOCI,for which the loss allowance is recognised in other comprehensive income. Write-off The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. A write-off constitutes a derecognition event. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due. Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in profit or loss in the period in which the recovery occurs.(7) Equity instrument The consideration received from the issuance of equity instruments net of transaction costs is recognised in shareholders’ equity. Consideration and transaction costs paid by the Company for repurchasing self-issued equity instruments are deducted from shareholders’ equity. When the Company repurchases its own shares, those shares are treated as treasury shares. All expenditure relating to the repurchase is recorded in the cost of the treasury shares, with the transaction recording in the share register. Treasury shares are excluded from profit distributions and are presented as a deduction under shareholders’ equity in the balance sheet. When treasury shares are cancelled, the share capital should be reduced to the extent of the total par value of the treasury shares cancelled. Where the cost of the treasury shares cancelled exceeds the total par value, the excess is deducted from capital reserve (share premium), surplus reserve and retained earnings sequentially. If the cost of treasury shares cancelled is less than the total par value, the difference is credited to the capital reserve (share premium). When treasury shares are disposed of, any excess of proceeds above cost is recognised in capital reserve (share premium); otherwise, the shortfall is deducted against capital reserve (share premium), surplus reserve and retained earnings sequentially.(8) Perpetual bonds At initial recognition, the Group classifies the perpetual bonds issued or their components as financial assets, financial liabilities or equity instruments based on their contractual terms and their economic substance after considering the definition of financial assets, financial liabilities and equity instruments. Perpetual bonds issued that should be classified as equity instruments are recognised in equity based on the actual amount received. Any distribution of dividends or interests during the instruments’ duration is treated as profit appropriation. When the perpetual bonds are redeemed according to the contractual terms, the redemption price is charged to equity.(1) Classification and cost Inventories include raw materials, work in progress, finished goods and reusable materials. Reusable materials include low-value consumables, packaging materials and other materials, which can be used repeatedly but do not meet the definition of fixed assets. Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversion and other expenditure incurred in bringing the inventories to their present location and condition. In addition to the purchase cost of raw materials, work in progress and finished goods include direct labour costs and an appropriate allocation of production overheads.(2) Measurement method of cost of inventories Cost of inventories recognised is calculated using the weighted average method. Consumables including low-value consumables and packaging materials are charged to profit or loss upon receipt. The amortisation charge is included in the cost of the related assets or recognised in profit or loss for the current period.(3) Basis for determining the net realisable value and method for provision for obsolete inventories At the balance sheet date, inventories are carried at the lower of cost and net realisable value. Net realisable value is the estimated selling price 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 net realisable value of materials held for use in the production is measured based on the net realisable value of the finished goods in which they will be incorporated. The net realisable value of the inventory held to satisfy sales or service contracts is measured based on the contract price, to the extent of the quantities specified in sales contracts, and the excess portion of inventories is measured based on general selling prices. Any excess of the cost over the net realisable value of each category of inventories is recognised as a provision for obsolete inventories, and is recognised in profit or loss.(4) Inventory count system The Group maintains a perpetual inventory system.(1) Investment cost of long-term equity investments (a) Long-term equity investments acquired through a business combination - The initial cost of a long-term equity investment acquired through a business combination involving entities under common control is the Company’s share of the carrying amount of the subsidiary’s equity in the consolidated financial statements of the ultimate controlling party at the combination date. The difference between the initial investment cost and the carrying amount of the consideration given is adjusted to the share premium in the capital reserve, with any excess adjusted to retained earnings. For a long-term equity investment in a subsidiary acquired through a business combination achieved in stages which do not form a bundled transaction and involving entities under common control, the Company determines the initial cost of the investment in accordance with the above policies. The difference between this initial cost and the sum of the carrying amount of previously-held investment and the consideration paid for the shares newly acquired is adjusted to capital premium in the capital reserve, with any excess adjusted to retained earnings. - For a long-term equity investment obtained through a business combination not involving entities under common control, the initial cost comprises the aggregate of the fair value of assets transferred, liabilities incurred or assumed, and equity securities issued by the Company, in exchange for control of the acquiree. For a long-term equity investment obtained through a business combination not involving entities under common control and achieved through multiple transactions in stages which do not form a bundled transaction, the initial cost comprises the carrying amount of the previously-held equity investment in the acquiree immediately before the acquisition date, and the additional investment cost at the acquisition date. (b) Long-term equity investments acquired other than through a business combination - A long-term equity investment acquired other than through a business combination is initially recognised at the amount of cash paid if the Group acquires the investment by cash, or at the fair value of the equity securities issued if an investment is acquired by issuing equity securities.(2) Subsequent measurement of long-term equity investment (a) Investments in subsidiaries In the Company’s separate financial statements, long-term equity investments in subsidiaries are accounted for using the cost method for subsequent measurement unless the investment is classified as held for sale (see Note III.29). Except for cash dividends or profit distributions declared but not yet distributed that have been included in the price or consideration paid in obtaining the investments, the Company recognises its share of the cash dividends or profit distributions declared by the investee as investment income for the current period. The investments in subsidiaries are stated in the balance sheet at cost less accumulated impairment losses. For the impairment of the investments in subsidiaries, refer to Note III.19. In the Group’s consolidated financial statements, subsidiaries are accounted for in accordance with the policies described in Note III.6.(b) Investment in joint ventures and associates A joint venture is an arrangement whereby the Group and other parties have joint control (see Note III.11(3)) and rights to the net assets of the arrangement. An associate is an entity over which the Group has significant influence (see Note III.11(3)). An investment in a joint venture or an associate is accounted for using the equity method for subsequent measurement, unless the investment is classified as held for sale (see Note III.29). The accounting treatments under the equity method adopted by the Group are as follows: - Where the initial cost of a long-term equity investment exceeds the Group’s interest in the fair value of the investee’s identifiable net assets at the date of acquisition, the investment is initially recognised at cost. Where the initial investment cost is less than the Group’s interest in the fair value of the investee’s identifiable net assets at the date of acquisition, the investment is initially recognised at the investor’s share of the fair value of the investee’s identifiable net assets, and the difference is recognised in profit or loss. - After the acquisition of the investment, the Group recognises its share of the investee’s profit or loss and other comprehensive income as investment income or losses and other comprehensive income respectively, and adjusts the carrying amount of the investment accordingly. Once the investee declares any cash dividends or profit distributions, the carrying amount of the investment is reduced by the amount attributable to the Group. Changes in the Group’s share of the investee’s owners’ equity, other than those arising from the investee’s net profit or loss, other comprehensive income or profit distribution (referred to as “other changes in owners’ equity”), is recognised directly in the Group’s equity, and the carrying amount of the investment is adjusted accordingly. - In calculating its share of the investee’s net profits or losses, other comprehensive income and other changes in owners’ equity, the Group recognises investment income and other comprehensive income after making appropriate adjustments to align the accounting policies or accounting periods with those of the Group based on the fair value of the investee’s identifiable net assets at the date of acquisition. Unrealised profits and losses resulting from transactions between the Group and its associates or joint ventures are eliminated to the extent of the Group’s interest in the associates or joint ventures. Unrealised losses resulting from transactions between the Group and its associates or joint ventures are eliminated in the same way as unrealised gains but only to the extent that there is no impairment. - The Group discontinues recognising its share of further losses of the investee after the carrying amount of the long-term equity investment and any long-term interest that in substance forms part of the Group’s net investment in the joint venture or associate is reduced to zero, except to the extent that the Group has an obligation to assume additional losses. If the joint venture or associate subsequently reports net profits, the Group resumes recognising its share of those profits only after its share of the profits has fully covered the share of losses not recognised. For the impairment of the investments in joint ventures and associates, refer to Note III.19.(3) Criteria for determining the existence of joint control or significant influence over an investee Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities (activities with significant impact on the returns of the arrangement) require the unanimous consent of the parties sharing control. The following factors are usually considered when assessing whether the Group can exercise joint control over an investee: - Whether no single participant party is in a position to control the investee’s related activities unilaterally; - Whether strategic decisions relating to the investee’s related activities require the unanimous consent of all participant parties that sharing of control. Significant influence is the power to participate in the financial and operating policy decisions of an investee but does not have control or joint control over those policies. Investment properties are properties held either to earn rental income or for capital appreciation or for both. Investment properties are accounted for using the cost model and stated in the balance sheet at cost less accumulated depreciation, amortisation and impairment losses. The cost of investment property, less its estimated residual value and accumulated impairment losses, is depreciated or amortised using the straight-line method over its estimated useful life, unless the investment property is classified as held for sale (see Note III.29). For the impairment of the investment properties, refer to Note III.19. The estimated useful lives, residual value rates and depreciation rates of each class of investment properties are as follows: Estimated useful Residual value rate Depreciation rate life (years) (%) (%) Land use rights 32 - 50 years 0.0% 2.0% - 3.1% Buildings 20 - 40 years 0% - 10.0% 2.3% - 5.0%(1) Recognition of fixed assets Fixed assets represent the tangible assets held by the Group for use in the production of goods, supply of services, for rental or for administrative purposes with useful lives over one year. The cost of a purchased fixed asset comprises the purchase price, related taxes, and any directly attributable expenditure for bringing the asset to working condition for its intended use. The cost of self-constructed assets is measured in accordance with the policy set out in Note III.14. Where the parts of an item of fixed assets have different useful lives or provide benefits to the Group in a different pattern, thus necessitating use of different depreciation rates or methods, each part is recognised as a separate fixed asset. Any subsequent costs including the cost of replacing part of an item of fixed assets are recognised as assets when it is probable that the economic benefits associated with the costs will flow to the Group, and the carrying amount of the replaced part is derecognised. The costs of the day-to-day maintenance of fixed assets are recognised in profit or loss as incurred. Fixed assets are stated in the balance sheet at cost less accumulated depreciation and impairment losses.(2) Depreciation of fixed assets The cost of a fixed asset, less its estimated residual value and accumulated impairment losses, is depreciated using the straight-line method over its estimated useful life, unless the fixed asset is classified as held for sale (see Note III.29). The estimated useful lives, residual value rates and depreciation rates of each class of fixed assets are as follows: Estimated useful Residual value rate Depreciation rate Class life (years) (%) (%) Buildings 10 - 50 years 3% - 10% 1.8% - 9.7% Equipment 2 - 25 years 0 - 10% 3.6% - 50% Others 2 - 10 years 0 - 10% 9.0% - 50% Useful lives, residual values and depreciation methods are reviewed at least at each year- end.(3) For the impairment of the fixed assets, refer to Note III.19.(4) Disposal of fixed assets The carrying amount of a fixed asset is derecognised: - when the fixed asset is holding for disposal; or - when no future economic benefit is expected to be generated from its use or disposal. Gains or losses arising from the retirement or disposal of an item of fixed asset are determined as the difference between the net disposal proceeds and the carrying amount of the item, and are recognised in profit or loss on the date of retirement or disposal. The cost of self-constructed assets includes the cost of materials, direct labour, capitalised borrowing costs (see Note III.15), and any other costs directly attributable to bringing the asset to working condition for its intended use. A self-constructed asset is classified as construction in progress and transferred to fixed asset when it is ready for its intended use. No depreciation is provided against construction in progress. Construction in progress is stated in the balance sheet at cost less accumulated impairment losses (see Note III.19). When an enterprise sells products or by-products produced before a fixed asset is available for its intended use, the proceeds and related cost are accounted for in accordance with CAS current period. Borrowing costs incurred directly attributable to the acquisition and construction of a qualifying asset are capitalised as part of the cost of the asset. Other borrowing costs are recognised as financial expenses when incurred. During the capitalisation period, the amount of interest (including amortisation of any discount or premium on borrowing) to be capitalised in each accounting period is determined as follows: - Where funds are borrowed specifically for the acquisition and construction of a qualifying asset, the amount of interest to be capitalised is the interest expense calculated using effective interest rates during the period less any interest income earned from depositing the borrowed funds or any investment income on the temporary investment of those funds before being used on the asset. - To the extent that the Group borrows funds generally and uses them for the acquisition and construction of a qualifying asset, the amount of borrowing costs eligible for capitalisation is determined by applying a capitalisation rate to the weighted average of the excess amounts of cumulative expenditure on the asset over the above amounts of specific borrowings. The capitalisation rate is the weighted average of the interest rates applicable to the general-purpose borrowings. The capitalisation rate is the weighted average of the interest rates applicable to the general-purpose borrowings. The effective interest rate is determined as the rate that exactly discounts estimated future cash flow through the expected life of the borrowing or, when appropriate, a shorter period to the initially recognised amount of the borrowings. During the capitalisation period, exchange differences related to the principal and interest on a specific-purpose borrowing denominated in foreign currency are capitalised as part of the cost of the qualifying asset. The exchange differences related to the principal and interest on foreign currency borrowings other than a specific-purpose borrowing are recognised as a financial expense when incurred. The capitalisation period is the period from the date of commencement of capitalisation of borrowing costs to the date of cessation of capitalisation, excluding any period over which capitalisation is suspended. Capitalisation of borrowing costs commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities of acquisition and construction that are necessary to prepare the asset for its intended use are in progress, and ceases when the assets become ready for their intended use. When the parts of the qualifying assets acquired or constructed that are eligible for capitalisation are completed separately, and each part is available for use in other parts of the construction process or can be sold externally, and for the purpose of making the parts of the assets ready for use or necessary for the sales status, the acquisition or construction activities have been substantially completed, the Group ceases the capitalisation of the borrowing costs related to the parts of the assets. Capitalisation of borrowing costs is suspended when the acquisition and construction activities are interrupted abnormally for a period of more than three months. Intangible assets are stated in the balance sheet at cost less accumulated amortisation (where the estimated useful life is finite) and impairment losses (see Note III.19). For an intangible asset with finite useful life, its cost less estimated residual value and accumulated impairment losses is amortised using the straight-line method over its estimated useful life, unless the intangible asset is classified as held for sale (see Note III.29). The respective amortisation periods for intangible assets are as follows: Amortisation Item period (years) Land use rights 20 - 50 years Patent and proprietary technology 5 - 20 years Computer software 3 - 10 years Others 5 - 20 years Useful lives and amortisation methods of intangible asset with finite useful life are reviewed at least at each year-end. An intangible asset is regarded as having an indefinite useful life and is not amortised when there is no foreseeable limit to the period over which the asset is expected to generate economic benefits for the Group. At the balance sheet date, the Group does not have any intangible assets with indefinite useful lives. Expenditure on an internal research and development project is classified into expenditure incurred during the research phase and expenditure incurred during the development phase. Expenditure during the research phase is expensed when incurred. Expenditure during the development phase is capitalised if development costs can be measured reliably, the product or process is technically and commercially feasible, and the Group intends to and has sufficient resources to complete the development. Capitalised development costs are stated in the balance sheet at cost less impairment losses (see Note III.19). Other development expenditure is recognised as an expense in the period in which it is incurred. When an enterprise sells products or by-products produced in the course of research and development, the proceeds and related cost are accounted for in accordance with CAS 14 – Revenue and CAS 1 – Inventories respectively, and recognised in profit or loss for the current period. The initial cost of goodwill represents the excess of cost of acquisition over the acquirer’s interest in the fair value of the identifiable net