Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Guangdong Dongfang Precision Science & Technology Co. Ltd.Annual Report 2024

【Date of Disclosure】18 March 2025Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Message to Our Shareholders

With the past year being a fruitful one we are ready to embrace a new chapter.

2024 marked the beginning of a global economic shift and restructuring. Amid the

convergence of multiple variables the upgrading of traditional industries driven by technological

innovation and the artificial intelligence revolution shaped the path for global development.In this transformative era Dongfang Precision has steadfastly implemented its “1+N”development strategy and the path of “the principal businesses as the core + extended investment asthe support”. Through the dual engines of organic growth and external expansion we continue to

strengthen our position in the global high-end equipment manufacturing sector while actively

advancing in technology.At the same time we have proactively anticipated industrial transformation trends making

forward-looking investments in fields such as robotics artificial intelligence nuclear power and

aerospace. These investments have infused cutting-edge technological innovation into Dongfang

Precision driving us to accelerate our evolution and gradually realize the transition from intelligent

equipment manufacturing to the high-quality development of digital intelligence as well as

achieving a comprehensive breakthrough in our “digital and intelligent” strategy.In 2024 Dongfang Precision achieved total operating revenue of RMB4.78 billion a net profit

of RMB500 million and a peak market value exceeding RMB20 billion presenting a report to all

shareholders that reflects both strategic stability and innovative breakthroughs.Sustained Advancement of Dual Main Businesses Strengthening the Foundation

Since its founding 29 years ago Dongfang Precision has remained focused on the high-end

equipment manufacturing sector and continuously expanded both upstream and downstream along

the industrial chain with the empowerment of the capital markets. Through years of experience we

have developed strategic management and deep integration capabilities in our core business sectors

achieving efficient integration of our acquisition activities and continuously generating synergistic

effects within the industrial chain.In the field of intelligent packaging equipment we have built a comprehensive industrial chain

that encompasses smart corrugated packaging equipment digital printers and industrial Internet

industry solutions alongside a global network for research manufacturing and sales. We have been

1 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

at the forefront of driving digital and intelligent transformation continuously enhancing the

technological content and added value of our products.In 2024 Dongfang Precision’s intelligent packaging equipment segment achieved a record

high in annual revenue. Our market share in smart corrugated packaging equipment continued to

rank first in China and second globally. The high-end brand Fosber saw its market share in North

America surpass 50%. Despite rising supply chain cost pressures and heightened global market

fluctuations we successfully strengthened our global leadership position in intelligent packaging

machinery becoming a trusted industry benchmark and preferred partner for international

customers.In the field of water powersports equipment we overcame key technological challenges in

outboard motors and officially launched and mass-produced a 300-horsepower gasoline outboard

motor that meets international advanced standards. This marks another significant achievement for

Dongfang Precision following our successful breakthroughs in 2021 and 2023 when we disrupted

the long-standing monopoly of American and Japanese brands in the 115-horsepower and 130-

horsepower gasoline outboard motor markets.Currently international competition has entered deeper waters and China is gradually

transitioning from “passive defense” to “active breakthrough”. Domestic substitution is

accelerating. In this context companies that can break foreign technological blockades will benefit

from both industry growth and domestic substitution. As a representative of the rise of domestic

outboard motor brands we will leverage our solid technological foundation actively promote R&D

innovation and systematically expand water powersports products centered around outboard

motors injecting new vitality into the Chinese economy.Today Dongfang Precision thrives on the strong momentum of its two main businesses—”intelligent packaging equipment” and “water powersports equipment”—positioning itself as an

industry leader in terms of market share industrial chain layout customer satisfaction and overall

competitiveness. This is the moat that enables us to effectively respond to various unknown

challenges in an era of uncertainty. It also serves as the solid foundation for our ongoing external

expansion and drives the company toward a higher stage of quality development.Clear External Expansion Strategy Multi-dimensional EffortsLooking back our unwavering strategic vision has always been “to grow larger not juststronger”. To this end we have crafted a clear external expansion strategy which has been

2 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024implemented through three key initiatives: “expanding core businesses and integrating the industrialchain” “strategic investments that align with core businesses” and “exploring emerging industriesthrough equity investments”. These initiatives are actively nurturing new growth drivers.In this process we fully leverage the advantages of our listed company’s brand platform. By

combining our deep integration and strategic management capabilities we continue to enhance our

position in intelligent equipment manufacturing by incubating companies with a core focus on

technological innovation high technical barriers and promising development prospects.“Building mountains from accumulated earth creating seas from accumulated water”. With the

technological depth achieved through our external expansion strategy we have made breakthroughs

in several core technologies. In 2024 the Company launched the industrial-grade high-definition

color digital printer marking the first use of high-speed digital inkjet printing technology with a

resolution of 1800NPI in the industrial-grade paper packaging printing field. Additionally the

industrial Internet business introduced new products and modules such as “InterLink” “MicroMes” and the “Equipment After-Sales Service Management System” which not only empower the

iteration and upgrade of our own products but also enhance the level of digital intelligence in the

existing production lines of corrugated packaging and composite paperboard industries.Today companies under the Fosber Tiru?a Parsun Power Wonder Digital Dongfang

Digicom and other brand series have fully integrated into the listed company’s development

system becoming key components of our core business and profit generation. Our forward-looking

investments in Jaten Robot Ruoyu Technology Aerospace Xinli and other companies are showing

strong development in robotics artificial intelligence and new materials. These ventures lay a solid

foundation for expanding the application of our “intelligent equipment manufacturing” strategy and

open up new industrial opportunities for the Group’s future.Moving Forward with the Times Thriving with the Nation

From initially focusing on the intelligent packaging equipment business to entering the water

powersports equipment sector and becoming a leading supplier and now accelerating growth with

new engines like robotics artificial intelligence and new materials—Dongfang Precision has

consistently strengthened its forward-looking planning strategic layout and innovative

breakthroughs in line with industrial development trends creating multi-dimensional core

competitive advantages.In the past when the era’s dividends exploded we chose to challenge the “impossible”.

3 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Fearlessly we transformed from an industry follower to a leader through organic growth and

strategic mergers and acquisitions. We have led the domestic high-end equipment manufacturing

industry toward deeper innovation and high-quality development.Looking ahead the inevitable trend of technological innovation is integration. Leveraging our

leading advantages in technological research and development we will continue to push forward

with innovation consolidating the accumulated sparks of 29 years of progress into an inexhaustible

source of Dongfang Precision’s high-quality growth. We will work hand in hand with upstream and

downstream partners across various business fields to help realize the nation’s technology self-

reliance strategy making Dongfang Precision a proud representative of Chinese national brands.The achievements of 2024 are a testament to the trust of our shareholders and the hard work of

our team. We are deeply grateful for your unwavering support and trust in Dongfang Precision’s

development. Facing the new challenges ahead we will remain committed to our mission to

“deepen our business operations” accelerate innovation and transformation with capital as the link

expand markets with a global perspective and continue to create greater value for investors in the

capital markets.Thank you!

Chairman of the Board: Tang Zhuolin

4 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Part I Important Notes Table of Contents and Definitions

The Board of Directors (or the “Board”) the Supervisory Committee as well as the

directors supervisors and senior management of Guangdong Dongfang Precision Science &

Technology Co. Ltd. (hereinafter referred to as the “Company”) hereby guarantee that the

contents of this Report are true accurate and complete and free of any misrepresentations

misleading statements or material omissions and collectively and individually accept legal

responsibility for such contents.Tang Zhuolin the Company’s legal representative Shao Yongfeng the Company’s Chief

Financial Officer and Chen Lin the Head of the Company’s Accounting Department

(equivalent to Financial Manager) hereby guarantee that the financial statements carried in

this Report are truthful accurate and complete.All directors of the Company attended in person the board meeting for the approval of

this Report.The future development strategies business plans and other forward-looking statements

mentioned in this Report shall be deemed as uncertain plans instead of promises to investors.Therefore investors are reminded to exercise caution when making investment decisions.For possible risks with respect to the Company please refer to “(III) Possible Risks andCountermeasures” in “XI Prospects” of “Part III Management Discussion and Analysis”

herein. And investors are kindly advised to read through the aforesaid contents.The Company planned not to distribute cash dividends give away bonus shares or

capitalize from public reserve.This Report has been prepared in Chinese and translated into English. Should there be

any discrepancies or misunderstandings between the two versions the Chinese version shall

prevail.

5 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Table of Contents

Part I Important Notes Table of Contents and Defin... 5

Part II Corporate Information and Key Financial In.. 10

Part III Management Discussion and Analysis......... 15

Part IV Corporate Governance.........................78

Part V Environmental and Social Responsibilities... 108

Part VI Significant Events......................... 110

Part VII Share Changes and Shareholder Information. 120

Part VIII Preference Shares.........................129

Part IX Corporate Bonds.............................130

Part X Corporate Financial Statement............... 131

6 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Documents Available for Reference

1. The financial statements signed and sealed by the Company’s legal representative Chief Financial Officer

and the person-in-charge of the financial organ.

2. The original of the Auditor’s Report sealed by the CPA firm as well as signed and sealed by the certified

public accounts.

3. All the originals of the Company’s announcements and documents that were disclosed to the public during

the Reporting Period on the media designated by the CSRC for information disclosure.

4. The 2024 Annual Report carrying the signature of the legal representative.

5. The documents above are lodged in the Securities Department of the Company 18A China Merchants

Plaza 1166 Wanghai Road Shekou Shuiwan Community Zhaoshang Street Nanshan District Shenzhen City

Guangdong Province China.

7 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Definitions

Term Definition

Guangdong Dongfang Precision Science & Technology Co. Ltd. and its

Dongfang Precision or the “Company”

consolidated subsidiaries except where the context otherwise requires

The corrugated box packaging machinery division of Guangdong Dongfang

Dongfang Precision (China)

Precision Science & Technology Co. Ltd.Fosber Italy Fosber S.p.A.Fosber Asia Guangdong Fosber Intelligent Equipment Co. Ltd.Fosber America Fosber America Inc.Fosber Tianjin Fosber Machinery (Tianjin) Co. Ltd.The business group including subsidiaries Fosber Italy Fosber America Qcorr

Fosber Group

Tiru?a Group etc.Tiru?a Group Tiru?a Slu

Tiru?a America Tiru?a America Inc.Tiru?a Asia Tiru?a (Guangdong) Intelligent Equipment Manufacturing Co. Ltd

QCorr QuantumCorrugated S.r.l.Dongfang Precision (Europe)/EDF EDF Europe S.r.l.Dongfang Precision (Netherland) Dong Fang Precision (Netherland) Cooperatief U.A.Dongfang Precision (HK) Dong Fang Precision (HK) Limited

Wonder Digital Shenzhen Wonder Digital Technology Co. Ltd.Parsun Power Suzhou Parsun Power Machine Co. Ltd.Suzhou High-Tech Zone Jinquan Business Management Partnership (Limited

Suzhou Jinquan

Partnership)

Shunyi Investment Suzhou Shunyi Investment Co. Ltd.Jaten Robot Guangdong Jaten Robot & Automation Co. Ltd.Yineng Investment Hainan Yineng Investment Co. Ltd.Yineng International Dongfang Yineng International Holding Co. Ltd.Dongfang Digicom Dongfang Digicom Technology Co. Ltd.Dongfang Digicom (Guangdong) Dongfang Digicom Technology (Guangdong) Co. Ltd.Corrugated cardboard is a multi-layer paper-bonding object composed of at least

one sandwich layer of wavy medium (commonly known as "corrugated paper"

Corrugated cardboard

"corrugated medium paper" "corrugated paper medium" and "corrugated base

paper") and one layer of cardboard (also known as "liner board").Corrugated box is a rigid paper container made of corrugated boards through die

Corrugated box cutting indenting nailing or gluing. Corrugated box is one of the most widely

used packaging containers in modern business and trade.Corrugated box printing and packaging production Corrugated box printing and packaging production line equipment include

line equipment corrugated box printing and packaging line and stand-alone products that

8 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

integrates pre-feeding printing grooving die cutting forming and packaging

functions in whole or in part which is highly functionally integrated highly

automated and highly technical can save the capital and manpower investment

reduce workers' workload and improve the production efficiency of box

manufacturers and requires equipment manufacturers to be highly competent in

design technological innovation assembly and finishing of parts.Corrugated cardboard production lines are assembly lines comprising

corrugating gluing agglutinating bundle breaking dimension board cutting and

output processes which are used to produce and process corrugated boards.A corrugated cardboard production line has two independent process sections as

the wet section and the dry section. The wet section composed of the base paper

stand auto splicer preheat pre-regulator single-face corrugator feeding bridge

Corrugated cardboard production lines glue machine and double facer is used to make corrugated based paper into

three-layer five-layer and seven-layer corrugated boards of different corrugated

combinations. The dry section composed of the rotary shear slitter indenter

cut-off knife and stacker is used to slit indent cut off and stack corrugated

boards as ordered.Corrugated cardboard production lines are key production equipment for

corrugated board and box manufacturers.Pre-printing and post-printing intelligent automatic packaging machinery refers

to equipment that is compatible with the corrugated box printing line or stand-

Pre-printing and post-printing intelligent automatic

alone products and can provide functions related to pre-printing and post-

packaging machinery

printing processes of corrugated box printing and packaging. It includes the pre-

feeder stripper conveyor intelligent stacker and folder gluer.Outboard motors are a kind of detachable power units that are mounted on the

Outboard motors

stern plate of a boat to drive the boat to sail.General utility small gasoline motors are a kind of thermo-dynamic machinery

of 20kW power or less with a wide range of applicability. It is characterized by

small size light weight and easy operation and is usually used as a power

General utility small gasoline motors engine for a variety of terminal products. By the structure of engine and

principle of work general utility small gasoline motors can be divided into two-

stroke general utility small gasoline motors and four-stroke general utility small

gasoline motors.CSRC China Securities Regulatory Commission

SZSE or the “Stock Exchange” Shenzhen Stock Exchange

Expressed in the Chinese currency of Renminbi expressed in tens of thousands

RMB yuan RMB’0000

of Renminbi

The “Reporting Period” or “Current Period” The period from 1 January 2024 to 31 December 2024

9 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Part II Corporate Information and Key Financial Information

I Corporate Information

Stock name Dongfang Precision Stock code 002611

Stock exchange Shenzhen Stock Exchange

Company name in Chinese 广东东方精工科技股份有限公司

Abbr. 东方精工

Company name in English (if

Guangdong Dongfang Precision Science & Technology Co. Ltd

any)

Abbr. (if any) Dongfang Precision

Legal representative Tang Zhuolin

(Office Building Plant A Plant B) 2 Qiangshi Road Shishan Town Nanhai District Foshan City

Registered address

Guangdong Province China

Previous registered address N/A

Zip code 528225

18A China Merchants Plaza 1166 Wanghai Road Shekou Shuiwan Community Zhaoshang

Office address

Street Nanshan District Shenzhen City Guangdong Province China

Zip code 518000

Company website http://www.df-global.cn/

Email address ir@vmtdf.com

II Contact Information

Board Secretary Securities Representative

Name Feng Jia Zhu Hongyu

18A China Merchants Plaza 1166 18A China Merchants Plaza 1166

Wanghai Road Shekou Shuiwan Wanghai Road Shekou Shuiwan

Office address Community Zhaoshang Street Nanshan Community Zhaoshang Street Nanshan

District Shenzhen City Guangdong District Shenzhen City Guangdong

Province China Province China

Tel. 0755-36889712 0755-36889712

Fax 0755-36889822 0755-36889822

Email address ir@vmtdf.com ir@vmtdf.com

10 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

III Media for Information Disclosure and Place where this Report Is Lodged

Newspapers designated by the Company for

China Securities Journal Shanghai Securities News and Securities Times

information disclosure

Website designated by the CSRC for publication of

http://www.cninfo.com.cn

this Report

Securities Department of the Company 18A China Merchants Plaza 1166

Place where this Report is lodged Wanghai Road Shekou Shuiwan Community Zhaoshang Street Nanshan

District Shenzhen City Guangdong Province China

IV Change to Company Registered Information

Unified social credit code 914406002318313119

Change to the principal activities of the

Unchanged

Company since its listing (if any)

Every change of controlling shareholder

Unchanged

since incorporation (if any)

V Other Information

The independent auditor hired by the Company:

Name of independent auditor Ernst & Young Hua Ming LLP

18/F Ernst & Young Tower 13 Pearl River East Road Tianhe District Guangzhou City China

Office address (the Headquarters: Rooms 01-12 17/F Ernst & Young Tower Oriental Plaza 1 East Chang An

Avenue Dongcheng District Beijing China)

Accountants writing signatures Feng Xingzhi and Liang Xinqi

The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period:

□ Applicable √ Not applicable

The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:

□ Applicable √ Not applicable

VI Key Financial Information

Indicate whether there is any retrospectively restated datum in the table below.□ Yes √ No

2024-over-2023

202420232022

change (%)

Operating revenue (RMB) 4777855602.69 4745737321.83 0.68% 3892708509.64

Net profit attributable to the listed 500578449.68 433240237.44 15.54% 447177897.38

11 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

company’s shareholders (RMB)

Net profit attributable to the listed

company’s shareholders before 526741293.29 364739306.60 44.42% 398376648.08

exceptional gains and losses (RMB)

Net cash generated from/used in

702555380.22487180738.6644.21%506294460.95

operating activities (RMB)

Basic earnings per share (RMB/share) 0.43 0.36 19.44% 0.37

Diluted earnings per share

0.430.3619.44%0.37

(RMB/share)

Weighted average return on equity (%) 10.55% 10.14% 0.41% 11.72%

Change of 31

December 2024 over

31 December 2024 31 December 2023 31 December 2022

31 December 2023

(%)

Total assets (RMB) 7528576996.98 7538222570.02 -0.13% 6928577115.10

Equity attributable to the listed

4977379483.294511690693.9710.32%4063966310.23

company’s shareholders (RMB)

Indicate whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional gains and

losses was negative for the last three accounting years and the latest independent auditor’s report indicated that there was uncertainty

about the Company’s ability to continue as a going concern.□ Yes √ No

Indicate whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional gains and

losses was negative.□ Yes √ No

VII Accounting Data Differences under China’s Accounting Standards for Business

Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign

Accounting Standards

1. Net Profit and Equity under CAS and IFRS

□Applicable √ Not applicable

No difference for the Reporting Period.

2. Net Profit and Equity under CAS and Foreign Accounting Standards

□Applicable √ Not applicable

No difference for the Reporting Period.

12 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

VIII Key Financial Information by Quarter

Unit: RMB

Q1 Q2 Q3 Q4

Operating revenue 935144681.91 1226044225.49 1144651410.20 1472015285.09

Net profit attributable to the listed

44642460.24119238011.90166163143.02170534834.52

company’s shareholders

Net profit attributable to the listed

company’s shareholders before 65730334.96 163377366.08 147087872.50 150545719.75

exceptional gains and losses

Net cash generated from/used in

5507844.28113062619.3761983377.23522001539.34

operating activities

Indicate whether any of the quarterly financial data in the table above or their summations differs materially from what have been

disclosed in the Company’s quarterly or interim reports.□ Yes √ No

IX Exceptional Gains and Losses

√ Applicable □ Not applicable

Unit: RMB

Item 2024 2023 2022 Note

Gain or loss on disposal of non-current

assets (inclusive of impairment allowance 5493843.53 694491.43 -351386.78

write-offs)

Government grants through profit or loss

(exclusive of government grants given in the

Company’s ordinary course of business at 14576461.93 15747293.82 20933377.44

fixed quotas or amounts as per the

government’s uniform standards)

Gain or loss on fair-value changes on held-

for-trading and derivative financial assets

and liabilities & income from disposal of

held-for-trading and derivative financial

-48502462.1760354587.2535196327.83

assets and liabilities and other debt

investments (exclusive of the effective

portion of hedges that arise in the

Company’s ordinary course of business)

Reversal of provision for impairment of

receivables individually tested for 7396.90 516000.00

impairment

Non-operating income and expenses other 5438396.45 -10155229.58 1761273.49

13 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

than the above

Less: Income tax effects 2057293.09 -3743887.17 7277576.78

Non-controlling interests effects (net

1119187.162400099.251460765.90

of tax)

Total -26162843.61 68500930.84 48801249.30 --

Details of other profit and loss items that meet the definition of non-recurring profit or loss.□ Applicable √ Not applicable

No such cases in the Reporting Period.Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory

Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss

Items:

□ Applicable √ Not applicable

No such cases in the Reporting Period

14 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Part III Management Discussion and Analysis

I The industry in which the company principally operates during the Reporting Period

(I) Industries in which the Company principally operates

According to the Classification of Strategic Emerging Industries (2018) and the Industrial Classification for

National Economic Activities (GB/T 4754-2017) the industries in which the Company principally operates are

shown below:

The Company’s Principal Business Divisions and Their Industries

Strategic Principal

emerging Industry business Primary products and their applications

industry division

1. Corrugated cardboard production lines: The

corrugated cardboard production lines are used for the

production of corrugated cardboards of different

specifications are the core machinery for corrugated

packaging production and are widely used by medium

and large enterprises (cardboard plants) that produce

Smart

corrugated cardboards.corrugated

packaging 2. Corrugated box printing and packaging production

equipment lines : The corrugated box printing and packaging

production line equipment is used to produce and

Intelligent Specialised

process corrugated cardboards into corrugated boxes of

manufacturing equipment different specifications. The corrugated box printing

equipment manufacturing and packaging production line equipment is widely

used by various enterprises (box plants) that produce

corrugated boxes in the corrugated packaging industry.Digital printers generate graphic images from digital

information. With the help of print head ink digital

Digital printing enables the formation of the image directly on

the printing stocks and can indirectly transmit the

printers

colour and auxiliary substances to the print stocks to

form the presswork. Digital printing can meet the

requirement for industrial production.Industrial Industrial Specific Industrial Internet Platformthe intelligent

Internet and Software and Internet production management system matched with the

corrugated box printing and packaging production

supporting information services industry

lines and equipment after-sales service management

services solutions

system

15 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Strategic Principal

emerging Industry business Primary products and their applications

industry division

Railway shipping Outboard motors are a kind of detachable power units

Manufacturing of aviation and other Water that are mounted on the stern plate of a boat to drive the

ship auxiliary transport equipment powersports boat to sail and can be applied to boats shorter than

24m. They are widely used in water recreation fishing

equipment manufacturing equipment

water traffic emergency rescue shore landing and

industries

maritime patrol.(II) Industry overview

1. The Industries to which the Company's Intelligent Packaging Equipment Business Segment Belongs

1.1 Demand side—customers

The intelligent packaging equipment division of the Company primarily serves B-end customers such as corrugated cardboard

and corrugated box manufacturers. The Company provides various single machine and complete production line products for

cardboard and box production.End demand for corrugated packaging is growing:. Corrugated packaging products are used in a vast number of fields

including food and beverage household chemicals electronic products and e-commerce express delivery and are inelastically

demanded by consumers. Electronic products food beverage and express delivery take up 26% 20% 21% and 13% respectively of

the downstream application market of paper packaging.China’s express market and the relevant fields such as e-commerce and

logistics show an increasing demand for corrugated box and board packaging which will drive the expansion of the capacity of

corrugated packaging enterprises and thus increase the demand for corrugated packaging machinery.Guided by the “large-scale equipment renewal” policy a swift acceleration in equipment upgrades is anticipated within

the domestic corrugated packaging sector.In 2024 the Central Financial and Economic Affairs Commission decided to promote a new round of large-scale equipmentrenewal explicitly mentioning the need to “promote the renewal and technological transformation of various types of productionequipment and service equipment”. The State Council executive meeting considered and passed the Issuing the Action Plan forPromoting Large-scale Equipment Renewals and Consumer Goods Trade-ins proposing to “promote the proportion of advancedproduction capacity to continue to increase”.Over the years China's corrugated packaging sector has largely consisted of numerous small- and medium-sized box

manufacturers dominated by low-end production capacities leading to a highly decentralised market and relatively low industry

consolidation. Responding to the Party Central Committee and State Council's “large-scale equipment renewal” policy directive the

corrugated packaging industry anticipates a heightened pace of equipment modernisation throughout the 14th Five-Year Plan period

with an expected surge in medium- to high-end production capacity proportions.In the corrugated packaging industry market concentration and the phase-out of low-end production capacity is an inevitable

trend due to market competition capacity upgrading M&A etc. It is estimated that the line machinery that is more intelligent and

productive will replace the existing corrugated cardboard production lines and corrugated box printing and packaging production line

equipment in the upcoming five to ten years. By statistics there are over 6000 existing corrugated cardboard production lines in the

16 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

domestic market and more corrugated box printing and packaging machinery.Digital and intelligent upgrading brings new development opportunities. The “strategy of robot assembling line” and “smartfactory” are increasingly recognized by the industry. Additionally leading packaging enterprises including Xiamen Hexing

Packaging Printing Co. Ltd. (HXPP) MYS Group Co. Ltd. (MYS) Shenzhen YUTO Packaging Technology Co. Ltd. and

Shenzhen Jinjia Group Co. Ltd. have successively entered markets such as intelligent manufacturing one after another. The capacity

upgrade in the paper packaging and printing industry continues to deepen. Against the backdrop of intelligent manufacturing leading

enterprises in the corrugated paper packaging equipment industry are also expected to embrace new opportunities for development.Overseas demand is growing steadily: In recent years when environmental pollution becomes more and more serious growing

environmental awareness has led to “plastic bans and restrictions” across the world providing a major boost to paper as an

alternative to plastic. The global green packaging market is projected to grow from USD262.27 billion in 2023 to USD381.98 billion

in 2028 with a compound annual growth rate of 7.81% during the forecast period (2023-2028).The corrugated cardboard produced by corrugated cardboard production lines is used to make various corrugated boxes

corrugated cartons and other corrugated packaging materials which are rigid consumer products in European and American countries.The philosophy of “sustainability” is gaining ground in the European and US consumer goods packaging markets. With the growing

trend of "replacing plastics with paper" in the packaging industry demand for corrugated packaging materials in the European and

US consumer goods markets continues to grow steadily helping to drive demand for corrugated packaging production line

equipment.The rapid development of digital printing brings more development opportunities for the industry.According to the latest

report by Smithers Pira the inkjet printing market has grown strongly over the past 5 years.The report forecasts that growth of inkjet

printing in packaging will be most rapid from 2022 to 2027 with expected compound annual growth rates of 17.7% by shipment

quantity and 16.3% by value.

1.2 Supply side——the Company’s World-leading comprehensive strength

In the field of intelligent packaging equipment Dongfang Precision has a complete layout and has formed a multi-segment

business system covering corrugated cardboard production lines core components of corrugated board production lines carton

printing and packaging lines as well as digital printing equipment. Relying on its comprehensive industrial chain layout and strong

technological strength the company with its wide range of products and advanced technologies provides global customers with one-

stop and all-round intelligent packaging equipment solutions.Corrugated cardboard production lines: Major manufacturers of corrugated cardboard production lines around the world include

Fosber Group BHS Marquip and J.S. Machine. Among them Fosber Group and its major rival BHS. Fosber Group holds

approximately 30% of the global middle- and high-end corrugated cardboard production line market and more than 50% of the North

American market.Corrugated & pressure rollers key components of corrugated cardboard production lines: The subsidiary Tiru?a Group has more

than 40 years of experience in the corrugated and pressure roller segment and is renowned in Europe as a world-leading specialist in

this segment.Corrugated box printing and packaging production line equipment: Major manufacturers in this field include Dongfang

Precision Bobst Gopfert Ward Ding Long (Shanghai) and Guangzhou Keshenglong. With an advantage in global resource

coordination leading design concept excellent overall R&D strength and a product system featuring complete categories and rich

specifications Dongfang Precision is an industry leader in China and is competitive with the global industry leader Bobst from

17 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Switzerland.Digital printers: Major manufacturers include HP EFI Koenig & Bauer Durst Wonder Digital Hanhua Gongye and Atexco

among others. Wonder Digital a majority-owned subsidiary of Dongfang Precision is a leader in the domestic digital printer industry

and has been committed to extending digital printing technology to such fields as paper packaging (colour printing & pre-printing)

advertising home furnishing building materials and label printing.Dongfang Precision leads the world in terms of its comprehensive strength in smart corrugated packaging equipment business

and can provide downstream customers such as cardboard plants and box plants with “one-stop” machinery and service support that

covers each production process including corrugated cardboard production corrugated box production and pre-printing and post-

printing production processes and different technology roadmaps including flexographic printing and digital printing.The value of the global corrugated packaging equipment market is estimated to be about RMB30-40 billion. In terms of

operating revenue Dongfang Precision accounts for approximately 15% of the global corrugated packaging equipment

market ranking first among domestic enterprises of the same type and second in the global market.

2. The industry to which the company's industrial Internet industry solutions business belongs

Policy side: .For eight consecutive years from 2018 to 2025 "Industrial Internet" has appeared in the government work report

every year. The government work report in 2025 put forward the idea of "vigorously promoting new industrialization and

accelerating the innovative development of the Industrial Internet". The "14th Five-Year Plan for the In-depth Integration of

Informatization and Industrialization Development" proposed that by 2025 informatization and industrialization would achieve

integrated development on a broader scale at a deeper level and at a higher level. Under the guidance and support of a series of

policies the Industrial Internet and smart factories have always been important directions for the transformation and upgrading of the

manufacturing industry.Market side: China is the only country in the world whose industries cover all industrial categories in the United Nations’

industrial classification. Concurrently it is expected to grow into the world’s largest industrial digitalization market. For the current

manufacturing industry of China digital transformation is no longer an “option” but a “compulsory course” that is critical to its

survival and long-term development.According to the Bluebook on the Digital Transformation of Enterprises--Empowering the Low-carbon and Green

Transformation of the Real Economy with New IT released by the China Academy of Information and Communications Technology

after relevant manufacturing enterprises complete digital transformation on average their production efficiency will be boosted their

operating expenses will be lowered and their energy utilisation rate will be improved. Concurrently with the rapid development and

continuous iteration of the new-generation information technology the cost of digital transformation of enterprises is gradually

decreasing.According to the data released by Frost & Sullivan the scale of the market of industrial Internet platforms and relevant solutions

in China by 2025 is estimated to reach RMB193.12 billion.The Scale of the Market of Industrial Internet Platforms and Relevant Solutions and Forecast between 2020 and 2025

18 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Supply side:The key technologies and industries that the industrial Internet involves are extensive and

complex and can hardly be fully covered by enterprises. Thus developing the industrial Internet by relying on

industrial manufacturing enterprises becomes a typical development path of industrial Internet enterprises such as

Root Cloud Midea Cloud. In the packaging field major manufacturers that provide industrial Internet-related

products and solutions services include Yunyin Dongfang Digicom and Shanghai Wantit.The subsidiary Dongfang Digicom carrying Dongfang Precision’s missions of expanding into the industrial

Internet industry and implementing “digital and intelligent transformation strategies” was established in 2020.With the vision “to become a world-leading provider of industrial Internet industry solutions” Dongfang Digicom

is engaged in building industrial Internet platforms for industries using new-generation information technologies

such as the IoT cloud computing big data and artificial intelligence to facilitate digital and intelligent upgrading.

3. The Industries to which the company's water power products segment belongs

3.1 Demand side——customers

Outboard motors are the key auxiliary equipment for small- and medium-sized ships and are characterized by

their compact structures light weights convenient installation and maintenance easy operations and low noise.The downstream of the outboard motor industry involves the shipbuilding industry primarily applied in areas such

as yachts sailboats and other vessels encompassing applications in recreational sports commercial operations

and military maritime activities.Applications of Parsun Power’s Outboard Motors

Field Scenario Example

19 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Recreational fishing

Recreational sailing and water

sports

Fishing water traffic

Commercial and waterway

maintenance

Emergency rescue

Official and and maritime patrol

military Beach landing and

water reconnaissance

Global Market: According to a report by the international market research agency GMI the global market

sales for outboard motors are expected to reach USD15975 million by 2030 with a compound annual growth rate

(CAGR) of 5.35% from 2023 to 2030.