assets of the acquiree under a business combination not involving entities under common control. Goodwill is not amortised and is stated in the balance sheet at cost less accumulated impairment losses (see Note III.19). On disposal of an asset group or a set of asset groups, any attributable goodwill is written off and included in the calculation of the profit or loss on disposal. Long-term deferred expenses are amortised using a straight-line method within the benefit period. The respective amortisation periods for such expenses are as follows: Amortisation Item period (years) Payment for public facilities construction and use 10 - 15 years Leasehold improvements 2 - 10 years Others 2 - 10 years The carrying amounts of the following assets are reviewed at each balance sheet date based on internal and external sources of information to determine whether there is any indication of impairment: - fixed assets - construction in progress - right-of-use assets - intangible assets - investment properties measured using a cost model - long-term equity investments - goodwill - long-term deferred expenses, etc. If any indication exists, the recoverable amount of the asset is estimated. In addition, the Group estimates the recoverable amounts of goodwill at each year-end, irrespective of whether there is any indication of impairment. Goodwill is allocated to each asset group or set of asset groups, which is expected to benefit from the synergies of the combination for the purpose of impairment testing. The recoverable amount of an asset (or asset group, set of asset groups) is the higher of its fair value (see Note III.20) less costs to sell and its present value of expected future cash flows. An asset group is composed of assets directly related to cash generation and is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or asset groups. The present value of expected future cash flows of an asset is determined by discounting the future cash flows, estimated to be derived from continuing use of the asset and from its ultimate disposal, to their present value using an appropriate pre-tax discount rate. An impairment loss is recognised in profit or loss when the recoverable amount of an asset is less than its carrying amount. A provision for impairment of the asset is recognised accordingly. Impairment losses related to an asset group or a set of asset groups are allocated first to reduce the carrying amount of any goodwill allocated to the asset group or set of asset groups, and then to reduce the carrying amount of the other assets in the asset group or set of asset groups on a pro rata basis. However, such allocation would not reduce the carrying amount of an asset below the highest of its fair value less costs to sell (if measurable), its present value of expected future cash flows (if determinable) and zero. Once an impairment loss is recognised, it is not reversed in a subsequent period. Unless otherwise specified, the Group measures fair value as follows: Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When measuring fair value, the Group takes into account the characteristics of the particular asset or liability (including the condition and location of the asset and restrictions, if any, on the sale or use of the asset) that market participants would consider when pricing the asset or liability at the measurement date, and uses valuation techniques that are appropriate in the circumstances and for which sufficient data and other information are available to measure fair value. Valuation techniques mainly include the market approach, the income approach and the cost approach. A provision is recognised for an obligation related to a contingency if the Group has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Where the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows. Factors pertaining to a contingency such as the risks, uncertainties and time value of money are taken into account as a whole in reaching the best estimate. Where there is a continuous range of possible outcomes for the expenditure required, and each possible outcome in that range is as likely as any other, the best estimate is the mid-point of that range. In other cases, the best estimate is determined according to the following circumstances: - Where the contingency involves a single item, the best estimate is the most likely outcome. - Where the contingency involves a large population of items, the best estimate is determined by weighting all possible outcomes by their associated probabilities. The Group reviews the carrying amount of a provision at the balance sheet date and adjusts the carrying amount to the current best estimate.(1) Classification of share-based payments Share-based payment transactions in the Group are equity-settled share-based payments.(2) Accounting treatment of share-based payments - Equity-settled share-based payments Where the Group uses shares or other equity instruments as consideration for services received from the employees, the payment is measured at the fair value of the equity instruments granted to the employees at the grant date. If the equity instruments granted do not vest until the completion of services for a period, or until the achievement of a specified performance condition, the Group recognises an amount at each balance sheet date during the vesting period based on the best estimate of the number of equity instruments expected to vest according to the newly obtained subsequent information of the changes of the number of the employees expected to vest the equity instruments. The Group measures the services received at the grant-date fair value of the equity instruments and recognises the costs or expenses as the services are received, with a corresponding increase in capital reserve. Revenue is the gross inflow of economic benefits arising in the course of the Group’s ordinary activities when the inflows result in increase in shareholders’ equity, other than increase relating to contributions from shareholders. Revenue is recognised when the Group satisfies the performance obligation in the contract by transferring the control over relevant goods or services to the customers.Where a contract has two or more performance obligations, the Group determines the stand-alone selling price at contract inception of the distinct good or service underlying eachperformance obligation in the contract and allocates the transaction price in proportion tothose stand-alone selling prices. The Group recognises as revenue the amount of thetransaction price that is allocated to each performance obligation. The stand-alone sellingprice is the price at which the Group would sell a promised good or service separately to acustomer. If a stand-alone selling price is not directly observable, the Group considers allinformation that is reasonably available to the entity, maximises the use of observable inputsto estimate the stand-alone selling price.For the contract which the Group grants a customer the option to acquire additional goods orservices (such as, loyalty points, discount coupons for future purchase, etc.,), the Groupassesses whether the option provides a material right to the customer. If the option providesa material right, the Group recognises the option as a performance obligation, andrecognises revenue when those future goods or services are transferred or when the optionexpires. If the stand-alone selling price for a customer’s option to acquire additional goods orservices is not directly observable, the Group estimates it, taking into account all relevantinformation, including the difference in the discount that the customer would receive whenexercising the option or without exercising the option, and the likelihood that the option willbe exercised.For the contract with a warranty, the Group analyses the nature of the warranty provided, ifthe warranty provides the customer with a distinct service in addition to the assurance thatthe product complies with agreed-upon specifications, the Group recognises for the promisedwarranty as a performance obligation. Otherwise, the Group accounts for the warranty inaccordance with the requirements of CAS No.13 – Contingencies.The transaction price is the amount of consideration to which the Group expects to beentitled in exchange for transferring promised goods or services to a customer, excludingamounts collected on behalf of third parties. The Group recognises the transaction price onlyto the extent that it is highly probable that a significant reversal in the amount of cumulativerevenue recognised will not occur when the uncertainty associated with the variableconsideration is subsequently resolved. To determine the transaction price for contracts inwhich a customer promises consideration in a form other than cash, the Group measures thenon-cash consideration at fair value. If the Group cannot reasonably estimate the fair valueof the non-cash consideration, the Group measures the consideration indirectly by referenceto the stand-alone selling price of the goods or services promised to the customer inexchange for the consideration. Where the contract contains a significant financingcomponent, the Group recognises the transaction price at an amount that reflects the pricethat a customer would have paid for the promised goods or services if the customer had paidcash for those goods or services when (or as) they transfer to the customer. The differencebetween the amount of promised consideration and the cash selling price is amortised usingan effective interest method over the contract term. The Group does not adjust theconsideration for any effects of a significant financing component if it expects, at contractinception, that the period between when the Group transfers a promised good or service to acustomer and when the customer pays for that good or service will be one year or less.The Group satisfies a performance obligation over time if one of the following criteria is met;or otherwise, a performance obligation is satisfied at a point in time:- the customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs;- the customer can control the asset created or enhanced during the Group’s performance; or- the Group’s performance does not create an asset with an alternative use to it and the Group has an enforceable right to payment for performance completed to date.For performance obligation satisfied over time, the Group recognises revenue over time bymeasuring the progress towards complete satisfaction of that performance obligation. Whenthe outcome of that performance obligation cannot be measured reasonably, but the Groupexpects to recover the costs incurred in satisfying the performance obligation, the Grouprecognises revenue only to the extent of the costs incurred until such time that it canreasonably measure the outcome of the performance obligation.For performance obligation satisfied at a point in time, the Group recognises revenue at thepoint in time at which the customer obtains control of relevant goods or services. Todetermine whether a customer has obtained control of goods or services, the Groupconsiders the following indicators:- the Group has a present right to payment for the goods or services;- the Group has transferred physical possession of the goods to the customer;- the Group has transferred the legal title of the goods or the significant risks and rewards of ownership of the goods to the customer; and- the customer has accepted the goods or services.The Group determines whether it is a principal or an agent, depending on whether it obtainscontrol of the specified good or service before that good or service is transferred to acustomer. The Group is a principal if it controls the specified good or service before that goodor service is transferred to a customer, and recognises revenue in the gross amount ofconsideration to which it has received (or receivable). Otherwise, the Group is an agent, andrecognises revenue in the amount of any fee or commission to which it expects to be entitled.The fee or commission is the net amount of consideration that the Group retains after payingthe other party the consideration, or is the established amount or proportion.For the sale of a product with a right of return, the Group recognises revenue when theGroup obtains control of that product, in the amount of consideration to which the Groupexpects to be entitled in exchange for the product transferred (i.e. excluding the amount ofwhich expected to be returned), and recognises a refund liability for the products expected tobe returned. Meanwhile, an asset is recognised in the amount of carrying amount of theproduct expected to be returned less any expected costs to recover those products (includingpotential decreases in the value of returned products), and carry forward to cost in theamount of carrying amount of the transferred products less the above costs. At the end ofeach reporting period, the Group updates its assessment of future sales return. If there is anychange, it is accounted for as a change in accounting estimate.The Group determines whether the licence transfers to a customer either at a point in time orover time. If all of the following criteria are met, revenue is recognised for performanceobligations satisfied over time. Otherwise, revenue is recognised for performance obligationssatisfied at a point in time.- the contract requires, or the customer reasonably expects, that the Group will undertake activities that significantly affect the intellectual property to which the customer has rights;- the rights granted by the licence directly expose the customer to any positive or negative effects of the Group’s activities; and- those activities do not result in the transfer of a good or a service to the customer as those activities occur.The Group recognises revenue for a sales-based or usage-based royalty promised inexchange for a licence of intellectual property only when (or as) the later of the followingevents occurs:- the subsequent sale or usage occurs; and- the performance obligation has been satisfied (or partially satisfied)For a change in the scope or price of a contract that is approved by the parties to thecontract, the Group accounts for the contract modification according to the followingsituations:- The addition of promised goods or services are distinct and the price of the contract increases by an amount of consideration reflects stand-alone selling prices of the additional promised goods or services, the Group shall account for a contract modification as a separate contract.- If the above criteria are not met, and the remaining goods or services are distinct from the goods or services transferred on the date of the contract modification, the Group accounts for the contract modification as if it were a termination of the existing contract and the creation of a new contract.- If the above criteria are not met, and the remaining goods or services are not distinct from the goods or services transferred on the date of the contract modification, the Group accounts for the contract modification as if it were a part of the existing contract. The effect that the contract modification has on the revenue is recognised as an adjustment to revenue in the reporting period.A contract asset is the Group’s right to consideration in exchange for goods or services that ithas transferred to a customer when that right is conditional on something other than thepassage of time. The Group recognises loss allowances for expected credit loss on contractassets (see Note III.9(6)). Accounts receivable is the Group’s right to consideration that isunconditional (only the passage of time is required). A contract liability is the Group’sobligation to transfer goods or services to a customer for which the Group has receivedconsideration (or an amount of consideration is due) from the customer.The following is the description of accounting policies regarding revenue from the Group’sprincipal activities:(1) Sale of goods The sales contracts/orders signed between the Group and its customers usually contain various trading terms. Depending on the trading terms, customers obtain control of the goods when the goods are delivered and received, or when they are received by the carrier. Revenue of sale of goods is recognised at that point in time. For the transfer of goods with a right of return, revenue is recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. Therefore, the amount of revenue recognised is adjusted for the amount expected to be returned, which are estimated based on the historical data. The Group recognises a refund liability based on the amount expected to be returned. An asset is initially measured by reference to the former carrying amount of the product expected to be returned less any expected costs to recover those products (including potential decreases in the value to the Group of returned products). At each balance sheet date, the Group updates the measurement of the refund liability for changes in expectations about the amount of funds. The above asset and liability are adjusted accordingly.(2) Rendering of services The Group recognises the revenue from rendering of services within a certain period of time according to the progress of the performance as the customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs. Otherwise, for performance obligation satisfied at a point in time, the Group recognises revenue at the point in time at which the customer obtains control of relevant services. Contract costs are either the incremental costs of obtaining a contract with a customer or the costs to fulfil a contract with a customer. Incremental costs of obtaining a contract are those costs that the Group incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. The Group recognises as an asset the incremental costs of obtaining a contract with a customer if it expects to recover those costs. Other costs of obtaining a contract are expensed when incurred. If the costs to fulfil a contract with a customer are not within the scope of inventories or other accounting standards, the Group recognises an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria: - the costs relate directly to an existing contract or to a specifically identifiable anticipated contract, including direct labour, direct materials, allocations of overheads (or similar costs), costs that are explicitly chargeable to the customer and other costs that are incurred only because the Group entered into the contract - the costs generate or enhance resources of the Group that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and - the costs are expected to be recovered. Assets recognised for the incremental costs of obtaining a contract and assets recognised for the costs to fulfil a contract (the “assets related to contract costs”) are amortised on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the assets relate and recognised in profit or loss for the current period. The Group recognises an impairment loss in profit or loss to the extent that the carrying amount of an asset related to contract costs exceeds: - remaining amount of consideration that the Group expects to receive in exchange for the goods or services to which the asset relates; less - the costs that relate directly to providing those goods or services that have not yet been recognised as expenses.(1) Short-term employee benefits Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance, maternity insurance and housing fund, measured at the amount incurred or accrued at the applicable benchmarks and rates, are recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the cost of assets where appropriate.(2) Post-employment benefits – defined contribution plans Pursuant to the relevant laws and regulations of the People’s Republic of China, the Group participated in a defined contribution basic pension insurance plan and unemployment insurance plan in the social insurance system established and managed by government organisations, and annuity plan established by the Group in compliance with the national policy of the corporation annuity. The Group makes contributions to basic pension and unemployment insurance plans based on the applicable benchmarks and rates stipulated by the government. Annuity is accrued based on the gross salaries of the employees. Basic pension insurance contributions payable are recognised as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the cost of assets where appropriate.(3) Post-employment benefits – defined benefit plans During the reporting period, the Group did not have defined benefit plans.(4) Termination benefits When the Group terminates the employment with employees before the employment contracts expire, or provides compensation under an offer to encourage employees to accept voluntary redundancy, a provision is recognised with a corresponding expense in profit or loss at the earlier of the following dates: - When the Group cannot unilaterally withdraw the offer of termination benefits because of an employee termination plan or a curtailment proposal; - When the Group has a formal detailed restructuring plan involving the payment of termination benefits and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it. Government grants are non-reciprocal transfers of monetary or non-monetary assets from the government to the Group except for capital contributions from the government in the capacity as an investor in the Group. A government grant is recognised when there is reasonable assurance that the grant will be received and that the Group will comply with the conditions attaching to the grant. If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. If a government grant is in the form of a transfer of a non- monetary asset, it is measured at fair value. Government grants related to assets are grants whose primary condition is that the Group qualifying for them should purchase, construct or otherwise acquire long-term assets. Government grants related to income are grants other than those related to assets. Those related to daily activities of the Company are included in other income or used to write off related cost based on the nature of economic businesses, or included in non-operating income and expense in respect of those not related to daily activities of the Company. With respect to the government grants related to assets, if the Group first obtains government grants related to assets and then recognizes the long-term assets purchased and constructed, deferred income is included in profit and loss based on a reasonable and systematic approach by stages when related assets are initially depreciated or amortized; or the deferred income is written off against the carrying amount of the asset when the asset becomes ready for its intended status or intended use. If the Group obtains government grants related to the assets after relevant long-term assets are put into use, deferred income is included in profit and loss based on a reasonable and systematic approach by stages within the remaining useful life of relevant assets, or the deferred income is written off against the carrying amount of relevant asset when the grants are obtained; the assets shall be depreciated or amortized based on the carrying amount after being offset and the remaining useful life of relevant assets. A grant that compensates the Group for expenses or losses to be incurred in the future is recognised as deferred income, and included in current income or offset against related expenses in the periods in which the expenses or losses are recognised. Or included in current income or offset against the related expenses directly. In respect of the policy-based preferential loan interest subsidy obtained by the Group, if the interest subsidy is appropriated to the lending bank which shall provide loans to the Group at the policy-based preferential interest rate, the actual loan amount is used as the entry value and relevant borrowing costs are calculated on the basis of the loan principal and the preferential interest rate. If the interest subsidy is directly appropriated to the Group, relevant borrowing costs shall be offset by corresponding interest subsidy. If borrowing costs are capitalized as part of the cost of the asset (see Note III. 15), the interest subsidy shall be used to offset relevant asset costs. Current tax and deferred tax are recognised in profit or loss except to the extent that they relate to a business combination or items recognised directly in equity (including other comprehensive income). Current tax is the expected tax payable calculated at the applicable tax rate on taxable income for the year, plus any adjustment to tax payable in respect of previous years. At the balance sheet date, current tax assets and liabilities are offset only if the Group has a legally enforceable right to set them off and also intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Deferred tax assets and deferred tax liabilities arise from deductible and taxable temporary differences respectively, being the differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases, which include the deductible losses and tax credits carried forward to subsequent periods. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is not recognised for the temporary differences arising from the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting profit nor taxable profit (or deductible loss). Deferred tax is not recognised for taxable temporary differences arising from the initial recognition of goodwill. At the balance sheet date, deferred tax is measured based on the tax consequences that would follow from the expected manner of recovery or settlement of the carrying amounts of the assets and liabilities, using tax rates enacted at the balance sheet date that are expected to be applied in the period when the asset is recovered or the liability is settled. The carrying amount of a deferred tax asset is reviewed at each balance sheet date, and is reduced to the extent that it is no longer probable that the related tax benefits will be utilised. Such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available. At the balance sheet date, deferred tax assets and deferred tax liabilities are offset if all of the following conditions are met: - the taxable entity has a legally enforceable right to offset current tax liabilities and current tax assets; - they relate to income taxes levied by the same tax authority on either: - the same taxable entity; or - different taxable entities which intend either to settle the current tax liabilities and current tax assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or deferred tax assets are expected to be settled or recovered. At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether: - the contract involves the use of an identified asset. An identified asset may be specified explicitly or implicitly specified in a contract and should be physically distinct, or capacity portion or other portion of an asset that is not physically distinct but it represents substantially all of the capacity of the asset and thereby provides the customer with the right to obtain substantially all of the economic benefits from the use of the asset. If the supplier has a substantive substitution right throughout the period of use, then the asset is not identified; - the lessee has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; - the lessee has the right to direct the use of the asset. For a contract that contains more separate lease components, the lessee and the lessor separate lease components and account for each lease component as a lease separately. For a contract that contains lease and non-lease components, the lessee and the lessor separate lease components from non-lease components. For a contract that contains lease and non-lease components, the lessee allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The lessor allocates the consideration in the contract in accordance with the accounting policy in Note III.23.(1) As a lessee The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability, any lease payments made at or before the commencement date (less any lease incentives received), any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease. The right-of-use asset is depreciated using the straight-line method. If the lessee is reasonably certain to exercise a purchase option by the end of the lease term, the right-of- use asset is depreciated over the remaining useful lives of the underlying asset. Otherwise, the right-of-use asset is depreciated from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. Impairment losses of right-of-use assets are accounted for in accordance with the accounting policy described in Note III.19. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. A constant periodic rate is used to calculate the interest on the lease liability in each period during the lease term with a corresponding charge to profit or loss or included in the cost of assets where appropriate. Variable lease payments not included in the measurement of the lease liability is charged to profit or loss or included in the cost of assets where appropriate as incurred. Under the following circumstances after the commencement date, the Group remeasures lease liabilities based on the present value of revised lease payments: - there is a change in the amounts expected to be payable under a residual value guarantee; - there is a change in future lease payments resulting from a change in an index or a rate used to determine those payments; - there is a change in the assessment of whether the Group will exercise a purchase, extension or termination option, or there is a change in the exercise of the extension or termination option. When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Group recognises the lease payments associated with these leases in profit or loss or as the cost of the assets where appropriate using the straight-line method or other systematic basis over the lease term.(2) As a lessor The Group determines at lease inception whether each lease is a finance lease or an operating lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset irrespective of whether the legal title to the asset is eventually transferred. An operating lease is a lease other than a finance lease. When the Group is a sub-lessor, it assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies practical expedient described above, then it classifies the sub-lease as an operating lease. Under a finance lease, at the commencement date, the Group recognises the finance lease receivable and derecognises the finance lease asset. The finance lease receivable is initially measured at an amount equal to the net investment in the lease. The net investment in the lease is measured at the aggregate of the unguaranteed residual value and the present value of the lease receivable that are not received at the commencement date, discounted using the interest rate implicit in the lease. The Group calculates and recognises interest income for each period of the lease term based on a fixed periodic interest rate. The derecognition and impairment of the finance lease receivable are recognised in accordance with the accounting policy in Note III.9. Variable lease payments not included in the measurement of net investment in the lease are recognised as income as they are earned. Lease receipts from operating leases is recognised as income using the straight-line method or other systematic basis over the lease term. The initial direct costs incurred in respect of the operating lease are initially capitalised and subsequently amortised in profit or loss over the lease term on the same basis as the lease income. Variable lease payments not included in lease receipts are recognised as income as they are earned. The Group classified a non-current asset or disposal group as held for sale when the carrying amount of a non-current asset or disposal group will be recovered through a sale transaction rather than through continuing use,. A disposal group refers to a group of assets to be disposed of, by sale or otherwise, together as a whole in a single transaction and liabilities directly associated with those assets that will be transferred in the transaction. A non-current asset or disposal group is classified as held for sale when all the following criteria are met: - According to the customary practices of selling such asset or disposal group in similar transactions, the non-current asset or disposal group must be available for immediate sale in their present condition subject to terms that are usual and customary for sales of such assets or disposal groups; - Its sale is highly probable, that is, the Group has made a resolution on a sale plan and has obtained a firm purchase commitment. The sale is to be completed within one year. Non-current assets or disposal groups held for sale are stated at the lower of carrying amount and fair value (see Note III.20) less costs to sell (except financial assets (see note III.9), deferred tax assets (see note III.27). Any excess of the carrying amount over the fair value (see Note III.20) less costs to sell is recognised as an impairment loss in profit or loss. Hedge accounting is a method which recognises in profit or loss (or other comprehensive income) the gain or loss on the hedging instrument and the hedged item in the same accounting period(s) to represent the effect of risk management.Hedged items are items that expose the Group to risks of changes in fair value or cash flowsand that are designated as being hedged and can be reliably measured. The Group’shedged items include a firm commitment that is settled with a fixed amount of foreigncurrency and that exposes the Group to foreign currency risk.A hedging instrument is a designated financial instrument whose changes in fair value orcash flows are expected to offset changes in the fair value or cash flows of the hedged item.For a hedge of foreign currency risk, the foreign currency risk component of a non-derivativefinancial asset or non-derivative financial liability may also be designated as a hedginginstrument provided that it is not an investment in an equity instrument for which an entityhas elected to present changes in the fair value in other comprehensive income.The Group assesses at the inception of a hedging relationship, and on an ongoing basis,whether the hedging relationship meets the hedge effectiveness requirements. A hedgingrelationship is regarded as having met the hedge effectiveness requirements if all of thefollowing conditions are satisfied:- There is an economic relationship between the hedged item and the hedging instrument.- The effect of credit risk does not dominate the value changes that result from the economic relationship.- The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of the hedged item.When a hedging relationship no longer meets the hedge effectiveness requirements due tothe hedge ratio, but the risk management objective of the designated hedging relationshipremains unchanged, the Group rebalances the hedging relationship. Rebalancing refers tothe adjustments made to the designated quantities of the hedged item or the hedginginstrument of an already existing hedging relationship for the purpose of maintaining a hedgeratio that complies with the hedge effectiveness requirements.The Group discontinues applying hedge accounting in any of the following circumstances:- The hedging relationship no longer meets the risk management objective on the basis of which it qualified for hedge accounting.- The hedging instrument expires or is sold, terminated or exercised.- There is no longer an economic relationship between the hedged item and the hedging instrument or the effect of credit risk starts to dominate the value changes that result from that economic relationship.- The hedging relationship no longer meets other criteria for applying hedge accounting.Cash flow hedgesA cash flow hedge is a hedge of the exposure to variability in cash flows. The portion of thegain or loss on a hedging instrument that is determined to be an effective hedge isrecognised in other comprehensive income as a cash flow hedge reserve. The amount of thecash flow hedge reserve is adjusted to the lower of the following (in absolute amounts):- the cumulative gain or loss on the hedging instrument from inception of the hedge;- the cumulative change in present value of the expected future cash flows on the hedged item from inception of the hedge.The change in the amount of the cash flow hedge reserve is recognised in othercomprehensive income in each period. The portion of the gain or loss on the hedging instrument that is determined to be ineffectiveness is recognised in profit or loss. If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or a hedged forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment for which fair value hedge accounting is applied, the Group removes that amount from the cash flow hedge reserve and includes it in the initial cost or other carrying amount of the asset or liability. For cash flow hedges other than those covered above, that amount is reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows affect profit or loss. When the Group discontinues hedge accounting for a cash flow hedge, the amount of the accumulated cash flow hedge reserve recognised in other comprehensive income is accounted for as follows: - If the hedged future cash flows are still expected to occur, that amount will remain in the cash flow hedge reserve, and be accounted for in accordance with the above policy. - If the hedged future cash flows are no longer expected to occur, that amount is immediately reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment. Dividends or profit distributions proposed in the profit appropriation plan, which will be approved after the balance sheet date, are not recognised as a liability at the balance sheet date but are disclosed in the notes separately. If a party has the power to control, jointly control or exercise significant influence over another party, or vice versa, or where two or more parties are subject to common control or joint control from another party, they are considered to be related parties. Related parties may be individuals or enterprises. Enterprises with which the Company is under common control only from the State and that have no other related party relationships are not regarded as related parties. In addition to the related parties stated above, the Company determines related parties based on the disclosure requirements of Administrative Procedures on the Information Disclosures of Listed Companies issued by the CSRC. Reportable segments are identified based on operating segments which are determined based on the structure of the Group’s internal organisation, management requirements and internal reporting system after taking the materiality principle into account. Two or more operating segments may be aggregated into a single operating segment if the segments have the similar economic characteristics and are same or similar in respect of the nature of each segment’s products and services, the nature of production processes, the types or classes of customers for the products and services, the methods used to distribute the products or provide the services, and the nature of the regulatory environment. Inter-segment revenues are measured on the basis of the actual transaction prices for such transactions for segment reporting. Segment accounting policies are consistent with those for the consolidated financial statements. The preparation of the financial statements requires management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates as well as underlying assumptions and uncertainties involved are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. Except for accounting estimates relating to depreciation and amortisation of assets such as fixed assets and intangible assets (see Notes III.13 and 16) and provision for impairment of various types of assets (see Notes V.4, 6, 7, 8, 10, 14, 15, 16 and 17). Other significant accounting estimates are as follows: (i) Note V.19: Recognition of deferred tax assets; (ii) Note V.30: Warranty provisions; (iii) Note IX. – Fair value measurements of financial instruments; and (iv) Note XI: Share-based payments. Significant judgements made by the Group in the application of accounting policies are as follows: (i) Note VII. 1(1) –Disclosure of significant judgements and assumptions of control and exercising significant influence over other entities.