By Application Field: The recreational boating sector is the largest downstream application market for

outboard motors. By 2030 it is expected that the market share of outboard motors used in water-based leisure

20 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

sports will account for 73.22% globally. Yachts are one of the main downstream products equipped with outboard

motors. In recent years the global yacht industry has shown a trend of expanding scale. According to a report by

the China Association of the National Shipbuilding Industry the global leisure boat market size is expected to

grow from USD16.4 billion in 2021 to USD23.6 billion in 2027 with a CAGR of approximately 6.20%.Benefiting from the rapid growth of the downstream yacht market the global outboard motor market for water

leisure sports is expected to grow steadily.By Power Size: The market share of mid-to-high power outboard motors accounts for more than three-

quarters of the total market. In 2023 the mid-to-high power outboard motor market share in the global outboard

motor market was 79.72%. North America and Europe are the main markets for mid-to-high power outboard

motors. From 2023 to 2030 the compound annual growth rate (CAGR) of the mid-to-high power outboard motor

market in the Asia-Pacific region is expected to reach 8.97%.By Power Type: Gasoline outboard motors are the mainstream model in the global outboard motor

consumption market. By 2030 it is expected that the market share of gasoline diesel and electric outboard

motors globally will be 80.21% 11.49% and 8.30% respectively. Diesel engines have certain market space in

specific fields. Electric outboard motors are primarily used for low horsepower with a higher price but features

such as greater environmental friendliness and easier maintenance. With increasingly stringent environmental

regulations in various countries and continuous advancements in battery technology the application of electric

outboard motors is becoming more widespread.Chinese Market: By 2030 the market size of outboard motors in China is expected to reach USD588 million

with a compound annual growth rate (CAGR) of 9.79% from 2022 to 2030 significantly higher than the global

CAGR. Benefiting from the rapid growth of China’s economy and changes in residents’recreational habits China

has become one of the fastest-growing countries in the global outboard motor market.Domestic substitution has become the mainstream trend in the development of the domestic outboard motor

industry. According to China’s customs import and export data the import value of outboard motors into China

reached RMB1283 million in 2023. In the public service and military fields China’s military outboard motors in

the mid-to-high power range primarily use overseas brands. Against the backdrop of the national policy

encouraging domestic equipment to replace imports with the rise of domestic outboard motor companies China

is expected to enter a new stage of prosperous development for domestic outboard motor companies. Leading

domestic outboard motor companies will benefit from both the industry’s rapid growth and domestic substitution.Policy Support: In recent years with the development of China’s water tourism and leisure industry and the

country’s emphasis on marine rights various government departments have provided significant policy support

for the development of the boating industry.

3.2 Supply side——the Company’s presence in the industry

The major participants in the global outboard motor market are Japanese and American brands including

Yamaha and Suzuki from Japan and Mercury from the United States. Compared to international competitors

Parsun Power relying on its product performance that is close to the competitors’ and its clear price advantage

competes globally with American and Japanese manufacturers by offering high cost-performance products.Parsun Power a holding subsidiary is a leading company in the domestic outboard motor industry. From

21 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

2020 to 2022 Parsun Power’s outboard motor products ranked first in market share in China for three consecutive

years. The company is a national “Little Giant” enterprise specializing in innovation a national high-tech

enterprise the Jiangsu Province Outboard Motor Engineering Technology Research Center a recognized

enterprise technology center in Jiangsu Province a leading enterprise in the Chinese internal combustion engine

industry and a member unit of the Small Gasoline Engine Branch of the China Internal Combustion Engine

Industry Association. At the same time its outboard motor products have also received various honors including

the National Torch Program Industrialization Demonstration Project Certificate China Machinery Industry

Innovative Products Jiangsu Province Famous Brand Products and Suzhou City Famous Brand Products.The leading comprehensive technical R&D capabilities in the domestic industry are the main competitive

advantage of Parsun Power in the outboard motor industry. In 2021 and 2023 Parsun Power successfully began

mass production of 115-horsepower and 130-horsepower gasoline outboard motors respectively. In March 2024

Parsun Power released its first domestically produced 300-horsepower gasoline outboard motor. These core

technologies with independent control and domestically sourced manufacturing supply chains represent a

milestone in the localization of high-end equipment manufacturing in the outboard motor sector. This

breakthrough is of epochal significance for the development of China’s domestic outboard motor industry. It

successfully breaks the monopoly of American and Japanese manufacturers in the high-power large-horsepower

outboard motor segment marking the leap of China's high-end equipment manufacturing industry from a

“follower” to a “competitor” in the high-end large-horsepower outboard motor field. It announces that domestic

outboard motors will fully enter the global high-end mainstream market and compete with international brands

worldwide.

22 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

II Principal operations of the Company in the Reporting Period

With “intelligent equipment manufacturing” as its primary strategic focus Dongfang Precision concentrateson the manufacturing of high-end intelligent equipment. Its principal operations include “intelligent packagingequipment” and “water powersports equipment”. The “intelligent packaging equipment business” consists of

smart corrugated packaging equipment digital printers and industrial Internet industry solutions.Business Divisions and Entities of Dongfang Precision

23 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

(I) The intelligent packaging equipment division

The intelligent packaging equipment division consists of smart corrugated packaging equipment digital printers and industrial Internet industry solutions which cover the most important

links in the value chain of corrugated packaging production (as shown below).Relationship between Corrugated Packaging Manufacturing Value Chain and the Company's Smart Corrugated Packaging Equipment

24 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

A. Smart corrugated packaging equipment business

(1) Corrugated cardboard production lines (including corrugated rollers)

The corrugated cardboard production lines business of Dongfang Precision is engaged in corrugated

cardboard production lines (under the brands of Fosber and Quantum) as well as corrugated and pressure rollers

(under the Tiru?a brand) which are key components of corrugated cardboard production lines. With the overseas

Fosber Group (under it Fosber Italy Fosber America QCorr and Tiru?a Group) as well as the domestic Fosber

Asia and Tiru?a Asia Dongfang Precision is able to provide products and services for customers around the world.

(1) Overseas Fobser Group primarily serves large- and medium-sized manufacturers in Europe North

America Latin America and other countries and regions. All the business units and profit centres of Fosber Group

have their business assets and staff located in Europe and North America. They adopt a local management and

operation model and design develop and manufacture their products locally. Fosber Group has established stable

partnerships with major manufacturers in the corrugated packaging industry in Europe and the US.

(2) Domestically Fosber’s corrugated lines have been designed and adapted to the needs of customers in

the Chinese market. Supported by China’s most complete supply chain across all industrial sectors globally as

well as the competitive edge of manufacturing over 90% of the components of the corrugated lines are

manufactured domestically. These products which are high-tech high-performance and cost-efficient for they are

made in China are provided for corrugated packaging manufacturers in China Asia (East Asia Southeast Asia

South Asia and the Middle East) Africa Russia and Latin America. Since 2022 the Company has further

introduced Tiru?a’s corrugated and pressure rollers to China for domestic design and local production. While

catering to the needs of Fosber Asia’s corrugated lines for corrugated and pressure rollers Tiru?a is also

developing new markets in China and the rest of Asia for its products.

(2) Corrugated box printing and packaging production lines

Domestically Dongfang Precision (China) is responsible for business operations associated with corrugated

box printing and packaging equipment while in the overseas market it is Dongfang Precision (Europe).The product matrix of Dongfang Precision (China) includes corrugated converting line and single machine

products that are of dozens of specifications and different market positioning featuring fixed type/open-close type

top printing/bottom printing and other technologies. These products mainly include “Dongfang Star” Quickset

Top Printing FFG and Top Printing Open-Close Type FFG Inline as well as “Asia Star” Bottom Printing Die

Cutter Stripper Vacuum Stacker Converting Line Bottom Printing Open-Close Type FFG Inline and Bottom

Printing Open-Closed Type/FFG & Stitcher. Dongfang Precision (China) is a professional manufacturer with an

early start and a strong foundation among domestic fellow companies enjoying high brand awareness and

customer recognition in the industry. The products are highly popular not only in the domestic market but also

exported to over 60 countries and regions worldwide.Dongfang Precision (Europe) specializes in high-end corrugated converting line products. Its primary

products include “FD” Quickset Top Printing FFG “HGL” Quickset Bottom Printing FFG and Quickset Bottom

Printing/Die Cutter Stripper Vacuum Line. These products are designed with noncrush feeder design full servo

control and fully automatic control features making them more suitable for high-definition printing.

25 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Primary Product Portfolio of Dongfang Precision’s intelligent packaging Equipment Business - Corrugated Cardboard Production Lines

Product type Brand Product image Main characteristics

Fosber Brand S/Line

Width: 2.5m~2.8m

Production speed: 370~470 meters/minute

Designed for large corrugated board

manufacturers Beltless Technology

Caddy oil-free technology

Gapless changeover with no speed reduction of

the cadre

Industry leading changeover times

Optimum board quality and low operating costs

Industry leading Syncro system control

Corrugated Process Control Supervision (PCS)

Data Tracking Supervision (DTS)

Cardboard

Production Quantum Line：

Widths from 1.8m to 2.5m

Lines

A new concept in corrugated board production

Better suited for lightweight corrugated board

production

Innovative design compact and flexible

Optimum appearance and print surface quality

Lower energy consumption and less labor

Wavy Line：

Designed for the production of single-sided

corrugated boards

Compact and flexible

High quality at high speeds

26 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Domestic Line:

Width: 2.2m~3.15m

Design speed: 270-370 meters/minute

Single tile double tile triple tile wet section

Wet section without belt technology

Cadre without lubrication technology

High board quality

Industry-leading Syncro system control

Process Control Supervision (PCS)

Data Tracking Supervision (DTS)

Instant Set:

Dual Module Slitting Machine

Gapless order change speed of 250

meters/minute

Positioning accuracy of +/-0.5mm

Within 3 seconds to change the order and line

up the knives

27 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Corrugated & The world's leading supplier of corrugating

pressure rolls and pressure rolls with industry-leading

rollers machining and tungsten carbide treatment

28 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Primary Product Portfolio of Dongfang Precision’s Smart Corrugated Packaging Equipment Business - Corrugated Box Printing and Packaging Production Line Equipment

Product type Brand Product image Main characteristics

DONGFANG STAR I QUICKSET TOP PRINTING FFG Fixed type

Full servo control

No downtime for plate change

2 minutes quick order change

Vacuum adsorption large belt high

precision cardboard transfer long service

life

Energy saving up to 30

Only 2 people are needed to operate the

whole line

DONGFANG STAR II TOP PRINTING OPEN-CLOSE TYPE FFG Vacuum adsorption roller transfer;

Computerized adjustment easy to operate;

High speed and stable operation; Patented

folding structure; Improve carton molding

effect

Integrated Only 2-3 persons are needed to operate the

corrugated whole line

box printing

and Suitable for shaped box machine box and

packaging pre-printed box etc. with one point and

lines multiple die-cutting.Mature down-printing die-cutting

technology; Clean chip removal and

accurate counting

Efficient production; Uninterrupted

feeding; No-speed down output of

29 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Product type Brand Product image Main characteristics

bundles flexible palletizing methods

Configurable for double-sided printing; 2-

3 person operation

Vacuum adsorption roller transfer

Asia-Pacific STAR II BOTTOM PRINTING OPEN-CLOSE TYPE FFG INLINE

Computerized adjustment of the whole

machine easy to operate

Good effect of clearing waste can realize

one opening and two die-cutting line

gluing carton.Asia-Pacific STAR I BOTTOM PRINTING DIE CUTTER STRIPPER VACUUM STACKER CONVERTING LINE Patented folding structure improves carton

molding effect.The whole line is operated by 2-3 persons

Asia-Pacific STAR III BOTTOM PRINTING OPEN-CLOSED TYPE/FFG & STITCHER

Design concept of down-printing type

gluing and nailing as a whole

Multi-purpose machine to meet the

production needs of different orders

Saving space reducing process greatly

reducing labor cost.Multiple pre-pressure to enhance folding

and molding effect precise control of

molding accuracy.

30 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Product type Brand Product image Main characteristics

Integrated

corrugated

box printing

and

packaging

lines

High-end down-printing fixed in-line

Spindle servo drive

Quick order change

Complete pre-press and post-press

supporting units

31 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

B. Digital printers

The business is primarily led by the subsidiary Shenzhen Wonder Digital Technology Co. Ltd. which

provides solutions for customers in the digital printing industry including digital printers ink accessories and

professional services. Wonder Digital has introduced a variety of digital printers to meet the diverse needs of

different market segments and customer levels including:

(1) Multi Pass digital printer series applicable for small-batch paper packaging printing

(2) Single Pass digital printer series applicable for large/medium/small batch paper packaging printing

(3) Single Pass digital series applicable for pre-printing on raw paper

(4) Hybrid printer series that combines Multi Pass high-precision printing and Single Pass high speed

printing into one.Wonder Digital offers a diverse range of products that cover various types and specifications from

postprinting to pre-printing from water-based dye/pigment water-based ink to spot colour UV ink from boxes

offset cartons to sheet metal. The products also support a range of application modes and scenarios from single-

sheet printing to exchange orders seamlessly with variable data printing and from single machine printing to

integration with ERP systems.Apart from digital printers Wonder Digital also sells supporting units after printing section including slotting

and varnish coating units as well as special ink products that are compatible with its own-brand equipment. These

special ink products including water-based dye ink water-based pigment ink and UV ink. Wonder Digital’s high

cost-performance digital printing solution provides customers with cost-effective configuration plans for digital

inkjet printing equipment and ink formulation plans.Based on accumulated know-how and experience Wonder Digital provides digital printers for advertising

home decoration and other fields including flatbed printing and roll to roll printing technologies. The flatbed

models can be used for digital printing on materials such as aluminum panels glass metal plates acrylic sheets

and alucobond panels while the roll-to-roll models are applicable for digital printing on corrugated cardboard

vehicle paste paper lamp box fabric PVC film decorated paper and sheet metal like aluminum sheets among

others. Additionally Wonder Digital also offers digital printers for the label printing industry.With its comprehensive product matrix Wonder Digital provides paper packaging digital printers that meet

the iverse needs of industry customers with different market positions and levels. Since its establishment in 2011

Wonder Digital’s digital printers have been exported to countries and regions such as Europe America Middle

East Latin America and Southeast Asia with over 1600 units of equipment installed worldwide.

32 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

Primary Product Portfolio of Dongfang Precision’s intelligent packaging Equipment Business – Digital Printers

Product Brand Product image Main characteristics

type

Printing reference accuracy: 1800 NPI

WONDER INNO PRO SINGLE PASS

Improved stability and print clarity

Industrial High-Definition Color Digital Printer

Better colour printing effect

Printing speed: up to 150 metres per minute to meet the needs of

high-speed printing

Printing thickness: 0.2mm-15mm

Printing material: thin paper/cardboard yellow and white kraft card

honeycomb board coated paper etc.Printing width up to 2500mm

Water-based dye ink/water-based pigment waterproof ink is optional.A cost-effective tool for bulk orders

Adopts Epson's latest HD industrial printheads.Printing width up to 2500mm

Speed up to 700 ㎡/h

Printing thickness 1.5mm-35mm

Full suction platform printing and feeding

WD250++ Series Scanning Wide Format Coated paper and honeycomb board can also be easily printed.High Quality Carton Digital Printer Base accuracy 1200dpi

Water-based dye ink/water-based pigment waterproof ink is optional.

33 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

Product Brand Product image Main characteristics

type

Fully automatic feeder system

CMYK+W ink colour scheme is optional.Printing quality is delicate and vivid

Colour effect comparable to offset printing

Printing thickness: 0.2mm-20mm

Digital WD250 PRINT MASTER MULTI PASS Printing material: cardboard/copperplate paper coated paper yellow

Printers Digital inkjet color printing equipment and white kraft card etc.\

The printing reference accuracy can reach 1200 dpi and can be

upgraded to 1800 dpi. The maximum printing line speed is 150

meters per minute.It is applicable to digital pre - printing of corrugated base paper car

stickers light - box cloth PVC colored film decorative paper thin

Industrial SINGLE PASS roll-to-roll aluminum plates etc. The printing quality exceeds flexography and

high-speed digital pre-printing machine is comparable to offset printing.Combines two different digital printing methods: Multi Pass high-

precision scanning and Single Pass high-speed printing.Reduce the

capital investment in equipment save space labor maintenance and

MULTI PASS-SINGLE PASS All-in-One other costs improve production efficiency

Digital Printing Machine

34 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

Product Brand Product image Main characteristics

type

Digital

Printers

35 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

C. Industrial Internet industry solutionsDongfang Digicom a subsidiary of Dongfang Precision serves as the primary business entity for “industrialInternet industry solutions”.Based on the extensive industry experience of Dongfang Precision spanning over three decades in the field of

corrugated packaging equipment as well as guided by the Group’s strategies the subsidiary Dongfang Digicom

leveraging cutting-edge technologies such as the Internet of Things (IoT) cloud computing big data 5G and

artificial intelligence (AI) has developed iDataPioneer an industrial Internet platform for the packaging industry

in a broad sense.One-Stop Digital Factory Overall Solution Architecture Diagram

In 2024 Dongfang Digicom upgraded its capabilities from “platform/software products” to a full-stack

solution of “platform + software customization + services + consulting.” The business model has become further

clarified providing products and services to large packaging industry clients that cover intelligent production lines

integrated production operations and intelligent business decision-making.Dongfang Digicom has launched customized products for packaging industry clients including “InterLink”

“Micro Mes” and “Equipment After-Sales Service Management System.” These products can be embedded into

the sale of new machines under the Dongfang Precision brand enhancing product value. They can also be sold

independently supporting the upgrade of existing equipment and compatible with multiple brands thus meeting

the diverse needs of industry clients with flexible business models.

36 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

“InterLink” is an intelligent production management system designed for Dongfang Precision’s corrugated

box printing and packaging equipment. It fully utilizes the ecological resource advantages of Dongfang Precision's

corrugated packaging equipment improving machine operation efficiency order processing capacity reducing

order management costs and enhancing the market competitiveness of machine products. “Micro Mes” is an

integrated application solution based on the intelligent production management system and enterprise ERP

achieving closed-loop management from order creation scheduling production issuance to reporting. It enhances

the digitalization level of production process control. The “Equipment After-Sales Service Management System”

focuses on the after-sales service of packaging printing equipment. It enables the reuse of underlying technologies

and realizes the digitalization of equipment “points rounds inspections” and maintenance through systematic

after-sales services online spare parts management full lifecycle management of equipment records and remote

maintenance.Dongfang Digicom also provides digital diagnostic consulting services for large packaging industry clients.Through digital transformation consulting it drives product sales creating a “service solution-driven product sales”

closed loop.D. Business Model

R&D model: The Company has industry-leading independent design and R&D capabilities continually

establishing high-level R&D innovation management mechanisms. The R&D team spearheaded by industry

experts employs a blend of long and short-term product R&D planning supported by a market-oriented R&D

mechanism. Additionally a robust R&D talent incentive mechanism enhances the Company’s overall technical

proficiency cementing its leadership position in the industry.Procurement and production model: The Company procures raw materials such as steel plates metal

components and electrical parts (such as motors and PLCs) from external suppliers while producing some core

components and corrugated rollers in-house.The majority of the Company’s equipment products adhere to a “made-to-order production” model. Upon

receiving orders and partial deposits from customers the Company purchases raw materials from suppliers based

on specific customer requirements and inventory levels and develops production plans and schedules. The

Company advocates a “lean production” model for production and operational management ensuring precise

control over BOM costs and manufacturing expenses while continuously enhancing operational efficiency.In 2024 the delivery period for orders of corrugated board production lines under the Fosber Group was

further shortened from 9 months in the second half of 2023 to about 6 months. The delivery period for orders of

corrugated box printing and packaging complete machine equipment under the Dongfang Precision brand was 3 to

6 months and the delivery period for orders of digital printing equipment under the Wonder Digital brand was 1

to 3 months.Marketing Model: The Company employs a “direct selling + distribution” marketing model. It utilizes a

direct sales approach for the domestic market and a combination of direct sales and agent distribution for overseas

markets tailoring the strategy to suit the unique needs of different countries and regions. This approach not only

widens the scope of sales channels and increases sales volume but also reduces market expansion and sales costs.

37 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

The Company’s complete production line and single-machine products are typically one-time sales with

more significant transaction amounts. However accessories software and services can be sold multiple times

throughout the life-cycle of the complete production line or single-machine products. The growing number of

existing equipment sold in the downstream industry market presents a steady stream of sales opportunities for

accessories software and services. Additionally providing high-quality technical support and services helps to

promote the sales of complete production line products.In terms of the settlement of orders the Company enjoys a high brand awareness and superior bargain power

in the industry so it collects down payment in advance and payment by stages for the sales of corrugated

cardboard production lines and corrugated box printing and packaging equipment. Generally 80% to 90% of the

sales payment can be collected upon the delivery of products.(II) . The water powersports equipment division

The main products of Parsun Power a subsidiary are outboard motors of various specifications and series.The product power range is broad covering from 2 horsepower to 300 horsepower. The products are of stable

quality and reliable performance with some products offering comprehensive performance comparable to

internationally renowned brands and emissions meeting European and American standards. Most models have

passed the China Classification Society (CCS) certification European CE certification and U.S. EPA certification.These products are widely used in water leisure sports fisheries water transportation emergency rescue coastal

landing maritime patrol and other fields and are exported globally.

(1) Outboard motors

Parsun Power has achieved a complete product line layout of “gasoline — diesel — electric” outboard

motors. Leveraging its years of experience and leading market share in the gasoline outboard motor sector the

company is now advancing towards high-power diesel and electric outboard motors. In the future Parsun Power's

outboard motor products will gradually focus on mid-to-high power while expanding the electric outboard motor

product line to continue solidifying its position as a leading domestic outboard motor brand.Gasoline outboard motors are the most diverse product range in Parsun Power’s portfolio covering from 20

horsepower to 300 horsepower including two-stroke and four-stroke models. Parsun Power has accumulated

extensive experience in this field over many years developing proprietary technologies that are applied to its

products. In 2021 Parsun Power achieved mass production and sales of a 115-horsepower gasoline outboard

motor successfully breaking the long-standing monopoly of internationally renowned brands in this power

segment. In 2023 it achieved mass production and sales of a 130-horsepower gasoline outboard motor and in

2024 it released a 300-horsepower gasoline outboard motor marking the formal entry of Chinese enterprises into

the global high-end mainstream outboard motor market.Electric outboard motors use rechargeable batteries as an energy source and convert electrical energy into

kinetic energy via an electric motor. Compared with fuel-powered outboard motors they feature zero emissions

lower noise and are easier to operate. Parsun Power’s electric outboard motors primarily focus on small to

medium horsepower mainly used in environmentally sensitive areas such as tourist resorts.Diesel outboard motors retain the advantages of gasoline outboard motors such as ease of installation

38 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

maintenance and operation while also offering greater fuel efficiency lower emissions higher torque enhanced

safety and easier maintenance. Parsun Power’s own-brand diesel outboard motors are still under development.The existing diesel outboard motor product line includes the agency sale of Swedish brand OXE Marine motors

primarily for the China mainland market. Models include 150 horsepower 175 horsepower 200 horsepower and

300 horsepower diesel outboard motors mainly used in commercial transport offshore oil extraction and public

law enforcement fields.Parsun Power’s Main Gasoline Outboard Motor Models

Model Product Illustration Main Parameters

115HP The maximum output power is 84.6

4 stroke kW and the maximum fuel（ ） consumption is 38.9 L/h

130HP The maximum output power is 95.5

4 stroke kW and the maximum fuel（ ） consumption is 46.2 L/h.

The maximum output power is

300HP expected to be 220.6 kW and the

（4 stroke） maximum fuel consumption is

expected to be 100 L/h.

(2) General machines

Parsun Power’s general machine products mainly include gasoline engines gasoline generator sets and

gasoline water pump sets. Gasoline engines primarily single-cylinder four-stroke units utilize gasoline as fuel

and are adaptable for use in agricultural machinery gardening equipment and other small machinery applications.Gasoline generator sets combine these engines with generators functioning as standby power sources. The

gasoline water pump sets feature centrifugal pumps driven by gasoline engines and are extensively utilized in

agricultural irrigation livestock watering and similar domains.

(3) The operational model of the water powersports equipment business

Parsun Power follows an industry-standard sales model that primarily relies on distribution supplemented by

39 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

direct selling. The demand for outboard motors which are the company’s main product is mainly distributed

overseas with end customers scattered throughout the world. Adopting a distribution-centric sales model enables

Parsun Power to reach end customers to the fullest extent possible.Parsun Power produces outboard motor products independently utilizing sales demand forecasts customer

orders product inventory status material delivery progress and product production cycles to formulate

production plans. The company then organizes the production of components in accordance with specializedprocesses and procedures. In procurement Parsun Power following the principle of “sales determine productionproduction determines procurement” Parsun Power determines the procurement requirements for its outboard

motor business while also taking into account reasonable safety stock.III Core Competitiveness Analysis

The analysis of the Company’s core competitiveness in the Reporting Period is as follows:

(I) Industry-leading technology and strong capabilities of R&D and innovation

The Company’s overall R&D capabilities rank among the top in domestic enterprises of the same type. By

the end of 2024 the Company had been granted 491 patents an increase of 71 compared to the previous year; it

had also been granted 84 software copyrights an increase of 9 compared to the previous year.

1. The smart corrugated packaging equipment business:

The high-end corrugated cardboard production lines under the Fosber Group a subsidiary is industry-

leading in terms of speed width accuracy reliability and level of intelligence. It has earned global recognition

from customers for its high quality reliability and intelligent software systems. Based on Industry 4.0 technology

Fosber Group has launched a corrugated cardboard production line control system which includes modules such

as Pro/Syncro Pro/Care and Pro/Quality. Using sensors AR AI analytics big data and cloud computing

technologies it enables high precision and intelligent management of production lines. Among them Pro/Syncro

achieves high-speed high-quality and low-energy consumption production; Pro/Care provides intelligent

diagnostics to reduce equipment downtime; and Pro/Quality performs real-time defect detection and quality

traceability. Fosber also offers remote services such as Pro/Visionair and Remote Control significantly reducing

after-sales costs and improving customer efficiency. Fosber Asia a subsidiary has introduced and applied the

“Instant Set” dual-module slitter in corrugated cardboard production lines. By independently controlling the

cutting blades and creasers with servo motors it reduces the order changeover time from the industry average of

8-15 seconds to under 3 seconds making it particularly suitable for China’s “small batch diverse product” order

characteristics.

40 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

How Fosber Group’s PRO Series Intelligent Production Management Information Technology System Works

Wonder Digital a holding subsidiary is a national high-tech enterprise and a “Little Giant” Enterprise with

specialties refined management unique technologies and innovation. It connects the physical and digital worlds

through a complete digital printing matrix offering comprehensive solutions. Wonder Digital’s brand UV digital

color printers and high-speed digital printers achieve a printing accuracy of 1800 NPI with color printing quality

comparable to traditional offset printing. The new product WONDER INNO PRO SINGLE PASS launched in

2024 represents a technological breakthrough in digital printing extending from color to high-definition colors. Its

large-width roll-to-roll high-speed digital printing machine is leading in China offering advantages in size

energy consumption and cost-effectiveness.

2. The water powersports equipment business:

Parsun Power is a national-level “Little Giant” with specialties refined management unique technologies

and innovation and a high-tech enterprise. It has long focused on the research and development of domestic

outboard motors accumulating rich innovative achievements. By the end of 2024 the company had accumulated

114 intellectual property rights and participated in the formulation of several industry standards. It has also won

the second prize of the China Machinery Industry Science and Technology Award twice. In 2021 and 2023

Parsun Power successfully achieved mass production of 115-horsepower and 130-horsepower gasoline outboard

motors. In March 2024 Parsun Power released its first domestically produced 300-horsepower gasoline outboard

motor realizing independent control of key core technologies for high-power outboard motors. The company

successfully designed a high-power gasoline outboard motor with a large displacement V6 in-line engine structure

innovatively applying engineering combustion theory to optimize combustion and emissions in outboard motors.These core technologies with independent control and domestic manufacturing supply chains mark a milestone

in the localization of high-end equipment manufacturing in the outboard motor sector. This achievement is of

epochal significance for the development of the domestic outboard motor industry.

41 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

(II) Complete layout in the corrugated packaging machinery industry chain and the most complete

and richest product portfolio in the industry

Among domestic companies in the corrugated packaging equipment sector Dongfang Precision is the

enterprise with the most complete and comprehensive industrial chain layout. Its products cover the fields of

corrugated cardboard production carton printing and packaging and digital printers. The company's business

encompasses all key links in the corrugated packaging production and processing value chain and it possesses the

most comprehensive and diverse product portfolio of corrugated packaging production line equipment in the

industry. This enables the company to meet the needs of different market segments and various types of customers

offering dozens of different specifications and models of full-line and standalone products making it the leader in

the domestic market.

1. Corrugated cardboard production linesIn the field of “High-End Intelligent Corrugated cardboard production lines “: Fosber Group a subsidiaryoffers three major series of products of corrugated cardboard production lines: S/Line Pro/Line and Quantum

Line along with key components for corrugated cardboard production lines such as corrugating rolls and pressure

rolls. These products are designed for medium to large-sized enterprises in the global corrugated cardboard

production and processing industry providing mid-to-high-end corrugated cardboard production lines in various

specifications types and different positioning levels.The S/Line and Pro/Line are primarily suitable for the production of corrugated cardboard with a thickness of

2mm to 13mm. This type of corrugated cardboard is known for its strong load-bearing capacity excellent shock

resistance high plasticity and environmental friendliness. It is widely used in logistics and express delivery

furniture and home appliances and electronics packaging. The Quantum Line is mainly suitable for the

production of solid fiberboard under 2mm thick and micro-corrugated cardboard. This type of cardboard is

lightweight high in strength moisture-resistant and environmentally friendly. It is widely used in packaging for

color boxes high-end products electronics and cultural and artistic items. The Tiru?a brand’s corrugating rolls

and pressure rolls are compatible with various brands and different specifications of corrugated cardboard

production lines. They can be customized based on the type of corrugated line coating requirements and

applicable paper types.

2. Corrugated box printing and packaging production lines

Dongfang Precision (China) and Dongfang Precision (Europe) offer high-quality corrugated box printing and

packaging production lines and standalone equipment for both the Chinese and overseas markets. They offer

dozens of different specifications and market positioning products covering fixed/open-close type top-

print/bottom-print full-line (line)/standalone models making them the most comprehensive and diverse suppliers

of products in this field globally.

3. Digital printers

Wonder Digital offers four major series of digital printing machines covering a wide range of types and

specifications from post-printing to pre-printing from water-based inks to dyes and pigments from water-based

spot colors to UV spot colors and from cartons and color boxes to coiled materials. The machines support various

application modes and scenarios including single-sheet printing to variable data seamless job changeover

42 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024standalone printing to ERP integration among others. Wonder Digital positions itself as a “digital printersupermarket” meeting the needs of different markets and industry customers at various levels for digital printing

production.(III) Profound Know-How experience and experienced team in the industry

Dongfang Precision has a team with deep industry Know-how and extensive experience. With over 20 years

of experience in both domestic and international markets the team has a profound understanding of the industry

layout development planning R&D roadmap production operations marketing and team management in the

field; The core management team has a broad vision and is able to deeply grasp the overall development trends of

the smart corrugated packaging equipment manufacturing industry. Through forward-looking strategic planning

and layout the steady and sustainable development of the Company is achieved. Furthermore the Company

practices a professional manager management model continuously improving organizational structure

management authority incentive systems and cultural development. These measures help the Company attract

talent and enhance the team’s combat effectiveness.(IV) High brand popularity and customer recognition worldwide

Intelligent Packaging Equipment Sector: The Fosber brand corrugated lines Quantum corrugated lines

Tiru?a brand corrugating rolls and pressure rolls as well as Dongfang Precision brand corrugated box printing

and packaging lines and Wonder Digital brand digital printers are well-known and influential both domestically

and internationally. Fosber Group a subsidiary was founded in 1978 and is one of the two companies with the

strongest comprehensive strength in the high-end corrugated line sector worldwide. The Fosber brand enjoys a

high level of recognition and reputation in the corrugated packaging industry markets in Europe North America

and Latin America. Tiru?a Group another subsidiary has nearly 40 years of experience in the field of corrugating

rolls and pressure rolls with its products being sold in over 60 countries and regions. Qcorr a subsidiary formerly

known as the Italian corrugated line supplier Agnati has over 80 years of industry experience. Dongfang

Precision brand’s corrugated box printing and packaging lines are sold in more than 60 countries and regions. The

holding subsidiary Wonder Digital is in the top tier of the domestic digital printer field with its products sold in

over 80 countries and regions and a market stock of over 1600 units.Water Powersports Equipment Sector: Parsun Power a subsidiary is a leading company in the domestic

outboard motor industry. From 2020 to 2022 Parsun Power’s outboard motor products maintained the highest

national market share for three consecutive years. The Parsun Power brand has received numerous honors

including “Jiangsu Province Famous Brand Product” and “Suzhou Famous Brand Product”. Overseas Parsun

Power’s sales network covers more than 100 countries and regions establishing business partnerships with

numerous customers worldwide.(V) Global layout of business assets

The Company mainly serves customers in the corrugated packaging industry worldwide and has realized the

global layout of its business assets:

In Asia the Company has three R&D and manufacturing bases located in Foshan Suzhou and Shenzhen. In

Europe the Company has four R&D and manufacturing bases located in Italy and Spain. Additionally the

Company has production bases and service outlets in the United States and Mexico. The international marketing

43 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

and service network enables the Company to provide products equipment and technical services to industry

clients in over 100 countries and regions. It also helps integrate global resources improve resource allocation

efficiency achieve complementary advantages reduce costs and realize the benefits of optimal resource

distribution.Global Distribution Diagram of the Company’s Business Assets and Marketing Network

(VI) Strong capabilities of strategic control and integration

Since going public Dongfang Precision has continuously expanded upstream and downstream in its core

industries. Over many years of practice the Company has developed strong strategic control and deep integration

capabilities across its business segments accumulating rich experience and practical knowledge. Strategic

management capabilities have become the Company's core strength in successfully managing its various business

entities.In practice the Company has developed a set of effective post-investment integration management methods

by deeply understanding the industry forecasting industry trends and focusing on strategic goals. These methodsinclude corporate governance standardization policy the “Board of Directors-Supervisory Committee-GeneralMeeting” operation mechanism the strategic and financial control system decentralized authorization

management complete audits and management incentives forming a set of measures for effective controls for

post-investment integration with the Company’s own characteristics to secure the effective implementation of the

strategic plan.* Corrugated cardboard production lines: Fosber Group recorded a compound annual growth rate (CAGR) of

net profit of 25% over the past five years

Since acquiring the controlling stake in Fosber Italy in 2014 Dongfang Precision and its management team

have implemented a series of effective integration measures including adjusting strategic planning business

strategies standardizing the management system management incentives and strengthening financial control.These measures successfully energized Fosber Group achieving a compound annual revenue growth rate of about

12% and a compound annual net profit growth rate of 25% from 2020 to 2024.

44 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

* Water powersports products: Parsun Power’s CAGRs of operating revenue and net profit achieved 22% over

the past five years

Since acquiring the controlling stake in Parsun Power in 2015 Dongfang Precision has helped Parsun Power

enhance its R&D marketing supply chain and manufacturing through strategic adjustments and the introduction

of outstanding talent. Between 2020 and 2024 Parsun Power achieved a compound annual growth rate of 22% in

both revenue and net profit.* Revitalizing established enterprises: Tiru?a Group and QCorr

From 2019 to 2020 Dongfang Precision completed the acquisition of Tiru?a Group and Qcorr (formerly

Italy’s Agnati) through its subsidiary Fosber Group. During the post-investment integration phase continuous

optimization and adjustments in strategy R&D market positioning production and talent management

effectively revived these two long-established European companies. In 2024 both QCorr and Tiru?a Group

achieved good annual net profit growth setting their best performance since becoming part of Dongfang Precision.Relying on strong strategic management and integration capabilities and based on mutual respect and mutual

trust with an open mindset the Company has successfully integrated its business entities. The synergies along the

industrial chain continue to be released contributing to the active practice of China’s private enterprises going

global accumulating valuable experience and providing strong support for the Company’s sustainable and steady

development.(VII) Going global and bringing in integrating domestic and international industrial Chain

advantages and strengthening the competitive moat

Over the years Dongfang Precision has actively implemented the “Go Global Bring In” strategy in the

corrugated packaging equipment sector through early overseas expansion and domestic manufacturing upgrades.While maintaining technological leadership in the industry the Company effectively reduces costs by leveraging

the advantages of Chinese manufacturing improving product cost-effectiveness and market adaptability thereby

enhancing the competitive advantage of its products and continuously building a moat in the domestic high-end

corrugated packaging equipment sector.Subsidiaries Fosber Asia and Tiru?a Asia have introduced Fosber’s corrugated cardboard production lines

and Tiru?a’s corrugating rolls and pressure rolls adapting and upgrading them to meet the actual needs of the

Chinese market. This has achieved technology localization and manufacturing domestication fully leveraging

China’s advantage as the world’s most complete industrial and manufacturing support network significantly

lowering production costs and improving product competitiveness. Fosber’s domestic manufacturing rate for mid-

to-high-end corrugated lines has reached 90% and Tiru?a Asia delivered its first batch of mass-produced

corrugating rolls and pressure rolls in 2024. The development of both companies fully embodies the integration of

domestic and foreign industries creating differentiated competitive advantages for domestic high-end smart

equipment and expanding into new markets in China and regions like Southeast Asia and South Asia.

45 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

IV Analysis of Principal Operations

(I) OverviewIn 2024 China’s national economy demonstrated a development trend of “steady improvement and progresswhile accumulating strength”. According to data from the National Bureau of Statistics China’s GDP grew by 5%

year-on-year in 2024. The added value of the equipment manufacturing industry has maintained a growth rate

higher than that of all industrial sectors above a designated size for 15 consecutive months. The intelligent

transformation and upgrading of the manufacturing industry has continued to deepen and new productive forces

have continued to develop and grow.Under the strong leadership of the Board of Directors and management team all employees in 2024 worked

diligently and made continuous efforts. As a result the Company achieved steady revenue and significant growth

in net profit in its core business operations.In 2024 the Company achieved total operating revenue of approximately RMB4778 million which

remained stable compared to 2023; It achieved a net profit attributable to shareholders of the listed company of

approximately RMB500 million a year-on-year increase of 15.54%. The net profit attributable to shareholders of

the listed company excluding non-recurring gains and losses was approximately RMB527 million a year-on-

year increase of 44.42%. The net cash flow generated from operating activities was RMB703 million a year-on-

year increase of 44.21%.Unit: RMB’0000

Gross profit

Business division Operatingrevenue in 2024 YoY change margin in YoY change2024

Intelligent packaging

equipment 402065.52 0.30% 31.58% 3.74%

Note

Corrugated cardboard

production lines 321044.78 0.02% 30.75% 4.50%

Corrugated box printing

and packaging production 81020.74 1.43% 34.84% 0.66%

equipment

Water powersports

equipment 75720.04 2.73% 22.14% -3.88%

Note:

Explanation of the Gross Profit Margin Change: On December 6 2024 the Ministry of Finance issued the Explanation No. 18

of the Accounting Standards for Business Enterprises which stipulates that from the date of issuance companies should account forestimated liabilities arising from quality guarantees that do not constitute a separate performance obligation under “main businesscosts” or “other business costs”. If a company has previously accounted for such estimated liabilities related to quality guarantees

under “sales expenses” it must make retrospective adjustments when first implementing this standard. The Company has

implemented the above regulations and in 2024 included the relevant estimated liabilities related to quality guarantee provisions in

the main business costs making retrospective adjustments to the relevant accounting treatment for the 2023 fiscal year. This

46 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

retrospective adjustment has led to a change in the gross profit margin for 2023 used in the 2024 Annual Report compared to the

gross profit margin data disclosed in the 2023 Annual Report. This change is due to the execution of the new accounting policy and

the retrospective adjustment of previous accounting treatment. The Company has uniformly compared the gross profit margins for

the two years according to the new accounting policy more accurately reflecting the trend in the Company’s gross profit margin

changes.(II) Performance of principal operations during the Reporting Period

1. The business division of intelligent packaging equipment

In 2024 the Company’s intelligent packaging equipment segment achieved total operating revenue of

RMB4021 million which remained stable compared to 2023. The gross profit margin increased by 3.74

percentage points year-on-year and the overall profitability of the segment improved compared to 2023.A. The segment of corrugated cardboard production lines

In 2024 Fosber Group a subsidiary achieved total operating revenue of RMB 2975 million representing a

2% year-on-year increase. From 2020 to 2024 Fosber Group’s compound annual revenue growth rate was 12%

and the compound annual net profit growth rate was 25% (the above operating revenue and net profit figures are

based on Fosber Group’s consolidated financial statements).* Stable Overall Revenue Strengthening the European and American Market Base Expanding Emerging

Growth Areas

In its core markets (Europe and North America) Fosber Group has maintained close cooperation with

leading companies and large enterprises in the corrugated packaging industry for many years earning strong

customer recognition and becoming a long-term stable partner. Despite mergers and acquisitions among major

corrugated packaging companies in Europe and North America in 2024 which slightly slowed the industry’s

capital expenditure pace Fosber Group maintained stable revenue growth in 2024. This stability was attributed to

its excellent reputation solid market position and improvements in order production and delivery times (reducing

full-line order delivery from 9 months in the second half of 2023 to about 6 months in 2024). In response to

slower growth in core markets Fosber actively expanded into emerging markets such as Latin America and Africa

adding 15 new customers in these markets; In 2024 Fosber completed the establishment of Fosber Mexico which

will enable the Company to offer higher-quality and more efficient services to Latin American customers starting

in 2025.Fosber Asia a subsidiary leverages industry-leading domestic mid-to-high-end corrugated line products and

focuses on regional market sales strategies providing high-quality domestic corrugated cardboard production

lines to customers in China and Southeast Asia.* Unlocking Internal Growth Potential Significant Profit Margin Improvement

In 2024 Fosber Group implemented a series of cost-reduction and efficiency-improvement measures tooptimize cost control through efficient operations. These measures included extensive adoption of “leanproduction” further streamlining inventory implementing collaborative procurement enhancing supply chain

47 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

responsiveness and strengthening expense control. Additionally the decline in inflation in the Eurozone since

early 2024 and the fall in raw material and energy prices provided a favorable external environment for gross

margin improvement.During the Reporting Period Fosber Asia launched new products including a 3-meter wide corrugated line

SF5B belt-type single facer and S/Line 370 wet end corrugated line. The new belt-type single facer uses globally

leading patented pressure design to enhance operational speed. The S/Line 370 wet end corrugated line realizes

the localized development and manufacturing of core corrugator components. Fosber Asia continued to improve

operational efficiency in 2024 with the delivery time for its core product the S/Line reduced from 9 months in

2023 to around 6 months in 2024 achieving a more than 20% improvement in efficiency; The implementation of

Total Quality Management (TQM) improved material quality inventory turnover and reduced period expenses.In 2024 the overall gross margin and net profit margin were higher than the five-year average. With both “high-end technological breakthroughs” and “domestic manufacturing cost reduction” Fosber Asia’s market

competitiveness continues to strengthen.* After-Sales and Spare Parts Business Become Key Growth Drivers

The after-sales business forcorrugated lines (including spare parts sales and technical support) is one of

Fosber Group’s core competitive advantages in the industry market. Over the years Fosber Group has provided

excellent support services to industry clients through leading industrial Internet technologies helping customers

enhance productivity. Amid the global macroeconomic slowdown and a slowdown in capital expenditures some

customers have opted to extend the lifespan of existing equipment driving growth in demand for spare parts and

maintenance services. In 2024 Fosber Group’s after-sales business share in overall revenue increased. In the

North American market Fosber USA provides comprehensive services throughout the entire project lifecycle

building differentiated competitive advantages becoming a key barrier with a market share exceeding 50% in

North America.Tiru?a Group a subsidiary has intensified efforts to expand its spare parts business for corrugated packaging

equipment. As a core supplier of corrugating rolls and pressure rolls for Fosber brand corrugated lines Tiru?a

Group also provides high-performance corrugating rolls and pressure rolls to third-party customers in Europe and

the Americas (including other corrugated cardboard production lines manufacturers and corrugated packaging

manufacturers). In 2024 Tiru?a Group achieved both revenue and order growth marking its fifth consecutive

year of revenue growth since 2020. The expansion of third-party customer business was particularly successful

enhancing its competitiveness in the European and American industry markets. With the stable implementation of

Tiru?a Group’s business plan and the deepening of lean production practices its production capacity has steadily

increased and cost-reduction and efficiency-improvement results are visible. In 2024 Tiru?a Group’s net profit

saw a more than 45% growth.Tiru?a Asia a subsidiary responsible for the domestic production of Tiru?a brand corrugating rolls and

pressure rolls completed equipment commissioning and process verification in 2024 at its new factory. It now has

the capacity to deliver mass-produced corrugating rolls and pressure rolls which will become an important part of

the domestic corrugated packaging equipment spare parts business in the future.

48 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

B. The business of corrugated box printing and packaging production lines

In 2024 Dongfang Precision (China) achieved a year-on-year revenue growth of 10.81% with export

revenue accounting for approximately 83% of total revenue (an increase of 10 percentage points compared to

2023). The penetration of Dongfang Precision brand corrugated box printing equipment in the international mid-

to-high-end market continued to rise.In the context of many domestic peers expanding overseas Dongfang Precision has strengthened its

advantages in markets such as Europe and North America through years of accumulated goodwill leading

technology levels excellent product quality and a robust sales and service system. In 2024 the Company

achieved its first sale of new fixed-type full-line products in the European market. During the Reporting Period

Dongfang Precision (China) implemented joint visits to overseas customers and strengthened its overseas after-

sales support system offering a comprehensive suite of services covering the entire product lifecycle including

machine equipment spare parts software upgrades after-sales support and training thereby consolidating and

enhancing customer loyalty.During the Reporting Period high-value-added full-line equipment became the core revenue source for

Dongfang Precision (China). In 2024 Dongfang Precision (China) launched high-end full-line products integrated

with the Interlink intelligent production management system developed by Dongfang Digicom helping industry

clients improve intelligent production management levels and further enhancing production line productivity.The “Smart Logistics Solution” achieved its first ten-million-level project. In 2024 the Company’s

investment and efforts in the smart logistics segment were validated by the market with two smart logistics

projects completed and accepted within the year. This marked a new level of market competitiveness. Dongfang

Precision’s smart logistics solution covers two major scenarios: raw paper logistics and cardboard logistics

integrating various advanced technologies including automation equipment intelligent algorithms and digital

management platforms. It helps industry clients build digital factories/workshops achieving cost reduction

quality improvement and efficiency enhancement while upgrading to intelligent systems. The smart logistics

solution aligns deeply with the company’s overall development strategy and is expected to become a key

component in the future development of the corrugated packaging equipment business segment.Gross margin continued to improve with supply chain optimization and cost control efforts achieving double

effects. During the Reporting Period Dongfang Precision (China) achieved a decrease in core costs through

domestic substitution and optimized procurement management. The Company also implemented refined

production scheduling to improve inventory turnover and strengthened expense control which effectively reduced

the period expense ratio. Multiple cost reduction and efficiency-enhancement measures led to significant

improvements. In 2024 both gross margin and net profit margin reached higher levels than in recent years.C. The business of digital printers

In 2024 the holding subsidiary Wonder Digital achieved operating revenue of approximately RMB186

million a year-on-year increase of about 20%.Launch of High-End New Products Entering the High-Definition Color Printing Market: In 2024 Woner

Digital globally launched the WONDER INNO PRO industrial-grade high-definition printer with a benchmark

49 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

accuracy of 1800npi. This product is designed for the color printing packaging sector and uses new technology to

enhance printing precision and color reproduction. It can achieve high speed high precision and excellent image

quality offering a high-definition color digital printing device that rivals the effects of offset printing.Additionally Wonder Digital launched the WD250 PRINT MASTER wide-format digital inkjet printer which

caters to high-end color printing on cardboard and coated paper as well as yellow and white kraft paper printing.Improvement in Revenue Structure: In 2024 Wonder Digital launched the upgraded “All-in-One DigitalPrinting Machine.” With its innovative “dual-mode integrated technology” it meets the diverse printing needs of

different sizes and helps customers reduce costs and improve efficiency. This product quickly gained popularity in

the domestic market and became a sales hit. The sales of ink consumables accessories and services grew by over

40% and the matching effect of the machines became more apparent. The volume of high-end color printing

products gradually increased helping to enhance Wonder Digital’s revenue scale and gross margin levels.Optimization of Production Manufacturing and Supply Chain Management: In 2024 Wonder Digital made

significant efforts to optimize its production processes improve product standardized design and implement

material classification management. As a result inventory turnover significantly improved obsolete inventory

continued to decrease and the efficiency of machine equipment order delivery was notably enhanced. Through

supply chain collaboration optimization the procurement cost of key components such as print heads was reduced.The Company achieved a period expense ratio lower than the average level of the past three years (since

Wonder Digital was included in Dongfang Precision’s consolidated financial statements in 2022). Through these

measures Wonder Digital's net profit returned to a growth trend in 2024.

2. The business division of water powersports equipment

In 2024 the holding subsidiary Parsun Power achieved operating revenue of approximately RMB757 million

a year-on-year increase of about 2.7%.Breaking into the High-End Outboard Motor Market Domestic 300-Horsepower Model Launches Strongly:

Parsun Power successfully launched its first domestically produced 300-horsepower gasoline outboard motor

which has been certified by the China Classification Society (CCS) and the European CE certification. This

product has achieved independent control over core technologies and the supply chain with its core performance

reaching international advanced levels.The release of this product breaks the long-standing monopoly of brands like Yamaha and Mercury in the

high-power segment filling the gap in the domestic market for high-horsepower gasoline outboard motors. The

300-horsepower outboard motor belongs to the high-power segment and covers a wide range of applications

including leisure commercial and professional uses such as sea fishing surfing offshore cruising fishing water

transport maritime law enforcement patrols and sea rescue. Its technical positioning is at the forefront of the

outboard motor industry applying advanced technologies such as four-stroke engines electronic fuel injection

(EFI) lightweight materials and integrated electronic control systems. This product represents high-end high-

value-added products in the global outboard motor market.As a Chinese manufacturer Parsun Power’s breakthrough in the large-horsepower model allows it to directly

target high-value markets competing globally with the core advantages of Chinese manufacturing. Parsun Power

50 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

is poised to become one of the core competitors in the global high-end outboard motor market laying the

foundation for its entry into the global high-end leisure yacht market and becoming a key driver of future revenue

growth.R&D and Capacity Synergy Layout: Parsun Power continues to deepen its “gasoline + electric + diesel” full-

track layout advancing the development of electric and diesel models; The company is focusing on expanding its

product layout in core water leisure scenarios initiating new projects like the top-tier engine development; As of

the end of 2024 Parsun Power has accumulated 114 intellectual property rights. In terms of production capacity

Parsun Power’s intelligent new factory construction project completed its main engineering construction in 2024

with trial production expected in 2025 which will significantly increase its production capacity.“Supply Chain Optimization + Expense Control” Achieving Simultaneous Improvement in Quality and

Efficiency: In 2024 Parsun Power strengthened its efforts to improve quality reduce costs and increase

efficiency. It optimized procurement management and improved inventory turnover resulting in overall cost

reductions while enhancing the quality of its fuel-powered models; The company also strengthened expense

control achieving a year-on-year decrease in the period expense ratio.(III) Analysis of key financial indicators

1. Revenue and Cost Analysis

(1) Breakdown of Operating Revenue

Unit: RMB

20242023

As a % of total As a % of total Change (%)

Operating revenue operating revenue Operating revenue operating revenue

(%)(%)

Total 4777855602.69 100% 4745737321.83 100% 0.68%

By operating division

Intelligent

4777855602.69100.00%4745737321.83100.00%0.68%

manufacturing

By product category

Corrugated

cardboard 3210447782.10 67.19% 3209889258.08 67.64% 0.02%

production lines

Corrugated box

printing and

packaging 810207423.62 16.96% 798784145.98 16.83% 1.43%

production line

equipment

Water powersports 757200396.97 15.85% 737063917.77 15.53% 2.73%

51 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

products and

general machines

By operating segment

Mainland China 551722648.45 11.55% 744020072.39 15.68% -25.85%

Other countries and

4226132954.2488.45%4001717249.4484.32%5.61%

regions

By sales mode

Direct selling 3900868714.41 81.64% 3977761773.94 83.82% -1.93%

Distribution selling

876986888.2818.36%767975547.8916.18%14.19%

+ reselling

(2) Operating Division Product Category or Operating Segment Contributing over 10% of Operating

Revenue or Operating Profit

√ Applicable □ Not applicable

Unit: RMB

YoY change

YoY change YoY change

Gross profit in gross

Operating revenue Cost of sales in operating in cost of

margin profit

revenue (%) sales (%)

margin (%)

By operating division

Intelligent manufacturing 4777855602.69 3340495826.94 30.08% 0.68% -2.84% 2.53%

By product category

Corrugated cardboard

3210447782.102223077047.1930.75%0.02%-6.08%4.50%

production lines

Corrugated box printing

and packaging production 810207423.62 527897598.86 34.84% 1.43% 0.41% 0.66%

line equipment

Water powersports

products and general 757200396.97 589521180.89 22.14% 2.73% 8.12% -3.88%

machines

By operating segment

Mainland China 551722648.45 441741841.88 19.93% -25.85% -20.89% -5.02%

Other countries and

4226132954.242898753985.0631.41%5.61%0.66%3.37%

regions

By sales mode

Direct selling 3900868714.41 2719099981.52 30.30% -1.93% -6.09% 3.08%

Distribution selling +

876986888.28621395845.4229.14%14.19%14.52%-0.20%

reselling

Under the circumstances that the statistical caliber of the Company's main business data is adjusted in the Reporting Period the

52 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Company's main business data that adjusted according to the caliber at the end of the Reporting Period

□ Applicable √ Not applicable

(3) Whether Revenue from Physical Sales Is Higher than Service Revenue

√ Yes □ No

Operating division Item Unit 2024 2023 Change (%)

Corrugated Unit sales Unit 191.00 194.00 -1.55%

cardboard Output Unit 192.00 195.00 -1.54%

production lines

Inventory Unit 5.00 4.00 25.00%

Corrugated box Unit sales Unit 393.00 350.00 12.29%

printing and Output Unit 393.00 323.00 21.67%

packaging

production line Inventory Unit 24.00 24.00 0.00%

equipment

Water powersports Unit sales Unit 60.25 47.35 27.23%

products and Output Unit 59.37 48.04 23.58%

general machines

Inventory Unit 0.68 1.56 -56.41%

Any over 30% YoYmovements in the data above and why:

√ Applicable □ Not applicable

The over 30% YoY decreases in the inventory of water powersports products and general machines are primarily driven by the

centralized shipment at the end of 2024.

(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period

□Applicable √ Not applicable

(5)Breakdown of Cost of Sales

Unit: RMB

20242023

Industry

Item As a % of total As a % of total Change (%)

Category Cost of sales cost of sales Cost of sales cost of sales

(%)(%)

Raw materials 2160002113.79 64.66% 2273399243.03 66.13% -4.99%

Intelligent

Labor cost 526866025.31 15.77% 493284128.29 14.35% 6.81%

manufacturing

Other 653627687.84 19.57% 671341382.59 19.53% -2.64%

Unit: RMB

Product Item 2024 2023 Change (%)

53 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

category As a % of As a % of

Cost of sales total cost of Cost of sales total cost of

sales (%) sales (%)

Corrugated Raw materials 1239323918.09 37.10% 1386840647.93 40.34% -10.64%

cardboard Labor cost 430426579.74 12.89% 398729132.93 11.60% 7.95%

production lines

Other 553326549.36 16.56% 581478606.30 16.91% -4.84%

Corrugated box Raw materials 402926438.37 12.06% 394267397.00 11.47% 2.20%

printing and Labor cost 64773023.81 1.94% 64402686.38 1.87% 0.58%

packaging

production line Other 60198136.68 1.80% 67051048.15 1.95% -10.22%

equipment

Water power Raw materials 517751757.33 15.50% 492291198.10 14.32% 5.17%

sports products Labor cost 31666421.76 0.95% 30152308.98 0.88% 5.02%

and general

machines Other 40103001.80 1.20% 22811728.14 0.66% 75.80%

(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period

□ Yes √ No

(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period

□Applicable √Not applicable

(8) Major Customers and Suppliers

Major customers:

Total sales to top five customers (RMB) 1226710251.46

Total sales to top five customers as a % of total sales of the

25.67%

Reporting Period (%)

Total sales to related parties among top five customers as a %

0.00%

of total sales of the Reporting Period (%)

Top five customers:

Sales revenue contributed for As a % of total sales revenue

No. Customer

the Reporting Period (RMB) (%)

1 Customer A 453102301.94 9.48%

2 Customer B 351328916.21 7.35%

3 Customer C 171132975.04 3.58%

4 Customer D 132315781.65 2.77%

5 Customer E 118830276.62 2.49%

Total -- 1226710251.46 25.67%

54 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Other information about major customers:

□ Applicable √ Not applicable

Major suppliers:

Total purchases from top five suppliers (RMB) 419499380.37

Total purchases from top five suppliers as a % of total

19.22%

purchases of the Reporting Period (%)

Total purchases from related parties among top five suppliers as

0.00%

a % of total purchases of the Reporting Period (%)

Top five suppliers:

Purchase in the Reporting

No. Supplier As a % of total purchases (%)

Period (RMB)

1 Supplier A 289976104.08 13.29%

2 Supplier B 39288093.83 1.80%

3 Supplier C 30593546.25 1.40%

4 Supplier D 30574731.47 1.40%

5 Supplier E 29066904.74 1.33%

Total -- 419499380.37 19.22%

Other information about major suppliers:

□ Applicable √ Not applicable

2. Expenses

Unit: RMB

2024 2023 Change (%) Reason for any significant change

Selling expenses 192404149.61 200344321.03 -3.96% No significant change.Administrative

360042388.32 344224692.51 4.60% No significant change.

expenses

Mainly due to the increase in interest

Finance costs -24492820.88 -1089616.70 2147.84%

income in the reporting period..R&D expenses 105524488.70 127566482.42 -17.28% No significant change.

3. R&D Investments

√ Applicable □ Not applicable

Objectives to be Expected impact on the

Main R&D projects Purpose Project progress

achieved Company

Localization of a world- To introduce the world- Mass production for Further enrich the

leading high-end leading high-end Promote as planned sales in the domestic Company's product

corrugated cardboard corrugated cardboard market portfolio which can

55 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

production line production line and become a new profit

make it localized to growth point for the

meet the needs of Company's corrugated

Chinese customers for box printing and

the highest-end and packaging production

highest-speed line machinery.corrugated cardboard

production line.Meet the demand for

To make up the blank

high-horsepower

market of high-

outboard motors in

horsepower outboard

High-horsepower Mass production for domestic and

motors and further Promote as planned

outboard motors sales in the world international markets

enhance the

becoming a new profit

competitiveness of

growth point for the

products.Company.To develop a battery-

powered outboard

The electric outboard Meet market demand

motor to further

Electric outboard motor has been Mass production for and become a new

enhance product

motors developed and put into sales in the world profit growth point for

competitiveness in the

mass production. the Company.new energy outboard

motor market.Details about R&D personnel:

2024 2023 Change (%)

Number of R&D personnel 314 335 -6.27%

R&D personnel as a % of total

13.90%14.80%-0.90%

employees

Educational background of R&D personnel

Bachelor’s degree 124 163 -23.93%

Master’s degree 58 25 132.00%

Other 132 147 -10.20%

Age structure of R&D personnel

Under 30 80 91 -12.09%

30-40130141-7.80%

Other 104 103 0.97%

Details about R&D investments:

2024 2023 Change (%)

R&D investments (RMB) 105524488.70 129198284.64 -18.32%

R&D investments as a % of

2.21%2.72%-0.51%

operating revenue

Capitalized R&D investments

01631802.22-100.00%

(RMB)

56 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

2024 2023 Change (%)

Capitalized R&D investments

as a % of total R&D 0.00% 1.26% -1.26%

investments

Reasons for any significant change to the composition of R&D personnel and the impact:

□ Applicable √ Not applicable

Reasons for any significant YoY change in the percentage of R&D investments in operating revenue:

□ Applicable √ Not applicable

Reason for any sharp variation in the percentage of capitalized R&D investments and rationale:

√ Applicable □ Not applicable

Mainly due to the completion of R&D for capitalized projects.

4. Cash Flows

Unit: RMB

Item 2024 2023 Change (%)

Subtotal of cash generated

4762527101.994773160187.72-0.22%

from operating activities

Subtotal of cash used in

4059971721.774285979449.06-5.27%

operating activities

Net cash generated from/used

702555380.22487180738.6644.21%

in operating activities

Subtotal of cash generated

1623611915.962827005182.87-42.57%

from investing activities

Subtotal of cash used in

2165113284.383013612153.30-28.16%

investing activities

Net cash generated from/used

-541501368.42-186606970.43190.18%

in investing activities

Subtotal of cash generated

262788352.77857532104.79-69.36%

from financing activities

Subtotal of cash used in

418138867.37768667640.45-45.60%

financing activities

Net cash generated from/used

-155350514.6088864464.34-274.82%

in financing activities

Net increase in cash and cash

-20224063.29438793914.57-104.61%

equivalents

Explanation of why any of the data above varies significantly on a year-on-year basis:

√ Applicable □ Not applicable

(1) Net cash generated from operating activities was RMB 702.5554 million primarily driven by the decrease in cash

expenditures arising from operating activities during this reporting period.

(2) Net cash used in investing activities was RMB 541.5014 million primarily driven by the company carried out financial asset

57 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

investments during this reporting period.

(3) Net cash generated from financing activities was RMB 155.3505 million primarily driven by the company's repayment of

loans during this reporting period.