(1) Description of and reasons for changes in accounting policies In 2022, the Group has adopted the revised accounting requirements and guidance under CAS newly issued by the Ministry of Finance (“MOF”) as follows: - “Accounting for selling outputs that are produced before fixed assets are available for intended use or produced in the course of research and development” (“accounting for sales before intended use") in CAS Bulletin No.15 (Caikuai [2021] No.35); - “Determining whether a contract is onerous” in CAS Bulletin No.15; - Notice of Application Issues for Accounting Treatment of COVID-19-Related Rent Concessions (Caikuai [2022] No.13); - “Accounting for the income tax consequences of dividends on financial instruments classified as equity instruments by the issuer” in CAS Bulletin No.16 (Caikuai [2022] No.31); and - “Accounting for the modification of a share-based payment transaction that changes the classification of the transaction from cash-settled to equity-settled” in CAS Bulletin No.16(a) Main effects of adopting the above requirements and guidance (i) Accounting for sales before intended use In accordance with CAS Bulletin No.15, the Group accounts for the proceeds and related cost arising from the sale of products or by-products produced before the fixed asset is available for its intended use and in the course of research and development (“sales before intended use”) in accordance with CAS 14 – Revenue and CAS 1 – Inventories respectively, and recognises them in profit or loss for the current period. The net amount of proceeds from such sales before intended use less related costs is no longer offset against the cost of the fixed asset or research and development expenditure. These provisions are effective from 1 January 2022. The Group has made retrospective adjustments in accordance with these provisions for sales before intended use occurring between 1 January 2021 and the date of initial implementation. The adoption of Bulletin No.15 does not have a significant effect on the financial position and financial performance of the Company. (ii) “Determining whether a contract is onerous” In accordance with CAS Bulletin No.15, when determining whether a contract is onerous, the Group includes in its estimated cost of fulfilling the contract the amount of the incremental cost of fulfilling the contract and the allocation of other costs directly attributable to fulfilling the contract. The adoption of Bulletin No.15 does not have a significant effect on the financial position and financial performance of the Group and the Company. (iii) Caikuai [2022] No.13 The Accounting Treatment of COVID-19-Related Rent Concessions (Caikuai [2020] No.10) provides a practical expedient under certain conditions for rent concessions occurring as a direct consequence of the COVID-19 pandemic. According to the provisions of Caikuai [2022] No.13, the practical expedient of Caikuai [2020] No.10 can continue to apply to eligible reduction in lease payments that are originally due after 30 June 2022. The adoption of the above regulation does not have a significant effect on the financial position and financial performance of the Group and the Company. (iv) Accounting for the income tax consequences of dividends on financial instruments classified as equity instruments by the issuer In accordance with CAS Bulletin No.16, for financial instruments classified as equity instruments (such as perpetual bonds classified as equity instruments, etc.) in accordance with the CAS No. 37 - Presentation and Disclosure of Financial Instruments and other requirements, if the relevant dividend payments are deductible for income tax purposes according to the relevant provisions of tax policies, the Group (as the issuer) shall recognise the income tax consequences of dividends when it recognises a liability to pay a dividend. The Group shall recognise the income tax consequences of dividends in (1) profit or loss, if those payments are distributions of profits generated from transactions or events previously recognised in profits or loss; or (2) the items of owner"s equity, if those payments are distributions of profits generated from the transactions or events previously recognised in the items of owner"s equity. The adoption of Bulletin No.16 does not have a significant effect on the financial position and financial performance of the Group and the Company. (v) Accounting for the modification of a share-based payment transaction that changes the classification of the transaction from cash-settled to equity-settled In accordance with CAS Bulletin No.16, if the terms and conditions of a cash- settled share-based payment transaction are modified such that it becomes an equity-settled share-based payment transaction, the Group shall, at the modification date: • measure the equity-settled share-based payment at its fair value as at the modification date and recognise in equity that fair value to the extent that the services have been rendered up to that date; • derecognise the liability for the cash-settled share-based payment as at the modification date; and • immediately recognise in profit or loss the difference between the carrying amount of the liability and the amount recognised in equity. If the modification extends or shortens the vesting period, the Group applies the modified vesting period to the above accounting treatment. The adoption of Bulletin No.16 does not have a significant effect on the financial position and financial performance of the Group and the Company.(b) The effects on the financial statements The effects on each of the line items in the consolidated balance sheet as at 31 December 2022 are as follows: Increase/(decrease) in the line items for the year as a result of applying new accounting policies The Group Assets: Inventories 125,164,818 Fixed assets 370,255,620 Construction in progress (122,638,939) Shareholders’ equity: Retained earnings 98,225,752 Capital reserve 112,771,892 Non-controlling interests 161,783,855 The effects on each of the line items in the consolidated income statement for the year ended 31 December 2022 are as follows: Increase/(decrease) in the line items for the year as a result of applying new accounting policies The Group Operating income 1,407,856,936 Operating costs 1,514,976,278 Research and development expenses 25,722,208 Losses before income tax (132,841,550) Net loss for the year (132,841,550) Attributable to: Shareholders of the Company (67,167,595) Non-controlling interests (65,673,955) The effects on each of the line items in the consolidated cash flow statement for the year ended 31 December 2022 are as follows: Increase/(decrease) in the line items for the year as a result of applying new accounting policies The Group Proceeds from sale of goods and rendering of services 1,558,099,468 Payment for goods and services 1,615,780,128 Payment to and for employees 119,971,211 Payment for acquisition of fixed assets, intangible assets and other long-term assets (177,651,871) (c) The effects on the comparative financial statements The effects of these changes in accounting policies on the Group’s net profit for the year ended 31 December 2021, and opening and closing balances of shareholders’ equity as at 1 January and 31 December 2021 are summarised as follows: The Group Net profit shareholders’ equity shareholders’ equity Net profit and shareholders’ equity before adjustments 30,431,668,974 216,873,143,467 173,397,734,714 The effects of sales before intended use 464,735,881 505,623,049 40,887,168 Net profit and shareholders’ equity after adjustments 30,896,404,855 217,378,766,516 173,438,621,882The effects on each of the line items in the consolidated balance sheet as at 31December 2021 are as follows: The Group The amounts of Before adjustments adjustments After adjustmentsAssets: Inventories 27,724,806,939 80,354,497 27,805,161,436 Fixed assets 226,695,489,704 445,877,180 227,141,366,884 Construction in progress 32,120,320,507 (20,608,628) 32,099,711,879Shareholders’ equity: Retained earnings 36,941,121,452 165,393,347 37,106,514,799 Capital reserve 53,804,309,393 113,299,701 53,917,609,094 Non-controlling interests 73,947,595,568 226,930,001 74,174,525,569The effects on each of the line items in the consolidated income statement for the yearended 31 December 2021 are as follows: The Group The amounts of Before adjustments adjustments After adjustmentsOperating income 219,309,799,505 1,725,918,507 221,035,718,012Operating costs 155,985,225,295 1,313,600,486 157,298,825,781Research and development expenses 10,668,844,187 (52,417,860) 10,616,426,327Profit before income tax 34,619,640,378 464,735,881 35,084,376,259Net profit for the year 30,431,668,974 464,735,881 30,896,404,855 Attributable to: Shareholders of the Company 25,830,935,500 129,816,146 25,960,751,646 Non-controlling interests 4,600,733,474 334,919,735 4,935,653,209The effects on each of the line items in the consolidated cash flow statement for the yearended 31 December 2021 are as follows: The Group The amounts of Before adjustments adjustments After adjustmentsProceeds from sale of goods and rendering of services 219,962,740,822 1,877,357,384 221,840,098,206Payment for goods and services 145,205,421,170 1,437,251,941 146,642,673,111Payment to and for employees 17,896,262,253 11,973,211 17,908,235,464Payment for acquisition of fixed assets, intangible assets and other long-term assets 35,669,946,105 428,132,232 36,098,078,337(d) After retrospective adjustments of the above accounting policy changes, the consolidated balance sheet as at 1 January 2021 are as follows: The Group Assets Current assets: Cash at bank and on hand 73,694,296,095 Financial assets held for trading 4,367,201,833 Bills receivable 215,994,373 Accounts receivable 22,969,140,355 Prepayments 1,119,595,984 Other receivables 658,114,833 Inventories 17,919,205,338 Contract assets 49,897,395 Assets held for sale 186,892,645 Other current assets 7,848,869,252 Total current assets 129,029,208,103 Non-current assets: Long-term equity investments 3,693,170,224 Investments in other equity instruments 533,645,423 Investment properties 1,196,168,511 Fixed assets 224,866,586,069 Construction in progress 42,572,986,272 Intangible assets 11,875,926,448 Goodwill 1,400,357,242 Long-term deferred expenses 299,634,100 Deferred tax assets 205,041,088 Other non-current assets 8,624,970,019 Total non-current assets 295,268,485,396 Total assets 424,297,693,499 The GroupLiabilities and shareholders’ equity Current liabilities: Short-term loans 8,599,569,471 Bills payable 1,231,533,895 Accounts payable 27,164,171,682 Advance payments received 124,040,749 Contract liabilities 3,440,720,535 Employee benefits payable 3,758,623,797 Taxes payable 1,077,686,869 Other payables 32,867,709,024 Non-current liabilities due within one year 24,500,550,121 Other current liabilities 2,194,716,852Total current liabilities 104,959,322,995Non-current liabilities: Long-term loans 132,452,767,135 Debentures payable 398,971,739 Long-term payables 2,114,175,683 Deferred income 4,246,231,468 Deferred tax liabilities 1,427,601,154 Other non-current liabilities 5,260,001,443Total non-current liabilities 145,899,748,622Total liabilities 250,859,071,617Shareholders’ equity: Share capital 34,798,398,763 Other equity instruments 14,146,997,427 Capital reserve 37,435,655,934 Less: Treasury shares 1,036,298,508 Other comprehensive income (22,198,072) Surplus reserve 2,444,416,669 Retained earnings 15,545,371,823 Total equity attributable to shareholders of the Company 103,312,344,036 Non-controlling interests 70,126,277,846Total shareholders’ equity 173,438,621,882Total liabilities and shareholders’ equity 424,297,693,499IV. Taxation Tax type Tax basis Tax rate Output VAT is calculated on product sales and Value-added tax taxable services revenue. The basis for VAT payable (VAT) is to deduct input VAT from the output VAT for the period City maintenance Based on VAT paid, VAT exemption and offset for the and construction tax period Education surcharges and Based on VAT paid, VAT exemption and offset for the local education period surcharges Corporate income Based on taxable profits 15% - 30% tax The income tax rate applicable to the Company for the year is 15% (2021: 15%). Pursuant to the Corporate Income Tax Law of the People’s Republic of China treatment No. is applicable to a preferential tax rate of 15%. On 2 December 2020, the Company renewed the High-tech Enterprise Certificate No. GR202011004594, which was entitled jointly by Beijing Municipal Science and Technology Commission, Beijing Municipal Financial Bureau, Beijing Municipal Tax Service, State Taxation Administration. The Company is subject to corporate income tax rate of 15% since the date of certification with the valid period of three years. The income tax rate applicable to other subsidiaries of the Group is 25% other than the following subsidiaries and the overseas subsidiaries which subject to the local income tax rate.The subsidiaries that are entitled to preferential tax treatments are as follows: PreferentialCompany name rate ReasonBeijing BOE Optoelectronics Technology Co., Ltd. (BOE OT) 15% High-tech EnterpriseChengdu BOE Optoelectronics Technology Co., Ltd. (Chengdu Optoelectronics) 15% High-tech EnterpriseHefei BOE Optoelectronics Technology Co., Ltd. (Hefei BOE) 15% High-tech EnterpriseBeijing BOE Display Technology Co., Ltd. (BOE Display) 15% High-tech EnterpriseHefei Xinsheng Optoelectronics Technology Co., Ltd. (Hefei Xinsheng) 15% High-tech EnterpriseOrdos Yuansheng Optoelectronics Co., Ltd. (Yuansheng Optoelectronics) 15% High-tech Enterprise Encouraged enterprise inChongqing BOE Optoelectronics Co., Ltd. (Chongqing BOE) 15% Western RegionsBOE (Hebei) Mobile Technology Co., Ltd. (BOE Hebei) 15% High-tech EnterpriseBOE Optical Science and technology Co., Ltd (Optical Technology) 15% High-tech EnterpriseBeijing BOE CHATANI Electronics Co., Ltd. (Beijing CHATANI) 15% High-tech EnterpriseHefei BOE Display Lighting Co., Ltd. (Hefei Display Lighting) 15% High-tech EnterpriseChongqing BOE Display Lighting Co., Ltd. (Chongqing Display Encouraged enterprise in Lighting) 15% Western RegionsBeijing BOE Vacuum Electronics Co., Ltd. (Vacuum Electronics) 15% High-tech EnterpriseBeijing BOE Vacuum Technology Co., Ltd. (Vacuum Technology) 15% High-tech EnterpriseBeijing BOE Energy Technology Co., Ltd. (BOE Energy) 15% High-tech EnterpriseFuzhou BOE Optoelectronics Technology Co., Ltd. (Fuzhou BOE) 15% High-tech EnterpriseHefei BOE Display Technology Co., Ltd. (Hefei Technology) 15% High-tech EnterpriseMianyang BOE Optoelectronics Technology Co., Ltd. (Mianyang BOE) 15% High-tech EnterpriseBOE Wisdom IOT Technology Co., Ltd. (Wisdom IOT) 15% High-tech EnterpriseK-Tronics (Suzhou) Technology Co., Ltd. (Suzhou K-Tronics) 15% High-tech EnterpriseBeijing BOE Sensing Technology Co., Ltd. (Sensing Technology) 15% High-tech EnterpriseChongqing BOE Smart Electronic System Co., Ltd. (Chongqing Encouraged enterprise in Smart Electronic) 15% Western RegionsBeijing BOE Health Technology Co., Ltd. (Health Technology) 15% High-tech EnterpriseChongqing BOE Electronic Technology Co., Ltd. (Chongqing Encouraged enterprise in Electronic Technology) 15% Western RegionsWuhan BOE Optoelectronics Technology Co., Ltd. (Wuhan BOE) 15% High-tech EnterpriseNanjing BOE Display Technology Co., Ltd. (Nanjing Technology) 15% High-tech EnterpriseChengdu BOE Display Sci-tech Co., Ltd.. (Chengdu Display Sci-tech) 15% High-tech EnterpriseBOE Regenerative Medical Technology Co., Ltd. (Regenerative Medical) 15% High-tech EnterpriseBeijing Zhongxiangying Technology Co., Ltd. (Beijing Zhongxiangying) 15% High-tech EnterpriseYunnan Invensight Optoelectronics Technology Co., Ltd. (Yunnan Invensight) 15% High-tech EnterpriseBOE Mled Technology Co., Ltd. (Mled Technology) 15% High-tech EnterpriseHefei BOE Semiconductor Co., Ltd. (Hefei Semiconductor) 15% High-tech EnterpriseV. Notes to the consolidated financial statements Amount in RMB/RMB Amount in RMB/RMB original currency Exchange rate equivalents original currency Exchange rate equivalents Cash on hand RMB 796,306 336,429 USD 1,773 6.9646 12,348 1,480 6.3757 9,438 HKD 35,650 0.8933 31,846 35,673 0.8176 29,166 JPY 106,508 0.0524 5,581 528,014 0.0554 29,252 KRW 70,909 0.0055 390 70,185 0.0054 379 Other foreign currencies 49,796 47,311 Sub-total 896,267 451,975 Bank deposits RMB 43,646,054,088 51,889,193,811 USD 2,681,806,253 6.9646 18,677,707,830 3,615,879,387 6.3757 23,053,762,209 HKD 364,050,751 0.8933 325,206,536 9,520,528 0.8176 7,783,984 JPY 10,556,434,427 0.0524 553,157,164 13,848,652,635 0.0554 767,215,356 KRW 578,139,636 0.0055 3,179,768 1,094,268,704 0.0054 5,909,051 EUR 200,208,832 7.4229 1,486,130,139 135,902,777 7.2197 981,177,279 Other foreign currencies 78,007,216 55,392,165 Sub-total 64,769,442,741 76,760,433,855 Other monetary funds RMB 3,914,979,538 3,857,498,365 USD 13,176,444 6.9646 91,768,662 49,772,132 6.3757 317,332,183 HKD 438,830 0.8933 392,007 7 0.8176 6 JPY 435,651,794 0.0524 22,828,154 922,720,289 0.0554 51,118,704 Sub-total 4,029,968,361 4,225,949,258 Total 68,800,307,369 80,986,835,088 Including: Total overseas deposits were equivalent to RMB 5,780,461,058 (2021: RMB As at 31 December 2022, other monetary funds included deposits with securities companies by the Group amounting to RMB 2,609,817, used as refundable deposits for stock repurchase and payment for settlement with third party platform, which can be withdrew on demand. The rest was restricted monetary funds, of which, RMB 164,299,257 was pledged for issuance of bills payable, and an equivalent to RMB 3,863,059,287 was mainly deposits in commercial banks as security. As at 31 December 2021, other monetary funds included deposits with securities companies by the Group amounting to RMB 73,244,093, used as refundable deposits for stock repurchase and payment for settlement with third party platform, which can be withdrew on demand. The rest was restricted monetary funds, of which, RMB 91,976,204 was pledged for issuance of bills payable, and an equivalent to RMB 4,060,728,961 was mainly deposits in commercial banks as security. Item 2022 2021 Financial assets at fair value through profit or loss - Structured deposit and wealth management products 16,931,468,153 10,028,172,853 - Investment in equity instruments 256,525,783 - Total 17,187,993,936 10,028,172,853(1) Classification of bills receivable Item 2022 2021 Bank acceptance bills 211,292,061 217,734,298 Commercial acceptance bills 500,000 - Total 211,792,061 217,734,298 All of the above bills are due within one year.(2) The pledged bills receivable of the Group at the end of the year As at 31 December 2022, the Group does not have any pledged bills receivable (2021: RMB(3) Outstanding endorsed or discounted bills that have not matured at the end of the year Item Amount Amount not derecognised as derecognised as at 31 December at 31 December Bank acceptance bills 289,638,315 28,239,380 For the year ended 31 December 2022, there was no amount transferred to accounts receivable from bills receivable due to non-performance of the issuers of the Group (2021: Nil).(1) The Group’s accounts receivable by customer type: Item 2022 2021 Amounts due from related parties 1,070,848,317 88,954,909 Amounts due from other customers 27,252,679,049 35,496,227,051 Sub-total 28,323,527,366 35,585,181,960 Less: Provision for bad and doubtful debts 119,879,797 81,767,140 Total 28,203,647,569 35,503,414,820(2) The Group’s accounts receivable by currency type: Amount in Amount in original RMB/RMB original RMB/RMB currency Exchange rate equivalents currency Exchange rate equivalents RMB 12,806,183,088 12,064,153,278 USD 2,139,614,722 6.9646 14,901,560,693 3,551,733,364 6.3757 22,644,786,409 JPY 5,046,551 0.0524 264,439 1,985,544 0.0554 109,999 Other foreign currencies 615,519,146 876,132,274 Sub-total 28,323,527,366 35,585,181,960 Less: Provision for bad and doubtful debts 119,879,797 81,767,140 Total 28,203,647,569 35,503,414,820(3) The ageing analysis of accounts receivable is as follows: Within 1 year (inclusive) 27,791,874,623 35,052,439,412 Over 1 year but within 2 years (inclusive) 232,130,123 190,180,631 Over 2 years but within 3 years (inclusive) 151,304,998 181,687,107 Over 3 years 148,217,622 160,874,810 Sub-total 28,323,527,366 35,585,181,960 Less: Provision for bad and doubtful debts 119,879,797 81,767,140 Total 28,203,647,569 35,503,414,820 The ageing is counted starting from the date when accounts receivable are recognised.(4) Accounts receivable by provisioning method Book value Provision for impairment Percentage Percentage Category Amount (%) Amount (%) Carrying amount Individual assessment - Customers with high credit risk 62,016,470 0% 59,921,373 97% 2,095,097 - Customers with low credit risk 1,359,564,251 5% - 0% 1,359,564,251 Collective assessment - Customers with moderate credit risk 26,901,946,645 95% 59,958,424 0% 26,841,988,221 Total 28,323,527,366 100% 119,879,797 0% 28,203,647,569 Book value Provision for impairment Percentage Percentage Category Amount (%) Amount (%) Carrying amount Individual assessment - Customers with high credit risk 66,060,901 0% 46,406,137 70% 19,654,764 - Customers with low credit risk 1,209,167,604 4% - 0% 1,209,167,604 Collective assessment - Customers with moderate credit risk 34,309,953,455 96% 35,361,003 0% 34,274,592,452 Total 35,585,181,960 100% 81,767,140 0% 35,503,414,820 (a) Criteria for collective assessment in 2022 and details: Customer group Basis With special matters, litigations or the deterioration Customers with high credit risk of customers’ credit status Banks, insurance companies, large state-owned Customers with low credit risk enterprises and public institutions Customers with moderate credit risk Customers not included in Groups above (b) Assessment of ECLs on accounts receivable in 2022: At all times the Group measures the impairment loss for accounts receivable at an amount equal to lifetime ECLs, and the ECLs are based on the number of overdue days and the expected loss rate. According to the Group’s historical experience, different loss models are applicable to different customer groups.(5) Movements of provisions for bad and doubtful debts: Balance at the beginning of the year 81,767,140 57,863,022 Charge during the year 77,823,874 48,438,509 Recoveries during the year (27,926,578) (20,188,349) Written-off during the year (14,534,442) (3,474,488) Translation differences 2,749,803 (871,554) Balance at the end of the year 119,879,797 81,767,140(6) Five largest accounts receivable by debtor at the end of the year The total of five largest accounts receivable of the Group at the end of the year was RMB made for bad and doubtful debts after assessment.