(4) Net increase in cash and cash equivalents was RMB 20.2241million primarily driven by the cash flow from financing

activities was in an outflow state during this reporting period.Explanation of why the net cash generated from/used in operating activities varies significantly from the net profit of the Reporting

Period:

□ Applicable √ Not applicable

V Analysis of Non-Core Businesses

√ Applicable □ Not applicable

Unit: RMB

As a % of gross

Amount Primary source/reason Recurrent or not

profit

Mainly due to the change

in investment income

recognized from the

Return on investment 1284823.56 0.18% implementation of Yes

securities investment

during the reporting

period.Mainly due to the

fluctuation in the fair

Gain/loss on changes in fair value -54273753.77 -7.39% value of the held trading Yes

financial assets during

the reporting period.Mainly due to the

provision for inventory

write-downs and

Asset impairment loss -24304048.87 -3.31% No

impairment of contract

assets during the

reporting period.Non-operating income 6230006.52 0.85% No significant impact. No

Non-operating expenses 793815.22 0.11% No significant impact. No

VI Analysis of Assets and Liabilities

1. Significant Changes in Asset Composition

Unit: RMB

31 December 2024 1 January 2024 Change in

Reason for any

As a % of total As a % of total percentage

Amount Amount significant change

assets assets (%)

58 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Cash and bank No significant

1729050383.3422.97%1826419904.4924.23%-1.26%

balances change.Accounts Mainly due to the

745862825.71 9.91% 904003975.47 11.99% -2.08% increase in sales

receivable proceed collection..No significant

Contract assets 52151171.92 0.69% 45946377.14 0.61% 0.08%

change.Mainly due to the

Inventories 1031899593.02 13.71% 1182411055.68 15.69% -1.98% increase in sales

shipments.Long-term

equity No significant113469148.58 1.51% 117265884.84 1.56% -0.05%

change.investments

Mainly due to the

increased investment

Fixed assets 681980621.79 9.06% 611851577.04 8.12% 0.94%

in long-term assets

during the period.Mainly due to the

Construction in increased investment

404826595.025.38%195557097.802.59%2.79%

progress in long-term assets

during the period.Right-of-use No significant

64147198.310.85%82342398.831.09%-0.24%

assets change.Mainly due to the

Short-term repayment of short-

85390128.991.13%370549972.804.92%-3.79%

borrowings term borrowings

during the period.Mainly due to the

Contract

373931068.16 4.97% 645608919.34 8.56% -3.59% increase in sales

liability

shipments.Mainly due to the

Long-term

125482485.31 1.67% 79107701.15 1.05% 0.62% borrowing of long-

borrowings

term loans.No significant

Lease liabilities 47666801.96 0.63% 65861441.32 0.87% -0.24%

change.Overseas assets that take up a large percentage of the Company’s net asset value:

√ Applicable □ Not applicable

Control As a % of the

Any material

Asset value Management measures to Company’s

Asset Source Location Return impairment

(RMB) model protect asset net asset

risk or not

safety value

100% Producing Operation

M&A 1336013740.84 Italy Good 25.57% Not

interest of and management

59 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Control As a % of the

Any material

Asset value Management measures to Company’s

Asset Source Location Return impairment

(RMB) model protect asset net asset

risk or not

safety value

Fosber marketing by

S.p.A. itself

Producing

100%

and Operation

interest of M&A 18346735.76 Italy Good 0.35% Not

marketing by management

EDF S.R. L

itself

60 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

2. Assets and Liabilities at Fair Value

√Applicable □ Not applicable

Unit: RMB

Cumulative

Impairment

fair-value

Gain/loss on fair-value allowance

Item Opening amount changes Purchased in the period Sold in the period Other changes Closing amount

changes in the period for the

recognized

period

in equity

Financial assets

1. Financial assets

held for trading

(exclusive of 651296267.76 18892255.59 1655620603.60 1537159794.77 788649332.18

derivative financial

assets)

2. Derivative

31329174.69-21163557.097410536.432755081.17

financial assets

3.Other non-current

461278259.6725319118.9877777778.0025000000.0074431.97539449588.63

financial assets

Subtotal of financial

1143903702.1223047817.481733398381.601569570331.2074431.971330854001.98

assets

Other non-current

10248630.14330904.1110579534.25

financial assets

Total of the above 1154152332.26 23378721.59 1733398381.60 1569570331.20 74431.97 1341433536.23

Financial liabilities 138319682.01 77321571.25 -2462817.49 213178435.77

Particulars about other changes: Other changes are mainly exchange movements.

61 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Indicate whether any significant change occurred to the measurement attributes of the major assets in the Reporting Period. □ Yes √ No

3. Assets to which the Company’s Rights Were Restricted as at the Period-End

Unit: RMB

Item Closing carrying amount Reason for restriction

Cash and bank balances 76759834.79Deposits used for obtaining bank acceptance bills and guarantees etc.Fixed assets 61309010.26For bank loans obtained by subsidiaries

Total 138068845.05

VII Investments Made

1. Total Investment Amount

√Applicable □ Not applicable

Total investment amount in 20234(RMB) Total investment amount in 2023 (RMB) Change (%)

950553363.691002404107.56-5.17%

2. Significant Equity Investments Acquired in the Reporting Period

□Applicable √Not applicable

3. Significant Non-Equity Investments of which the Acquisition Was Uncompleted in the Reporting Period

□Applicable √ Not applicable

62 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

4. Financial Investments

(1) Securities Investments

√ Applicable □ Not applicable

Unit: RMB

Cumulati

ve fair-

Gain/loss on

Initial Opening value Closing Fundin

Security Security Security Measureme fair-value Purchased in Sold in the Gain/loss in Accounti

investment carrying changes carrying g

type code name nt method changes in the period period the period ng title

cost amount recognize amount source

the period

d in

equity

Financial

Domesticall Montnets

y/ overseas 002123.S Technolo 65764930.0 Fair value 65764930.0 28117927. 28117927. 187638899.assets Self-

93756042.00

Z 0 0 00 00 00 held for funded

listed stocks gy

trading

Financial

Domesticall - assets Self-

y/ overseas Others 119577997. Fair value 119577997. 216460505.1 6286995.35103274.3 90595512.00

80 80 9 9 held for funded

listed stocks 5

trading

Financial

Trust 40000000.0 assets Self-Fair value 20153767.7153767.72 40000000.00 20000000.00 153767.72

products 0 2 held for funded

trading

- - Financial

Funds 332290725. Fair value 332290725. 108948283.9 347067239.Self-

6023666.088148104.056023666.0

57 57 0 36 assets

6 6 fundedheld for

63 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

trading

Financial

-

Others 133662614. Fair value 133662614. 1747501.2 1322320765. 1219443055. 233789426.assets Self-

2750898.7

39398702310

6 held for funded

trading

Total 691296267. -- 651296267. 18892255. 1655620603. 1544051664. 25784125. 788649332.0.00 -- --

76765960472918

Disclosure date of the board

announcement approving the March 28 2024

securities investments

Disclosure date of the general

meeting announcement approving the April 20 2024

securities investments (if any)

(2) Investments in Derivative Financial Instruments

√ Applicable □Not applicable

1) Derivative Investments for Hedging Purposes in the Reporting Period

√ Applicable □Not applicable

Unit: RMB'0000

Cumulative fair- Closing amount

Gain/loss on fair-

Initial investment value changes Purchased in the Sold in the as % of the

Type of derivative Opening amount value changes in the Closing amount

amount recognized in Reporting Period Reporting Period Company’s closing

period

equity equity

Forward Foreign

53553.7543339.20-44.27010214.5532811.8920741.864.17%

Exchange

Swap Foreign

5031.880.00-0.2205031.885031.8800.00%

Exchange

合计58585.6343339.20-44.49015246.4337843.7720741.864.17%

Description of No significant change

64 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

significant changes in

accounting policies

and specific financial

accounting principles

in respect of the

Company's hedges for

the Reporting Period

as compared to the

prior reporting period

Actual gains/losses in

During the Reporting Period the actual Profit on derivative contracts for hedging purposes stood at RMB 114.4 thousand.the Reporting Period

Results of hedges Currently not available

Funding source Self-funded

Risk analysis of

positions held in

derivatives during the

Reporting Period and The above-mentioned hedging transactions are mainly intended to avert and prevent risks arising from fluctuations in exchange rates. In the Rules on the Management of Financial

description of control Derivative Transaction Business formulated by the Company the operating rules review and approval authority routine management and risk control mechanisms on the financial

measures (Including derivative transaction business have been prescribed to standardize business operation as well as prevent and control related risks. Chinese futures exchanges have established well-

but not limited to improved risk control mechanisms. As future exchanges assume the performance responsibility there is a low probability of credit risk. The Company will strengthen the

market risk liquidity understanding and mastering of national policies and requirements of relevant governing bodies to avoid related credit and legal risks.risk credit risk

operational risk legal

risk etc.)

Changes in market

prices or fair value of

derivative products

during the Reporting

Period specific

Undue forward forex settlement and sale contracts are measured at fair value i.e. the difference between the signing price of an undue forward forex settlement and sale contract

methods used and

held at the period-end and the bank’s forward forex rates at the period-end.relevant assumption

and parameter settings

shall be disclosed for

analysis of fair value

of derivatives

Legal matter (if

N/A

applicable)

Disclosure date of the 28 March 2024

65 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

announcement about

the board’s consent for

the derivative

investment (if any)

Disclosure date of the

announcement about

the general meeting’s

20 April 2024

consent for the

derivative investment

(if any)

2) Derivative Investments for Speculative Purposes in the Reporting Period

√ Applicable □Not applicable

Unit: RMB'0000

Closing

investment Actual

Purchased

Relationship Initial Opening Sold in the Impairment Closing amount gain/loss in

Related Type of in the

Counterparty with the investment Start date End date investment Reporting allowance investment as % of the the

transaction derivative Reporting

Company amount amount Period (if any) amount Company’s Reporting

Period

closing Period

equity

Shenwan

15August 19 August

Hongyuan N/A No Accumulator 5000.00 2870.79 0 83.80 0 0 0% -2787

20232024

Securities

China Foreign

22 May 22 August

Merchants N/A No Exchange 50.00 0 50 50.93 0 0 0% 0.93

20242024

Bank Options

Total 5050.00 -- -- 2870.79 50 134.73 0 0 0% -2786.07

Funding source Self-funded

Legal matter (if applicable) N/A

Disclosure date of the announcement about the board’s

28 March 2024

consent for the derivative investment (if any)

Disclosure date of the announcement about the general

20 April 2024

meeting’s consent for the derivative investment (if any)

Risk analysis of positions held in derivatives during the Risk analysis:

Reporting Period and description of control measures 1. Decision-making risk: The Company's involvement in futures and derivatives trading is influenced by a variety of factors including

66 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

(Including but not limited to market risk liquidity risk international and domestic economic policies economic conditions developments in the underlying commodity sectors fluctuations in

credit risk operational risk legal risk etc.) exchange rates and interest rates. Furthermore this type of trading is inherently complex and requires a high level of specialisation thus

carrying a certain degree of risk in trading decision-making processes.

2. Market risk: Financial markets are susceptible to macroeconomic conditions industry cycles and numerous other influences causing linked

underlyings in snowball products to fluctuate during holding periods leading to variable valuations that could result in substantial gains or

losses. Exchange rate movements are bi-directional; in the context of forward exchange rates there's a possibility that locked-in forward

exchange transactions may lead to settlement exchange rates below the company's book rate on the delivery date potentially generating foreign

exchange losses. Additionally due to factors tied to futures and other derivative markets futures prices and spot prices might exhibit

discrepancies in timing and volatility such that during the hedging period related businesses could incur either additional profits or losses.

3. Liquidity risk: A sudden and extreme shift in the relevant price index or managing excessively large positions could potentially result in

untimely margin calls and force the liquidation of positions thereby exposing the Company to liquidity risks.

4. Policy and legal risks: The Company may suffer losses due to alterations in the legal framework non-compliance with relevant laws

regulations or contractual breaches by counterparties leading to improper execution of contracts.

5. Other risks: During transaction execution failing to adhere to standard procedures for derivatives trading or inadequate comprehension of

derivative product information can introduce operational risks potentially leading to losses stemming from non-compliant actions or unforeseen

legal contingencies.Description of control measures:

1. In the Rules on the Management of Financial Derivative Transaction Business formulated by the Company the operating rules review and

approval authority routine management and risk control mechanisms on the financial derivative transaction business have been prescribed to

standardise business operation as well as prevent and control related risks.

2. The Company will diligently select qualified financial institutions for partnership and may engage experienced external professionals when

needed to offer advisory services. This ensures thorough and methodical research and analysis prior to investments thereby minimising

operational risks and performance uncertainties.

3. Throughout its business operations the Company and its associates rigorously comply with applicable national laws and regulations to avert

legal hazards. They conduct regular supervision and inspections to ensure the derivatives business's standardisation internal control efficacy

and information disclosure accuracy. They closely monitor shifts in domestic and international regulatory policies and changes to relevant rules

proactively adjusting hedging strategies accordingly to mitigate potential policy risks well ahead of time.

4. Domestic futures exchanges maintain a robust risk control framework assuming clearing responsibilities thereby reducing the likelihood of

credit risk significantly. The Company will diligently stay informed and aligned with national policies and management body requirements to

mitigate credit and legal risks effectively.

5. The Company will steadfastly uphold cautious investment principles consistently enhancing its analysis and research on economic policies

market conditions and environmental shifts promptly adjusting its investment strategies and scales as needed. Moreover it will continuously

fortify the professional education of its team members elevating the proficiency of its practitioners.

6. The internal audit departments of the Company are responsible for supervising and verifying the implementation of futures and derivatives

trading business proposing timely rectification opinions on existing problems and reporting to the Audit Committee of the Board of Directors

of the Company.Changes in market prices or fair value of derivative

Based on market value changes

products during the Reporting Period specific methods

67 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

used and relevant assumption and parameter settings shall

be disclosed for analysis of fair value of derivatives

Description of significant changes in accounting policies

and specific financial accounting principles in respect of the

No significant change

Company's derivatives for the Reporting Period as

compared to the prior reporting period

5. Use of Raised Funds

□Applicable √ Not applicable

No such cases in the Reporting Period.

68 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

VIII Sale of Major Assets and Equity Investments

1. Sale of Major Assets

□Applicable √ Not applicable

No such cases in the Reporting Period.

2. Sale of Major Equity Investments

□Applicable √ Not applicable

No such cases in the Reporting Period.IX Principal Subsidiaries and Joint Stock Companies

√ Applicable □ Not applicable

Principal subsidiaries and joint stock companies with an over 10% effect on the consolidated net profit:

Unit: RMB

Relations

Register

hip with Principal Operating Operating

Name ed Total assets Net assets Net profit

the activities revenue profit

capital

Company

R&D

processing

manufacturi

ng and

marketing

of

corrugated EUR1.5

Fosber Subsidiar 2457380933 1336013740 2975296374 586008222 428455725

cardboard 6

Group y .64 .84 .92 .15 .21

production million

lines and

parts as

well as

provision of

after-sales

services

Shunyi

Investment

is

principally

engaged in

Shunyi

Subsidiar business RMB10 831348551.9 500778907.3 757200396.9 91625107. 80596569.Investm

y entity and million 6 8 7 18 54

ent

project

investments

etc. It is

the direct

controlling

69 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

shareholder

of Parsun

Power.X Structured Bodies Controlled by the Company

√ Applicable □ Not applicable

1. In March 2021 the Company established Tianjin Hangchuang Zhijin Investment Partnership (Limited

Partnership) (the "Tianjin Hangchuang Fund" or the "Partnership") with AVIC Innovation Capital Management

Co. Ltd. The Company as the sole LP of the Fund subscribed for the Partnership's contribution share of

RMB20000000. The Fund is a special fund which is to invest in the equity of Sichuan Dajin Stainless Steel Co.Ltd. (now renamed as Chengdu Dajin Aero-Tech Co. Ltd.).This investment is in line with the Company’s development strategy considering the Fund’s investment direction

decision-making management income distribution loss allocation etc. From the perspective of business nature

the Company provides much of the capital of the Tianjin Hangchuang Fund so it is reasonable to include the

Fund in the Company’s consolidated financial statements of the Reporting Period.

2. In March 2022 the wholly owned subsidiary Yineng Investment indirectly invested in Beijing Sinoscience

Fullcryo Technology Co. Ltd. (referred to as "Fullcryo" in this Report) and Sinoscience Fullcryo (Zhongshan)

Equipment Manufacturing Co. Ltd. by making a capital contribution to a limited partnership and obtained non-

controlling interests of the two companies.As one of the limited partners of the partnership Yineng Investment accounts for 94.86% of the total capital

contributions. Considering the partnership's agreements on investment orientation investment decisions operation

and management income apportionment and loss bearing and the fact that Yineng Investment accounts for the

majority of the capital contributions to the partnership the partnership is included in the consolidated statements

of Dongfang Precision as a "structured body controlled by the Company" from the perspective of commercial

substance and after complying with the Accounting Standard for Business Enterprises and referring to the

professional opinions of the independent auditor.XI Prospects

(I) The Company's development strategy

1. Company vision

Business purposes of the Company: To become an industrial group with high influence in its areas trust from

customers and shareholders and respect from employees; uphold the business philosophies of "Integrity

Innovation and Excellence" and achieve mutual benefits with customers shareholders employees and the society.

2. Corporate strategy

In 2022 the Company completed its strategic plan for the third five-year period (2018-2022). Looking back

at the past five years the Company achieved 100.1% of its strategic objectives of operating revenue and 96.9% of

70 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

its strategic objectives of net profit. To be specific the Company's annual operating revenue (excluding the impact

of Pride) has expanded from RMB2377 million in 2018 to RMB3893 million in 2022 representing a compound

annual growth rate of approximately 13.13% and its annual net profit (excluding the impact of Pride) has

increased from RMB209 million in 2018 to RMB484 million in 2022 with a compound annual growth rate of

approximately 23.24%. These results demonstrate the strong capabilities of the Company’s management team in

scientific decision-making and strategic planning as well as the competence of efficient strategic execution and

realization of all staff of the Company. These capabilities are a solid foundation for the Company's sound and

sustainable growth in the future.Currently the Company has formulated its strategic plan for the fourth five-year period (2023-2027). During

the period from 2023 to 2027 the Company will adhere to the strategy of "a wealth of talent" and "cultural

guidance" as the solid support and promote the five strategies of "business concentration" "extended investment"

"globalization" "digitalization" and "collaboration" under the coordination of the endogenous capabilities and

extension expansion by the "1 + N" development model to achieve the goal of "to become an industrial group

with high influence in its areas trust from customers and shareholders and respect from employees". .The Company's strategic plan for the fourth five-year period (2023-2027)

To become an industrial group

high influence in its arewasithtrust from customers and

shareholders and respect from employees

"1+N" development model

Business Extended

concentration investment Globalization Digitalization Collaboration

sFtorcautesgoyn Folloswtrtahteegguyidance

"integrated of the Group's Global marketing Realize closeImprove the

corrugated strategic plan seek global operation and a collaborationinternal IT system

packaging business synergies global business among all businessbuild digitalized

solutions" carry on explore new business portfolio divisions by givingfactories increase

with the spin-off opportunities and play to the Groupmanagement

listing of the facilitate the Group's Headquarters’effectiveness and

business of "water robust development functionssupport better

powersports with the principal production

equipment" and businesses as the core efficiency

continuously and extended

optimize capital investment as the

operation support

"Awealth of Talent" × "Cultural Guidance"

Details are as follows:

* Business concentration strategy: Focus on the core main business of "high-end intelligent equipment"

target the dual main axes of "intelligent packaging equipment" and "marine power equipment" position

the "marine power equipment" business as a key first level of the core main business continuously

optimize the internal driving force build a leader in domestic high-end outboard motors and a strong

competitor in the global outboard motor market and create hardcore competitiveness in the field of

high-end intelligent equipment.

71 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

* Globalization strategy: Committed to the globalization of the marketing network management and

operation and the business portfolio.* Digitalization strategy: Internally continue to enhance the IT system to improve management

effectiveness and support the improvement of operational efficiency; externally build digital factories

as a benchmark in the equipment manufacturing industry provide modular digital factory solutions and

facilitate the digital transformation of the industrial chain.* Collaboration strategy: Accelerate the building of a three-tier group operation structure of "Group

Headquarters + Business Divisions + Profit Generating Units" realize close collaboration among all

business divisions by giving play to the Group Headquarters’ functions as well as strengthen the

organizing ability and the collaboration mechanism for group operation

* A wealth of talent strategy: Enhance cross-culture leadership optimize the talent management system

build an excellent management team etc.* Cultural guidance strategy: Establish common goals and values for the Group build the Group as an

international family and lead the Group and subsidiaries towards common growth.* “1+N” Development Model and External Expansion Strategy:

While focusing on the two core business segments the Company places high importance on externalexpansion through equity investments. Adhering to the principle of “the principal businesses as the core +extended investment as the support” the Company leads and coordinates “organic growth + external expansion”

with the “1+N” development model.“1” refers to focusing on the core businesses of high-end intelligent equipment manufacturing (corrugated

packaging equipment + water powersports equipment) firmly establishing its foundational position continuously

strengthening and expanding and enhancing core competitiveness to maintain and increase market share amidst

the trends of digitalization and intelligence.“N” refers to external expansion which can include the following three aspects:

1. Deepening Chain Extension: Mergers and Acquisitions Synergy Strengthening Core Moat

Building on the advantages of Dongfang Precision's main business the Company focuses on acquiring high-

quality companies within the same industry chain globally. By vertically integrating the supply chain it

implements precise mergers and acquisitions of high-quality targets in related fields. After the acquisition the

Company performs deep integration outputs key capabilities and stimulates internal industry chain synergies to

further strengthen its core businesses. In 2022 with the full coverage and penetration of e-commerce the

Company keenly recognized the technological innovations in the packaging industry after conducting thorough

market research. The rapid response and flexible production scheduling of digital printing perfectly matched the

needs for personalized and flexible production in e-commerce fast-moving consumer goods packaging. As a result

the Company acquired Wonder Digital early in 2022 effectively expanding its core product lines and further

enhancing Dongfang Precision’s position in the packaging equipment sector opening up space for the continued

expansion of its core businesses.

72 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

2. Breaking Boundaries for Ecological Co-Creation: Strategic Investment and Co-Creation of Strategic

Emerging Industry “New Productive Power Clusters”

Stepping beyond traditional boundaries and closely following the national strategy of developing new

productive forces the Company will employ a cluster-based strategic investment approach to deeply integrate into

the entire industry chain of new productive forces. Specifically the Company plans to invest in areas such as

embodied intelligence robotics and commercial aerospace forming a comprehensive industry chain investment

layout in these key areas. In the 2025 government work report China will include “embodied intelligence” and

“intelligent robots” as key areas for nurturing future industries marking new opportunities for intelligent upgrades

in Chinese manufacturing. As a leading enterprise in the high-end equipment manufacturing sector the Company

will align itself with national strategic guidance deepen its industrial layout in robotics and embodied intelligence

and build a “soft and hard integrated” intelligent industrial ecosystem through technological breakthroughs scene

implementation and ecological collaboration to create a true new productive power industry cluster.The Company will also continue to leverage its advantage in high-end equipment manufacturing utilizing its

deep engineering capabilities accumulated in traditional high-end equipment manufacturing to collaborate actively

with invested enterprises. Within its reach the Company will accelerate the application of artificial intelligence

and related products in the invested enterprises truly practicing the “strategic investment + industry collaboration”

investment logic and realizing cooperation and win-win results across the entire industry chain.In recent years the Company has made initial investments in the intelligent robotics sector such as in Jaten

Robot and Ruoyu Technology. Jaten Robot is one of the top ten domestic and a global leader in intelligent

industrial robots and smart logistics systems. Over the past two decades it has accumulated a wealth of industry

Know-how; Ruoyu Technology focuses on the industrialization of multimodal large models in embodied

intelligence for robots. It not only provides robots with a next-generation multimodal smart brain but also endows

robots with higher-dimensional autonomous reasoning abilities and broader task generalization capabilities. In

response to the new wave of technological revolution and industrial transformation the Company recognizes the

need to seize opportunities increase innovation efforts nurture emerging industries and accelerate the

development of new productive forces. Through in-depth cooperation with Ruoyu Technology and the strong

academic foundation of Harbin Institute of Technology (Shenzhen) the Company can provide more exploration

of application scenarios for Ruoyu Technology’s large models. At the same time the Company expects to

leverage Ruoyu Technology’s AI capabilities to better achieve breakthroughs in digitalization and intelligence

ensuring the Company’s high-quality development.

3. Positioning on Key Core Tracks: Forward-looking Investment to Build Future Competitiveness

Under the national “14th Five-Year Plan” strategic guidance the subsidiary Yineng Investment continues to

focus on Dongfang Precision’s fourth Five-Year development plan and deepen its strategic layout in emerging

industries. The Company focuses on hard-tech fields with significant technological barriers and national strategic

value such as artificial intelligence+ aerospace technology and new materials to build core competitiveness

through forward-looking industrial investments. In recent years Yineng Investment has invested in the aerospace

sector including Sichuan Tengdun UAV and CASIC Rocket completing its layout in aerospace technology. In

the new materials sector Yineng Investment has invested in Yunnan Yuze Semiconductor and Guizhou

73 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

Aerospace Xinli targeting key technological areas in photovoltaic semiconductors and controlled nuclear fusion

structural materials to secure technological leadership. Going forward Yineng Investment will continue to focus

on national strategic needs and invest in embodied intelligence and robotics-related industries. It will continue to

explore value gaps in the industrial chain nurture globally competitive leading technology companies and

provide technological reserves and industrial support for the Company’s high-quality development.(II) The Company's main business plan for 2025

1. New capacity to be gradually released empowering performance growth

A. Fosber Group’s New European Headquarters Project

In 2024 Fosber Group officially launched the new European headquarters project with a building area of

approximately 35000 to 40000 square meters. Upon completion it will integrate existing capacities and form the

headquarters for Fosber Group’s European manufacturing base with a total planned investment of over EUR40

million. The project is expected to be completed by the end of 2026. This project is a significant investment by

Dongfang Precision aimed at steady growth and sustainable development. Once completed it will further solidify

Fosber Group’s core position in the corrugated packaging equipment manufacturing industry.B. Fosber Asia’s Intelligent Corrugated cardboard production lines Factory Construction Project

Fosber Asia’s new intelligent corrugated cardboard production lines factory is located in Songxia Industrial

Park Nanhai District Foshan City Guangdong Province covering an area of approximately 80 acres. With a

planned investment of RMB500 million the project will primarily serve as the research development production

and service base for domestic high-end corrugated board production equipment. After the new factory is

completed Fosber Asia's production capacity will increase more than twofold. The new factory passed all

government joint inspections in early 2025 and is expected to be put into use later in the year.C. Tiru?a’s Corrugating Roll and Pressure Roll Production Base Project

Tiru?a’s corrugating roll and pressure roll production base is located in Nanhai District Foshan City

Guangdong Province covering 30 acres with a planned total investment of over RMB100 million. This base fully

leverages China’s manufacturing advantages globally to achieve the localization of core components (corrugating

rolls and pressure rolls) for Tiru?a brand corrugated cardboard production lines. It will supply corrugating rolls

and pressure rolls to both internal customers of Dongfang Precision’s corrugated packaging equipment business

and third-party external customers expanding Tiru?a’s market in China and Asia. This production base was put

into operation in 2024 and Tiru?a Asia has already achieved mass production of the first batch of corrugating

rolls and pressure rolls.D. Parsun Power’s Digitalized Factory Construction Project

Parsun Power’s digitalized factory project is located in Suzhou Jiangsu Province. The infrastructure was

completed in 2024 and the site is ready for acceptance and production line installation. After the completion of

remaining construction work on the factory and office buildings in 2025 it will be operational. The completion of

this project will lay a solid foundation for Parsun Power’s future development.

2. Smart corrugated packaging equipment business: enhancing industrial synergies and uncovering

growth potential

74 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

The core business of smart corrugated packaging equipment covers all major key links in the corrugated

packaging production and processing value chain. With a complete industrial chain layout and many similarities

and synergies in product technology sales networks and supply chains across different business segments the

Company provides excellent conditions for deeper integration and resource sharing among various business units.The internal collaboration between Fosber brand corrugated line Quantum brand corrugated line and Fosber

Asia’s domestically produced mid-to-high-end corrugated line continues to deepen improving synergies in R&D

design production manufacturing and supply chain sharing. Fosber Asia as part of the domestic business unit

implements the “go global bring in” strategy introducing industry-leading high-end intelligent corrugated line

products from Fosber Group into China and upgrading them according to market needs in China and Asia. This

has successfully achieved the localization of several high-end pieces of equipment effectively enhancing market

competitiveness.Dongfang Precision (China) and Dongfang Precision (Europe)’s corrugated box printing and packaging

business continues to deepen collaboration in R&D design manufacturing and supply chain coordination. Tiru?a

Asia's domestic production base for corrugating rolls and pressure rolls was completed and operational in 2024.The Company now has both overseas and domestic production bases for corrugating rolls with collaboration

between the overseas and domestic corrugating roll businesses continuing to deepen.In 2024 the Company promoted deeper collaboration among its domestic and overseas business units in

supply chain production manufacturing and sales networks achieving resource sharing complementing

advantages and improving overall operational efficiency. This has led to a significant increase in the gross margin

and net profit margin of the “corrugated packaging equipment” business segment along with a noticeable

reduction in overall expense ratios. In the future the Company will continue to dig deeper into internal growth

potential improving process management in major value chain segments to continuously enhance quality and

efficiency optimizing management to reduce costs and further releasing internal profit growth potential.

3. Water powersports equipment business: breaking into global markets improving R&D and

capacity

Parsun Power a holding subsidiary focuses on market expansion product R&D and capacity construction

to enhance its core competitiveness in the global outboard motor market. On the market expansion front the

company is simultaneously strengthening its penetration in mainstream markets in Europe and North America as

well as emerging regions. It is boosting the penetration of its mid-to-high-power and electric products in mature

markets in Europe and North America while also expanding into emerging markets in Africa and Asia. By

building a “distributor + direct sales” sales system optimizing product layout and positioning and using a

differentiated strategy to compete with leading brands in different markets the company is building strong after-

sales service capabilities. This will help achieve the strategic goal of becoming a leading brand in the global

outboard motor market. In terms of product R&D the company is establishing a solid moat by focusing on both

“traditional + electric” technologies horizontally expanding the product line with breakthroughs in high-power

fuel engine models and vertically laying out products through breakthroughs in electric models. It is

strengthening core technology in-house applications and improving product technology premiums. The new

factory will drive the mass production of all product categories and the economies of scale will support leapfrog

75 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

growth. After the new factory is put into production in 2025 Parsun Power will focus on mid-to-high-power and

electric products applying advanced production management models and intelligent manufacturing technologies

to create core processes and improve efficiency. The new factory will provide a solid foundation for Parsun

Power’s expansion in the global water powersports equipment market and product line extension.

4. Digital printer business: expanding new application scenarios and optimizing product structure

In terms of application scenarios Wonder Digital a subsidiary launched new products in 2024 aimed at the

high-definition color printing sector. The downstream application scenarios of digital printer have further

expanded opening up more development space for its core business. In terms of product structure Wonder

Digital optimized its product structure in 2024 by increasing resource investment in high-end digital printer line

products while also strengthening its ink and consumables business. In 2025 Wonder Digital will further increase

the proportion of high-end equipment products and ink consumables thus improving its revenue structure. The

company will continue to strengthen its market expansion in the high-definition color printing field while also

optimizing sales models and after-sales services to further increase market share.

5. Deepening exploration of “AI + Smart Factories”

Dongfang Digicom a subsidiary empowers the domestic large packaging industry and aims to help

customers achieve full-process data visualization and AI-driven decision-making in production.Dongfang Digicom has started to introduce AI technology into the digital factory field of the packaging

industry. The company is attempting breakthroughs in the “AI+” area of the packaging industry by embedding its

accumulated industry know-how and high-quality production line capabilities into its equipment via edge-side AI

deployment. It will also provide customers with a complete intelligent factory deployment solution enhancing

productivity and value for industry clients. In the future Dongfang Digicom will collaborate with Ruoyu

Technology and Jaten Robot to explore the application modes of cutting-edge technologies such as AI+ robotics

in the smart factory field. The company will offer a one-stop service from data collection and integration of

connected devices to data analysis and smart applications helping customers achieve intelligent manufacturing.With its flexible business model Dongfang Digicom strengthens collaboration with Dongfang Precision’s

corrugated packaging equipment business unit. It provides industrial Internet platforms customized system

software and digital and AI upgrade solutions for the packaging industry. The company will continue to increase

its R&D investment in this field leading the industry’s intelligent transformation truly enabling the packaging

industry with AI+ and becoming a supportive partner in the customers’ development path growing together with

them.(III) Possible risks and countermeasures

1. Risks arising from fluctuations in exchange rates

The main settlement currency and recording currency of Fosber Group the principal overseas business entity

of the Company are euros while the revenue of Fosber America and domestic entities from export is mainly

settled with the US dollar. Fluctuations in the US dollar and euro exchange rates do not significantly impact the

routine operation of overseas business entities but exert certain impacts on the presentation of their assets and

operating results in the consolidated financial statements.

76 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd Annual Report 2024

In 2024 the RMB exchange rate exhibited a “rise first then fall” curve. Factors such as domestic

macroeconomic conditions and policies changes in the Federal Reserve’s interest rate cut expectations global

geopolitical and trade situation changes central bank monetary policy changes international balance of payments

inflation rates and interest levels can all affect the RMB exchange rate. Under the comprehensive influence of

multiple complex factors the volatility of the RMB foreign exchange market has significantly increased.Countermeasures:

The Company can closely track the global financial market and national exchange rate policies make timely

decisions to select proper exchange rate management tools to manage exchange rate risks actively. It can also

reduce risk exposure and increase exchange gains by increasing debts of foreign currency and rely on Group

management to strengthen the level of capital coordination in different countries and regions balance and offset

fluctuation risks at the Group level.

2. Potential risks of financial investment business

In recent years the Company has arranged some of its idle owned funds to carry out financial investment

business such as securities investment and entrusted wealth management in an appropriate manner based on the

actual and development needs. There are certain risks of carrying out the above business due to fluctuations in the

financial market and uncertainty of income; and the risk that the Company may suffer certain investment losses in

case of risk events in the process of wealth management activities in terms of investment strategies and use of

funds.Countermeasures:

On the premise that the funds required for the daily operation of the main business will not be affected the

Company reasonably controls the capital scale for financial investment; it establishes and improves the internal

control system and mechanism standards for securities investment and entrusted financial management and

strengthens the risk control management of securities investment business safeguard the safety of investment

funds and strictly control the risk exposure. In accordance with the economic situation and changes in the

financial market it continuously tracks and analyses the progress of securities investment and the investment of

funds the progress of project investment and the performance of the capital market and timely takes

corresponding preservation measures to control investment risks.

77 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

XII Communications with the Investment Community such as Researches Inquiries and Interviews

√Applicable □ Not applicable

Type of the Main discussions and

Way of Index to the relevant

Date Place communication Communication party materials provided by the

communication information

party Company

Introduction of the

Company's operation

Company competitive advantages

Tianfeng Securities Hexu Fund Mingfu Fund Shangshan cninfo.com

2024-01-17 Conference Field Research Institutes industry development

Asset.Room trend and future strategic http://www.cninfo.com.cn

planning and answering

investor questions

Dajia Asset Management Co. Ltd. SDIC Securities Co.Ltd. ICBC Credit Suisse Asset Management Co. Ltd.Invesco Great Wall Fund Management Co. Ltd. SW Fund

Management Co. Ltd. Western Profit Fund Management

Co. Ltd. Hua'an Fund Management Co. Ltd. Chunhou

Fund Management Co. Ltd. CSC Fund Management Co. Introduction of the

Company Ltd. Caitong Securities Co. Ltd. Shenzhen Hua'an Hexin Company's operation

Asset Management Co. Ltd. Beijing Zundao Asset competitive advantages

Online

2024-01-22 Conference Institutes Management Co. Ltd. Bank of Ningbo Wealth Management

cninfo.com

industry development

communication Co. Ltd. Huamei International Investment Group Shenzhen trend and future strategic http://www.cninfo.com.cn

Room Kinggrand Asset Management Co. Ltd. Yongxing Securities planning and answering

Co. Ltd. Shanghai Panhou Investment Management Co. investor questions

Ltd. Xiangju Capital Management Co. Ltd. Hony Capital

Fund Management Co. Ltd. Industrial Securities Co. Ltd.Generali China Asset Management Co. Ltd. Peking

University Founder Life Insurance Asset Management

Center Haitong Securities Co. Ltd. Beijing StarRock

Investment Management Co. Ltd. Shanghai Gechuan

78 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Type of the Main discussions and

Way of Index to the relevant

Date Place communication Communication party materials provided by the

communication information

party Company

Private Fund Management Partnership Shenzhen Zhengyuan

Investment Co. Ltd. Fullerton Fund Management

(Shanghai) Co. Ltd.CCB Pension Management Co. Ltd. Changjiang Pension

Insurance Co. Ltd. Great Wall Fortune Insurance Asset

Management Co. Ltd. Da Cheng Fund Management Co.Introduction of the

Ltd. China International Fund Management Co. Ltd. CITIC

Company's operation

Securities Co. Ltd. Boshi Fund Management Co. Ltd.Company competitive advantages

Online China Merchants Fund Management Co. Ltd. Xiangcai cninfo.com

2024-03-28 Conference Institutes industry development

communication Fund Management Co. Ltd. Essence Securities Co. Ltd.Room trend and future strategic http://www.cninfo.com.cn

Xin Yuan Fund Management Co. Ltd. Chang Xin Fund

planning and answering

Management Co. Ltd. Essence Fund Management Co. Ltd.investor questions

Yuanxin Yongfeng Fund Management Co. Ltd. Southern

Fund Management Co. Ltd. Bao Ying Fund Management

Co. Ltd.Introduction of the

Company's operation

Company competitive advantages

Online Minsheng Royal Fund Nantu Asset Guotai Junan Securities cninfo.com

2024-04-01 Conference Institutes industry development

communication China International Capital Corporation (CICC).Room trend and future strategic http://www.cninfo.com.cn

planning and answering

investor questions

SDIC Securities Tianfeng Securities Zheshang Securities Introduction of the

Zhongtai Securities Guotai Junan Securities Founder Company's operation

Company Securities Huachuang Securities CITIC Securities competitive advantages cninfo.com

2024-04-19 Conference Field Research Institutes Changjiang Securities China International Capital industry development

Room http://www.cninfo.com.cnCorporation (CICC) Everbright Securities Huafu Securities trend and future strategic

Zhongtian Guofu Securities Huaxi Securities Sealand planning and answering

Securities GF Securities ELITE-BAYCapital Essence investor questions

79 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Type of the Main discussions and

Way of Index to the relevant

Date Place communication Communication party materials provided by the

communication information

party Company

Fund Gewai Investment Jiayi Asset Mingshi Investment

Dinghe Insurance Mingda Asset Huaer Capital Jingyuan

Tiancheng Yunfeng Fund Kangxi Fund Daqin Fund Lanhai

Fund Zhongdaqing Private Equity Guojian'an Fund

Chaoshang Investment Ruilin Investment Hengyixin

Investment Taiju Fund Sino Life Insurance Haigang Life

Insurance Mutual Fund Haitian Investment Bao Ying Fund

Gaoshengxin Private Equity Fund Pengpai Private Equity

Fund Chuanghua Investment Shanghai Securities News

China Securities Journal Securities Times Shenzhen TV

Finance and Economics China Business Journal.Invesco Great Wall Fund Management Co. Ltd. China

Merchants Fund Management Co. Ltd. Neuberger Berman

Introduction of the

Fund Management Co. Ltd. Zhengyuan Investment Co.Company's operation

Ltd. Ping An Asset Management Co. Ltd.Nantu Asset

Company competitive advantages

Online Management Co. Ltd. He YongAsset Management Co. cninfo.com

2024-07-03 Conference Institutes industry development

communication Ltd.Huaxia Jiuying Asset Management Co. Ltd. Yongxing

Room trend and future strategic http://www.cninfo.com.cn

Asset Management Co. Ltd. Dunhe Asset Management Co.planning and answering

Ltd. Sun Life Everbright Asset Management Co. Ltd.investor questions

Northeast Securities Co. Ltd. CSC Securities Co. Ltd.Orient Securities Co. Ltd.XIII Implementation of the “Quality and Earnings Dual Improvement” Action Plan

Indicate whether the Company has disclosed the “Quality and Earnings Dual Improvement” Action Plan.□ Yes √ No

80 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Part IV Corporate Governance

I General Information of Corporate Governance

During the Reporting Period the Company strictly abided by laws and regulations and rules and normative documents of

regulatory authorities including the Company Law the Securities Law the Code of Corporate Governance for Listed Companies

the Rules for Stock Listing of Shenzhen Stock Exchange and the Shenzhen Stock Exchange Guideline No. 1 for the Self-regulation

of Listed Companies - Standardized Operation of Listed Companies on the Main Board continued to improve the Company's

corporate governance structure refine internal management and control policies and further strengthen the Company's capability of

governance.(I) Shareholders and general meeting

During the Reporting Period the Company convened and held general meetings in a standard manner in strict accordance with

laws and regulations. The convening and holding procedures of general meetings the qualifications of attendants to the meetings and

the voting procedures of the meetings met the provisions of the Company Law Rules for the Shareholders' Meetings of Listed

Companies Articles of Associations and Rules of Procedure for General Meeting. Lawyers were engaged to witness the general

meetings of shareholders and issued legal opinions on their legitimacy to ensure fair treatment toward and fully execution of rights of

all shareholders especially minority shareholders.(II) The Company and controlling shareholders

During the Reporting Period the Company properly handled the relationship between it and the controlling shareholders in

accordance with the Company Law Securities Law Articles of Association and relevant provisions of the securities regulatory

authority. The controlling shareholders of the Company acted in a normative manner could exercise their rights and assume their

obligations according to law did not directly or indirectly interfere with the decision-making and business activities of the Company

beyond the general meeting of shareholders. The Company was independent of the controlling shareholders in terms of business

staffing assets organization and finance and had an independent and complete business system and capability to operate

independently. The Board of Directors Supervisory Committee and internal organs of the Company operated independently.(III) Directors and the Board of Directors

During the Reporting Period directors of the Company were elected in strict accordance with the director election procedure

specified in the Articles of Association. The Board of Directors of the Company was composed of seven directors including three

independent directors and the number of members and composition of it met legal and regulatory requirements. During the

Reporting Period all directors of the Company actively and strictly complied with the Company Law Articles of Association and

Rules of Procedure for the Board of Directors earnestly attended meetings of the Board of Directors and general meetings of

shareholders and took an active part in relevant training to improve their business skill and were diligent and responsible. The

convening holding and voting procedure and daily operation of the meetings of the Board of Directors of the Company complied

with relevant regulations.(IV) Supervisors and the Supervisory Committee

During the Reporting Period supervisors of the Company were elected in strict accordance with the supervisor election

procedure specified in the Articles of Association. The Supervisory Committee of the Company was composed of three supervisors

81 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

including one supervising employee representative and the number of members and composition of it met legal and regulatory

requirements. The supervisors conscientiously performed their duties and in line with the attitude of being responsible to

shareholders supervised the financial affairs of the Company as well as the legality and compliance of the performance of duties by

directors and senior managers of the Company and safeguarded the legitimate rights and interests of the Company and shareholders.The convening holding and voting procedures of the meetings of the Supervisory Committee of the Company complied with the

Company Law Articles of Association and Rules of Procedure for the Supervisory Committee.(V) Independent directors and special committees of the Board of Directors

During the Reporting Period independent directors of the Company honestly diligently and independently performed their

duties in accordance with the Company Law and regulations normative documents and implementation rules of other departments

actively attended relevant meetings earnestly deliberated the proposals of the Board of Directors gave independent advice about the

major issues of the Company effectively protected the interests of the Company and shareholders especially small and medium

shareholders and well played their role to supervise as independent directors. In addition the Company has revised its ‘Working

Rules for Independent Directors’at the company level and the "Implementation Rules" of the Audit Committee the Nomination

Committee and the Compensation and Appraisal Committee under the Board of Directors in accordance with the "Administrative

Measures for Independent Directors of Listed Companies" issued by the China Securities Regulatory Commission so as to ensure the

legality and compliance of the company's internal systems.(VI) Information disclosure and transparency

During the Reporting Period the Company performed its obligation of information disclosure in strict accordance with laws and

regulations and the Management Measures for Information Disclosure and disclosed information in a true accurate complete and

timely manner and made no false records misleading statements or major omissions by which it ensured that all investors and

stakeholders had equal opportunities to obtain the Company's information increased the Company's information transparency and

effectively played its role in protecting the right to know of small and medium investors.In December 2024 the company has updated

the "Information Disclosure Management Measures" at the company level to be consistent with the relevant provisions of the current

effective departmental regulations regulatory documents and business rules of the CSRC and the SZSE. Moreover based on the

company's internal latest management requirements and internal processes for information disclosure work the company has made

adjustments and updates to matters such as the internal review procedures for information disclosure announcements and the

management and use of digital certificates in the identity authentication system.Were there any significant differences between the actual situation of the corporate governance and the applicable laws and

regulations as well as rules published by China Securities Regulatory Commission on the governance of listed companies

□ Yes √ No

There were not significant differences between the actual situation of the corporate governance and the applicable laws and

regulations as well as rules published by China Securities Regulatory Commission on the governance of listed companies.II The Independence of the Company from Controlling Shareholders and Actual Controller

on Assets Personnel Finance Structure and Business

Since establishment the Company has been operating in strict accordance with the Company Law Securities Law and Articles

of Association and has established and improved its corporate governance structure. The Company is completely independent of its

controlling shareholders and actual controller in terms of business staffing assets organization and finance and has an independent

and complete business system and capability to operate independently in the market. All production operations and major issues of

82 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

the Company were discussed and determined by the Management the Board of Directors and the general meetings of shareholders in

accordance with the Articles of Association and relevant policies and none of them was controlled by any controlling shareholder or

the actual controller.

1. Asset independence

The Company was founded on the overall change of a limited liability company. All its assets and personnel before the share

restructuring joined the joint stock company. The Company has independent and complete operating assets. After the overall change

the Company owns all the production and operational assets needed for production and operation and there is no dispute over

property rights. The Company owns production systems auxiliary production systems and supporting facilities related to its

production and operation and has independent raw material procurement and product selling systems. Assets of the Company are

strictly separated from those of shareholders and the actual controller and no assets of the Company are being occupied by

shareholders or the actual controller.

2. Personnel independence

The Company has completely independent labour personnel and salary management systems and independent staff teams and

has signed labour contracts with its employees in accordance with the Labour Law and the Company's policies on labour

management. Directors supervisors and senior managers of the Company were elected in strict accordance with the Company Law

and Articles of Association and senior managers including general managers deputy general managers financial directors and

secretaries to the Board of Directors are working full time in the Company and getting paid by the Company. Mr Tang Zhuolin the

actual controller of the Company is serving as the Chairman of the Board of Directors and has been legally exercising its functions

and powers according to the Company Law and Articles of Association in engaging in the Company's management.

3. Finance independence

The Company has an independent financial department and full-time financial personnel and has established an independent

and fine financial accounting system and standardized financial policies. It has implemented an effective financial supervision and

management system and an internal control system and it is capable of making independent financial decisions carrying out

independent accounting and assuming sole responsibility for its profits and losses according to the Articles of Association and its

own situation. The Company has an independent bank account and is not sharing any account of controlling shareholders or the

actual controller and as an independent taxpayer declares taxes and fulfils tax payment obligations independently according to law

and has never paid taxes together with shareholders' companies.

4. Organization independence

The Company in accordance with the Company Law and Articles of Association has set up the General Meeting of

Shareholders as the highest authority the Board of Directors as the decision-making body and the Supervisory Committee as the

supervisory body and has a complete corporate governance structure. The Company has a complete internal management system and

corresponding offices and operating departments. The functional departments work according to respective duties and cooperate with

each other making the Company an organic and independent operating entity free from the intervention of controlling shareholders

and the actual controller.

5. Business independence

The Company has its business independent of controlling shareholders has independent and complete supply production and

sales systems and is capable of independent decision-making on business policies and business plans independent allocation and use

of personnel money and materials and successful organization and implementation of production and business activities. The

Company is completely independent in business and is not relying on the first majority shareholder and the actual controller. The

83 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

controlling shareholders are not conducting business of horizontal competition with that of the Company and have undertaken not to

conduct any business that may be of horizontal competition with that of the Company.III Horizontal Competition

□Applicable √ Not applicable

IV Annual and Extraordinary General Meetings Convened during the Reporting Period

1. General Meeting Convened during the Reporting Period

Investor

Date of the Disclosure

Meeting Type participation Resolution

meeting date

ratio

1. The Proposal on the 2023 Work Report of the

Board of Directors (including the 2023 Work

Report of Independent Directors) was approved.

2. The Proposal on the 2023 Work Report of the

Supervisory Committee was approved.

3. The Proposal on the 2023 Annual Report and

Its Summary was approved.

4. The Proposal on the 2023 Final Financial

Accounts was approved.

5. The Proposal on the 2024 Budget was

The 2023 approved.Annual

Annual 6. The Proposal on the 2023 Final Dividend

General 36.37% 2024-04-19 2024-04-20 Plan was approved.General

Meeting 7. The Proposal on the 2023 Internal Control

Meeting Assessment Report was approved.

8. The Proposal on Intention to Appoint the

Independent Auditor for 2024 was approved.

9. The Proposal on the Use of Own Funds for

Entrusted Wealth Management in 2024 was

approved.

10. The Proposal on 2024 Estimated Quota of

Futures and Derivatives Transactions was

approved.

11.The Proposal on providing guarantee for the

wholly-owned subsidiary was approved.

1. The Proposal on the Non-Fulfillment of the

The first Release Conditions for the Second Release -

Restriction Period of the First-Granted Portion

Extraordinary Extraordina under the 2022 Restricted Stock Incentive Plan

General ry General 33.35% 2024-05-27 2024-05-28 and the Repurchase and Cancellation of Some

Meeting of Meeting Restricted Stocks was approved.

2. The Proposal on Changing the Registered

2024 Capital and Revising the Articles of Association

was approved.The second Annual 1. The Proposal on the By-Election of

33.85% 2024-09-02 2024-09-03 Independent Directors of the Fifth-Term Board

Extraordinary General of Directors was approved.

84 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Investor

Date of the Disclosure

Meeting Type participation Resolution

meeting date

ratio

General Meeting

Meeting of

2024

The Third

Extraordinary Extraordina 1.The Proposal on Terminating the Spin-off

General ry General 34.08% 2024-09-23 2024-09-24 listing of the Subsidiary Parsun Power on the

Meeting of Meeting ChiNext Board of the SZSE was approved.

2024

1. The Proposal on the 2024 Employee Stock

Ownership Plan (Draft) and Its Summary was

The Fourth approved.

2. The Proposal on the 2024 Employee Stock

Extraordinary Extraordina Ownership Plan Management Measures was

General ry General 32.38% 2024-10-09 2024-10-10 approved.Meeting of Meeting 3. The Proposal on the Company's

Shareholders' Meeting to Authorize the Board

2024 of Directors to Handle Matters Related to the

Company's 2024 Employee Stock Ownership

Plan was approved.The Fifth 1. The Proposal on Changing the Registered

Extraordinary Extraordina Capital and Revising the Articles of Association

General ry General was approved.31.29% 2024-12-30 2024-12-31

2. The Proposal on the Repurchase and

Meeting of Meeting Cancellation of Some Restricted Stocks was

2024 approved.

2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed

Voting Rights

□Applicable √ Not applicable

85 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

V Directors Supervisors and Senior Management

1. General Information

Opening Increase in Decrease in Other Closing Reason

Incumbent/

Name Gender Age Office title Start of tenure End of tenure shareholding the period the period increase/dec shareholding for share

Former

(share) (share) (share) rease (share) (share) change

Tang Chairman of the 15 November dispose of

Male 62 Incumbent 22 July 2010 270737568 9313200 261424368

Zhuolin Board 2026 shares

Director and General 15 November

Qiu Yezhi Female 53 Incumbent 22 July 2010 23382388 23382388

Manager 2026

Xie Director and Deputy 15 November dispose

Male 51 Incumbent 16 June 2016 752000 188000 564000

Weiwei General Manager 2026 of shares

Director Board

15 November

Feng Jia Female 39 Secretary and Vice Incumbent 12 August 2022 700000 700000

2026

President

Chief Financial

Shao 29 December 15 November

Male 50 Officer and Vice Incumbent 800000 800000

Yongfeng 2020 2026

President

15 November

Li Ketian Male 68 Independent Director Incumbent 12 August 2022 0 0

2026

2 September

Liu Da Male 50 Independent Director Former 12August 2022 0 0

2024

Tu 15 November

Male 45 Independent Director Incumbent 12 August 2022 0 0

Haichuan 2026

Feng 2 September 15 November

Male 52 Independent Director Incumbent 0 0

Zhidong 2024 2026

86 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Chairman of the

Chen 15 November

Female 40 Supervisory Incumbent 19 May 2017 480 480

Huiyi 2026

Committee

Zhao 15 November

Male 54 Employee Supervisor Incumbent 16 June 2016 0 0

Xiuhe 2026

He 22 September 15 November

Male 42 Supervisor Incumbent 614088 614088

Baohua 2020 2026

Total -- -- -- -- -- -- 296986524 0 9501200 0 287485324 --

87 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Indicate whether any director supervisor or senior management resigned or was dismissed before the end of their tenure during the

Reporting Period.□ Yes √ No

Changes of directors supervisors and senior management:

?Applicable □ Not applicable

Name Office Title Types of Change Date of Chage Reason

Liu Da Independent Director Resigned 2 September 2024 Resigned due topersonal work reasons.Elected by the

Feng Zhidong Independent Director be elected 2 September 2024 shareholders' meeting

of the company.

2. Biographical Information

Professional backgrounds major work experience and current posts in the Company of the incumbent directors supervisors and

senior management:

1. Members of the Board of Directors

Mr. Tang Zhuolin Chinese has no right of permanent residence abroad. He is a member of the 12th People's Political Consultative

Conference of Nanhai District Foshan City Guangdong Province Managing Director of the 9th Council of China Packaging

Federation Managing Director of Guangdong Food and Packaging Machinery Association Vice President of Foshan Machinery

Equipment Industry Association Honorary President of Foshan Nanhai District Machinery Equipment Trade Association Vice

President of Foshan High-tech Zone Chamber of Commerce and Vice President of Foshan Nanhai District Listed Company

Association. He once was Head of Nanhai Guichengdong Plastic and Textile Factory No. 2 Head of Nanhai Guichengdong Printing

Machinery Factory No. 2 and Supervisor of Shenzhen Zhiquan Venture Capital Co. Ltd. He used to serve as Dongfang Precision's

General Manager and Chief Engineer since 1996 and is currently Chairman of the Board of Dongfang Precision Director of Dong

Fang Precision (HK) Limited Director of Guangdong Fosber Intelligent Equipment Co. Ltd. Director of Suzhou Parsun Power

Machine Co. Ltd. Executive Director and General Manager of Suzhou Shunyi Investment Co. Ltd. Executive Director and General

Manager of Hainan Yineng Investment Co. Ltd. Supervisor of Dongfang Digicom Technology Co. Ltd. Supervisor of Dongfang

Digicom Technology (Guangdong) Co. Ltd. Executive Director and Manager of Dongfang Yineng International Holding Co. Ltd.Chairman of the Board of Shenzhen Wonder Digital Technology Co. Ltd. Chairman of the Board of Fosber S.p.A. Director of EDF

Europe S.r.l. Director of Fosber America Inc. Director of Tiru?a S.L.U. Director of QuantumCorrugated S.r.l. Executive Director

and General Manager of Shenzhen Xianglin Venture Capital Co. Ltd. Supervisor of Shenzhen Shenghui Venture Capital Co. Ltd.and Supervisor of Foshan Hengbao Taisheng Trade Co. Ltd.Ms. Qiu Yezhi Chinese has no right of permanent residence abroad MBA National Model Worker Member of the 12th People's

Political Consultative Conference of Foshan City Guangdong Province and Deputy to the 17th People’s Congress of Nanhai District

Foshan City Guangdong Province. She served successively as Dongfang Precision's Director of the General Manager's Office

General Manager of Operations and General Manager since 1996 and as Dongfang Precision's General Manager and Board

Secretary from July 2010 to October 2013. Currently she is Dongfang Precision's Director and General Manager Chairman of the

Board of Guangdong Fosber Intelligent Equipment Co. Ltd. Director of Shenzhen Wonder Digital Technology Co. Ltd.Supervisor of Hainan Yineng Investment Co. Ltd. Supervisor of Dongfang Yineng International Holding Co. Ltd. Vice Chairman

of the Board of Fosber S.p.A. Director of Fosber America Inc. Director of Tiru?a S.L.U. Director of EDF Europe S.r.l. Director of

Tiru?a America inc. Director of Dong Fang Precision (Netherland) Cooperatief U.A. Executive Director and General Manager of

88 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Shenzhen Shenghui Venture Capital Co. Ltd. and Supervisor of Shenzhen Xianglin Venture Capital Co. Ltd.Mr. Xie Weiwei Chinese has no right of permanent residence abroad MBA Member of the 14th People's Political Consultative

Conference of Nanhai District Foshan City Guangdong Province graduated from Huazhong University of Science and Technology

in 2008. Once served as the Standing Deputy General Manager of Foshan Multimodal Transport Corp. Chairman of the Board of

Foshan Donghuochang Railway Logistics Co. Ltd. Deputy Chief of the Reform and Development Division of Foshan SASAC and

Deputy Head of the Investment Department and Head of the Asset Management Department of Foshan Financial Investment

Holdings Co. Ltd. Currently the Company's Director and Deputy General Manager Executive Director and General Manager of

Dongfang Digicom Technology Co. Ltd. Executive Director and General Manager of Dongfang Digicom Technology (Guangdong)

Co. Ltd.Director of Suzhou Parsun Power Machine Co. Ltd.and Director of the joint-stock company Guangdong Jaten Robot &

Automation Co. Ltd.Ms. Feng Jia Chinese has no right of permanent residence abroad. She is Doctor of Engineering of Zhejiang University

Postdoctoral Fellow of Guangzhou Institute of Energy Conversion of Chinese Academy of Sciences and Intermediate Engineer. She

used to work as Associate Researcher at Guangzhou Institute of Energy Conversion of Chinese Academy of Sciences from 2014 to

2018 Senior Manager in the Research and Development Department of China Securities Co. Ltd. from 2018 to 2019 and Assistant

to President & Board Secretary of Tianjin LVYIN Landscape and Ecology Construction Co. Ltd. from 2019 to 2021. Joining the

Company in September 2021 she is now Director Vice President and Board Secretary of the Company the supervisor of Shenzhen

Wonder Digital Technology Co. and the joint-stock company Guangdong Jaten Robot & Automation Co. Ltd.Mr. Li Ketian Chinese has no right of permanent residence abroad. Graduated from South China University of Technology with a

doctoral degree and a professional title of professor of mechanical engineering. Once served as a worker technician and engineer at

the Wuhan Camera Factory from 1974 to 1989 and as a lecturer associate professor and professor at Guangdong University of

Technology from 1992 to 2020. Currently the Independent Director of Dongfang Precision.Mr. Feng Zhidong Chinese has no right of permanent residence abroad. Graduated from Renmin University of China with bachelor

of international accounting & economics and from South China University of Technology with master of business administration

holding an intermediate - level professional accounting qualification certificate. Once served asthe deputy general manager of the

Capital Operation Department of Yuexiu Enterprises (Group) Co. Ltd from 2009 to 2016 the general manager of the Investor

Relations Department of Yuexiu Property Co. Ltd. (Stock Code: 123.HK). from 2012 to 2016. Currently the chairman of Guangzhou

Airparking Network Technology Co. Ltd and the Independent Director of Dongfang Precision since 2 September 2024. In the last

five years he has served as the Independent Director of Societe Generale IoT Services Group Co. Ltd. (Stock Code: 9916.HK) and

the Independent Director of Jianhong Group Holdings Co. Ltd. (Stock Code: 1557.HK) and and an independent director of Xinda

Investment Holdings Co. Ltd. (Stock Code: 1281.HK).Mr. Tu Haichuan Chinese has no right of permanent residence abroad. Graduated from Shanghai University of Finance and

Economics. Bachelor degree. A certified public accountant. Once served as the Audit Manager of Guangdong Dahua Delv Certified

Public Accountants from 2004 to 2009 Investment Director of Guangxi Saifu Investment Co. Ltd. in 2010 Financial Manager

Chief Financial Officer and Assistant to the Chairman of Guangdong Dongfang Precision Science & Technology Co. Ltd. from

December 2010 to September 2016. Currently the Executive Director and General Manager of Shenzhen Changhe Capital

Management Co. Ltd. In the last five years he has been the Director of Guangzhou Shoulian Environment Group Co. Ltd. and

Shenzhen Aiwen Culture Development Co. Ltd. and Independent Director of Dongfang Precision.

2. Members of the Supervisory Committee

Ms. Chen Huiyi Chinese with a university degree has no right of permanent residence abroad. Once served as the assistant of the

Quality Control Department of Dongfang Plastic Products Co. Ltd. from September 2008 to December 2009 currently the Chairman

89 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

of the Supervisory Committee and Secretary to General Manager of Dongfang Precision as well as Supervisor of the subsidiary

Suzhou Parsun Power Machine Co. Ltd.Mr. He Baohua Chinese with a university degree has no right of permanent residence abroad. Joined Guangdong Dongfang

Precision Science & Technology Co. Ltd. in 2002 engaged in after-sales management and project management currently the

Company's supervisor and Senior Project Manager of the Project Management Department.Mr. Zhao Xiuhe Chinese with a technical secondary school degree has no right of permanent residence abroad. Joined Dongfang

Precision in February 2006 currently the Company's Director of the Administration Department. Served as the Company's Employee

Supervisor since June 2016.