(1) The Group’s prepayments by category: Prepayment for inventory 261,349,159 648,790,765 Prepayment for electricity, water, gas and power 234,247,912 290,002,465 Others 94,167,609 174,086,777 Total 589,764,680 1,112,880,007(2) The ageing analysis of prepayments is as follows: Ageing Amount Percentage (%) Amount Percentage (%) Within 1 year (inclusive) 471,778,052 80% 1,088,149,020 98% Over 1 year but within 2 years (inclusive) 112,700,267 19% 9,828,654 1% Over 2 years but within 3 years (inclusive) 2,959,783 1% 2,531,759 0% Over 3 years 2,326,578 0% 12,370,574 1% Total 589,764,680 100% 1,112,880,007 100% The ageing is counted starting from the date when prepayments are recognised. The total of five largest prepayments of the Group at the end of the year is RMB Note 2022 2021 Dividends receivable - 2,414,503 Others (1) 975,809,236 1,920,413,875 Total 975,809,236 1,922,828,378(1) Others (a) The Group’s other receivables by customer type: Customer type 2022 2021 Amounts due from related parties 16,588,534 1,901,777 Amounts due from other customers 969,833,087 1,927,555,914 Sub-total 986,421,621 1,929,457,691 Less: Provision for bad and doubtful debts 10,612,385 9,043,816 Total 975,809,236 1,920,413,875 (b) The Group’s other receivables by currency type: Amount in Amount in original RMB/RMB original RMB/RMB currency Exchange rate equivalents currency Exchange rate equivalents RMB 480,934,242 808,428,477 USD 69,194,294 6.9646 481,910,580 170,390,641 6.3757 1,086,359,610 JPY 316,069 0.0524 16,562 - - - Other foreign currencies 23,560,237 34,669,604 Sub-total 986,421,621 1,929,457,691 Less: Provision for bad and doubtful debts 10,612,385 9,043,816 Total 975,809,236 1,920,413,875 (c) The ageing analysis of the Group’s other receivables is as follows: Within 1 year (inclusive) 367,646,687 1,637,506,264 Over 1 year but within 2 years (inclusive) 362,777,830 21,232,566 Over 2 years but within 3 years (inclusive) 14,948,621 24,183,841 Over 3 years 241,048,483 246,535,020 Sub-total 986,421,621 1,929,457,691 Less: Provision for bad and doubtful debts 10,612,385 9,043,816 Total 975,809,236 1,920,413,875 The ageing is counted starting from the date when other receivables are recognised.(d) Other receivables by provisioning method Book value Provision for impairment Percentag Percentag Carrying Category Amount e (%) Amount e (%) amount Individual assessment 10,612,385 1% 10,612,385 100% - Collective assessment 975,809,236 99% - 0% 975,809,236 Total 986,421,621 100% 10,612,385 1% 975,809,236 Book value Provision for impairment Percentag Percentag Carrying Category Amount e (%) Amount e (%) amount Individual assessment 9,043,816 0% 9,043,816 100% - Collective assessment 1,920,413,875 100% - 0% 1,920,413,875 Total 1,929,457,691 100% 9,043,816 0% 1,920,413,875(e) Movements of provisions for bad and doubtful debts Balance at the beginning of the year 9,043,816 9,044,012 Charge during the year 1,679,930 275,661 Recoveries during the year - (115,952) Written-off during the year (111,361) (159,905) Balance at the end of the year 10,612,385 9,043,816(f) The Group’s other receivables categorised by nature Nature 2022 2021 VAT refunds and export tax rebate 512,851 253,311 Amounts due from equity transfer 200,000,000 200,000,000 Surety and deposits Note 598,972,862 1,518,208,550 Others 186,935,908 210,995,830 Sub-total 986,421,621 1,929,457,691 Less: Provision for bad and doubtful debts 10,612,385 9,043,816 Total 975,809,236 1,920,413,875 Note: As at 31 December 2022, an equivalent to RMB 436,628,186 (2021: RMB surety paid by the Group to suppliers. (g) Five largest other receivables by debtor at the end of the year The total of five largest other receivables of the Group at the end of the year was RMB provision is made for bad and doubtful debts after assessment.(1) The Group’s inventories by category: Provision for Provision for impairment of impairment of inventories/Provi inventories/Provi sion for sion for impairment of impairment of costs to fulfil a costs to fulfil a contract with a contract with a Book value customer Carrying amount Book value customer Carrying amount Raw materials 11,178,326,632 2,890,923,826 8,287,402,806 12,029,879,462 2,083,190,076 9,946,689,386 Work in progress 4,879,573,518 1,316,529,598 3,563,043,920 4,080,209,516 732,973,017 3,347,236,499 Finished goods 14,699,012,100 4,072,862,311 10,626,149,789 17,108,598,457 2,795,564,803 14,313,033,654 Consumables 147,843,921 - 147,843,921 130,472,966 - 130,472,966 Costs to fulfil a contract with a customer 163,373,789 - 163,373,789 67,728,931 - 67,728,931 Total 31,068,129,960 8,280,315,735 22,787,814,225 33,416,889,332 5,611,727,896 27,805,161,436 As at 31 December 2022, there was no amount of capitalised borrowing cost in the Group’s closing balance of inventories (2021: Nil). As at 31 December 2022, the Group had no inventory used as collateral (2021: Nil).(2) An analysis of provision for impairment of inventories of the Group is as follows: Balance at the beginning of the Charge during the Decrease during Balance at the year year the year end of the year Raw materials 2,083,190,076 1,535,322,358 (727,588,608) 2,890,923,826 Work in progress 732,973,017 1,103,212,064 (519,655,483) 1,316,529,598 Finished goods 2,795,564,803 8,482,398,827 (7,205,101,319) 4,072,862,311 Total 5,611,727,896 11,120,933,249 (8,452,345,410) 8,280,315,735(1) The Group’s contract assets by customer type: A contract asset is the Group’s right to consideration in exchange for goods or services that it has transferred to a customer when that right is conditional on something other than the passage of time.(2) Significant changes in the contract assets during the year: Significant changes in the contract assets of the Group are as follows: RMB Balance at the beginning of the year 75,698,324 Transfers from contract assets recognised at the beginning of the year to receivables (65,331,121) Increase in contract assets resulting from no unconditional right obtained 61,269,258 Balance at the end of the year 71,636,461(3) Movements of provision for contract assets during the year: Balance at the beginning of the year - 207,800 Decrease from disposal of subsidiaries - (207,800) Balance at the end of the year - - VAT on tax credits 2,556,625,457 2,643,490,711 Prepaid income taxes 331,652,233 20,739,659 Input tax to be verified or deducted 329,605,466 575,209,816 Costs receivables for recovering products from a customer 108,097,353 126,447,496 Others 68,056,410 213,032,028 Total 3,394,036,919 3,578,919,710(1) The Group’s long-term equity investments by category: Investments in joint ventures 392,291,560 - Investments in associates 13,086,523,900 7,066,228,472 Sub-total 13,478,815,460 7,066,228,472 Less: Provision for impairment 1,056,936,609 1,025,280,155 Total 12,421,878,851 6,040,948,317(2) Movements of long-term equity investments during the year are as follows: Movements during the year Translation differences arising from Investment Declared translation of Balance at the (loss) / income Other distribution of foreign currency beginning of the Increase in Decrease in recognised under comprehensive Other equity cash dividends or financial Balance at the Investee year capital capital equity method income movements profits statements end of the year Joint venture Chongqing Maite Optoelectronics Co., Ltd. - 400,000,000 - (7,708,440) - - - - 392,291,560 Sub-total - 400,000,000 - (7,708,440) - - - - 392,291,560 Associates Erdos BOE Energy Investment Co., Ltd. 1,409,666,833 405,200,000 - (2,983,503) - - - - 1,811,883,330 Beijing Xindongneng Investment Fund (Limited Partnership) 2,088,917,867 - (129,798,594) 241,130,621 (61,062,079) - (104,317,491) - 2,034,870,324 Beijing Innovation Industry Investment Co., Ltd. 207,564,573 - - 15,651,980 - - - - 223,216,553 Beijing Electric Control Industry Investment Co., Ltd. 231,777,557 21,234,700 - (2,556,780) 7,694,430 - - - 258,149,907 BOE Art Cloud Technology Co., Ltd. 286,976,389 129,500,000 (130,381,715) 10,026,871 - 134,476,619 - - 430,598,164 Cnoga Medical Co., Ltd. 253,501,065 - - - - - - 23,414,968 276,916,033 Tianjin Xianzhilian Investment Centre (Limited Partnership) 968,341,880 234,000,000 - 184,737,344 - - - - 1,387,079,224 BioChain (Beijing) Science & Technology, Inc. 339,845,254 - - (5,751,469) - - - - 334,093,785 Beijing YanDong MicroElectronic Co., Ltd. 1,009,985,276 - - 34,518,797 - 126,743,478 - - 1,171,247,551 SES Imagotag SA Co., Ltd. - 4,871,837,182 - 11,536,838 - - - - 4,883,374,020 Others 269,651,778 46,917,149 (87,070,668) 49,501,421 63,317 14,310,853 (18,731,712) 452,871 275,095,009 Sub-total 7,066,228,472 5,708,689,031 (347,250,977) 535,812,120 (53,304,332) 275,530,950 (123,049,203) 23,867,839 13,086,523,900 Total 7,066,228,472 6,108,689,031 (347,250,977) 528,103,680 (53,304,332) 275,530,950 (123,049,203) 23,867,839 13,478,815,460 Less: Provision for impairment 1,025,280,155 1,056,936,609 Total 6,040,948,317 12,421,878,851 As at 31 December 2022, Hefei Xin Jing Yuan Electronic Materials Co., Ltd. still suffered loss and the Group does not have an obligation to assume additional losses. Therefore, the Company discontinues recognising its share of further losses after the carrying amount of long-term equity investment is reduced to zero. As at 31 December 2022, the accumulated unrecognised investment losses were RMB 14,922,087 (2021: RMB 20,352,876). As at 31 December 2022, Beijing Infi-Hailin Venture Investment Co., Ltd. made a profit and made up for the unrecognised investment losses of RMB 1,152,818 in the prior year, and recognised investment income amounting to RMB 2,073,333 during the year. Items 2022 2021 Listed equity instruments investment - Beijing Electronic City High Tech Group Co., Ltd. 53,614,432 56,638,836 - Bank of Chongqing Co., Ltd. 91,600,150 91,875,688 - New Century Medical Holding Co., Ltd. 9,098,008 19,810,485 Unlisted equity instruments investment - Danhua Capital, L. P. 34,823,000 31,878,500 - Danhua Capital II, L.P. 69,646,002 63,757,002 - Kateeva Inc. 83,192,147 76,157,736 - Nanosys INC 21,591,641 47,817,750 - Baebies INC 30,600,273 28,012,830 - Illumina Fund I,L.P. 31,079,577 25,607,407 - Horizon Robotics, Inc. 35,616,005 31,722,880 - Others 22,199,071 45,809,032 Total 483,060,306 519,088,146(1) Investments in other equity instruments: Accumulated Reason for being gains or losses Amount Reason for designated at fair recognised in transferred from transferring from value through other other other other Dividend income comprehensive comprehensive comprehensive comprehensive recognised for the income income to retained income to retained Item income year (“-” for losses) earnings earnings Listed equity instruments investment With the intention of establishing or maintaining a long-term - Beijing Electronic City High Tech Group investment for Co., Ltd. strategic reasons 206,209 (36,545,996) - Not applicable With the intention of establishing or maintaining a long-term investment for - Bank of Chongqing Co., Ltd. strategic reasons 9,918,634 (28,484,225) - Not applicable With the intention of establishing or maintaining a long-term investment for - New Century Medical Holding Co., Ltd. strategic reasons - (131,750,842) - Not applicable Unlisted equity instruments investment With the intention of establishing or maintaining a long-term investment for - Danhua Capital, L. P. strategic reasons 5,045,925 296,625 - Not applicable With the intention of establishing or maintaining a long-term investment for - Danhua Capital II, L.P. strategic reasons 20,183,700 1,998,251 - Not applicable With the intention of establishing or maintaining a long-term investment for - Kateeva Inc. strategic reasons - 329,681 - Not applicable With the intention of establishing or maintaining a long-term investment for - Nanosys INC strategic reasons - (28,757,359) - Not applicable With the intention of establishing or maintaining a long-term investment for - Baebies INC strategic reasons - 1,476,718 - Not applicable With the intention of establishing or maintaining a long-term investment for - Illumina Fund I,L.P. strategic reasons - 1,110,906 - Not applicable With the intention of establishing or maintaining a long-term investment for - Horizon Robotics, Inc. strategic reasons - 3,661,505 - Not applicable With the intention of establishing or maintaining a Transfer out due long-term to bankruptcy investment for liquidation - Others strategic reasons - (38,958,805) (10,091,839) derecognition Total 35,354,468 (255,623,541) (10,091,839) Item 2022 2021 Financial assets at fair value through profit or loss 2,022,967,681 606,895,447 Including: Investments in equity instruments 2,022,967,681 606,895,447 Total 2,022,967,681 606,895,447 Land use rights Buildings Total Cost Balance at the beginning of the year 687,434,677 1,022,831,969 1,710,266,646 Additions during the year - 5,461,739 5,461,739 Balance at the end of the year 687,434,677 1,028,293,708 1,715,728,385 Less: Accumulated depreciation or amortisation Balance at the beginning of the year 168,017,805 383,883,440 551,901,245 Additions during the year 13,622,701 28,179,301 41,802,002 Balance at the end of the year 181,640,506 412,062,741 593,703,247 Carrying amounts At the end of the year 505,794,171 616,230,967 1,122,025,138 At the beginning of the year 519,416,872 638,948,529 1,158,365,401(1) Analysis of the Group’s fixed assets are as follows: Item Plant & buildings Equipment Others Total Cost Balance at the beginning of the year 65,746,184,870 289,073,320,848 10,027,118,299 364,846,624,017 Additions during the year - Purchases 22,873,906 576,061,450 1,874,710,266 2,473,645,622 - Transfers from construction in progress 195,460,071 9,633,715,949 732,046,393 10,561,222,413 - Written-down against government interest discounts (16,355,538) (166,721,924) (12,987) (183,090,449) Decrease due to disposal of subsidiaries (61,688,333) (185,865,467) (88,382,014) (335,935,814) Transfers to construction in progress - (1,161,980,085) (29,857,355) (1,191,837,440) Disposals or written-offs during the year (176,295) (446,815,683) (169,873,534) (616,865,512) Translation differences 4,131,352 29,007,311 6,239,955 39,378,618 Balance at the end of the year 65,890,430,033 297,350,722,399 12,351,989,023 375,593,141,455 Less: Accumulated depreciation Balance at the beginning of the year 7,908,069,483 122,199,288,667 5,704,812,685 135,812,170,835 Charge during the year 2,072,464,102 29,207,688,566 1,947,737,403 33,227,890,071 Decrease due to disposal of subsidiaries (30,181,955) (137,710,504) (23,163,432) (191,055,891) Transfers to construction in progress - (730,517,943) (21,961,743) (752,479,686) Disposals or written-offs during the year (13,666) (374,611,961) (69,200,542) (443,826,169) Translation differences 391,129 15,781,865 1,425,638 17,598,632 Balance at the end of the year 9,950,729,093 150,179,918,690 7,539,650,009 167,670,297,792 Less: Provision for impairment Balance at the beginning of the year 34,480 1,704,957,933 188,093,885 1,893,086,298 Charge during the year - 132,578,826 10,492,666 143,071,492 Transfers to construction in progress - (19,908,202) (165,882) (20,074,084) Disposals or written-offs during the year - (77,467,003) (2,823,470) (80,290,473) Balance at the end of the year 34,480 1,740,161,554 195,597,199 1,935,793,233 Carrying amounts At the end of the year 55,939,666,460 145,430,642,155 4,616,741,815 205,987,050,430 At the beginning of the year 57,838,080,907 165,169,074,248 4,134,211,729 227,141,366,884 In 2022, some of the equipment of the Group is idle and there is no clear use plan. The Group evaluated the recoverable amount of these equipment and made provisions for impairment of RMB 143,071,492 (2021: RMB 675,831,912) based on the evaluation results.(2) Fixed assets pending certificates of ownership As at 31 December 2022, fixed assets pending certificates of ownership totalled RMB being processed.(1) Analysis of the Group’s construction in progress is as follows: Provision for Provision for Item Book value impairment Carrying amount Book value impairment Carrying amount The 6th generation AMOLED project - Chongqing 31,013,623,277 - 31,013,623,277 24,774,517,248 - 24,774,517,248 Others 12,446,773,478 74,262,087 12,372,511,391 7,369,688,455 44,493,824 7,325,194,631 Total 43,460,396,755 74,262,087 43,386,134,668 32,144,205,703 44,493,824 32,099,711,879 In 2022, some of the engineering projects of the Group is idle and cannot be further used. The Group evaluated the residual values of these engineering projects and made a provision for impairment of RMB 29,768,263 based on the evaluation results.(2) Movements of major construction projects in progress during the year Percentage Accumulated Interest rate Balance at the of actual capitalised Interest for beginning of Additions Transfers to Balance at the cost to interest at the capitalised capitalisation Sources of Item Budget the year during the year fixed assets end of the year budget (%) end of the year in 2022 in 2022 (%) funding The 6th generation Self-raised AMOLED project - funds and Chongqing 46,500,000,000 24,774,517,248 6,243,115,489 (4,009,460) 31,013,623,277 70.04% 624,014,961 438,224,219 4.24% borrowings(1) Intangible assets Patent and proprietary Computer Land use rights technology software Others Total Original book value Balance at the beginning of the year 5,539,522,787 6,978,992,728 1,676,849,060 1,549,958,675 15,745,323,250 Additions during the year - Purchases 256,914,399 8,532,419 121,172,137 - 386,618,955 - Transfers from construction in progress - - 114,068,215 112,297 114,180,512 Decrease due to disposal of subsidiaries - (1,732,355,021) (17,486,779) (846,913,855) (2,596,755,655) Disposals during the year - - (548,585) - (548,585) Translation differences - (9,139,455) 947,362 2,450,615 (5,741,478) Written-down against interest discount - (771,120) (120,528) (771,120) (1,662,768) Balance at the end of the year 5,796,437,186 5,245,259,551 1,894,880,882 704,836,612 13,641,414,231 Less: Accumulated amortisation Balance at the beginning of the year 524,719,007 2,613,841,165 999,888,044 397,376,628 4,535,824,844 Charge during the year 135,495,338 602,728,282 198,089,822 85,027,074 1,021,340,516 Decrease due to disposal of subsidiaries - (652,040,647) (5,447,593) (204,670,848) (862,159,088) Disposals during the year - - (490,789) - (490,789) Translation differences - (2,483,639) 168,335 886,909 (1,428,395) Balance at the end of the year 660,214,345 2,562,045,161 1,192,207,819 278,619,763 4,693,087,088 Carrying amount at the end of the year 5,136,222,841 2,683,214,390 702,673,063 426,216,849 8,948,327,143 Carrying amount at the beginning of the year 5,014,803,780 4,365,151,563 676,961,016 1,152,582,047 11,209,498,406(1) Changes in goodwill Balance at the Decrease due to beginning of the Additions during disposal of Balance at the Name of investee year the year subsidiaries end of the year Book value Beijing Yinghe Century Co., Ltd. 42,940,434 - - 42,940,434 K-Tronics (Suzhou) technology Co., Ltd. 8,562,464 - - 8,562,464 Beijing BOE Optoelectronics Technology Co., Ltd. 4,423,876 - - 4,423,876 BOE Healthcare Investment & Management Co., Ltd. 146,460,790 - - 146,460,790 SES Imagotag SA Co., Ltd. 706,406,821 - (706,406,821) - Chengdu BOE Display Sci-tech Co., Ltd.. (Chengdu Display Sci-tech) 537,038,971 - - 537,038,971 Nanjing BOE Display Technology Co., Ltd. 155,714,415 - - 155,714,415 Hefei Jiangcheng Technology Co., Ltd. 9,391,961 - (9,391,961) - Sub-total 1,610,939,732 - (715,798,782) 895,140,950 Provision for impairment Beijing BOE Optoelectronics Technology Co., Ltd. (4,423,876) - - (4,423,876) BOE Healthcare Investment & Management Co., Ltd. (82,137,669) - - (82,137,669) SES Imagotag SA Co., Ltd. (394,371,200) - 394,371,200 - Chengdu BOE Display Sci-tech Co., Ltd.. (Chengdu Display Sci-tech) - (147,755,754) - (147,755,754) Sub-total (480,932,745) (147,755,754) 394,371,200 (234,317,299) Carrying amount 1,130,006,987 (147,755,754) (321,427,582) 660,823,651(2) Provision for impairment of goodwill The recoverable amount of Beijing Yinghe Century Co., Ltd., Suzhou K-Tronics, BOE Healthcare Investment & Management Co., Ltd. (“Health Investment”), Chengdu Display Sci- tech and Nanjing BOE Display Technology Co., Ltd. is determined based on the present value of expected future cash flows. When predicting the present value of cash flow, the cash flow in the next 5 years is determined based on the financial budget approved by the management. The cash flow in the years after the 5-year financial budget will remain stable. The pre-tax discount rate is determined with reference to comparable companies and related capital structures. As at 31 December 2022, as the present value of future cash flows of the asset group to which Chengdu Display Sci-tech"s goodwill belongs was lower than the carrying amount of the asset group, the Group made an impairment provision of RMB 147,755,754 for the relevant goodwill. Balance at Additions during Decrease during Balance at Payment for public facilities construction and use 51,962,118 - (10,800,827) 41,161,291 Leasehold improvements 10,325,942 16,912,468 (7,807,977) 19,430,433 Others 574,242,442 61,375,716 (139,268,505) 496,349,653 Total 636,530,502 78,288,184 (157,877,309) 556,941,377(1) Deferred tax assets and liabilities Deductible/ Deductible/ (taxable) (taxable) temporary Deferred tax temporary Deferred tax Item differences assets/(liabilities) differences assets/(liabilities) Deferred tax assets: Provision for impairment of assets 151,264,910 31,020,460 113,867,486 24,884,958 Changes in fair value of investments in other equity instruments 142,547,604 21,382,141 139,523,200 20,928,480 Depreciation of fixed assets 239,415,255 37,326,236 201,462,125 34,642,083 Assessed value added by investing real estate in subsidiaries 119,895,400 29,973,850 125,449,252 31,362,313 Accumulated losses 459,130 75,757 422,990,806 118,064,555 Government grant 143,385,420 21,507,813 209,807,147 31,471,072 Others 59,695,684 9,274,649 306,215,006 19,010,893 Sub-total 856,663,403 150,560,906 1,519,315,022 280,364,354 Amount offset (80,310,481) (90,028,830) Balance after offsetting 70,250,425 190,335,524 Deferred tax liabilities: Revaluation due to business combinations involving entities not under common control (882,129,374) (217,980,404) (2,197,597,331) (584,383,821) Depreciation of fixed assets (7,266,110,223) (1,094,970,944) (6,388,163,232) (984,779,332) Long-term equity investments (120,141,687) (18,021,253) (120,141,687) (18,021,253) Others (151,491,002) (23,744,713) (167,106,175) (28,467,297) Sub-total (8,419,872,286) (1,354,717,314) (8,873,008,425) (1,615,651,703) Amount offset 80,310,481 90,028,830 Balance after offsetting (1,274,406,833) (1,525,622,873)(2) Details of unrecognised deferred tax assets Deductible temporary differences 22,749,630,064 24,215,956,667 Deductible tax losses 44,677,908,573 19,433,679,291 Total 67,427,538,637 43,649,635,958 As at 31 December 2022, the accumulated deductible temporary differences are mainly subsidiaries’ impairment provisions of assets and accrual of expenses. Due to the uncertainty that there will be sufficient taxable income to cover these deductible differences in future periods, the deferred income tax assets were not recognised in consideration of prudence.