3. Senior management

Ms. Qiu Yezhi currently the Company's General Manager. Her resume is detailed in "1. Members of the Board of Directors".Mr. Xie Weiwei currently the Company's Deputy General Manager. His resume is detailed in "1. Members of the Board of

Directors".Ms. Feng Jia currently the Company’s Board Secretary and Vice President. Her resume is detailed in "1. Members of the Board of

Directors".Mr. Shao Yongfeng Chinese has no right of permanent residence abroad. Graduated with a bachelor's degree from Zhongnan

University of Economics and Law a PRC certified public accountant and PRC certified public assets estimator. Served as Financial

Manager and Financial Director of TCL Multimedia Technology Holdings Limited from 2001 to 2010 joined Haier Europe in 2015

and served successively as the company's Financial Director and CFO of Europe joined Shenzhen Smoore Technology Limited and

served as Financial Director from 2016 to 2017 served as Vice President Finance in Shenzhen CIMC Tianda from 2017 to 2020 and

joined Guangdong Dongfang Precision Science & Technology Co. Ltd. in April 2020. Currently the Company's Chief Financial

Officer and Vice President and the CFO of the subsidiaries of Dongfang Digicom Technology Co. Ltd. Dongfang Digicom

Technology (Guangdong) Co. Ltd Hainan Yineng Investment Co. Ltd.Dongfang Yineng International Holding Co. LtdTiru?a

(Guangdong) Intelligent Equipment Manufacturing Co. Ltd.Offices held concurrently in shareholding entities:

□ Applicable √ Not applicable

Offices held concurrently in other entities:

√ Applicable □ Not applicable

Name Other entity Office held in the entity Start of End of Remuneration or allowancetenure tenure from the entity or not

Tang 2013-02-

Dongfang Precision (HK) Director No

Zhuolin 05

Tang 2023-05-

Fosber Italy Chairman of the Board Yes

Zhuolin 19

Tang 2024-01-

Dongfang Precision (Europe) Director Yes

Zhuolin 31

Tang 2022-07-

Fosber America Director Yes

Zhuolin 26

Tang 2022-08-

Tiru?a S.L.U. Director Yes

Zhuolin 03

90 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Name Other entity Office held in the entity Start of End of Remuneration or allowancetenure tenure from the entity or not

Tang 2023-06-

QCorr Director Yes

Zhuolin 26

Tang 2016-04-

Fosber Asia Director Yes

Zhuolin 18

Tang 2015-05-

Parsun Power Director No

Zhuolin 24

Tang Executive DirectorGeneral 2020-10-

Shunyi Investment No

Zhuolin Manager 26

Tang Executive DirectorGeneral 2020-10-

Yineng Investment Yes

Zhuolin Manager 10

Tang 2020-10-

Dongfang Digicom Supervisor No

Zhuolin 26

Tang 2021-02-

Dongfang Digicom (Guangdong) Supervisor No

Zhuolin 26

Tang 2022-06-

Wonder Digital Chairman of the Board Yes

Zhuolin 01

Tang Dongfang Yineng International Executive DirectorGeneral 2022-02-

No

Zhuolin Holding Co. Ltd. Manager 15

Tang Shenzhen Xianglin Venture Capital Executive DirectorGeneral 2016-05-

No

Zhuolin Co. Ltd. Manager 26

Tang Shenzhen Shenghui Venture Capital 2016-05-

Supervisor No

Zhuolin Co. Ltd. 18

Tang Foshan Hengbao Taisheng Trade Co. 2023-09-

Supervisor No

Zhuolin Ltd. 06

2014-03-

Qiu Yezhi Fosber Italy Vice Chairman of the Board Yes

26

2017-12-

Qiu Yezhi Fosber America Director Yes

14

2022-07-

Qiu Yezhi Tiru?a America Director Yes

26

2019-05-

Qiu Yezhi Tiru?a S.L.U. Director Yes

30

2016-04-

Qiu Yezhi Fosber Asia Chairman of the Board Yes

18

2016-06-

Qiu Yezhi Dongfang Precision (Europe) Director Yes

15

2020-10-

Qiu Yezhi Yineng Investment Supervisor No

10

2024-12-

Qiu Yezhi Wonder Digital Director Yes

31

Dongfang Yineng International 2022-02-

Qiu Yezhi Supervisor No

Holding Co. Ltd. 15

91 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Name Other entity Office held in the entity Start of End of Remuneration or allowancetenure tenure from the entity or not

Shenzhen Xianglin Venture Capital 2016-05-

Qiu Yezhi Supervisor No

Co. Ltd. 26

Shenzhen Shenghui Venture Capital Executive DirectorGeneral 2016-05-

Qiu Yezhi No

Co. Ltd. Manager 18

2023-11-

Qiu Yezhi Dongfang Precision (Netherland) Director Yes

08

Executive DirectorGeneral 2025-01-

Xie Weiwei Dongfang Digicom(Guangdong) No

Manager 17

Executive DirectorGeneral 2025-01-

Xie Weiwei Dongfang Digicom No

Manager 24

2015-05-

Xie Weiwei Shunyi Investment Supervisor No

24

2016-03-

Xie Weiwei Jaten Robot Director Yes

23

2024-12-

Xie Weiwei Parsun Power Director No

31

Foshan Nanhai District Machinery 2020-11-

Xie Weiwei Branch Secretary No

Equipment Trade Association 23

Huanong Property and Casualty 2023-12-

Xie Weiwei External supervisor Yes

Insurance Co. Ltd. 28

2023-12-

Feng Jia Wonder Digital Supervisor Yes

21

2024-07-

Feng Jia Jaten Robot Supervisor No

11

Tu Shenzhen Longriver Capital 2016-01-

Executive Director Yes

Haichuan Management Co. Ltd. 06

Tu Shenzhen Ivan Culture Development 2018-03-

Director No

Haichuan Co. Ltd. 02

Feng Guangzhou Airparking Network 2015-07-

Chairman of the Board Yes

Zhidong Technology Co. Ltd. 10

Feng Societe Generale IoT Services Group 2019-09-

Independent Director Yes

Zhidong Co. Ltd. 17

Feng 2022-06-

Jianhong Group Holdings Co. Ltd. Independent Director Yes

Zhidong 01

Feng 2022-10-

Xinda Investment Holdings Co. Ltd. Independent Director Yes

Zhidong 07

Shao 2020-10-

Dongfang Digicom Chief Financial Officer Yes

Yongfeng 26

Shao 2020-10-

Yineng Investment Chief Financial Officer Yes

Yongfeng 10

Shao Dongfang Yineng International 2022-02-

Chief Financial Officer No

Yongfeng Holding Co. Ltd. 15

92 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Name Other entity Office held in the entity Start of End of Remuneration or allowancetenure tenure from the entity or not

Shao 2025-01-

Dongfang Digicom(Guangdong) Chief Financial Officer No

Yongfeng 17

Shao Tiru?a (Guangdong) Intelligent 2025-02-

Chief Financial Officer No

Yongfeng Equipment Manufacturing Co. Ltd 27

2025-01-

Chen Huiyi Fosber Asia Supervisor No

16

Tiru?a (Guangdong) Intelligent 2025-02-

He Baohua Supervisor No

Equipment Manufacturing Co. Ltd 27

Shenzhen Zhiquan Venture Capital Co. 2021-08-

He Baohua Supervisor No

Ltd. 10

Shenzhen Qianyi International Trade 2021-04-

He Baohua Supervisor No

Co. Ltd. 19

Foshan Hengbao Taisheng Trade Co. Executive DirectorGeneral 2022-06-

He Baohua Yes

Ltd. ManagerChief Financial Officer 10

Note Not applicable

Punishments imposed in the recent three years by the securities regulator on the incumbent directors supervisors and senior

management as well as those who left in the Reporting Period:

□ Applicable √ Not applicable

3. Remuneration of Directors Supervisors and Senior Management

Following the approval of the Remuneration and Appraisal Committee the remunerations for directors supervisors and senior

management are submitted to the Board of Directors and the Supervisory Committee for further approval. The remunerations of

directors and supervisors are subject to final approval by the general meeting and those of senior management are subject to the

Board of Directors. The decision-making procedures are in compliance with the Company Law the Company’s Articles of

Association and the Company’s Specific Implementation Rules for the Remuneration and Appraisal Committee under the Board of

Directors. In the Reporting Period the actual payments of remuneration for directors supervisors and senior management were

consistent with the resolutions of the general meeting and the Board of Directors.Remuneration of directors supervisors and senior management for the Reporting Period

Unit: RMB'0000

Total before-tax remuneration Remuneration from any

Name Gender Age Office title Incumbent/Former

from the Company related party or not

Tang

Male 62 Chairman of the Board Incumbent 435.07 Yes

Zhuolin

Director and General

Qiu Yezhi Female 53 Incumbent 224.58 Yes

Manager

Director and Deputy

Xie Weiwei Male 51 Incumbent 90.16 Yes

General Manager

Feng Jia Female 39 Director Board Secretary Incumbent 80.87 No

93 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

and Vice President

Shao Chief Financial Officer and

Male 50 Incumbent 81.81 No

Yongfeng Vice President

Li Ketian Male 68 Independent Director Incumbent 20.00 No

Liu Da Male 50 Independent Director Incumbent 15.05 No

Tu

Male 45 Independent Director Former 20.00 No

Haichuan

Feng

Male 52 Independent Director Incumbent 4.95 No

Zhidong

Chairman of the

Chen Huiyi Female 40 Incumbent 25.36 No

Supervisory Committee

Zhao Xiuhe Male 54 Employee Supervisor Incumbent 23.91 No

He Baohua Male 43 Supervisor Incumbent 41.26 Yes

Total -- -- -- -- 1063.02 --

VI Performance of Duty by Directors in the Reporting Period

1. Board Meetings Convened during the Reporting Period

Meeting Date of the meeting Disclosure date Resolution

1. The Proposal on the cancellation of repurchased shares

The 2nd was approved.

(Extraordinary)

2024-02-05 2024-02-06 2. The Proposal on the Achievement of the Unlocking

Meeting of the 5th Conditions for the Third Unlocking Period of the Reserved

Board of Directors Granted Portion under the 2020 Restricted Stock Incentive

Plan was approved.

1. The Proposal on the 2023 Work Report of the Board of

Directors (including the 2023 Work Report of Independent

Directors) was approved.

2. The Proposal on the 2023 Work Report of the General

Manager was approved.

3. The Proposal on the 2023 Annual Report and Its Summary

was approved.

4. The Proposal on the 2023 Final Financial Accounts was

The 3rd Meeting approved.of the 5th Board of 2024-03-26 2024-03-28 5. The Proposal on the 2024 Budget was approved.

6. The Proposal on the 2023 Final Dividend Plan was

Directors approved.

7. The Proposal on the 2023 Internal Control Assessment

Report was approved.

8. The Proposal on the Summary Report of the Audit

Committee of the Board of Directors on the 2023 Audit

Service Provided by Ernst & Young Hua Ming LLP (Special

General Partnership) and the Renewal of Ernst & Young as

the Company's 2024 Audit Institution was approved.

9. The Proposal on the Use of Own Funds for Entrusted

94 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Meeting Date of the meeting Disclosure date Resolution

Wealth Management in 2024 was approved.

10. The Proposal on the Use of Own Funds for Investment

Securities in 2024 was approved.

11. The Proposal on the Application for Comprehensive

Credit Line from Banks in 2024 was approved.

12. The Proposal on 2024 Estimated Quota of Futures and

Derivatives Transactions was approved.

13. The Proposal on providing guarantee for the wholly-

owned subsidiary was approved.

14. The Proposal on the Rolling Revision of the 2023~2027

Five Year Strategic Plan was approved.

15. The Proposal on Adjustment of Members for the Audit

Committee under the Fifth Board of Directors was approved.

16. The Proposal on the Convening of the 2023 Annual

General Meeting was approved.

1. The Proposal on the 2024 First Quarter Report was

The 4th approved.

(Extraordinary) 2. The Proposal on the Non-Fulfillment of the Release

2024-04-252024-04-26

th Conditions for the Second Release - Restriction Period of theMeeting of the 5 First-Granted Portion under the 2022 Restricted Stock

Board of Directors Incentive Plan and the Repurchase and Cancellation of Some

Restricted Stocks was approved.

1. The Proposal on the Non-Fulfillment of the Release

Conditions for the Second Release - Restriction Period of the

The 5th First-Granted Portion under the 2022 Restricted Stock

(Extraordinary) Incentive Plan and the Repurchase and Cancellation of Some

2024-05-09 2024-05-10 Restricted Stocks was approved.

Meeting of the 5th 2. The Proposal on Changing the Registered Capital and

Board of Directors Revising the Articles of Association was approved.

3. The Proposal on the Convening of 1st Extraordinary

General Meeting for 2024 was approved.The 6th Meeting of

the 5th Board of 2024-07-25 2024-07-26 1. The Proposal on the 2024 Semi-Annual Report and Its

Summary was approved.Directors

The 7th 1. The Proposal on the By-Election of Independent Directors

(Extraordinary) of the Fifth-Term Board of Directors was approved.

2024-08-152024-08-16

Meeting of the 5th 2. The Proposal on the Convening of 2nd Extraordinary

Board of Directors General Meeting for 2024 was approved.The 8th 1. The Proposal on Terminating the Spin-off listing of the

(Extraordinary) Subsidiary Parsun Power on the ChiNext Board of the SZSE

2024-09-06 2024-09-07 was approved.

Meeting of the 5th 2. The Proposal on the Convening of 3rd Extraordinary

Board of Directors General Meeting for 2024 was approved.

1. The Proposal on the 2024 Employee Stock Ownership

th Plan (Draft) and Its Summary was approved.The 9 2. The Proposal on the 2024 Employee Stock Ownership

(Extraordinary)

2024-09-20 2024-09-24 Plan Management Measures was approved.

Meeting of the 5th 3. The Proposal on the Company's Shareholders' Meeting to

Board of Directors Authorize the Board of Directors to Handle Matters Related

to the Company's 2024 Employee Stock Ownership Plan was

approved.

95 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Meeting Date of the meeting Disclosure date Resolution

4. The Proposal on By-election of the Committee under the

Fifth Board of Directors was approved.

5. The Proposal on the Convening of 4th Extraordinary

General Meeting for 2024 was approved.The 10th

(Extraordinary)

2024-10-25 2024-10-26 1. The Proposal on the 2024 Third Quarter Report was

Meeting of the 5th approved..Board of Directors

1. The Proposal on the Repurchase and Cancellation of Some

Restricted Stocks was approved.The 11th 2. The Proposal on Changing the Registered Capital and

(Extraordinary) Revising the Articles of Association was approved.

2024-12-132024-12-14

th 3.The Proposal on the amendments of the InformationMeeting of the 5 Disclosure Management Measures at the company level was

Board of Directors approved.

2. The Proposal on the Convening of 5th Extraordinary

General Meeting for 2024 was approved.

2. Attendance of Directors at Board Meetings and General Meetings

Attendance of directors at board meetings and general meetings

The director

Total number Board

Board Board failed to

of board Board meetings

meetings meetings the attend two General

meetings the meetings attended by

Director attended director consecutive meetings

director was attended on way of

through a failed to board attended

eligible to site telecommuni

proxy attend meetings or

attend cation

not

Tang Zhuolin 10 2 8 0 0 Not 6

Qiu Yezhi 10 2 8 0 0 Not 6

Xie Weiwei 10 2 8 0 0 Not 6

Feng Jia 10 2 8 0 0 Not 6

Li Ketian 10 2 8 0 0 Not 6

Liu Da 6 2 4 0 0 Not 2

Tu Haichuan 10 1 9 0 0 Not 6

Feng Zhidong 4 0 4 0 0 Not 4

Why any director failed to attend two consecutive board meetings: N/A

3. Objections Raised by Directors on Matters of the Company

Indicate whether any directors raised any objections on any matter of the Company.□ Yes √ No

No such cases in the Reporting Period.

96 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

4. Other Information about the Performance of Duty by Directors

Indicate whether any suggestions from directors were adopted by the Company.√ Yes □ No

Suggestions from directors adopted or not adopted by the Company:

During the Reporting Period the directors and independent directors of the Company worked in strict accordance with the

requirements of the Company Law the Securities Law Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies

No. 1 - Standardized Operation of Main Board Listed Companies the Articles of Association the Rules of Procedure for the Board

of Directors the Rules for Independent Directors and other relevant laws and regulations earnestly attended the Board meetings and

the General Meetings and were diligent and responsible. They have made relevant suggestions on the major governance and

operation decisions of the Company. The independent directors actively got to know the operation of the Company and delivered

different opinions on major matters of the Company giving better play to their supervisory role and effectively maintaining the

interests of the Company and its shareholders.

97 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

VII Performance of Duty by Special Committees under the Board in the Reporting Period

Particulars

Number of Important Other

Date of about

Committee Members meetings Contents opinion and performance of

meeting objections (if

convened suggestions duties

any)

1. The Proposal on the 2023 Auditor’s Report of Guangdong

Dongfang Precision Science & Technology Co. Ltd. was

approved.

2. The Proposal on the 2023 Internal Control Self-Assessment

Report was approved.Tu Haichuan Li 2024-03- 3. The Proposal on the Summary Report of the Audit

Audit Committee Ketian and Qiu 1

26 Committee of the Board of Directors on the 2023 Annual Audit

No No No

Yezhi of Ernst & Young Hua Ming LLP was approved.

4. The Proposal on the Proposed Appointment of an Audit

Institution for 2024 was approved.

5. The Proposal on 2024 Estimated Quota of Futures and

Derivatives Transactions was approved.

1. The Proposal on the Work Report of the Audit Department for

Q4 2023 was approved.

2. The Proposal on the Work Report of the Audit Committee for

Q4 2023 was approved.Tu Haichuan Li 2024-03- 3. The Proposal on the Work Report of the Audit Department for

Audit Committee Ketian and Qiu 1 No No No

26 2023 was approved.Yezhi

4. The Proposal on the Work Report of the Audit Committee for

2023was approved.

5. The Proposal on the Work Plan of the Audit Department for

2024 was approved.

1. The Proposal on the Work Report of the Audit Department for

Q1 2024 was approved.Tu Haichuan Li 2024-04- 2. The Proposal on the Work Report of the Audit Committee for

Audit Committee Ketian and Liu 1 Q1 2024 was approved. No No No

Da 25 3. The Proposal on the Work Plan of the Audit Department for

Q2 2024 was approved.

4. The Proposal on the Audit Report for the Q1 2024 Financial

98 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Particulars

Number of Important Other

Date of about

Committee Members meetings Contents opinion and performance of

meeting objections (if

convened suggestions duties

any)

Statements was approved.

1. The Proposal on the Work Report of the Audit Department for

Q2 2024 was approved.

2. The Proposal on the Work Report of the Audit Committee for

Tu Haichuan Li 2024-07- Q2 2024 was approved.Audit Committee Ketian and Liu 1 No No No

Da 25 3. The Proposal on the Work Plan of the Audit Department for

Q3 2024 was approved.

4. The Proposal on the Audit Report for the Q2 2024 Financial

Statements was approved.

1. The Proposal on the Work Report of the Audit Department for

Q3 2024 was approved.

2. The Proposal on the Work Report of the Audit Committee for

Tu Haichuan Li 2024-10- Q3 2024 was approved.Audit Committee Ketian and Feng 1 No No No

Zhidong 25 3. The Proposal on the Work Plan of the Audit Department for

Q4 2024 was approved.

4. The Proposal on the Audit Report for the Q3 2024 Financial

Statements was approved.

1. The Proposal on the 2022 Annual Performance Appraisal

Results for the Awardees of the 2020 Restricted Share Incentive

Remuneration and Liu Da Qiu 2024-02- Plan was approved.Appraisal Yezhi and Li 1 No No No

Committee Ketian 04 2. The Proposal on the Satisfaction of the Unlocking Conditions

for the 3rd Unlocking Period for the Reserved Shares under the

2020 Restricted Share Incentive Plan was approved.

1. The Proposal on the Non-Fulfillment of the Release

Remuneration and Liu Da Qiu 2024-05- Conditions for the Second Release - Restriction Period of the

Appraisal Yezhi and Li 1 First-Granted Portion under the 2022 Restricted Stock Incentive No No No

Committee Ketian 09 Plan and the Repurchase and Cancellation of Some Restricted

Stocks was approved.Remuneration and Feng Zhidong 2024-09- 1. The Proposal on the 2024 Employee Stock Ownership Plan

Appraisal Qiu Yezhi and 1 (Draft) and its Summary was approved. No No No

Committee Li Ketian 20 2. The Proposal on the 2024 Employee Stock Ownership Plan

99 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Particulars

Number of Important Other

Date of about

Committee Members meetings Contents opinion and performance of

meeting objections (if

convened suggestions duties

any)

Management Measures was approved.Remuneration and Feng Zhidong 2024-09- 1. The Proposal on the election of the Convener of the

Appraisal Qiu Yezhi and 1 Remuneration and Appraisal Committee under the Fifth Board No No No

Committee Li Ketian 23 of Directors was approved.Liu Da Tang 1. The Proposal on the Nomination of Candidate for

Nomination 2024-08-

Zhuolin and Tu 1 Independent Director of under the Fifth Board of Directors was No No No

Committee

Haichuan 15 approved.Feng Zhidong

Nomination 2024-09-

1.The Proposal on the election of the Convener of the

Tang Zhuolin 1 Nomination Committee under the Fifth Board of Directors was No No No

Committee

and Tu Haichuan 23 approved.

100 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

VIII Performance of Duty by the Supervisory Committee

Indicate whether the Supervisory Committee found any risk to the Company during its supervision in the Reporting Period.□ Yes √ No

No such cases in the Reporting Period.IX Employees

1. Number Functions and Educational Backgrounds of Employees

Number of in-service employees of the Company as the parent at

518

the period-end

Number of in-service employees of principal subsidiaries at the

1741

period-end

Total number of in-service employees at the period-end 2259

Total number of paid employees in the Reporting Period 2677

Number of retirees to whom the Company as the parent or its

0

major subsidiaries need to pay retirement pensions

Functions

Function Employees

Production&Operation 1397

Marketing 256

R&D and technical 314

Financial 84

Comprehensive 208

Total 2259

Educational backgrounds

Educational background Employees

Below junior college 711

Junior college 965

Bachelor’s degree 425

Master’s degree and above 158

Total 2259

2. Employee Remuneration Policy

The Company remuneration policy in 2024 continued to be based on posts and performance and subject to

total control. A comprehensive remuneration system was established and further improved to retain and attract

talents needed for the Company's sustainable development.

101 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

1. Paid remuneration based on posts: The relative value of a post was determined based on its duties and the

remuneration rage of the post was determined based on the relative value and according to the Company's value

orientation.

2. Paid remuneration based on performance: The Company determined the basic remuneration based on the

relative value of a post and personal competence determined the performance bonus in an employee's

remuneration based on his/her performance and adjusted the remuneration based on his/her personal competence

and overall performance.

3. Changed remuneration with the change in post: The remuneration was strictly fitted to the post and if the

post changed the remuneration changed so that the remuneration system can support the career development of

employees.

4. Total control: The total amount of remuneration was controlled within the scope recognized by the

Company and the growth rate of remuneration should be lower than that of sales revenue and profit. The

Company's affordability was taken into account so that the Company's business performance can support the

growth of the total labour cost.

5. The remuneration system of payment by piece is applied to first-line workers of domestic business entities

so that they could be paid more by being more profession and working harder so as to reflect an internally fair

remuneration policy based on differential skill scoring.Overseas business entities:

The remuneration system for each overseas business entity is put in place in accordance with the local labor

law and other applicable laws.

3. Training Plan

1. Actively introduce diversified training resources and innovative training organization forms such as sand

table simulations and workshops to empower core employees and share the group's training resources. Strengthen

the follow-up of the early communication return visits and feedback for key training projects to continuously

improve the implementation effect of training.

2. Optimize the internal training management system of the group make full use of the internal resources of

the group take inventory of and sort out the internal trainer teams of the group headquarters and its subsidiaries

and promote the accumulation and precipitation of the group's internal knowledge resources.

3. Implement and complete customized individual training plans for employees organize the employees of

the group headquarters to formulate and complete personal internal training external training and internal

training teaching plans ensure the maximum utilization of training resources and enhance employees'

professional skills and comprehensive qualities in a targeted manner.

4. Continuously promote cross-organizational talent cultivation within the group facilitate knowledge

sharing and technical exchanges within the group and improve the overall technical level and innovation ability

of the group.

5. Overseas subsidiaries always attach great importance to employees' career development and personal

growth and actively carry out training programs including professional and technical training leadership training

safety and health training language training and soft skills training.

102 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

4. Labor Outsourcing

√ Applicable □ Not applicable

Total hours of labor outsourced 14137

Total payment for labor outsourcing (RMB'0000) 36.2

X Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)

The profit distribution policy for shareholders especially the formulation implementation and amendments to the cash

dividend policy in the Reporting Period:

√ Applicable □ Not applicable

Articles 183 and 186 of the Articles of Association of Guangdong Dongfang Precision Science & Technology Co.Ltd. has specified the method of profit distribution and the conditions schedule and proportion of cash dividend as well

as the procedures to decide and adjust or change profit distribution in order to fully protect the legitimate rights and

interests of investors.The profit distribution policy of the Company remained unchanged in the Reporting Period.Special statement about the cash dividend policy

In compliance with the Company’s Articles of Association and

Yes

resolution of general meeting

Specific and clear dividend standard and ratio Yes

Complete decision-making procedure and mechanism Yes

Independent directors faithfully performed their duties and

Yes

played their due role

If the Company has no dividend plan it should disclose the

specific reasons and the next steps it intends to take to enhance Yes

investor returns

Non-controlling shareholders are able to fully express their

opinion and desire and their legal rights and interests are fully Yes

protected

In case of adjusting or changing the cash dividend policy the

conditions and procedures involved are in compliance with Not applicable

applicable regulations and transparent

During the reporting period it was profitable and the profit available for distribution to shareholders of the parent

company was positive but no cash dividend distribution plan was proposed

□ Applicable √ Not applicable

The situation of profit distribution and conversion of capital reserve into share capital during this reporting period.□ Applicable √ Not applicable

The company plans to do not distribute cash dividends issue bonus shares or convert capital reserve into share capital

in the planned year.

103 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

XI Equity Incentive Plans Employee Stock Ownership Plans or Other Incentive Measures for

Employees

√ Applicable □ Not applicable

1. Equity Incentives

The implementations of the above-mentioned incentive plans during the Reporting Period are as follows:

1. On 5 February 2024 the Proposal on the Satisfaction of the Unlocking Conditions for the 3rd Unlocking Period for the

Reserved Restricted Shares under the 2020 Restricted Share Incentive Plan was approved at the 2nd (Extraordinary) Meeting of the

5th Board of Directors and the 2nd (Extraordinary) Meeting of the 5th Supervisory Committee. On 26 February 2024 1632000

shares held by 17 awardees were unlocked for public trading in the 3rd unlocking period for the reserved restricted shares under the

2020 Restricted Share Incentive Plan.

2. On 9 May 2024 The Proposal on the Non-Fulfillment of the Release Conditions for the Second Release - Restriction Period

of the First-Granted Portion under the 2022 Restricted Stock Incentive Plan and the Repurchase and Cancellation of Some Restricted

Stocks was approved at the 5th (Extraordinary) Meeting of the 5th Board of Directors and the 5th (Extraordinary) Meeting of the 5th

Supervisory Committee.On 27 May 2024 The Proposal on the Non-Fulfillment of the Release Conditions for the Second Release - Restriction Period of

the First-Granted Portion under the 2022 Restricted Stock Incentive Plan and the Repurchase and Cancellation of Some Restricted

Stocks was approved at the first Extraordinary General Meeting of 2024. The Shenzhen Branch of China Securities Depository and

Clearing Corporation Limited confirmed that it had completed the repurchase and cancellation of some of the company's restricted

shares on January 13 2025.

3. On 13 December 2024 The Proposal on the Repurchase and Cancellation of Some Restricted Stocks was approved was

approved at the 11th (Extraordinary) Meeting of the 5th Board of Directors and was approved by the 5th Extraordinary General

Meeting on 30 December 2024.In view of the fact that one of the original equity incentive recipients has terminated the labor contract

relationship with the company and no longer meets the conditions for the company's equity incentive the company plans to

repurchase and cancel 400000 restricted shares that have been granted to the above-mentioned person but have not yet been released

from the restrictions.The Shenzhen Branch of China Securities Depository and Clearing Corporation Limited confirmed that it had

completed the repurchase and cancellation of some of the company's restricted shares on January 13 2025.Equity incentives received by directors and senior management:

√ Applicable □ Not applicable

Unit: share

Share Exercis Market Restri

Exercis Exerci Unloc

option e price Clos price at cted Closi

Open able sed Openi ked Grant

s for ing the shares ng

ing shares shares ng shares price

Offic newly exercis shar period- newly restri

Name share in the in the restric in the (RMB

e title grante ed e end grante cted

optio Reporti Repor ted Repor yuan/sh

d in shares optio (RMB d in share

ns ng ting shares ting are)

the in the ns yuan/sh sPeriod Period Period the

Repor Reporti are) Repor

104 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

ting ng ting

Period Period Period

(RMB

yuan/sh

are)

Direct

or

Board

Secret

Feng ary 5600 56000 0 1

Jia 00 00

and

Vice

Presid

ent

Chief

Finan

cial

Shao

Offic

Yongf 3200 3200 0 1 0

er and 00 00

eng

Vice

Presid

ent

Total -- -- -- 8800 3200 56000 --

000000

Appraisal of and incentive for senior management:

The Company has established a sound performance appraisal and remuneration policy for senior managers and determined key

performance indicators (KPIs) matching different posts which linked the income of the Company's managers and employees at

different levels to their work performance. During the Reporting Period the Company assessed and appraised the work ability duty

performance and completion of responsibility goals of senior managers based on the KPIs and closely linked their remuneration

levels with the Company's business performance.

2. Implementation of Employee Stock Ownership Plans

?Applicable □ Not applicable

The situation of all effective employee stock ownership plans during the reporting period

Total Proportion of

Number

number of Change the total share

Scope of employees of Source of funds

shares held situation capital of the

employees

(shares) listed company

Company directors (excluding independent The long-term

directors) senior managers who play important incentive award

roles and have significant impacts on the overall 51 21330000 NA 1.75% fund withdrawn by

performance and medium to long-term the company in

development of the company as well as core accordance with

105 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

managers and core business (technical) personnel the systems

who are employed by the company or its regarding salary

controlled subsidiaries management and

performance

management.The shareholding of directors supervisors and senior management personnel in the employee stock ownership plan during the

reporting period

The proportion of the

Opening shareholding Closing shareholding

Name Office title total share capital of the

(share) (share)

listed company.Director and General

Qiu Yezhi 0 4090000 0.34%

Manager

Director and Deputy

Xie Weiwei 0 900000 0.07%

General Manager

Director Board

Feng Jia Secretary and Vice 0 700000 0.06%

President

Chief Financial Officer

Shao Yongfeng 0 700000 0.06%

and Vice President

Changes in asset management institutions during the reporting period

□ Applicable √ Not applicable

Changes in equity caused by holders' disposal of shares etc. during the reporting period

□ Applicable √ Not applicable

The situation of the exercise of shareholders' rights during the reporting period.□ Applicable √ Not applicable

Other relevant matters regarding the employee stock ownership plan during the reporting period

□ Applicable √ Not applicable

Changes in the members of the management committee of the employee stock ownership plan

□ Applicable √ Not applicable

The financial impact of the employee stock ownership plan on the listed company during the reporting period and relevant

accounting treatments

?Applicable □ Not applicable

According to "Accounting Standards for Business Enterprises No. 11 - Share-based Payments" for equity-settled share-based

payments in exchange for employees' services that can only be exercised when the services during the waiting period are completed

or the stipulated performance conditions are met on each balance sheet date during the waiting period the services obtained in the

current period should be included in relevant costs or expenses and capital reserve based on the best estimate of the number of

exercisable equity instruments and in accordance with the fair value of the equity instruments on the grant date. The amortization

expense of the company's employee stock ownership plan in 2024 was 7.8788 million yuan which was included in relevant expense

accounts and capital reserve。

The situation of the termination of the employee stock ownership plan during the reporting period.□ Applicable √ Not applicable

106 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

3. Other Incentive Measures for Employees

□Applicable √ Not applicable

XII Formulation and Implementation of Internal Control System during the Reporting

Period

1. Internal Control Formulation and Implementation

In accordance with the provisions of the Basic Code for Internal Control of Enterprises and its supporting guidelines and other

regulatory requirements for internal control the Company has set up a relatively complete corporate governance structure and

internal control management system in line with its actual operation which is in line with the needs of the Company's operation and

management. The Company has established internal control over the businesses and matters included in the scope of evaluation for

effective implementation. The objective of internal control has been basically achieved with no material weakness.The Board of Directors of the Company is responsible for establishing sound and effective internal controls and evaluating their

effectiveness in accordance with the provisions of the standard system for enterprise internal control. The Supervisory Committee

supervised the establishment and implementation of internal controls by the Board of Directors.The Company would ensure legal compliance in operation and management assets safety truthfulness and integrity of financial

reports and related information through the sound and effective implementation of internal controls to improve operational efficiency

and effect and promote the development strategy.