(3) Expiration of deductible tax losses for unrecognised deferred tax assets Year Note 2022 2021 Others (a) 515,644,651 998,688,134 Total 44,677,908,573 19,433,679,291 (a) According to the applicable local tax laws, loss of some overseas subsidiaries of the Group has indefinite carry-over period to deduct the future taxable income. Surety 1,338,834,402 1,339,517,936 Prepayments for construction 153,690,890 224,400,336 Prepayment for fixed assets 148,834,349 572,510,455 VAT on tax credits - 3,424,055,815 Deferred VAT for imported equipment 2,696,796 1,407,330,930 Others 311,464,947 509,612,011 Total 1,955,521,384 7,477,427,483 Credited/ collateralised Amount in original RMB/RMB guaranteed/ currency Exchange rate equivalents pledged Bank loans - RMB 901,622,500 Guaranteed - RMB 30,006,237 Credited Sub-total 931,628,737 Foreign currency bank loans - USD 128,585,504 6.9646 895,546,601 Credited - JPY 205,792,620 0.0524 10,783,533 Credited - HKD 600,000,000 0.8933 535,980,000 Credited Sub-total 1,442,310,134 Total 2,373,938,871 Credited/ collateralised Amount in original RMB/RMB guaranteed/ currency Exchange rate equivalents pledged Bank loans - RMB 1,352,433,750 Guaranteed - RMB 140,148,195 Credited Sub-total 1,492,581,945 Foreign currency bank loans - USD 83,382,510 6.3757 531,621,869 Credited - JPY 863,548,156 0.0554 47,853,518 Credited Sub-total 579,475,387 Total 2,072,057,332 As at 31 December 2022, no short-term loan was past due (2021: Nil). Bank acceptance bills 847,418,525 663,001,350 Commercial acceptance bills 22,803,013 164,956,681 Total 870,221,538 827,958,031 There is no due but unpaid bill payable at the end of the year. The bills above are all due within one year.(1) The Group’s accounts payable by category are as follows: Payables to related parties 179,047,266 142,557,107 Payables to third parties 29,655,673,198 32,313,273,587 Total 29,834,720,464 32,455,830,694(2) The Group’s accounts payable by currency are as follows: Amount in RMB/RMB Amount in RMB/RMB original currency Exchange rate equivalents original currency Exchange rate equivalents - RMB 21,162,560,832 23,743,766,250 - USD 1,146,041,405 6.9646 7,981,719,969 1,093,846,298 6.3757 6,974,035,842 - JPY 9,299,005,433 0.0524 487,267,885 10,050,541,520 0.0554 556,800,000 - Other foreign currencies 203,171,778 1,181,228,602 Total 29,834,720,464 32,455,830,694 As at 31 December 2022, the Group had no significant accounts payable with ageing of more than one year. Item 2022 2021 Advances from related parties 188,623 961,806 Advances from third parties 79,660,354 145,178,278 Total 79,848,977 146,140,084 Item 2022 2021 Sale of goods 2,411,717,792 3,765,081,554 Contract liabilities primarily relate to the Group’s advances from goods purchase and sale contracts. The Group receives a certain proportion of advances as agreed in contract when entering into the contract with customers. The revenue related to the contracts will be recognised until the Group satisfies its performance obligation. Significant changes in the contract liabilities of the Group are as follows: RMB Balance at the beginning of the year 3,765,081,554 Revenue recognised that was included in the contract liability balance at the beginning of year (3,578,825,023) Increase of contract liabilities due to cash received at the end of the year 2,225,461,261 Balance at the end of the year 2,411,717,792(1) Employee benefits payable: Balance at Balance at Accrued during Decrease during 31 December Note 1 January 2022 the year the year 2022 Short-term employee benefits (2) 5,098,605,495 16,306,120,923 (18,748,357,070) 2,656,369,348 Post-employment benefits - defined contribution plans (3) 34,235,855 1,643,219,063 (1,619,403,086) 58,051,832 Termination benefits 313,887 125,276,407 (21,478,651) 104,111,643 Total 5,133,155,237 18,074,616,393 (20,389,238,807) 2,818,532,823 Balance at Balance at Accrued during Decrease during 31 December Note 1 January 2021 the year the year 2021 Short-term employee benefits (2) 3,733,572,462 18,689,911,958 (17,324,878,925) 5,098,605,495 Post-employment benefits - defined contribution plans (3) 21,628,033 1,142,227,556 (1,129,619,734) 34,235,855 Termination benefits 3,423,302 26,091,251 (29,200,666) 313,887 Total 3,758,623,797 19,858,230,765 (18,483,699,325) 5,133,155,237(2) Short-term employee benefits Balance at Balance at Accrued during Decrease during 31 December Salaries, bonuses, allowances 4,304,276,089 12,995,283,767 (15,610,071,500) 1,689,488,356 Staff welfare - 1,212,939,702 (1,212,939,702) - Social insurance 43,095,684 780,825,248 (778,894,329) 45,026,603 Medical insurance 38,317,039 720,094,785 (718,045,022) 40,366,802 Work-related injury insurance 2,583,340 44,668,965 (44,821,987) 2,430,318 Maternity insurance 2,195,305 16,061,498 (16,027,320) 2,229,483 Housing fund 33,089,973 946,098,096 (949,389,930) 29,798,139 Labour union fee, staff and workers’ education fee 697,018,542 370,534,929 (196,078,722) 871,474,749 Staff bonus and welfare fund 20,553,209 - - 20,553,209 Other short-term employee benefits 571,998 439,181 (982,887) 28,292 Total 5,098,605,495 16,306,120,923 (18,748,357,070) 2,656,369,348 Balance at Balance at Accrued during Decrease during 31 December Salaries, bonuses, allowances 3,184,794,255 15,851,656,348 (14,732,174,514) 4,304,276,089 Staff welfare - 1,087,174,457 (1,087,174,457) - Social insurance 32,667,412 612,771,541 (602,343,269) 43,095,684 Medical insurance 29,551,408 563,695,980 (554,930,349) 38,317,039 Work-related injury insurance 1,614,132 32,393,361 (31,424,153) 2,583,340 Maternity insurance 1,501,872 16,682,200 (15,988,767) 2,195,305 Housing fund 27,141,059 679,488,225 (673,539,311) 33,089,973 Labour union fee, staff and workers’ education fee 467,724,919 445,370,010 (216,076,387) 697,018,542 Staff bonus and welfare fund 20,553,209 - - 20,553,209 Other short-term employee benefits 691,608 13,451,377 (13,570,987) 571,998 Total 3,733,572,462 18,689,911,958 (17,324,878,925) 5,098,605,495(3) Post-employment benefits - defined contribution plans Balance at Balance at Accrued during Decrease during 31 December Basic pension insurance 30,284,940 1,408,163,207 (1,401,435,524) 37,012,623 Unemployment insurance 906,583 45,871,870 (45,457,632) 1,320,821 Annuity 3,044,332 189,183,986 (172,509,930) 19,718,388 Total 34,235,855 1,643,219,063 (1,619,403,086) 58,051,832 Balance at Balance at Accrued during Decrease during 31 December Basic pension insurance 19,052,829 1,055,978,182 (1,044,746,071) 30,284,940 Unemployment insurance 1,110,934 38,192,020 (38,396,371) 906,583 Annuity 1,464,270 48,057,354 (46,477,292) 3,044,332 Total 21,628,033 1,142,227,556 (1,129,619,734) 34,235,855 Value-added tax 142,337,422 101,448,944 Corporate income tax 287,859,236 1,266,575,648 Individual income tax 48,228,934 58,763,365 City construction tax 428,525,949 383,455,432 Education surcharges and local education surcharges 306,515,854 274,382,851 Others 117,933,793 115,623,065 Total 1,331,401,188 2,200,249,305 Note 2022 2021 Interest payable 151,200 126,701 Dividends payable 6,410,514 6,561,972 Others (1) 19,625,661,555 23,828,686,269 Total 19,632,223,269 23,835,374,942(1) Others (a) The Group’s other payables by category are as follows: Note 2022 2021 Projects and equipment 13,185,841,311 16,494,274,603 Fund transaction (Note) 3,130,038,067 3,077,116,568 Deferred VAT for imported equipment 196,440,706 927,825,520 Repurchase obligation of restricted shares V.39 753,440,228 835,215,390 Accrued water and electricity charges and freight 407,770,818 348,955,956 Security and deposits 505,702,125 537,788,828 External agency fee 172,851,477 193,251,964 Others 1,273,576,823 1,414,257,440 Total 19,625,661,555 23,828,686,269 The Group’s significant other payables aged over one year are payables of projects and equipment. Note: The other payables by the Group as at 31 December 2022 are amounts and interests due to original controlling shareholders of Nanjing Display Technology and Chengdu Display Sci-tech acquired in 2020, with interest rates of 2.175% and 0%. (b) The Group’s other payables by currency are as follows: Amount in Amount in original RMB/RMB original RMB/RMB currency Exchange rate equivalents currency Exchange rate equivalents RMB 13,336,886,237 16,157,489,471 USD 736,000,871 6.9646 5,125,951,666 857,826,112 6.3757 5,469,241,942 JPY 18,492,932,844 0.0524 969,029,681 38,321,236,336 0.0554 2,122,996,493 Other foreign currencies 193,793,971 78,958,363 Total 19,625,661,555 23,828,686,269 As at 31 December, the non-current liabilities due within one year for the Group were long- term loans due within one year, lease liabilities,long-term payables and contribution of non- controlling interests with redemption provisions. Credited/ collateralised Amount in RMB/RMB guaranteed/ Note original currency Exchange rate equivalents pledged Bank loans - RMB 117,008,022 Pledged - RMB 11,356,508,048 Collateralised - RMB 94,144,290 Guaranteed - RMB 5,528,984,741 Credited - USD 694,159,756 6.9646 4,834,545,037 Collateralised Sub-total 21,931,190,138 Long-term payables V.33 143,117,840 Lease liabilities V.60 118,302,766 Contribution of non-controlling interests with redemption provisions V.35 511,140,000 Total 22,703,750,744 Credited/ collateralised Amount in original RMB/RMB guaranteed/ Note currency Exchange rate equivalents pledged Bank loans - RMB 27,993,413 Pledged - RMB 7,544,963,177 Collateralised - RMB 1,718,446 Guaranteed - RMB 11,614,011,025 Credited - USD 1,136,473,175 6.3757 7,245,812,022 Collateralised - USD 63,796,480 6.3757 406,747,218 Guaranteed - EUR 141,129,872 7.2197 1,018,915,337 Credited - EUR 6,605,651 7.2197 47,690,819 Pledged Sub-total 27,907,851,457 Long-term payables V.33 520,546,343 Lease liabilities V.60 92,788,055 Contribution of non-controlling interests with redemption provisions V.35 353,772,859 Total 28,874,958,714 Item 2022 2021 Warranty provisions 3,368,859,501 3,595,808,261 Refund liability 101,672,253 141,997,964 Pending output VAT 139,462,782 216,565,073 Others 3,973,137 97,161,211 Total 3,613,967,673 4,051,532,509 The other current liabilities of the Group were warranty provision. The warranty provision mainly relates to the expected after-sales repair warranty to the customers. The provision is estimated by the Management, based on historical claim experience and current actual sales outcomes. Credited/ collateralised Amount in original RMB/RMB guaranteed/ Note currency Exchange rate equivalents pledged Bank loans - RMB 1,058,900,427 Pledged - RMB 49,363,519,760 Collateralised - RMB 4,326,076,807 Guaranteed - RMB 58,386,326,488 Credited - USD 4,586,027,388 6.9646 31,939,846,346 Collateralised Less: Long-term loans due within one year V.29 21,931,190,138 Total 123,143,479,690 Credited/ collateralised Amount in original RMB/RMB guaranteed/ Note currency Exchange rate equivalents pledged Bank loans - RMB 537,167,163 Pledged - RMB 54,546,276,790 Collateralised - RMB 3,703,662,752 Guaranteed - RMB 46,573,377,423 Credited - USD 5,747,119,917 6.3757 36,641,912,455 Collateralised - USD 101,494,400 6.3757 647,097,846 Guaranteed - EUR 12,407,013 7.2197 89,574,912 Pledged - EUR 172,784,008 7.2197 1,247,448,703 Credited Less: Long-term loans due within one year V.29 27,907,851,457 Total 116,078,666,587 (1) Debentures payable Item 2022 2021 Debentures payable - 359,586,437 Less: Debentures payable due within one year - - Total - 359,586,437(2) The movements of debenture payable: Amortisatio Balance at Increase n of Decrease due Balance at Maturity Issuance the beginning during the Interest at discounts or to disposal of Translation the end of the Debenture Face value Issuance date period amount of the year year face value premium subsidiaries differences year EUR EUR Euro PP 10,000,000 2016.12.29 7 years 10,000,000 71,955,154 - 2,268,020 95,736 (76,355,057) 2,036,147 - EUR EUR Euro PP 30,000,000 2017.03.29 6 years 30,000,000 216,118,687 - 6,804,060 353,720 (229,394,798) 6,118,331 - EUR EUR Euro PP 10,000,000 2019.07.22 6 years 10,000,000 71,512,596 - 2,948,426 158,190 (76,678,281) 2,059,069 - Total 359,586,437 - 12,020,506 607,646 (382,428,136) 10,213,547 - SES Imagotag SA Co., Ltd. (“SES”) issued two private placement bonds with a total face value of Euro 40 million to institutional investors on 29 December 2016 and 29 March 2017. The coupon rate of the bonds is 3.50% and the maturity date is 29 December 2023. Interest payments are made annually and the principle amount will be paid when the bonds become due. SES issued a private placement bond with a total face value of Euro 10 million to institutional investors on 22 July 2019. The coupon rate of the bond is 4.55% and the maturity date is 22 July 2025. Interest payments are made annually, and the principle amount will be paid when the bond becomes due. Item 2022 2021 Obligations under finance leases 372,704,917 1,427,139,181 Less: Obligations under finance leases due within one year 143,117,840 520,546,343 Total 229,587,077 906,592,838 As at 31 December 2022, the Group sold and leased back some of its machinery and equipment and construction in progress. Since asset sales and lease transactions are interrelated, and it is almost certain that they will be repurchased after the lease term expires, the Group conducts accounting treatment according to mortgage loans and presents them as long-term payables. Balance at the Amounts beginning of the Additions during recognised in Balance at the Item year the year other income Other changes end of the year Related to assets 3,865,273,297 704,986,506 (739,587,184) (32,283,470) 3,798,389,149 Related to income 2,550,816,314 2,610,333,056 (3,781,917,899) (21,273,288) 1,357,958,183 Total 6,416,089,611 3,315,319,562 (4,521,505,083) (53,556,758) 5,156,347,332 Item Note 2022 2021 Contribution of non-controlling interests with redemption provisions (1) 2,499,075,805 3,020,160,654 Deferred VAT for imported equipment - 479,505,410 Others - 36,143,812 Total 2,499,075,805 3,535,809,876(1) Contribution of non-controlling interests with redemption provisions The contribution of non-controlling interests with redemption provisions is mainly due to the redemption obligation of the Company to the non-controlling interests of Fuzhou BOE. The Company recognises the above non-controlling interests contribution as a financial liability which is subsequently measured at the cost of amortisation. The Company has an obligation to repurchase part of the equity of non-controlling interests of its subsidiary Fuzhou BOE on 29 September 2023, with the repurchase principal of RMB for the redemption obligation to non-current liabilities due within one year (Note V.29). Balance at the beginning of the Balance at the year Changes during the year end of the year Issuance of new Cancellation of shares treasury shares Sub-total Total shares 38,445,746,482 - (249,383,061) (249,383,061) 38,196,363,421 On 20 September 2022, the Company repurchased and cancelled 243,229,361 domestically listed foreign shares (B shares) at China Securities Depository and Clearing Corporation Limited Shenzhen Branch. After the repurchase and cancellation, the total share capital of the Company changed from 38,445,746,482 to 38,202,517,121 shares. On 14 October 2022, the Company repurchased and cancelled 6,153,700 shares of restricted shares at China Securities Depository and Clearing Corporation Limited Shenzhen Branch. After the repurchase and cancellation, the total share capital of the Company changed from 38,202,517,121 to 38,196,363,421 shares.(1) Financial instruments (including perpetual bonds) that remain outstanding at the end of the year are set out as follows: Maturity date or Conditions Outstanding financial Accounting Issuance renewal for Conversion instruments Issuance date classification Interest rate price Quantity Amount status conversion status Equity RMB Not Not Equity RMB Not Not Equity RMB Not Not Equity RMB Not Not Total 80 million RMB 8 billion (2) Major terms: On 29 October 2019, with the approval document No. 1801 [2019] of the China Securities Regulatory Commission (“CSRC”), the Company successfully issued a renewable corporate bond to qualified investors. The full name of the bond was Renewable Corporate Bond Publicly Issued by BOE Technology Group Co., Ltd. (to qualified investors) in 2019 (the First Phase), which referred to as 19BOEY1 (“2019 bond”); on 28 February 2020, 19 March 2020 and 27 April 2020, the Company issued renewable corporate bonds to qualified investors. The full name of these bonds was Renewable Corporate Bond Publicly Issued by BOE Technology Group Co., Ltd. (to qualified investors) in 2020, which referred to as 20BOEY1, renewable corporate bonds to qualified investors. The full name of these bonds was Renewable Corporate Bond Publicly Issued by BOE Technology Group Co., Ltd. (digital economy) in 2022 (the First Phase), which referred to as 22BOEY1 (“2022 bond”). Both 2019 bond, 2020 bond and 2022 bond have a base term of 3 years and take every three interest-bearing years as a period. The Company is entitled to choose to extend the maturity by 1 period at the end of the agreed base term or at the end of each extended period, or choose to fully redeem the 2019 bond, 2020 bond and 2022 bond at the end of the period. The nominal interest rate of the 2019 bond, 2020 bond and 2022 bond is fixed during the first period, and then is reset once every period. The nominal interest rate in the first period is the initial benchmark interest rate plus the initial spread, and the nominal interest rate in the subsequent period is adjusted to the current benchmark interest rate plus the initial spread and 300 basis points. Therefore, when the Company exercises the renewal option, the nominal interest rate will significantly increase, and the corresponding nominal interest will also increase sharply. The 2019 bond, 2020 bond and 2022 bond have an issuer’s right to defer the payment of interest. Unless a mandatory interest payment event occurs (including distributions to ordinary shareholders and decrease of registered capital). At each interest payment date of the bonds, the Company may choose at its discretion whether to defer the payment of the current interest as well as all the deferred interests and the yields under this term until the next interest payment date without being subjected to any limit on the number of interest deferring attempts. The 2019 bond with a three-year issuance period will expire on 28 October 2022. The Company has decided not to exercise the bond issuer’s option to renew the bond and has paid the principal and interest of the bond in full. As at 31 December 2022, the actual issuance of the 2020 bond and 2022 bond amounted to RMB 8,000,000,000 in total, and the Company considers that the renewable corporate bonds do not meet the definition of financial liabilities, and therefore will charge the total amount of the issuance to other equity instruments after deducting underwriting fees and other transaction costs.