2. Significant Defects in Internal Control Identified during the Reporting Period

□ Yes √ No

XIII Subsidiary Management during the Reporting Period

Subsidiary Management plan Progress Problems Solutions Solution progress Subsequent plan

N/A N/A N/A N/A N/A N/A N/A

XIV Self-Assessment Report and Independent Auditor’s Report on Internal Control

1. Internal Control Self-Assessment Report

Date of disclosure of the

full internal control 18 March 2025

assessment report

Index to the full internal

control assessment Published on www.cninfo.com.cn

report disclosed

Ratio of the total assets

of the organizations

100.00%

included in the

assessment to the total

107 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

assets in the Company's

consolidated financial

report

Ratio of the revenue of

the organizations

included in the

assessment to the 100.00%

revenue in the

Company's consolidated

financial report

Defect identification criteria

Category Financial report Non-financial report

The identification of defects in non-financial reports

is mainly based on the degree of impact of the

defects on the effectiveness of business procedures

1) Indications of significant defects in financial and the possibility of their occurrence.

reports include: 1) Significant defect

a. Fraudulent conduct by directors supervisors and If the possibility of the defect is high it will

senior management of the Company; b. Correction of seriously reduce the work efficiency or

a published financial report by the Company; c. effectiveness seriously increase the uncertainty of

Significant misstatement in the current financial the effectiveness or make the work result seriously

report identified by a certified public account but not deviate from the expected goal the defect is a

identified during the Company's internal control significant defect. The following usually indicates a

audit; d. Invalid supervision of the Audit Committee significant defect in the internal control of non-

and audit department over the Company's external financial reports:

financial reports and internal control of financial a. Violation of national laws and regulations; b.reports. Outflow of managers or key technicians; c. Frequent

2) Indications of important defects in financial reports negative news from media; d. Failure to correct the

Qualitative criteria

included: results especially significant or important defects in

a. Failure to select or apply accounting policies in internal control assessment; e. Lack of system

accordance with GAAP; b. Failure to implement anti- control or systematic failure of system in important

fraud procedures and take control measures; c. Lack business.of corresponding control mechanism for accounting 2) Important defect

treatment of unconventional or special transactions or If the possibility of the defect is relatively high it

lack of corresponding compensatory control; d. One will significantly reduce the work efficiency or

or more defects in the control of the period-end effectiveness significantly increase the uncertainty

financial reporting process and failure to reasonably of the effectiveness or make the work result

ensure true and complete financial reports. significantly deviate from the expected goal the

3) General defects refer to the control defects other defect is an important defect. The following usually

than significant and important defects mentioned indicates an important defect in the internal control

above. of non-financial reports:

a. Defects in important business policies or systems;

b. Important mistakes in the decision-making

process; c. Serious outflow of business personnel in

108 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

key posts; d. Failure to timely remedy the important

defects identified in internal supervision of internal

control; e. Other circumstances that have a negative

impact on the Company. 3) General defects referred

to the control defects other than significant and

important defects mentioned above.The revenue and total assets were the measuring

indicators for the quantitative criteria. If the loss that

may result from or results from an internal control

defect is related to the profit report it was measured

by the revenue indicator. If the amount of

misstatement in the financial report that may result

from the defect alone or it together with other

defects is less than 0.5% of the revenue the defect

was determined as a general defect. If it exceeds

A quantitative judgment was made based on the

0.5% and is less than 1% of the revenue it was

pretax profit of the Company. The misstatement

determined as an important defect. If it exceeds 1%

exceeding 5% of the total pretax profit was

of the revenue it was determined as a significant

Quantitative criteria determined as a significant misstatement that

defect.exceeding 3% of the total pretax profit was

If the loss that may result from or results from an

determined as an important misstatement and others

internal control defect is related to asset

were determined as general misstatements.management it was measured by the total asset

indicator. If the amount of misstatement in the

financial report that may result from the defect alone

or it together with other defects is less than 0.5% of

the total assets the defect was determined as a

general defect. If it exceeds 0.5% and is less than 1%

of the total assets it was determined as an important

defect. If it exceeds 1% of the total assets it was

determined as a significant defect.Number of significant

defects in financial 0

reports

Number of significant

defects in non-financial 0

reports

Number of important

defects in financial 0

reports

Number of important

defects in non-financial 0

reports

109 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

2. Independent Auditor’s Report on Internal Control

√ Applicable □ Not applicable

Opinion paragraph in the independent auditor’s report on internal control

In the opinion of Ernst & Young Hua Ming LLP Guangdong Dongfang Precision Science & Technology Co. Ltd. maintained in

all material respects effective internal control over financial reporting as at 31 December 2024 based on the Basic Rules on

Enterprise Internal Control and other applicable rules.Independent auditor’s report on

Yes

internal control disclosed or not

Disclosure date 18 March 2025

Index to such report disclosed www.cninfo.com.cn

Type of the auditor’s opinion Unmodified unqualified opinion

Material weaknesses in internal

control not related to financial None

reporting

Indicate whether any modified opinion is expressed in the independent auditor’s report on the Company’s internal control.□ Yes √ No

Indicate whether the independent auditor’s report on the Company’s internal control is consistent with the internal control self-

evaluation report issued by the Company’s Board of Directors.√ Yes □ No

XV Rectifications of Problems Identified by Self-inspection in the Special Action for Listed

Company Governance

N/A

110 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Part V Environmental and Social Responsibilities

I Significant Environmental Issues

Whether the listed company and its subsidiaries fell into major pollutant-discharge enterprises and institutions published by national

environmental protection authorities.□ Yes √ No

Being subject to administrative penalties due to environmental issues during the reporting period.Impact on the

Adopted

Violation production and

Company Name Reason Penalty results Rectification

situations operation of the

measures

listed company

The operation of

Failure to operate air Failure to operate air Ordered to make

pollution prevention

pollution prevention pollution prevention corrections and fined

Parsun Power None and control facilities

and control facilities and control facilities RMB 100000 in

has been fully

properly. properly. total.corrected.Measures taken to reduce carbon emissions in the Reporting Period and the impact:

√ Applicable □ Not applicable

The subsidiary Fosber Italy has established and implemented a sustainability management system and is certified to the following

international standards: ISO45001:2018 ISO9001:2015 ISO14001:2015 EMAS (EU Eco-Management and Audit System) and

SA8000:2014.Reasons for non-disclosure of other environmental information

□ Applicable √ Not applicable

For other environmental information please refer to “II Social Responsibilities” below.II Social Responsibilities

The Company attached importance to fulfilling social responsibility in daily operations intending to promote harmony and co-

prosperity between it and parties related to its interests. The Company also took active measures in the protection of the rights and

interests of shareholders creditors employees suppliers customers and consumers environmental protection sustainable

development public relations and social public welfare undertakings and strived to maximize comprehensive social benefits

including the sustainable development of itself.

(1) Corporate governance: During the Reporting Period the Company strictly abided by the Company Law the Securities Law

and Code of Corporate Governance for Listed Companies continued to refine the corporate governance structure improve the

internal control system formed the decision-making system comprising the Shareholders' General Meeting the Board of Directors

the Supervisory Committee and the Management and timely fulfilled its obligation of information disclosure according to laws and

regulations and effectively safeguarded the rights and interests of all shareholders.

(2) Rights and interests of employees: The Company provided employees with welfare and care by providing holiday gifts and

holding employee birthday parties annual meetings and team-building activities improved employees' professional competence by

offering regular or irregular training to employees in the headquarters and domestic and foreign branches and subsidiaries and

continued to improve the competitive comprehensive remuneration system to retain and attract talents needed for the Company's

sustainable development.

(3) Relationship with customers and suppliers: Long adhering to the principle of "honest business" and "mutual benefit and

win-win" the Company took the initiative to construct and develop a strategic partnership with suppliers and customers and jointly

built a platform of trust and cooperation and earnestly fulfilled its social responsibilities to suppliers customers and consumers. The

Company has been well-performing contracts with suppliers and customers and ensuring that the rights and interests of all parties are

highly valued and duly protected.

(4) Production safety: The Company strictly abided by the Labour Law and the Labour Contract Law adhered to the "people-

oriented" principle attached importance to the needs of employees strived to improve the working and living environments of

employees and has set up a labour union to effectively protect the interests of employees. It also provided labour protection supplies

according to the risk factors of different posts organized occupational health examinations for employees (before taking the post on

the post and before leaving the post) and bought safety liability insurance for employees on highly risky posts. In 2020 Dongfang

Precision extended its Grade II Production Safety Standardization Certificate for Machinery Enterprises and Parsun Power and

Fosber Asia were granted the Grade III Production Safety Standardization Certificate for Machinery Enterprises.

111 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

(5) Environmental protection: Dongfang Precision was granted the National Pollutant Discharge Permit and regularly completes

the filling of data for post-license monitoring of the National Discharge License. It commissioned the qualified third-party

environmental protection agencies to compile the Contingency Plans for Environmental Emergencies and update it on a regular basis.The Company established the "Environmental Self-Monitoring Programme" entrusted a third party to install and operate 24-hour

sewage on-line flow monitoring equipment and entrusted a third-party monitoring organisation to carry out quarterly testing of

wastewater exhaust gas and noise and issue third-party test reports. Moreover the Company’s environmental protection facilities

passed the qualification re-examination on OHSAS18001:2007 Occupational Health and Safety Management Systems and

ISO14001:2005 Environmental Management System. .

(6) Anti-fraud: The Group complied a thorough internal authorization manual that detailed provisions on internal authorization

process of major matters to ensure appropriate internal control and reduce the risk of fraud. In order to create a fair just honest and

non-corrupt internal business environment and strengthen internal monitoring the Company also established and launched the anti-

fraud reporting platform to encourage employees to report fraud findings.

(7) Social honour: Dongfang Precision is a State-level High-tech Enterprise and won honorary titles including "Top 500 Private

Manufacturing Enterprises in China" "Leading Enterprises in Subdivided Industries in Foshan" and "Guangdong Provincial

Industrial Design Centre ". The subsidiary Fosber Asia won honorary titles including "Guangdong Demonstration Enterprise of

Intellectual Property". The subsidiary Wonder Digital has been successfully selected as a State-level "Little Giant" enterprise with

specialties refined management unique technologies and innovation. The subsidiary Parsun Power is a State-level "Little Giant"

enterprise with specialties refined management unique technologies and innovation a State-level High-tech Enterprise an

engineering technology research centre for outboard motors in Jiangsu Province an enterprise technology centre recognised by

Jiangsu Province a leading enterprise in China's internal combustion engine industry and a director unit of the Small Gasoline

Engine Branch of China Internal Combustion Engine Industry Association. The outboard motors of Parsun Power have also won

many honours such as the certificate of industrialisation demonstration project of national torch plan innovative product of China

machinery industry famous brand product of Jiangsu province and famous brand product of Suzhou city.III Efforts in Poverty Alleviation and Rural Revitalization

The Company did not conduct activities related to targeted poverty alleviation in the Reporting Year nor did it develop any

subsequent plan for targeted poverty alleviation.

112 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Part VI Significant Events

I Fulfillment of Undertakings

1. Undertakings of the Company’s Actual Controller Shareholders Related Parties and Acquirers as well

as the Company Itself and other Entities Fulfilled in the Reporting Period or Ongoing at the Period-end

√ Applicable □ Not applicable

Cause of Parties of Types of Date of Term of Fulfilment

undertakings undertakings undertakings Contents of undertakings undertakings undertakings ofundertakings

Undertakings

related to

reform of

shareholder

structure

Undertakings

made in

acquisition

report of

change of

equity report

1. I will conduct all related-party transactions

unavoidable or arising from a reasonable reason

between me and companies controlled by me and

Dongfang Precision and its controlling

subsidiaries in a fair and reasonable manner and

on an equal mutually beneficial equivalent and

compensable basis in strict accordance with

market principles. For all related-party

transactions between me and companies

controlled by me and Dongfang Precision and its

controlling subsidiaries I will sign agreements

and go through procedures according to law and

Undertaking fulfil the obligation of information disclosure in

on accordance with relevant laws regulations

Tang horizontal normative documents Articles of Association of

Zhuolin competition Dongfang Precision and other corporate In normal

Tang related-party governance provisions and undertakes not to

25April Long-term progress of

Undertakings Zhuomian transactions damage the legitimate rights or interests of the

2017 effective fulfilment

made in asset and capital listed company and small and medium

reorganization occupation shareholders. 2. When any related-partytransaction involving me and companies

controlled by me is being deliberated by the

authority of Dongfang Precision I will

proactively perform the obligation of evading

according to law and conduct the transaction only

with the approval of the competent authority. 3. I

undertake not to obtain any improper benefits or

cause Dongfang Precision and its controlling

subsidiaries to assume any improper obligations

through related-party transactions. In case of any

losses to Dongfang Precision or its controlling

subsidiaries as a result of any breach of the above

undertakings I will be liable for such losses.Tang Undertaking 1. The undertaker and companies controlled by it

Zhuolin 25 In normalon are not engaging in any business the same as

Tang November

Long-term progress of

horizontal similar to or competing with the business of the effective

Zhuomian 2019 fulfilmentcompetition listed company and companies controlled by it

113 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Cause of Parties of Types of Date of Term of Fulfilment

undertakings undertakings undertakings Contents of undertakings undertakings undertakings ofundertakings

related-party and they will neither in any way engage in or

transactions assist others in engaging in any business that

and capital competes or may compete with the business of

occupation the listed company and companies controlled by

it nor merge or substantially invest in (or jointly

hold) directly or indirectly other companies

engaging in any business that competes or may

compete with the business of the listed company

and companies controlled by it. 2. If the listed

company engages in a new business sector the

undertaker will not engage in any business that

competes with such a new business of the listed

company except with the prior written consent of

the listed company. 3. If any business opportunity

obtained by the undertaker from any third party

completes or may compete with the business of

the listed company and companies controlled by

it the undertaker will immediately inform and

make every effort to deliver the business

opportunity to the listed company. 4. The

undertaker will not in any way use the

information or other resources obtained from the

listed company to conduct any act that harms the

interests of the listed company. 5. In case of any

losses to the listed company as a result of breach

of these undertakings by the undertaker the

undertaker will make thorough timely and full

compensation for all such losses and take active

measures to eliminate the adverse effects caused

thereby.

1. The undertaker will refrain from any illegal

occupation of the funds and assets of the listed

company and will never require the listed

company to provide any form of guarantee to it

or companies controlled by it under any

circumstances. 2. The undertaker will to the

extent possible avoid and minimize related-party

transactions with the listed company and for all

related-party transactions unavoidable or arising

from a reasonable reason it will conduct

following the principle of voluntary fair and

reasonable market pricing and according to

Undertaking normal market trading conditions sign

on agreements and go through procedures according

Tang horizontal to law abide by relevant laws regulations

Zhuolin competition normative documents and articles of association 25 Long-term In normal

Tang related-party of the listed company perform internal decision- November effective progress of

Zhuomian transactions making and approval procedures according to 2019 fulfilment

and capital law and timely perform the obligation of

occupation information disclosure so as to ensure that the

related-party transactions are fairly and

reasonably priced and conducted under fair

trading conditions and that it will not damage the

legitimate rights or interests of the listed

company and its shareholders through related-

party transactions. 3. In case of any losses to the

listed company as a result of breach of these

undertakings by the undertaker the undertaker

will make thorough timely and full

compensation for all such losses and take active

measures to eliminate the adverse effects caused

thereby.Tang Other 1. I will not overstep my authority to intervene in 25 Long-term In normal

114 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Cause of Parties of Types of Date of Term of Fulfilment

undertakings undertakings undertakings Contents of undertakings undertakings undertakings ofundertakings

Zhuolin undertakings the operation and management of Dongfang November effective progress of

Tang Precision will not occupy the interests of 2019 fulfilment

Zhuomian Dongfang Precision and will earnestly take

corresponding measures to fill up the diluted spot

returns of Dongfang Precision. 2. After the CSRC

and Shenzhen Stock Exchange otherwise release

the measures to fill up diluted spot returns and

opinions and implementation rules for its

undertakings if Dongfang Precision's

corresponding policies and undertakings fail to

meet such provisions I will immediately submit

a supplementary undertaking to the CSRC and

Shenzhen Stock Exchange as required in order to

be compliant. 3. I undertake to earnestly take the

corresponding measures formulated by the listed

company to fill up diluted spot returns and to

earnestly fulfil my undertakings. If I violate such

undertaking(s) and cause losses to the Company

or investors I am willing to bear the

corresponding liability for compensation

according to law.

1. After the relevant transaction the undertaker

will continue to maintain the independence of the

listed company in terms of staffing asset

business organization and finance in accordance

with relevant laws regulations and normative

documents and will not conduct any act that

affects such independence or damages the

interests of the listed company and other

shareholders and will effectively safeguard the

Tang independence of the listed company in terms of

Zhuolin Other staffing asset business organization and 25 Long-term In normal

Tang undertakings finance. 2. This letter of undertaking shall be November effective progress of

Zhuomian effective and irrevocable as of the date when it is 2019 fulfilment

officially signed by the undertaker. The

undertaker warrants to fulfil the undertaking(s) in

good faith and the listed company has the right

to supervise its fulfilment. Where the undertaker

fails to fulfil the undertaking(s) in good faith of

undertaking and thus cause actual losses to the

listed company the undertaker shall compensate

the listed company for all director or indirect

losses caused thereby.I as a director/senior executive of the Company

will faithfully and diligently perform my duties

safeguard the legitimate rights and interests of

the Company and all shareholders and make the

He Weifeng following undertakings to ensure that the

Mai Company's measures to fill up returns will be

Zhirong effectively implemented.Peng 1. I will not transfer benefits to other

Xiaowei Other organizations or individuals for free or under 25Qiu Yezhi Long-term

In normal

undertakings unfair conditions nor will I damage the interests November effective progress ofTang of the Company in other ways. 2. I will constrain 2019 fulfilment

Zhuolin Xie my consumption behaviour on the position. 3. I

Weiwei will not use the Company's assets to engage in

Zhou any investment or consumption activities

Wenhui unrelated to my performance of duties. 4. I will

link the remuneration system formulated by the

Board of Directors or the Remuneration

Committee to the implementation of the

Company's measures to fill up returns. 5. If the

115 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Cause of Parties of Types of Date of Term of Fulfilment

undertakings undertakings undertakings Contents of undertakings undertakings undertakings ofundertakings

Company has an equity incentive program I will

link the exercise conditions of the equity

incentive program to be announced to the

implementation of the Company's measures to

fill up returns. 6. After this undertaking is given

if the regulator puts forward other requirements

for the measures to fill up returns and the

undertaking and the undertaking fails to meet

such requirements I will give a supplementary

undertaking according to the latest requirements

of the regulator. 7. I will effectively implement

the Company's measures to fill up returns and

fully fulfil my corresponding undertakings and I

am willing to bear the corresponding liability for

compensation according to law if I violate such

undertaking(s) and cause losses to the Company

or investors.Before the fact that I am (or the Company is) a

major shareholder of the issuer is changed I (or

Undertaking the Company) will not directly or indirectly in

on any way (including but not limited to sole

Tang horizontal proprietorship joint venture and holding stocks

Zhuolin competition or interests in other companies or enterprises) 18 August Long-term In normal

Tang related-party engage in any business or activity that competes 2010 effective progress of

Zhuomian transactions or may compete with the business of the issuer. I fulfilment

and capital (The Company) shall compensate the issuer for

occupation any loss caused to it as a result of the failure to

Undertakings fulfil the undertaking to avoid horizontal

made in IPO competition.or refinancing

If relevant government or judicial authorities

decide that Dongfang Precision or Weike

Dongmeng need to make a supplementary

Tang payment for employees' public housing

Zhuolin Other provision or Dongfang Precision or Weike 15August Long-term In normal

Tang undertakings Dongmeng is subject to any late fee fine or loses 2011 effective progress of

Zhuomian for failing to pay the public housing provision for fulfilment

some employees I will unconditionally and in

full bear such supplementary payment late fees

and fines.Undertakings

related to

equity

incentives

Undertakings

made to

minority

shareholders

of the

Company

Other

undertakings

Whether the

undertakings

were timely Yes

performed

Where the

Company

failed to Not applicable

fulfill an

undertaking

116 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Cause of Parties of Types of Fulfilment

undertakings undertakings undertakings Contents of undertakings

Date of Term of

undertakings undertakings ofundertakings

on time it

shall explain

in detail the

reasons for

failing to do

so and the

subsequent

plan

2. Where there had been an earnings forecast for an asset or project and the Reporting Period was still

within the forecast period explain why the forecast has been reached for the Reporting Period.□Applicable √ Not applicable

II Occupation of the Company’s Capital by the Controlling Shareholder or Its Related Parties

for Non-Operating Purposes

□Applicable √ Not applicable

No such cases in the Reporting Period.III Irregularities in Provision of Guarantees

□Applicable √ Not applicable

No such cases in the Reporting Period.IV Explanations Given by the Board of Directors Regarding the Last “Modified Opinion” on

Financial Statements

□Applicable √ Not applicable

V Explanations Given by the Board of Directors the Supervisory Committee and the

Independent Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on

the Financial Statements of the Reporting Period

□Applicable √ Not applicable

VI YoY Changes to Accounting Policies and Estimates and Correction of Material

Accounting Errors

√ Applicable □ Not applicable

On December 6 2024 the Ministry of Finance issued the "Interpretation No. 18 of the Accounting Standards" which further

standardized and clarified the accounting treatment of warranty - type quality guarantees that are not single - performance obligations.This interpretation shall come into force from the date of its issuance and enterprises are allowed to implement it in advance from

the year of its release.When an enterprise accounts for the estimated liability arising from a warranty - type quality guarantee that is

not a single - performance obligation it shall in accordance with the relevant provisions of the "Accounting Standard for Enterprises

No. 13 - Contingent Events" debit the accounts such as "main business cost" and "other business cost" for the determined amount of

the estimated liability and credit the "estimated liability" account and accordingly present it in the "operating cost" item in the

income statement and the items such as "other current liabilities" "non - current liabilities due within one year" and "estimated

liability" in the balance sheet.When an enterprise first implements the content of this interpretation if the original provision for warranty type quality

guarantees is included in the "selling expenses" it shall treat the changes as a change in accounting policies and make retroactive

adjustments.

117 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

The company has implemented the above - mentioned provisions. In 2024 the estimated liability arising from the provision for

quality guarantee funds that meets the requirements is included in the main business cost and the relevant accounting treatment in

2023 is retroactively adjusted as a change in accounting policies.

VII YoY Changes to the Scope of the Consolidated Financial Statements

□Applicable √ Not applicable

No such cases in the Reporting Period.VIII Engagement and Disengagement of Independent Auditor

Current independent auditor:

Name of the domestic independent auditor Ernst & Young Hua Ming LLP

The Company’s payment to the domestic independent auditor RMB4.77 million

How many consecutive years the domestic independent auditor

has provided audit service for the Company 5 years

Names of the certified public accountants from the domestic

independent auditor writing signatures on the auditor’s report Feng Xingzhi and Liang Xinqi

How many consecutive years the certified public accountants

have provided audit service for the Company 5 years for Feng Xingzhi and 1year for Liang Xinqi

Name of the overseas independent auditor (if any) N/A

The Company’s payment to the overseas independent auditor N/A

How many consecutive years the overseas independent auditor N/A

has provided audit service for the Company

Names of the certified public accountants from the overseas N/A

independent auditor writing signatures on the auditor’s report

How many consecutive years the overseas certified public N/A

accountants have provided audit service for the Company

Indicate whether the independent auditor was changed for the Reporting Period.□ Yes √ No

Independent auditor financial advisor or sponsor hired for the audit of internal control:

√ Applicable □ Not applicable

Ernst & Young Hua Ming LLP was appointed as the independent auditor of internal control for the Company for 2024 for a fee of

RMB300000.IX Possibility of Delisting after the Disclosure of this Report

□Applicable √ Not applicable

X Insolvency and Reorganization

□Applicable √ Not applicable

No such cases in the Reporting Period.XI Significant Legal Matters

□Applicable √ Not applicable

No such cases in the Reporting Period.XII Punishments and Rectifications

□Applicable √ Not applicable

118 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

XIII Credit Quality of the Company as well as Its Controlling Shareholder and Actual

Controller

□Applicable √ Not applicable

XIV Significant Related-Party Transactions

1. Continuing Related-Party Transactions

□Applicable √ Not applicable

No such cases in the Reporting Period.

2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Investments

□Applicable √ Not applicable

No such cases in the Reporting Period.

3. Related-Party Transactions Regarding Joint Investments in Third Parties

□Applicable √ Not applicable

No such cases in the Reporting Period.

4. Amounts Due to and from Related Parties

□Applicable √ Not applicable

No such cases in the Reporting Period.

5. Transactions between the Company and Related Financial Companies

□Applicable √ Not applicable

No such cases in the Reporting Period.

6. Transactions between Financial Companies Controlled by the Company and Related Parties

□Applicable √ Not applicable

No such cases in the Reporting Period.

7. Other Significant Related-Party Transactions

□Applicable √ Not applicable

No such cases in the Reporting Period.XV Significant Contracts and Execution thereof

1. Entrustment Contracting and Leases

(1) Entrustment

□Applicable √ Not applicable

No such cases in the Reporting Period.

119 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

(2) Contracting

□Applicable √ Not applicable

No such cases in the Reporting Period.

(3) Leases

□Applicable √ Not applicable

No such cases in the Reporting Period.

2. Significant Guarantees

√ Applicable □ Not applicable

Unit: RMB'0000

Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries)

Disclosure

date of the Counter Guarante

guarantee Line of Actual Actual - Having e for aObligor line guarantee occurrence guarantee

Type of Security (if Term of

guarantee any) guarant guarantee expired or related

announceme date amount ees (if not party or

nt any) not

Guarantees provided by the Company as the parent for its subsidiaries

Disclosure date Counter- Guarantee

Obligor of the Line of

Actual Actual

occurrence guarantee Type of Security (if guarante Term of

Having for a

guarantee line guarantee guarantee any) es (if guarantee expired or related

announcement date amount any) not party ornot

From the

Dongfang No more date when

Precision than the

(Netherland 14 June 2023 EUR34.5 15 June 2023

EUR34.4056 Joint liability; Securitymillion deposits -- guarantee Yes No

) million took effectto 15 June

2024

From the

effective

date of the

No more than security

RMB67.0375

Tiru?a Asia 28 March 2024 RMB 1 28 April 2024 Joint liability -- -- agreement No No

million

billion until three

years after

the maturity

of the loan

Total approved line for Total actual amount of

such guarantees in the No more than RMB 1 such guarantees in the EUR34.4056 million

Reporting Period (B1) billion Reporting Period (B2)

Total approved line for Total actual balance of

such guarantees at the No more than RMB 1 such guarantees at the

end of the Reporting billion end of the Reporting

RMB67.0375million

Period (B3) Period (B4)

Guarantees provided between subsidiaries

Disclosure

date of the Counter Guarante

guarantee Line of Actual Actual - Having e for aObligor line guarantee occurrence guarantee

Type of Security (if Term of

guarantee any) guarant guarantee expired or related

announceme date amount ees (if not party or

nt any) not

No more tha From the

QCorr 15 May 2020 n EUR3 mill 30 April 2020 0 GeneralGuarantee - - date when Yes Noion the

120 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

guarantee

took effect

to 30 June

2024

Total approved line for Total actual amount of

such guarantees in the 0 such guarantees in the 0

Reporting Period (C1) Reporting Period (C2)

Total approved line for Total actual balance of

such guarantees at the such guarantees at the

end of the Reporting 0 end of the Reporting 0

Period (C3) Period (C4)

Total guarantee amount (total of the three kinds of guarantees above)

Total guarantee line approved in No more than Total actual guaranteethe Reporting Period amount in the Reporting EUR34.4056 million

(A1+B1+C1) RMB 1 billion Period (A2+B2+C2)

Total approved guarantee line at Total actual guarantee

the end of the Reporting Period No more than balance at the end of theReporting Period RMB67.0375million(A3+B3+C3) RMB 1 billion (A4+B4+C4)

Total actual guarantee amount (A4+B4+C4) as % of the

Company’s net assets 1.35%

Of which:

Balance of guarantees provided for shareholders

the actual controller and their related parties (D) 0

Balance of debt guarantees provided directly or

indirectly for obligors with an over 70% debt/asset RMB67.0375million

ratio (E)

Amount by which the total guarantee amount

exceeds 50% of the Company’s net assets (F) 0

Total of the three amounts above (D+E+F) RMB67.0375million

Joint liability possibly borne or already borne in

the Reporting Period for outstanding guarantees (if N/A

any)

Guarantees provided in breach of prescribed

procedures (if any) N/A

3. Cash Entrusted to Other Entities for Management

(1) Cash Entrusted for Wealth Management

√ Applicable □ Not applicable

Overview of wealth management entrustments in the Reporting Period:

Unit: RMB’0000

Type Funding Amount Undue Unrecovered overdue Impairment provision for unrecoveredsource amount amount overdue amount

Bank’s wealth management

product Self-funded 26450.00 23311.00 0 0

Securities firm’s wealth

management product Self-funded 35700.00 35700.00 0 0

Trust product Self-funded 2000.00 2000.00 358.62 358.62

Total 64150.00 61011.00 358.62 358.62

High-risk wealth management transactions with a significant single amount or with low security and low liquidity:

□ Applicable √ Not applicable

Wealth management transactions where the principal is expectedly irrecoverable or an impairment may be incurred:

√ Applicable □ Not applicable

121 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

As of the end of the Reporting Period the unrecovered amount of trust products was RMB3.5862 million for which an impairment

allowance of RMB3.5862 million was established.

(2) Entrusted Loans

□Applicable √ Not applicable

No such cases in the Reporting Period.

4. Other Significant Contracts

□Applicable √ Not applicable

No such cases in the Reporting Period.XVI Other Significant Events

□Applicable √ Not applicable

No such cases in the Reporting Period.XVII Significant Events of Subsidiaries

□Applicable √ Not applicable

122 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Part VII Share Changes and Shareholder Information

I Share Changes

1. Share Changes

Unit: share

Before Increase/decrease in the period (+/-) After

Shares as

Shares as

dividend

Percentage New dividend Percentage

Shares converted Other Subtotal Shares

(%) issues converted (%)

from capital

from profit

reserves

1. Restricted

22637253318.25%000-2398000-239800022397453318.37%

shares

1.1 Shares held

by the 0 0.00% 0 0 0 0 0 0 0.00%

government

1.2 Shares held

by state-owned 0 0.00% 0 0 0 0 0 0 0.00%

corporations

1.3 Shares held

by other

22621253318.23%000-2238000-223800022397453318.37%

domestic

investors

Including: Shares

held by domestic 0 0.00% 0 0 0 0 0 0 0.00%

corporations

Shares held by

domestic 226212533 18.23% 0 0 0 -2238000 -2238000 223974533 18.37%

individuals

1.4 Shares held

by overseas 160000 0.01% 0 0 0 -160000 -160000 0 0.00%

investors

Including: Shares

held by overseas 0 0.00% 0 0 0 0 0 0 0.00%

corporations

Shares held by

1600000.01%000-160000-16000000.00%

overseas

123 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

individuals

2. Unrestricted - -

101424586781.75%00099507180781.63%

shares 19174060 19174060

2.1 RMB-

--

denominated 1014245867 81.75% 0 0 0 995071807 81.63%

1917406019174060

ordinary shares

2.2 Domestically

listed foreign 0 0.00% 0 0 0 0 0 0 0.00%

shares

2.3 Overseas

listed foreign 0 0.00% 0 0 0 0 0 0 0.00%

shares

2.4 Others 0 0.00% 0 0 0 0 0 0 0.00%

--

3. Total shares 1240618400 100.00% 0 0 0 1219046340 100.00%

2157206021572060

Reasons for share changes:

√ Applicable □ Not applicable

1. Cancellation of 21572060 repurchased shares

On February 1 2024 the company disclosed the "Announcement on the Completion of the Share Repurchase Implementation and

Share Changes" announcing the completion of the implementation of the 2023 annual share repurchase plan launched in January

2023. During the implementation period of this share repurchase the company cumulatively repurchased approximately 21572060

shares of the company through centralized bidding transactions accounting for approximately 1.74% of the company's total share

capital. The highest transaction price was 4.89 yuan per share the lowest transaction price was 4.50 yuan per share and the

cumulative total payment amount was approximately 100.7755 million yuan (excluding transaction fees). On March 4 2024 the

company released the "Announcement on the Completion of the Repurchased Share Cancellation and Share Changes". The above-

mentioned 21572060 repurchased public shares had been cancelled.