(3) Movement of the financial instruments (including perpetual bonds) that remain outstanding at the end of the year: Outstanding At the beginning of the year Additions during the year Decrease during the year Accumulated interest At the end of the year financial Carrying Carrying Carrying Charge for the Paid during Carrying instruments Quantity amount Quantity amount Quantity amount year the year Quantity amount Total 140,000,000 14,146,997,427 20,000,000 1,989,320,755 (80,000,000) (7,957,047,264) 530,695,890 (533,600,000) 80,000,000 8,176,366,808(4) Relevant information of amounts attributable to holders of equity instruments: Attributable to shareholders of the Company 136,089,410,395 143,204,240,947 - Equity attributable to ordinary shareholders of the Company 127,913,043,587 129,057,243,520 - Equity attributable to holders of the Company’s other equity instruments 8,176,366,808 14,146,997,427 Equity attributable to non-controlling shareholders 65,960,886,731 74,174,525,569 - Equity attributable to non-controlling ordinary shareholders 65,960,886,731 74,174,525,569 - Equity attributable to non-controlling shareholders of other equity instruments - - (5) Accrued interest on holders of other equity instruments In 2022, as the above-mentioned issued renewable corporate bonds are cumulative other equity instruments, the Company accrued interest of RMB 530,695,890 on renewable corporate bonds from undistributed profits and paid interest of RMB 533,600,000 on renewable corporate bonds. Other capital Item Note Share premium reserves Total Balance at the beginning of the year 53,380,787,828 536,821,266 53,917,609,094 Add: Changes in shareholding ratio of subsidiaries 1,135,268,806 - 1,135,268,806 Equity-settled share-based payment XI - 654,336,707 654,336,707 Other movements in equity of associates V.10 - 274,685,689 274,685,689 Cancellation of treasury shares (641,811,942) - (641,811,942) Others (42,952,736) (78,631,226) (121,583,962) Balance at the end of the year 53,831,291,956 1,387,212,436 55,218,504,392 Balance at the beginning of the Additions during Reductions during Balance at the Item year the year the year end of the year Treasury shares 3,415,768,207 1,048,154,539 (955,720,835) 3,508,201,911 According to the Proposal of Repurchase of Certain Domestically Listed Foreign Shares (B shares) by the Company deliberated on an item-by-item basis and adopted in the 39th meeting of the ninth session of the Board of Directors held on 30 March 2022 and the 2021 annual general meeting of shareholders held on 28 April 2022, the Company repurchased its shares through centralised price bidding transactions with a designated securities account for repurchase. The Company has repurchased the first batch of shares on 27 June 2022. By the delivery date 2 September 2022, the Company repurchased 243,229,361 B shares in total by paying total consideration of RMB 856,052,540. On 20 September 2022, the Company completed the repurchase and cancellation procedures at China Securities Depository and Clearing Corporation Limited Shenzhen Branch. The shortfall between the cancelled treasury shares and the share capital of RMB 612,823,179 is deducted from Capital reserve - Share premium. According to the Proposal of Repurchase of Certain Public Shares by the Company deliberated and adopted in the thirty-first meeting of the ninth session of the Board of Directors meeting held on 27 August 2021, the Company is allowed to use its own funds to repurchase certain of its shares through centralised price bidding transactions. The Company repurchased the shares for the first time on 2 September 2021. The Company has repurchased its shares by centralised price bidding transactions with a designated securities account for repurchase during 2022. The Company repurchased 39,580,919 A shares in total by paying total consideration of RMB 192,101,999. According to the Proposal of Repurchase and Cancellation of Certain Restricted Shares by the Company deliberated and adopted in the fifth meeting of the tenth session of the Board of Directors meeting held on 26 August 2022, the Company completed repurchase and cancellation of 6,153,700 restricted shares before 14 October 2022 at an average repurchased price of RMB 5.71/share. The corresponding reduction of the treasury shares are RMB 35,142,463, the shortfall between the cancelled treasury shares and the share capital of RMB 28,988,763 is deducted against Capital reserve—Share premium. In 2022, the Company recognised RMB 64,525,832 of restricted share dividends against Other payables—the Repurchased obligation of restricted shares (Note V. 28) and Treasury shares. Movements during the year Less: Amount Less: Transfer of Balance at the transferred Net-of-tax other Balance at the end end of previous from other Net-of-tax amount amount comprehensive of the year year attributable Less: comprehensive attributable to attributable to income to attributable to to shareholders Income tax income to profit shareholders of the non-controlling retained shareholders of the Item of the Company Before-tax amount expenses or loss Company interests earnings Company Items that will not be reclassified to profit or loss 34,424,335 (133,368,736) (453,661) - (132,915,075) - 22,781,941 (121,272,681) Including: Other comprehensive income recognised under equity method 207,633,206 (53,367,649) - - (53,367,649) - 32,873,780 121,391,777 Changes in fair value of investments in other equity instruments (173,208,871) (80,001,087) (453,661) - (79,547,426) - (10,091,839) (242,664,458) Items that may be reclassified to profit or loss 79,126,812 (1,011,198,322) - 13,903,395 (1,031,622,161) 6,520,444 - (952,495,349) Including: Other comprehensive income recognised under equity method (284,718) 63,317 - (64,550) 127,867 - - (156,851) Translation differences arising from translation of foreign currency financial statements 79,411,530 (1,011,261,639) - 13,967,945 (1,031,750,028) 6,520,444 - (952,338,498) Total 113,551,147 (1,144,567,058) (453,661) 13,903,395 (1,164,537,236) 6,520,444 22,781,941 (1,073,768,030) Balance at the beginning of the Additions during Others changes Balance at the Item year the year during the year end of the year Statutory surplus reserve 2,599,918,896 348,186,351 3,287,378 2,951,392,625 Discretionary surplus reserve 289,671,309 - - 289,671,309 Total 2,889,590,205 348,186,351 3,287,378 3,241,063,934 Item Note 2022 2021 Retained earnings at the beginning of the year (before adjustment) 37,106,514,799 15,509,794,622 Total adjustments for opening retained earnings (“+” for increase; “-” for decrease) - 35,577,201 Retained earnings at the beginning of the year (after adjustment) 37,106,514,799 15,545,371,823 Add: Net profits for the year attributable to shareholders of the Company 7,550,877,790 25,960,751,646 Less: Appropriation for statutory surplus reserve 348,186,351 439,649,657 Interest on holders of other equity instruments V.37 530,695,890 533,600,000 Dividends to ordinary shares 7,958,923,130 3,476,073,919 Transfer of other comprehensive income to retained earnings (a) (19,494,563) (49,714,906) Retained earnings at the end of the year 35,839,081,781 37,106,514,799 According to the Annual Shareholders’ Meeting for 2021 held on 28 April 2022, the Company distributed cash dividends to shareholders of A shares and B shares on 30 May 2022 (A shares) and 1 June 2022 (B shares), with RMB 2.1 (2021: RMB 1) every 10 shares and a profit distribution amount of RMB 7,961,342,043. Considering the turnover rate, the corresponding dividends of the expected non-exercisable portions of restricted shares are RMB 2,418,913 with a profit distribution of RMB 7,958,923,130 (2021: RMB 3,476,073,919). As at 31 December 2022, the consolidated retained earnings attributable to the Company included appropriation to surplus reserves made by the Company’s subsidiaries amounting to RMB 6,206,465,315 (2021: RMB 5,488,720,290). (a) The amounts both transferred from other comprehensive income to retained earnings which is associates’ gains from disposal of other equity instrument investments included in retained earnings and changes in the fair value of other equity instrument investments are carried out to retained earnings in 2022 are RMB 19,494,563 (2021: RMB 49,714,906). Item Income Cost Income Cost Principal activities 174,113,214,324 154,442,890,090 217,251,896,977 155,258,379,475 Other operating activities 4,300,516,855 3,087,676,062 3,783,821,035 2,040,446,306 Total 178,413,731,179 157,530,566,152 221,035,718,012 157,298,825,781 Including: Revenue from contracts with customers 177,667,655,331 157,352,470,042 220,166,407,207 157,114,068,547 Other income - Leases 746,075,848 178,096,110 869,310,805 184,757,234 Information on income of principal activities has been included in Note XIV. Revenue and the related costs of the Group"s sales before intended use are as follows: Relating to ordinary activities: Operating income 1,407,856,936 1,725,918,507 Operating costs 1,514,976,278 1,313,600,486 Property tax 561,061,660 502,150,698 City maintenance and construction tax 268,999,607 386,889,711 Education surcharges and local education surcharges 193,572,818 278,848,244 Stamp duty 167,033,833 168,092,921 Land use tax 50,378,527 49,797,281 Others 34,124,894 38,426,971 Total 1,275,171,339 1,424,205,826 Warranty provisions 2,390,095,031 3,417,085,420 Staff costs 1,112,021,277 1,350,848,641 Share-based payments 97,853,078 75,191,185 Others 633,320,911 641,464,732 Total 4,233,290,297 5,484,589,978 Staff costs 3,251,030,370 3,810,075,453 Repair expense 68,934,663 94,713,646 Depreciation and amortisation 971,573,303 931,978,993 Share-based payments 238,162,832 218,406,816 Others 1,717,935,838 1,638,198,681 Total 6,247,637,006 6,693,373,589 Staff costs 4,601,448,025 5,065,671,981 Material expenses 1,907,254,468 1,678,488,408 Depreciation and amortisation 2,000,893,037 1,913,242,133 Share-based payments 269,690,937 241,880,815 Others 2,321,482,210 1,717,142,990 Total 11,100,768,677 10,616,426,327 Interest expenses from loans 4,033,749,371 5,219,339,546 Less: Borrowing costs capitalised 461,537,933 352,561,213 Interest income from bank deposits (1,483,022,892) (1,050,431,325) Exchange losses / (gains) 258,458,498 (248,019,022) Other financial expenses 97,483,531 114,051,216 Total 2,445,130,575 3,682,379,202 The interest rate per annum, at which the borrowing costs were capitalised by the Group, was 3.25% - 4.25% (2021: 0.76% - 3.24%) for the year. Government grants related to assets 739,587,184 507,320,798 Government grants related to income 4,717,326,643 1,567,752,188 Others 28,615,497 17,692,742 Total 5,485,529,324 2,092,765,728 The amount of government subsidies related to income received by the Group in 2022 and directly included in other income was RMB 935,408,744. Note 2022 2021 Income from long-term equity investments accounted for using the equity method V.10 528,103,680 1,245,036,895 Investment income from disposal of long- term equity investments VI.1 829,872,568 37,327,797 Dividend income from investments in other equity instruments V.11 35,354,468 24,695,749 Including: Dividend income from investments in other equity instruments held at the balance sheet date 35,354,468 24,695,749 Investment income from disposal of financial assets held for trading 116,153,975 36,689,179 Investment income from disposal of debt investments - 3,739,725 Gains from remeasurement of remaining equity interests to fair value upon loss of control VI.1 4,266,631,856 - Others 318,151,337 - Total 6,094,267,884 1,347,489,345 Item 2022 2021 Financial assets held for trading 159,344,584 84,966,963 Item 2022 2021 Accounts receivable 49,897,296 28,250,160 Other receivables 1,679,930 159,709 Total 51,577,226 28,409,869 Impairment losses of inventories 6,975,372,718 3,437,630,440 Impairment losses of fixed assets 143,071,492 675,831,912 Impairment losses of construction in progress 29,768,263 83,037,514 Impairment losses of long-term equity investments 8,503,403 2,009,770 Impairment losses of goodwill 147,755,754 279,742,216 Total 7,304,471,630 4,478,251,852 Amount recognised in extraordinary gain and loss in Item 2022 2021 2022 Gains from the disposal of assets held for sale - 156,565,635 - Gains / (losses) from disposal of fixed assets 7,963,317 (4,596,757) 7,963,317 Gains from disposal of intangible assets - 29,726 - Losses from disposal of construction in progress - (94,570) - Gains from disposal of right-of-use assets 3,002,239 1,601,757 3,002,239 Total 10,965,556 153,505,791 10,965,556(1) Non-operating income by item is as follows: Amount recognised in extraordinary gain and loss in Item 2022 2021 2022 Government grants 1,751,445 2,464,320 1,751,445 Others 161,491,412 129,143,626 161,491,412 Total 163,242,857 131,607,946 163,242,857 Government grants recognised in profit or loss for the current period Item 2022 2021 Policy incentives and others 1,751,445 2,464,320(2) Non-operating expenses Amount recognised in extraordinary gain and loss in Donations provided 28,491,697 4,901,023 28,491,697 Losses from scrapping of non-current assets 17,322,542 18,096,305 17,322,542 Others 41,435,304 32,217,774 41,435,304 Total 87,249,543 55,215,102 87,249,543 Note 2022 2021 Current tax expense based on tax law and regulations 1,675,605,623 4,072,640,975 Changes in deferred tax assets/liabilities (1) 112,788,484 115,330,429 Total 1,788,394,107 4,187,971,404(1) The analysis of changes in deferred tax assets/liabilities is set out below: Origination and reversal of temporary differences 112,788,484 115,330,429(2) Reconciliation between income tax expenses and accounting profit: Profit before taxation 51,218,939 35,084,376,259 Expected income tax expenses at tax rate of 15% 7,682,841 5,262,656,439 Add: Effect of different tax rates applied by subsidiaries (14,751,718) 54,451,529 Effect of non-deductible costs, expenses and losses 315,429,605 236,708,708 Tax effect of weighted deduction and tax preference (2,652,168,644) (1,428,917,005) Utilisation of prior year tax losses (49,695,309) (1,690,731,054) Tax effect of deductible losses of deferred tax assets not recognised 4,456,877,895 815,217,892 Tax effect of deductible temporary differences of deferred tax assets not recognised (274,980,563) 1,006,609,982 Effects of tax rate changes on deferred tax - (68,025,087) Income tax expenses 1,788,394,107 4,187,971,404 In accordance with the Announcement of the Ministry of Finance, the State Taxation Administration and the Ministry of Science and Technology on Increasing Efforts for Pre-tax Deduction to Support Scientific and Technological Innovation (Announcement [2022] No.28 of the Ministry of Finance and the State Taxation Administration), high-tech enterprises are allowed to deduct the full amount of equipment and appliances newly purchased during the period from 1 October 2022 to 31 December 2022 from the taxable income amount on a one- off basis in the current year and allowed to conduct 100% weighted deduction before tax. Basic earnings per share is calculated as dividing consolidated net profit attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding. The Group does not have any potential dilutive ordinary shares for the listed years. Consolidated net profit attributable to shareholders of the Company 7,550,877,790 25,960,751,646 Less: Current interest of other equity instruments 530,695,890 533,600,000 Less: Current dividends of restricted shareholders 64,525,832 31,234,036 Consolidated net profit attributable to ordinary shareholders of the Company 6,955,656,068 25,395,917,610 Weighted average number of ordinary shares outstanding (shares) 37,502,641,911 35,704,986,088 Basic earnings per share (RMB/share) 0.19 0.71 Weighted average number of ordinary shares is calculated as follows: Issued ordinary shares at the beginning of the year 37,638,356,849 34,448,398,830 Add: Weighted average number of ordinary shares issued in current period - 1,330,137,380 Less: Weighted average number of ordinary shares repurchased in current period 135,714,938 73,550,122 Weighted average number of ordinary shares at the end of the year 37,502,641,911 35,704,986,088(1) Supplement to cash flow statement (a) Reconciliation of net (loss) / profit to cash flows from operating activities: Net (loss) / profit (1,737,175,168) 30,896,404,855 Add: Credit losses 51,577,226 28,409,869 Impairment loss 7,304,471,630 4,478,251,852 Depreciation of fixed assets, investment properties and right-of- use assets 33,422,031,705 33,432,161,074 Amortisation of intangible assets 995,315,014 1,185,263,603 Amortisation of long-term deferred expenses 83,058,206 130,732,527 Gains from disposal of fixed assets, intangible assets, and other long- term assets (10,965,556) (154,943,108) Losses from scrapping of fixed assets and intangible assets 15,873,895 18,096,305 Financial expenses 4,070,314,610 4,521,336,008 Gains from changes in fair value (159,344,584) (84,966,963) Investment income (6,094,267,884) (1,347,489,345) Share-based payments 649,427,866 640,692,637 Change in deferred income (1,259,742,279) 2,177,609,983 Change in deferred tax assets 25,329,486 14,705,564 Change in deferred tax liabilities 136,748,088 100,681,820 Increase in inventories (3,360,776,944) (13,376,494,050) Decrease / ( increase) in operating receivables 7,975,232,270 (8,905,074,070) Increase in operating payables 914,859,724 8,943,309,995 Net cash flows from operating activities 43,021,967,305 62,698,688,556 (b) Change in cash and cash equivalents: Cash and cash equivalents at the end of the year 64,382,037,764 76,623,486,083 Less: Cash and cash equivalents at the beginning of the year 76,623,486,083 68,064,736,371 Net (decrease) / increase in cash and cash equivalents (12,241,448,319) 8,558,749,712(2) Information on acquisition or disposal of subsidiaries during the current year: Information on acquisition of subsidiaries: Cash or cash equivalents paid during the year for acquiring subsidiaries during the year - (5,916,812) Less: Cash and cash equivalents held by acquired subsidiaries - (3,101,277) Net payment for acquisition of subsidiaries - (2,815,535) Information on disposal of subsidiaries: Cash or cash equivalents received during the year for disposing of subsidiaries during the year 1,248,072,000 - Less: Cash and cash equivalents held by acquired subsidiaries 311,313,078 - Net cash received for disposing of subsidiaries 936,758,922 - Cash or cash equivalents received during the year for disposing of subsidiaries during the year - 88,028,400 Less: Cash and cash equivalents held by acquired subsidiaries 144,689,766 248,916,397 Net payment for disposal of subsidiaries (144,689,766) (160,887,997)(3) Details of cash and cash equivalents Cash on hand 896,267 451,975 Bank deposits available on demand 64,378,531,680 76,549,790,015 Other monetary funds available on demand 2,609,817 73,244,093 Closing balance of cash and cash equivalents 64,382,037,764 76,623,486,083 Note: The cash and cash equivalents disclosed above do not include the interest accrued on bank deposits at the end of the period and the use of other currency funds subject to restrictions. Balance at the beginning of the Additions during Decreases during Balance at the end Item year the year the year of the year Reason for restriction Mainly deposits, pledged for Cash at bank and on hand 4,152,705,165 2,382,241,772 (2,507,588,393) 4,027,358,544 drawing bills payable Endorsed with resource and Bills receivable 23,902,855 28,239,380 (23,902,855) 28,239,380 pledged for drawing bill Investment properties 41,247,205 - (1,529,204) 39,718,001 Mortgaged as collateral Fixed assets 171,435,160,686 2,484,511,825 (33,500,815,134) 140,418,857,377 Mortgaged as collateral Construction in progress 316,234,570 17,494,722,323 (15,759,854,976) 2,051,101,917 Mortgaged as collateral Intangible assets 1,623,510,499 - (162,384,713) 1,461,125,786 Mortgaged as collateral Total 177,592,760,980 22,389,715,300 (51,956,075,275) 148,026,401,005 (1) As a lessee Right-of-use assets Plant & buildings Equipment Others Total Cost Balance at the beginning of the year 567,247,967 107,357,735 192,885,015 867,490,717 Additions during the year 229,346,204 15,740,262 5,538,270 250,624,736 Decrease due to disposal of subsidiaries (49,677,267) - - (49,677,267) Decreases during the year (80,820,628) (107,136,932) - (187,957,560) Translation differences 20,192,444 - - 20,192,444 Balance at the end of the year 686,288,720 15,961,065 198,423,285 900,673,070 Accumulated depreciation Balance at the beginning of the year 82,687,553 22,013,731 9,625,196 114,326,480 Charge for the year 146,686,766 4,393,747 10,482,467 161,562,980 Decrease due to disposal of subsidiaries (15,326,483) - - (15,326,483) Decreases during the year (24,030,120) (25,897,396) - (49,927,516) Translation differences 2,916,663 - - 2,916,663 Balance at the end of the year 192,934,379 510,082 20,107,663 213,552,124 Provision for impairment Balance at the beginning of the year and at the end of the year - - - - Carrying amount Carrying amount at the end of the year 493,354,341 15,450,983 178,315,622 687,120,946 Carrying amount at the beginning of the year 484,560,414 85,344,004 183,259,819 753,164,237 Lease liabilities Item Note 31 December 2022 1 January 2022 Long-term lease liabilities 656,888,776 761,918,319 Less: lease liabilities due within one year V.29 118,302,766 92,788,055 Total 538,586,010 669,130,264 In 2022, the Group, as the lessee, chooses the simplified treatment method for short-term lease expenses, low-value asset lease expenses and the amount of income obtained from sublease of right-of-use assets is not significant.VI. Change of consolidation scope Disposal of investments in subsidiaries through a single transaction resulting in loss of control Investment income or loss transferred Difference from other between Gain or loss comprehensi consideration Proportion Carrying from Method and ve income received and the of remaining amount of Fair value of remeasureme key related to related share of shareholdin remaining remaining nt of assumptions previous net assets in g on the equity equity remaining for determining equity Shareholding Date of Basis for consolidated date of interests on interests on equity the fair value investments being Disposal losing determining date financial losing the date of the date of interests to of remaining in Name of enterprise Disposal price disposed (%) method control of losing control statements control losing control losing control fair value equity interests subsidiaries Equity delivery and completing changes in the Asset BOE Digital Technology Co., Equity 31 August Articles of appraisal Ltd. 129,500,000 51% replacement 2022 Association 62,130,573 15% 19,794,533 38,081,355 18,286,822 report - Completing re- Transactions election of The stock within the 28 members of the closing price secondary November Board of when control is SES Imagotag SA Co., Ltd. 1,248,072,000 9.51% market 2022 Directors 753,774,050 32.56% 623,492,148 4,871,837,182 4,248,345,034 lost 13,967,945 Wisdom IOT. During the year, SES made contributions to BOE Art Cloud Technology Co., Ltd.which is an associate of the Group with its Digital Technology. In the consolidated financial statements, the long-term equity investment is re-measured at its fair value at the date when control is lost. shares of SES on November 25, 2022. After the sale was completed, Smart Retail"s shareholding percentage in SES dropped from Board of Directors, therefore, Smart Retail no longer has a majority vote on the Board of Directors of SES, the Group has lost control of SES. In the consolidated financial statements, the long-term equity investment is re-measured at its fair value at the date when control is lost. During the year, the Company newly established three tier-one subsidiaries, namely BOE Environmental Energy Technology Co., Ltd., Chengdu BOE Display Technology Co., Ltd., and Beijing BOE Chuangyuan Technology Co., Ltd. ("Chuangyuan Technology").VII. Interests in other entities(1) Composition of the Group Shareholding (or similar equity interest) percentage Principal place of Registered Name of the subsidiary business place Business nature Registered capital Direct Indirect Acquisition method Beijing BOE Optoelectronics Beijing, Research and development (“R&D”), design and manufacturing USD Founded by Technology Co., Ltd. China Beijing, China of TFT-LCD 649,110,000 - 100% investment Business combinations Chengdu BOE Optoelectronics Chengdu, Chengdu, R&D, design, manufacturing, and sale of new display devices RMB involving entities not Technology Co., Ltd. China China and components 25,000,000,000 100% - under common control Investment, construction, R&D, production and sales of the Business combinations Hefei BOE Optoelectronics Technology Hefei, relevant products of thin film transistor LCD and its auxiliary RMB involving entities not Co., Ltd. China Hefei, China products 9,000,000,000 100% - under common control Beijing BOE Display Technology Co., Beijing, RMB Founded by Ltd. China Beijing, China Development of TFT-LCD, manufacturing and sale of LCD 17,882,913,500 97.17% 2.83% investment Investment, construction, R&D, production and sales of the Business combinations Hefei Xinsheng Optoelectronics Hefei, relevant products of thin film transistor LCD and its auxiliary RMB involving entities not Technology Co., Ltd. China Hefei, China products 19,500,000,000 99.97% 0.03% under common control Ordos, Ordos Yuansheng Optoelectronics Co., China Ordos, China Manufacture and sales of AM-OLED products and auxiliary RMB Founded by Ltd. products 11,804,000,000 100% - investment R&D, production and sales of semi-conducting display devices, Business combinations Chongqing BOE Optoelectronics Chongqing, Chongqing, complete machine and related products; import & export of RMB involving entities not Technology Co., Ltd. China China goods and technology consulting 19,226,000,000 100% - under common control Investment, construction, R&D, production and sales of the relevant products of thin film transistor LCD and its auxiliary products (separate business site); self-support and agency for the import and export of various goods and technologies, except those goods and technologies that are restricted by the country or prohibited from import and export; business management consulting and services; property leases; machinery and equipment leases; technology development, transfer, consulting and services related to LCD products (For business activities subject to approval in accordance with laws Business combinations Fuzhou BOE Optoelectronics Fuzhou, Fuzhou, and regulations, operations may be conducted only with the RMB involving entities not Technology Co., Ltd. China China approval of the relevant government authorities). 17,600,000,000 83.24% - under common control Beijing BOE Video Technology Co., Ltd. Beijing, RMB Founded by (“BOE Video”) China Beijing, China Investment platform, sales of LCD 4,424,095,800 100% - investment Shareholding (or similar equity interest) percentage Principal place of RegisteredName of the subsidiary business place Business nature Registered capital Direct Indirect Acquisition methodBeijing BOE Vacuum Electronics Co., Beijing, RMB Founded by Ltd. China Beijing, China Manufacture and sale of vacuum electronic products 33,250,000 57.89% - investmentBeijing BOE Vacuum Technology Co., Beijing, RMB Founded by Ltd. China Beijing, China Manufacture and sale of electronic tubes 32,000,000 100% - investment Beijing, Management of engineering projects; real estate development; RMB Founded byBeijing Yinghe Century Co., Ltd. China Beijing, China public parking lot for motor vehicles service; market survey 233,105,200 100% - investmentBOE Optical Science and technology Suzhou, Suzhou, R&D, production and sales of LCD, back light for display and RMB Founded by Co., Ltd. China China related components 826,714,059 95.17% - investmentBOE Hyundai LCD (Beijing) Display Beijing, Development, manufacture and sale of liquid display for mobile USD Founded by Technology Co., Ltd. China Beijing, China termination 5,000,000 75% - investmentBOE (Hebei) Mobile Technology Co., Langfang, Langfang, Manufacture and sale of mobile flat screen display technical RMB Founded by Ltd. China China products and related services 1,358,160,140 100% - investment Design, consultancy and service of solar cell, photovoltaicBeijing BOE Energy Technology Co., Beijing, system, wind power system and solar thermal system as well RMB Founded by Ltd. China Beijing, China as the assembly units; energy-saving service 1,242,690,058 68.40% - investment Technology development, technology transfer, technology consulting and technology services; sales of computer software, hardware and auxiliary equipment, digital video and audio technology products, electronic digital products, video telephone, mobile phones and spare parts, hardware (excluding electric bicycle), household appliances, photographic equipment, sporting goods, Class I medical devices, lamps, stationery, cosmetics, bathroom appliances, knitwear and textile, clothing, daily necessities, timepieces, glasses, toys and food; equipment maintenance; import and export of goods; basic software services; application software service; machinery and equipment leases; design, production, agency and publication of advertisements. (Market participants independently select the business activities and carry out the business activities in accordance with laws and regulations; sales of food and business activities subject to approval in accordance with laws and regulations, operations may be conducted only with the approval of relevant governmentBeijing BOE Multimedia Technology Beijing, authorities; business activities prohibited and restricted by the RMB Founded by Co., Ltd. China Beijing, China industrial policies of the state and the city.) 400,000,000 100% - investment Beijing, Technology promotion services, property management, sales of RMB Founded byBeijing BOE Life Technology Co., Ltd. China Beijing, China electronic products 24,000,000 100% - investment Shareholding (or similar equity interest) percentage Principal place of RegisteredName of the subsidiary business place Business nature Registered capital Direct Indirect Acquisition method Ordos,Ordos City Haosheng Energy China Ordos, China RMB Founded by Investment Co., Ltd. Energy investment 30,000,000 - 100% investment Processing, manufacturing and sales of precision electronic components, semi-conductor devices, micro modules, Beijing, microelectronic devices and electronic materials; import & RMB Founded byBOE Semi-conductor Co., Ltd. China Beijing, China export of goods 11,250,000 84% - investment Hong Kong, British Virgin USD Founded byBOE Optoelectronics Holding Co., Ltd. China Islands Investment holding 1,000,000,000 100% - investment KRW Founded byBOE (Korea) Co., Ltd. Korea Korea Wholesale and retail trade 95,000,000 100% - investment Business combinationsBOE Healthcare Investment & Beijing, RMB involving entities not Management Co., Ltd. China Beijing, China Investment management and project investment 7,300,000,000 100% - under common control Colour TV set, display tube, colour RPTV projection tube and Business combinations Beijing, materials of electronic components; property management and RMB involving entities notBeijing Matsushita Colour CRT Co., Ltd. China Beijing, China parking services, etc. 325,754,049 88.80% - under common control Business combinationsHefei BOE Display Technology Co., Hefei, Investment, R & D and production of products related to TFT- RMB involving entities not Ltd. China Hefei, China LCD and the supporting facility 24,000,000,000 8.33% - under common controlBeijing BOE Technology Development Beijing, RMB Founded by Co., Ltd. China Beijing, China Development, transfer, consulting and service of technology 1,000,000 100% - investmentHefei BOE Zhuoyin Technology Co., Hefei, Investment, construction, R&D, production and sales of RMB Founded by Ltd. China Hefei, China products related to OLED display device and auxiliary products 800,000,000 75% - investment Development, construction, property management and supporting service of industrial plants and supporting facilities; information consulting of real estate; lease of commercial Beijing, facilities, commercial attendants and the supporting service RMB Founded byBeijing BOE Real Estate Co., Ltd. China Beijing, China facilities; motor vehicles public parking service 55,420,000 70% - investment Sales of communication equipment, hardware & software of computer and peripheral units, electronic products, equipment maintenance; development, transfer, consulting and service providing of technologies; import & export of goods and Beijing, technologies, agency of import & export; manufacturing RMB Founded byBeijing BOE Marketing Co., Ltd. China Beijing, China consignment of electronic products and LCD devices 50,000,000 100% - investment Shareholding (or similar equity interest) percentage Principal place of RegisteredName of the subsidiary business place Business nature Registered capital Direct Indirect Acquisition methodBeijing Zhongxiangying Technologies Beijing, Technology promotion services, property management, sales of RMB Founded by Co., Ltd. China Beijing, China electronic products 109,767,000 91.10% - investment Development, promotion, transfer, consultation and services of display technology; computer software, hardware and network system services; the construction, operations and management of e-commerce platform; product design; conference services; undertaking exhibitions and presentation activities; computer animation design; production, R&D and sales of OLED microdisplays and AR/VR whole widget; warehousing services; Project investments and management of the invested projects;Yunnan Invensight Optoelectronics Kunming, Kunming, import and export of goods and technologies; property leases, RMB Founded by Technology Co., Ltd. China China machinery and equipment leases 3,040,000,000 79.10% - investment R&D, production and sales of flexible AMOLED, the products Business combinations are mainly involvingMianyang BOE Optoelectronics Mianyang, Mianyang, used in smart phones, wearable devices, car display, AR/VR, RMB entities not under Technology Co., Ltd. China China etc. 26,000,000,000 83.46% - common control Formation of X-ray sensors, microfluidic chips, biochemical chips, gene chips, security sensors, microwave antennas, biosensors, logistics network technology and otherBeijing BOE Sensing Technology Co., Beijing, semiconductor sensors, technology testing, technical RMB Founded by Ltd. China Beijing, China consulting, technical services, technology transfer 4,651,482,400 100% - investment Business combinations involvingWuhan BOE Optoelectronics Wuhan, Investing, researching, manufacturing and selling TFT-LCD RMB entities not under Technology Co., Ltd. China Wuhan, China products and accessory products 26,000,000,000 47.14% - common control Business combinations R&D, manufacture and sales of semiconductor display devices, involvingChongqing BOE Display Technology Chongqing, Chongqing, whole widget and relevant products, import and export of goods RMB entities not under Co., Ltd. (“Chongqing BOE Display”) China China and technical consulting 21,124,724,750 38.46% - common control R&D, production and sale of TFT-LCD panels, colour filters and LCD whole-widget modules; providing products and business- Business combinations related services, as well as other business activities related to involvingNanjing BOE Display Technology Co., Nanjing, Nanjing, the above; import and export of proprietary and agent RMB entities not under Ltd. China China commodities and technologies 17,500,000,000 80.83% - common control Shareholding (or similar equity interest) percentage Principal place of RegisteredName of the subsidiary business place Business nature Registered capital Direct Indirect Acquisition methodHefei BOE Xingyu Technology Co., Ltd. Hefei, R&D, production and sales of Mini LED backlight components USD Founded by (“Hefei Xingyu”) China Hefei, China and Mini LED display module components 115,380,000 63.77% - investment R&D, production and sales of semiconductor display device- related products and related products; import or export of goods or technology; display device and component, other electronic components, and technology development, technology transfer, technical consulting, related fields related to display devices Business combinations and electronic products, technical services; business involvingFuzhou BOE Display Technology Co., Fuzhou, Fuzhou, management consulting; property management; house rental; RMB entities not under Ltd. (“Fuzhou BOE Display”) China China machinery and equipment rental 50,000,000 43.46% - common control Beijing, RMB Founded byBOE Innovation Investment Co., Ltd. China Beijing, China Project investment and investment management 800,000,000 100% - investment General businesses: technical services, technology development, technology consulting, technical exchange, technology transfer, technology promotion; manufacturing of display devices [operations of branches]; sale of display devices; manufacturing of electronic components [operations of branches]; wholesale of electronic components; manufacturing of others electronic devices [operations of branches]; import and export of goods; import and export of technology; business management consulting; property management; non-residential real estate leasing; machinery and equipment leasing. (Except for business activities subject to approval in accordance withChengdu BOE Display Techlogy Co., Chengdu, Chengdu, laws and regulations, operations are conducted in accordance RMB Founded by Ltd. China China with the law and business license.) 10,000,000 52.63% - investment Technology development, technology consulting, technology transfer, technology services; software development; basic software services; application software services; computer system services; internet data services (data centres in Internet data services, excluding cloud computing data centres with a PUE over 1.4); information processing and storage support services; general construction contracting, professional contracting, labour subcontracting; installation, maintenance and lease of equipment; literary and artistic creation; computer animation design; product design; enterprise management; Beijing, enterprise management consulting; sales of computer, software RMB Founded byBOE Mled Technology Co., Ltd. China Beijing, China and auxiliary equipment, electronic products. 950,000,000 100% - investment Provision of hardware and software integrated system solutions for the IoT market segment; intelligent city, intelligent transport, Beijing, intelligent finance, intelligent park and the display terminal RMB Founded byBOE Smart Technology Co., Ltd. China Beijing, China products such as the intelligent all-in-one machines 6,521,250,000 100% - investment Shareholding (or similar equity interest) percentage Principal place of RegisteredName of the subsidiary business place Business nature Registered capital Direct Indirect Acquisition method Technology development, technology consulting, technology services, technology transfer and technology promotion; software development; basic software services; application software services; computer system services; sales of stationery items, sporting goods, household appliances and electronic products; business management; market research; economic and trade consulting; business management consulting; education consulting; public relations services; corporate image planning; exhibition and presentation activities; conference services; research and experimental development in the natural sciences; research and experimental development in engineering and technology; agricultural scientific research and experimental development; medical research and experimental development; copyright agency; arts and crafts creation services. (Market participants independently select the business activities and carry out the business activities in accordance with laws and regulations; sales of food and business activities subject to approval in accordance with laws and regulations, operations may be conducted only with the approval of relevant government authorities; business Beijing, activities prohibited and restricted by the industrial policies of RMB Founded byBOE Education Technology Co., Ltd. China Beijing, China the state and the city.) 55,000,000 100% - investment Technology development, technology services; application software services; basic software services; sales of daily necessities, fresh fruit, fresh vegetables, primary edible agricultural products, household appliances, electronic products and sporting goods; trade agency; translation services; conference services; organisation of cultural and artistic interchange activities (excluding shows); exhibition and presentation activities; design, production, agency and publication of advertisements; enterprise management; market research; real estate information consulting; warehousing services; public relations services; health management, health consulting (excluding diagnosis and treatment activities subject to the approval); ticket agency; hotel booking agency; airline ticket sales agency; railway and passenger ticket agency services; tourism consulting; hotel management; automobile leases; property management; public parking services for motor vehicle; landscaping management; cleaning services; import and export of goods, import and export agency, import and export of technologies; car decoration; operation of sporting events (excluding high-risk sports); accommodation (branch operation only); catering services (branch operation only); beauty services, hairdressing services (branch operation only); medical services (branch operation only); family services (branch operation only); inbound tourism business; sales of food; internet information services. (Market participants independently select the business activities and carry out the business activities in accordance with laws and regulations; sales of food and business activities subject to approval in accordance with laws and regulations, operations may be conducted only with the approval of relevant governmentDongfang Chengqi (Beijing) Business Beijing, authorities; business activities prohibited and restricted by the RMB Founded by Technology Co., Ltd. China Beijing, China industrial policies of the state and the city.) 10,000,000 100% - investment Shareholding (or similar equity interest) percentage Principal place of RegisteredName of the subsidiary business place Business nature Registered capital Direct Indirect Acquisition method Technology development, technology consulting, technology transfer, technology promotion, technical services, technical testing of energy-saving technology, environmentally friendly new energy technology, environmental protection equipment, solar electrical energy generation, building integrated PV, electric power, power station operations and maintenance; software development; Internet data services (data centers for Internet data services, excluding cloud computing data centres with a PUE over 1.4); information processing and storage support services (data centers for information processing and storage support services, excluding cloud computing data centres with a PUE over 1.4); contract energy management; water pollution treatment; air pollution control; solid waste treatment; soil pollution treatment and restoration services; environmental protection monitoring; installation, maintenance, leasing of equipment; professional design services; property management; sale of special equipment for environment protection, lighting equipment, electronic products, machinery and equipment, electrical equipment, instruments, hardware products, computers, software and auxiliary equipment, chemical products (excluding licensed chemical products); import and export of goods; import and export of technology; import and export agents; power supply business; construction engineering design; electrical installation services; various engineering and construction activities; EPC of houseBOE Environmental Energy Technology Beijing, construction and municipal infrastructure projects; construction RMB Founded by Co., Ltd. China Beijing, China labour subcontracting. 100,000,000 100% - investment R&D, production and sales of TFT-LCD panels and modules,Chengdu BOE Display Sci-tech Co., liquid crystal display monitors, televisions, instruments, Business combinations Ltd. (formerly known as “Chengdu machinery equipment and accessories as well as provision of involving CEC Panda FPD Technology Co., Chengdu, Chengdu, technical services; foreign trade in form of import and export of RMB entities not under Ltd.”) China China goods and technology 21,550,000,000 35.03%

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