2. Unlocking of some restricted shares

(1) Unlocking of restricted shares under the equity incentive plan

On February 26 2024 the shares subject to the unlocking of the third restricted share unlocking period of the reserved grant portion

of the company's 2020 Restricted Stock Incentive Plan were released and the total number of shares released was 1632000 shares.

(2) Changes in locked shares held by senior executives

In March 2024 the term of office determined upon Mr. Zhou Wenhui's assumption of office as a director had expired and six months

had passed since the expiration. The shares held by him were legally unlocked and became tradable shares.Approval of share changes:

√ Applicable □ Not applicable

During the reporting period for matters such as "the release for trading of the shares subject to the unlocking of the third restricted

share unlocking period of the reserved grant portion of the 2020 Restricted Stock Incentive Plan" and "the cancellation of the

repurchased shares" the company has fulfilled the necessary approval procedures of the general meeting of shareholders and the

board of directors in accordance with laws regulations and the provisions of the Articles of Association of the Company.

124 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Transfer of share ownership:

√ Applicable □ Not applicable

In the Reporting Period with respect to the transfers of share ownership involved in the “cancellation of some repurchased shares”

the Company completed the transfers with the Shenzhen branch of China Securities Depository and Clearing Co. Ltd. after they

were approved by the Shenzhen Stock Exchange.Effects of share changes on the basic earnings per share diluted earnings per share equity per share attributable to the

Company’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period

respectively:

□Applicable √ Not applicable

Other information that the Company considers necessary or is required by the securities regulator to be disclosed:

□Applicable √ Not applicable

2. Changes in Restricted Shares

√ Applicable □ Not applicable

Unit: share

Increase in

Opening Closing

restricted Unlocked in Date of

Shareholder restricted restricted Reason for restriction

shares in the the period unlocking

shares shares

period

Xie Weiwei 750000 0 186000 564000 Restricted shares of senior management 2024-1-2

The term of office determined upon taking

office has expired and six months have

Zhou Wenhui 900000 0 900000 0 passed since the expiration. The restricted 2024-3-21

shares shall be lifted in accordance with the

law.Participated in the Restricted Share Incentive

Shao Yongfeng 600000 320000 320000 600000 2024-2-26

Plan /restricted shares of senior management

The other 16 awardees of

the reserved grant of the Participated in the Restricted Share Incentive

13120000131200002024-2-26

2020 Restricted Share Plan

Incentive Plan

Total 3562000 320000 2718000 1164000 -- --

3. Changes in Restricted Shares between the End of the Reporting Period and the Date of This Report

Disclosure

In January 2025 due to the failure to achieve the company-level performance assessment targets for the second restricted share

unlocking period of the Company's 2022 restricted stock incentive plan 880000 restricted shares were repurchased and cancelled.Meanwhile as one employee who participated in the equity incentive plan terminated the labor relationship with the company

another 400000 restricted shares were repurchased and cancelled. After the completion of this repurchase and cancellation the total

share capital of the company was changed from 1219046340 shares to 1217766340 shares.

125 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

II Issuance and Listing of Securities

1. Securities (Exclusive of Preference Shares) Issued in the Reporting Period

□Applicable √ Not applicable

2. Changes to Total Shares Shareholder Structure and Asset and Liability Structures

□Applicable √ Not applicable

3. Existing Staff-Held Shares

□Applicable √ Not applicable

III Shareholders and Actual Controller

1. Shareholders and Their Shareholdings at the Period-End

Unit: share

Number of Number of

Number of ordinary preference Number of preference

ordinary shareholders shareholders with shareholders with resumed

shareholders 150739 at the month- 176932 resumed voting 0 voting rights at the month- 0

at the period- end prior to rights at the end prior to the disclosure of

end the disclosure period-end (if this Report (if any)

of this Report any)

5% or greater shareholders or top 10 shareholders(excluding lending of shares through the facility)

Total shares Increase/decrease Shares in pledge marked or

Name of Nature of Shareholding Restricted Unrestricted

held at the in the Reporting frozen

shareholder shareholder percentage shares held shares held

period-end Period Status Shares

Domestic

Tang Zhuolin 21.44% 261424368 -9313200 203053176 58371192 In pledge 110090000

individual

Tang Domestic

7.95% 96885134 0 0 96885134 In pledge 41660000

Zhuomian individual

Beijing Puren

Pulead Domestic

Technology R non-state-

2.18% 26628340 0 0 26628340 NA 0

& D Center owned

(Limited corporation

Partnership)

Hong Kong

State-

Securities

owned 2.03% 24795267 -23387866 0 24795267 NA 0

Clearing

corporation

Company

126 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Limited

Domestic

Qiu Yezhi 1.92% 23382388 0 17536791 5845597 NA 0

individual

Guangdong

Dongfang

Precision

Science &

Technology

Co. Ltd. - Others 1.75% 21330000 21330000 0 21330000 NA 0

2024

Employee

Stock

Ownership

Plan

Pulead

State-

Technology

owned 1.52% 18471487 -17277100 0 18471487 NA 0

Industry Co.corporation

Ltd.Luzhou

Industrial

State-

Development

owned 1.40% 17104310 -14665700 0 17104310 NA 0

Investment

corporation

Group Co.Ltd.Domestic

Zhang Yuan 0.43% 5300000 5300000 0 5300000 NA 0

individual

Domestic

Zhang Jian 0.29% 3530000 3530000 0 3530000 NA 0

individual

Strategic investor or

general corporation

becoming a top-10 NA

shareholder in a rights

issue (if any)

Mr. Tang Zhuolin and Mr. Tang Zhuomian are brothers. On 18 August 2010 they signed the Agreement

Related or acting-in- on Acting in Concert. Pulead Technology Industry Co. Ltd. and Beijing Puren Pulead Technology R &

concert parties among the D Center (Limited Partnership) are acting-in-concert parties.shareholders above Apart from that the Company is not aware of any related or acting-in-concert parties among the other

shareholders above.The holders of the Guangdong Dongfang Precision Science & Technology Co. Ltd. - 2024 Employee

Above shareholders

Stock Ownership Plan as a whole waive the shareholder voting rights enjoyed by virtue of holding the

entrusting or entrusted

underlying stocks through participation in this employee stock ownership plan while retaining other

with voting rights or

shareholder rights (including rights to asset returns such as dividend rights rights to subscribe for new

waiving voting rights

shares and rights to convert capital reserve into share capital).Top 10 shareholders NA

127 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

including the special

account of repurchased

shares (if any)

Top 10 unrestricted shareholders

Unrestricted shares held at the Shares by type

Name of shareholder

period-end Type Shares

RMB-denominated ordinary

Tang Zhuomian 96885134 96885134

stock

RMB-denominated ordinary

Tang Zhuolin 58371192 58371192

stock

Beijing Puren Pulead

RMB-denominated ordinary

Technology R & D Center 26628340 26628340

stock

(Limited Partnership)

Hong Kong Securities RMB-denominated ordinary

2479526724795267

Clearing Company Limited stock

Guangdong Dongfang

Precision Science &

RMB-denominated ordinary

Technology Co. Ltd. - 2024 21330000 21330000

stock

Employee Stock Ownership

Plan

Pulead Technology Industry RMB-denominated ordinary

1847148718471487

Co. Ltd. stock

Luzhou Industrial

RMB-denominated ordinary

Development Investment 17104310 17104310

stock

Group Co. Ltd.RMB-denominated ordinary

Qiu Yezhi 5845597 5845597

stock

RMB-denominated ordinary

Zhang Yuan 5300000 5300000

stock

RMB-denominated ordinary

Zhang Jian 3530000 3530000

stock

Related or acting-in-

concert parties among top Mr. Tang Zhuo Lin and Mr. Tang Zhuo Min are brothers and on August 18 2010 they entered into a

10 unrestricted ordinary "Letter of Agreement on Acting in Concert".

shareholders as well as Pulead Technology Industry Co. Ltd. and Beijing Puren Pulead Technology R & D Center (Limited

between top 10 Partnership) are acting-in-concert parties.unrestricted ordinary The Company does not know whether there are any other related relationships or persons acting in

shareholders and top 10 concert between the above shareholders.ordinary shareholders

Description of the

participation of the top 10 The Company's shareholder Luzhou Industrial Development Investment Group Co. Ltd. holds

common shareholders in 17104310 shares through a client credit transaction guarantee securities account with Guotai Junan

the financing and Securities Co. Ltd.securities financing

128 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

business (if any)

Shareholders holding more than 5% of shares the top 10 shareholders and the top 10 unrestricted tradable shareholders participating

in the refinancing shares lending business.□ Applicable √ Not applicable

The top 10 shareholders and the top 10 unrestricted tradable shareholders have changed compared with the previous period due to the

lending/returning reasons in the refinancing shares lending business.□ Applicable √ Not applicable

Indicate whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted

any agreed repurchase transactions during the Reporting Period.□ Yes √ No

No such cases in the Reporting Period.

2. Controlling Shareholder

Nature of the controlling shareholder: controlled by an individual

Type of the controlling shareholder: individual

Name of the controlling shareholder Nationality Residency in other countries or regions or not

Tang Zhuolin Chinese Not

Main occupation and position Chairman of the Board of Dongfang Precision

Interests held in other domestically and

overseas listed companies in the Reporting Not applicable

Period

Change of the controlling shareholder in the Reporting Period:

□ Applicable √ Not applicable

No such cases in the Reporting Period.

3. Actual Controller and Acting-in-Concert Parties

Nature of the actual controller: domestic individual

Relationship with the actual Residency in other countries or

Name of the actual controller Nationality

controller regions or not

Tang Zhuolin Actual controller himself Chinese Not

Acting-in-concert party

Tang Zhuomian (contractual kinship-based and Chinese Not

common control-based)

Mr. Tang Zhuolin serves as the Chairman of the Board of Dongfang Precision as his main

Main occupation and position

occupation.Controlling interests in other

domestically and overseas listed Not applicable

companies in the past 10 years

129 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

The actual controller of the Company remained unchanged during the Reporting Period.Ownership and control relationship between the actual controller and the Company:

Tang Zhuolin Tang Zhuomian

21.44%7.95%

Guangdong Dongfang Precision Science &

Technology Co. Ltd.Indicate whether the actual controller controls the Company via trust or other ways of asset management.□ Applicable √ Not applicable

4. Shares Cumulatively Put in Pledge by the Company’s Controlling Shareholder or Biggest Shareholder

and Its Acting-in-Concert Parties Accounting for 80% of Their Shareholdings in the Company

□Applicable √ Not applicable

5. Other 10% or Greater Corporate Shareholders

□Applicable √ Not applicable

6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder Actual Controller

Reorganizer and Other Commitment Makers

□Applicable √ Not applicable

IV Share Repurchase in the Reporting Period

Progress on any share repurchase:

√ Applicable □ Not applicable

Shares

repurchased

Disclosure date of Number of As % of Shares as % of total

Amount to be Repurchase

the repurchase shares to be total share Purpose repurchased shares under

used period

plan repurchased capital (share) the equity

incentive plan

(if any)

Not lower From 31 All the repurchased

than RMB100 January 2023 shares are to be retired

7 January 2023 NA NA 21572060 N/A

million to 30 January which will reduce the

(inclusive) 2024 Company’s registered

130 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

and no more capital accordingly

than RMB200

million

(inclusive)

Progress on reducing the repurchased shares by way of centralized bidding:

□ Applicable √ Not applicable

131 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Part VIII Preference Shares

□Applicable √ Not applicable

No preference shares in the Reporting Period.

132 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Part IX Corporate Bonds

□Applicable √ Not applicabl

133 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Part X Corporate Financial Statement

I. Auditor’s Report

Type of Audit Opinion Standard Unreserved opinion

Signing date of the Auditor’s Report 17 March 2025

Name of the Audit Institution Ernst & Young Hua Ming LLP

Document number of the Auditor’s report Ernst & Young Hua Ming (2025) Auditor’s Report No.

70022785_G01

Name of the Chinese Certified Public Accountant Feng Xingzhi Liang Xinqi

Auditor’s Report

Ernst & Young Hua Ming (2025) Auditor’s Report No. 70022785_G01

Guangdong Dongfang Precision Science & Technology Co. Ltd.To the Shareholders of Guangdong Dongfang Precision Science & Technology Co. Ltd.I. Opinion

We have audited the financial statements of Guangdong Dongfang Precision Science & Technology

Co. Ltd. (hereinafter referred to as the “Company” ) which comprise the consolidated and the

Company’s balance sheets as at 31 December 2024 the consolidated and the Company’s income

statements the consolidated and the Company’s statements of changes in equity and the consolidated

and the Company’ s statements of cash flows for the year then ended and notes to the financial

statements.In our opinion the accompanying financial statements present fairly in all material respects the

consolidated and the Company’s financial position as at 31 December 2024 and the consolidated and

the Company’ s financial performance and cash flows for the year then ended in accordance with

Accounting Standards for Business Enterprises (“ASBEs”).II. Basis for Opinion

We conducted our audit in accordance with China’ s Standards on Auditing “ CSAs” . Our

responsibilities under those standards are further described in the Auditor’s Responsibilities for the

Audit of the Financial Statements section of our report. We are independent of the Company in

accordance with China Code of Ethics for Certified Public Accountants (the “Code”) and we have

fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.III. Key Audit Matter

Key audit matter is the matter that in our professional judgment was of most significance in our audit

of the financial statements of the current period. This matter was addressed in the context of our audit

of the financial statements as a whole and in forming our opinion thereon and we do not provide a

separate opinion on this matter. For the matter below our description of how our audit addressed the

matter is provided in that context.We have fulfilled our responsibilities described in the Auditor’s Responsibilities for the Audit of the

Financial Statements section of our report including in relation to these matters. Accordingly our audit

included the performance of procedures designed to respond to our assessment of the risks of material

misstatements of the financial statements. The results of our audit procedures including procedures

134 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

performed to address the matter below provide the basis for our opinion on the accompanying financial

statements.Key audit matter: How our audit addressed the key audit

matter:

Impairment of goodwill

The carrying amount of goodwill amounted to The procedures performed to address this

RMB561131045.84 as at 31 December 2024 matter are as follows:

and the impairment allowance for goodwill was

RMB136141742.91. (1) Performed internal control walk through

and executed control tests on identified

The Group's management performs goodwill critical control points.impairment testing at the end of each year. The (2) Assessed the identification of asset groups

assessment of goodwill impairment testing was by the Group's management and the

based on the recoverable amount of the goodwill allocated to the asset groups;

relevant cash-generating unit to which the (3) Obtained reports on the assessment of

goodwill is allocated and the recoverable goodwill impairment issued by the

amount of such cash-generating unit was independent third-party asset appraisal

determined by the present value of the cash- institution engaged by the management

generating unit's expected future cash flows. In with securities and futures related business

a goodwill impairment test the forecasting of qualifications;

future cash flows involved significant (4) Involved our internal valuation experts to

judgments and estimates including sales assess the rationality of the major

growth rate gross margin and discount rate. assumptions and assessment methods used

Because goodwill had a large carrying value by the Group's management when

and exerted a significant impact on the forecasting the recoverable amount of asset

financial statements we identified goodwill groups including the discount rate and

impairment as a key audit matter. long-term growth rate;

(5) Assessed the forecast sales revenue and

The accounting policies on and disclosures of operating performance for future years and

goodwill were set out in Item 16 of Note III comparing them with historical operating

Item 31 of Note III and Item 20 of Note V to performance; and

the financial statements. (6) Evaluated the adequacy of the Group's

disclosures in the notes to the financial

statements.IV. Other Information

The management of the Company is responsible for the other information. The other information

comprises all of the information included in the annual report other than the financial statements and

our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not express any

form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other

information and in doing so consider whether the other information is materially inconsistent with the

financial statements or our knowledge obtained in the audit or otherwise appears to be materially

misstated.If based on the work we have performed we conclude that there is a material misstatement of this

other information we are required to report that fact. We have nothing to report in this regard.V. Responsibilities of Management and Those Charged with Governance for the Financial

Statements

The management is responsible for the preparation and fair presentation of the financial statements in

accordance with ASBEs and for designing implementing and maintaining such internal control as the

management determines is necessary to ensure the preparation of financial statements to be free from

material misstatement whether due to fraud or error.In preparing the financial statements the management is responsible for assessing the Company’ s

ability to continue as a going concern disclosing as applicable matters related to going concern and

135 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

using the going concern basis of accounting unless the management either intends to liquidate or to

cease operations or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’ s financial reporting

process.VI. Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are

free from material misstatement whether due to fraud or error and to issue an auditor’s report

that includes our opinion. Reasonable assurance is a high level of assurance but is not a

guarantee that an audit conducted in accordance with CSAs will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error and are considered

material if individually or in the aggregate they could reasonably be expected to influence the

economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with CSAs we exercise professional judgment and maintain

professional skepticism throughout the audit. We also:

(1) Identify and assess the risks of material misstatement of the financial statements whether due to

fraud or error design and perform audit procedures responsive to those risks and obtain audit

evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not

detecting a material misstatement resulting from fraud is higher than for one resulting from error

as fraud may involve collusion forgery intentional omissions misrepresentations or the

override of internal control.

(2) Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances.

(3) Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by the management.

(4) Conclude on the appropriateness of the management’ s use of the going concern basis of

accounting and based on the audit evidence obtained whether a material uncertainty exists

related to events or conditions that may cast significant doubt on the Company’ s ability to

continue as a going concern. If we conclude that a material uncertainty exists we are required to

draw attention in our auditor’s report to the related disclosures in the financial statements or

and if such disclosures are inadequate to modify our opinion. Our conclusions are based on the

audit evidence obtained up to the date of our auditor’ s report. However future events or

conditions may cause the Company to cease to continue as a going concern.

(5) Evaluate the overall presentation structure and content of the financial statements including the

disclosures and whether the financial statements represent the underlying transactions and

events in a manner that achieves fair presentation.

(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or

business activities within the Company to express an audit opinion on the financial statements.We are responsible for the direction supervision and performance of the group audit. We

remain solely responsible for our audit opinion.VI. Auditor’s Responsibilities for the Audit of the Financial Statements (Cont’d)

We communicate with those charged with governance regarding among other matters the planned

scope and timing of the audit and significant audit findings including any significant deficiencies in

internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant

ethical requirements regarding independence and to communicate with them all relationships and other

matters that may reasonably be thought to bear on our independence and where applicable related

safeguards (if applicable).From the matters communicated with those charged with governance we determine the matter that was

of most significance in the audit of the financial statements of the current period and is therefore the

key audit matter. We describe this matter in our auditor’s report unless law or regulation precludes

public disclosure about the matter or when in extremely rare circumstances we determine that a matter

should not be communicated in our report because the adverse consequences of doing so would

reasonably be expected to outweigh the public interest benefits of such communication.

136 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd. Annual Report 2024

Ernst & Young Hua Ming LLP Chinese Certified Public Accountant: Feng Xingzhi

(Engagement Partner)

Chinese Certified Public Accountant: Liang Xinqi

Beijing China 17 March 2025

Important Notice

This auditor ’ s report is an English translation of the auditor ’ s report for the audit

engagements which adopt CSAs. In case the English version does not conform to the Chinese

version the Chinese version prevails.

137 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd.

Consolidated Balance Sheet

As at 31 December 2024 Expressed in Renminbi Yuan

Assets Note V 31 December 2024 31 December 2023

(Restated)

Current assets

Cash and bank balances 1 1729050383.34 1826419904.49

Financial assets held for trading 2 788649332.18 651296267.76

Derivative financial assets 3 2755081.17 31329174.69

Notes receivable 4 98048145.31 47661412.88

Accounts receivable 5 745862825.71 904003975.47

Receivables financing 6 16303982.64 9365344.07

Prepayments 7 28226195.35 45741143.90

Other receivables 8 40647410.48 51797943.96

Inventories 9 1031899593.02 1182411055.68

Contract assets 10 52151171.92 45946377.14

Current portion of non-current assets 11 8035336.42 5970000.00

Other current assets 12 60543096.49 75234656.07

Total current assets 4602172554.03 4877177256.11

Non-current assets

Long-term receivables 13 4047852.80 4308196.00

Long-term equity investments 14 113469148.58 117265884.84

Other non-current financial assets 15 539449588.63 461278259.67

Fixed assets 16 681980621.79 611851577.04

Construction in progress 17 404826595.02 195557097.80

Right-of-use assets 18 64147198.31 82342398.83

Intangible assets 19 356564206.44 365954480.05

Goodwill 20 424989302.93 440633826.08

Long-term prepaid expenses 21 21718570.19 28543581.54

Deferred tax assets 22 222186749.21 255872409.78

Other non-current assets 23 93024609.05 97437602.28

Total non-current assets 2926404442.95 2661045313.91

Total assets 7528576996.98 7538222570.02

The accompanying notes to the financial statements form an integral part of the financial statements.

138 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd.

Consolidated Balance Sheet

As at 31 December 2024 Expressed in Renminbi Yuan

Liabilities and equity Note V 31 December 2024 31 December 2023

(Restated)

Current liabilities

Short-term borrowings 25 85390128.99 370549972.80

Derivative financial liabilities 26 206216239.00 115900827.21

Notes payable 27 144137609.00 152433276.09

Accounts payable 28 687235330.65 737544841.42

Contract liabilities 29 373931068.16 645608919.34

Employee benefits payable 30 139543012.38 153282932.10

Tax payable 31 69194598.03 67609203.41

Other payables 32 117617259.50 126415425.61

Current portion of non-current liabilities 33 81630784.65 57001396.44

Other current liabilities 34 41832335.71 9145175.01

Total current liabilities 1946728366.07 2435491969.43

Non-current liabilities

Long-term borrowings 35 125482485.31 79107701.15

Lease liabilities 36 47666801.96 65861441.32

Long-term employee benefits payable 37 13128052.34 13964394.20

Provisions 38 146820629.26 168358953.84

Deferred income 39 14790331.66 9956991.66

Deferred tax liabilities 22 2042929.48 8854294.28

Other non-current liabilities 40 7573539.20 22418854.80

Total non-current liabilities 357504769.21 368522631.25

Total liabilities 2304233135.28 2804014600.68

The accompanying notes to the financial statements form an integral part of the financial statements.

139 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd.

Consolidated Balance Sheet

As at 31 December 2024 Expressed in Renminbi Yuan

Liabilities and equity Note V 31 December 2024 31 December 2023

Equity

Share capital 41 1219046340.00 1240618400.00

Capital surplus 42 2818982096.52 2889928997.21

Less: Treasury stock 43 117233041.40 218298532.79

Other comprehensive income 44 29809317.74 75122078.52

Special reserve 45 18106386.75 16229817.03

Surplus reserves 46 51830974.45 51830974.45

Retained earnings 47 956837409.23 456258959.55

Total equity attributable to owners of the

parent 4977379483.29 4511690693.97

Non-controlling interests 246964378.41 222517275.37

Total equity 5224343861.70 4734207969.34

Total liabilities and equity 7528576996.98 7538222570.02

The financial statements have been signed by:

Legal representative: Tang Zhuolin

Chief Financial Officer: Shao Yongfeng

Head of Accounting Department: Chen Lin

The accompanying notes to the financial statements form an integral part of the financial statements.

140 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd.

Consolidated Income Statement

2024 Expressed in Renminbi Yuan

Note V 2024 2023

(Restated)

Operating revenue 48 4777855602.69 4745737321.83

Less: Cost of sales 48 3340495826.94 3438024753.91

Taxes and surcharges 49 15757643.21 14552830.09

Selling expenses 50 192404149.61 200344321.03

Administrative expenses 51 360042388.32 344224692.51

R&D expenses 52 105524488.70 127566482.42

Finance costs 53 (24492820.88 ) (1089616.70 )

Including: Interest expenses 53 23820328.49 24236011.48

Interest income 53 (45289702.90 ) (35308583.52 )

Add: Other income 54 14576461.93 15747293.82

Investment income 55 1284823.56 10707429.16

Including: Share of profit of associates 55 (3722072.85 ) (2259252.98 )

Gain/loss on changes in fair value 56 (54273753.77 ) 47387905.11

Credit impairment loss 57 (2397239.39 ) (10541916.77 )

Asset impairment loss 58 (24304048.87 ) (17217097.39 )

Gain on disposal of assets 59 5496048.68 716995.85

Operating profit 728506218.93 668914468.35

Add: Non-operating income 60 6230006.52 5974641.17

Less: Non-operating expenses 61 793815.22 16152375.18

Profit before income taxes 733942410.23 658736734.34

Less: Income tax expenses 62 193824143.93 188398152.72

Net profit 540118266.30 470338581.62

Net profit classified by continuing operations

Net profit from continuing operations 540118266.30 470338581.62

Net profit classified by attribution of ownership

Net profit attributable to owners of the

parent 500578449.68 433240237.44

Net profit attributable to non-controlling

interests 39539816.62 37098344.18

The accompanying notes to the financial statements form an integral part of the financial statements.

141 / 282Guangdong Dongfang Precision Science & Technology Co. Ltd.

Consolidated Income Statement

2024 Expressed in Renminbi Yuan

Note V 2024 2023

Other comprehensive income net of tax 44 (45156575.23 ) 48074232.21

Other comprehensive income attributable to

owners of the parent net of tax (45312760.78 ) 48609161.45

Other comprehensive income that will not be

reclassified to profit or loss 126738.95 (44025.32 )

Changes caused by remeasurements on defined

benefit schemes 126738.95 (44025.32 )

Other comprehensive income that will be

reclassified to profit or loss (45439499.73 ) 48653186.77

Differences arising from the translation of

foreign currency-denominated financial

statements (45439499.73 ) 48653186.77

Other comprehensive income attributable to non-44

controlling interests net of tax 156185.55 (534929.24 )

Total comprehensive income 494961691.07 518412813.83

Including:

Total comprehensive income attributable to

owners of the parent 455265688.90 481849398.89

Total comprehensive income attributable to

non-controlling interests 39696002.17 36563414.94

Earnings per share

Basic earnings per share 63 0.43 0.36

Diluted earnings per share 63 0.43 0.36

The accompanying notes to the financial statements form an integral part of the financial statements.

142 / 282Consolidated Statement of Changes in Equity

Year ended 31 December 2024 Expressed in Renminbi Yuan

2024

Non-

controlling

Equity attributable to owners of the parent interest Total equity

Less: Other

Treasury comprehensiv Special Surplus Retained

Share capital Capital surplus stock e income reserve reserves earnings Subtotal

At 31 1240618400. 2889928997. 218298532.7 75122078.5 16229817.0 51830974.4 456258959.5 4511690693. 222517275. 4734207969.I. December 2023 00 21 9 2 3 5 5 97 37 34

At 1 January 1240618400. 2889928997. 218298532.7 75122078.5 16229817.0 51830974.4 456258959.5 4511690693. 222517275. 4734207969.II. 2024 00 21 9 2 3 5 5 97 37 34

Changes for the

III. year

(I) Total

comprehensive

income

(45312760.7500578449.639696002.1

---8)--8455265688.907494961691.07

(II) Shareholders’

contributions

and reduction

in capital

1. Share-based

payments

included in

equity - 8256530.70 - - - - - 8256530.70 - 8256530.70

Others (101065491. (15248899.1

2.(21572060.00)(79203431.39)39)----290000.003)(14958899.13)

(III) Special reserve

1. Provision in theyear - - - - 3183215.00 - - 3183215.00 - 3183215.00

2. Utilisation in (1306645.2the year - - - - 8 ) - - (1306645.28 ) - (1306645.28 )

143 / 282Consolidated Statement of Changes in Equity (Cont’d)

Year ended 31 December 2024 Expressed in Renminbi Yuan

At 31 1219046340. 2818982096. 117233041.4 29809317.7 18106386.7 51830974.4 956837409.2 4977379483. 246964378. 5224343861.IV. December 2024 00 52 0 4 5 5 3 29 41 70

The accompanying notes to the financial statements form an integral part of the financial statements.

144 / 282Consolidated Statement of Changes in Equity (Cont’d)

Year ended 31 December 2024 Expressed in Renminbi Yuan

2023

Non-controlling Total equity

Equity attributable to owners of the parent interest

Less: Other

Capital Treasury comprehens Special Surplus Retained

Share capital surplus stock ive income reserve reserves earnings Subtotal

I. At 31

December

2022

and 1 January124110640 294726384 240255502. 26512917. 14488955 51830974 23018722.1

20230.003.534507.52.4514063966310.23202028952.724265995262.95

Changes for

II. the year

(I) Total

comprehensiv 48609161. 433240237.e income - - - 45 - - 44 481849398.89 36563414.94 518412813.83

(II) Shareholder’s

contributions

and reduction

in capital

1. Share-based

payments

included in 22151043.2

equity - 1 - - - - - 22151043.21 - 22151043.21

2. Others (79485889.5 (21956969.

(488000.00)3)66)----(58016919.87)(16075092.29)(74092012.16)

(III) Special

reserve

1. Provision in 5118146.

the year - - - - 78 - - 5118146.78 - 5118146.78

2. Utilisation in (3377285.

the year - - - - 27 )- - (3377285.27 ) - (3377285.27 )

145 / 282Consolidated Statement of Changes in Equity (Cont’d)

Year ended 31 December 2024 Expressed in Renminbi Yuan

At 31

December 124061840 288992899 218298532. 75122078. 16229817 51830974 456258959.III. 2023 0.00 7.21 79 52 .03 .45 55 4511690693.97 222517275.37 4734207969.34

The accompanying notes to the financial statements form an integral part of the financial statements.

146 / 282Consolidated Statement of Cash Flows

Year ended 31 December 2024 Expressed in Renminbi Yuan

Note V 2024 2023

I. Cash flows from operating activities

Proceeds from sale of goods and rendering

of services 4639298827.54 4642173392.49

Receipts of taxes and surcharges refunds 63188406.26 67900854.62

Cash generated from other operating

activities 64 60039868.19 63085940.61

Subtotal of cash generated from operating

activities 4762527101.99 4773160187.72

Payments for goods and services 2730066540.16 3004966440.52

Cash payments to and on behalf of

employees 855502006.85 766697629.83

Payments of all types of taxes and

surcharges 216346898.40 170874687.85

Cash used in other operating activities 64 258056276.36 343440690.86

Subtotal of cash used in operating

activities 4059971721.77 4285979449.06

Net cash generated from operating

activities 65 702555380.22 487180738.66

II. Cash flows from investing activities

Proceeds from disinvestment 1557866442.57 2817697183.06

Investment income 16947074.94 8788769.72

Net proceeds from the disposal of fixed

assets intangible assets and other long-

lived assets 6363398.45 519230.09

Cash generated from other investing

activities 64 42435000.00 -

Subtotal of cash generated from investing

activities 1623611915.96 2827005182.87

Payments for the acquisition of fixed

assets intangible assets and other long-

lived assets 358172446.66 307727914.50

Payments for investments 1757308965.71 2705884238.80

Cash used in other investing activities 64 49631872.01 -

Subtotal of cash used in investing

activities 2165113284.38 3013612153.30

Net cash generated used in investing

activities (541501368.42 ) (186606970.43 )

The accompanying notes to the financial statements form an integral part of the financial statements.

147 / 282Consolidated Statement of Cash Flows (Cont’d)

Year ended 31 December 2024 Expressed in Renminbi Yuan

Note V 2024 2023

III. Cash flows from financing activities

Borrowings raised 155442846.07 441741239.04

Cash generated from other financing

activities 64 107345506.70 415790865.75

Subtotal of cash generated from financing

activities 262788352.77 857532104.79

Repayment of borrowings 364083772.95 373742740.68

Interest and dividends paid 23204859.65 16883749.75

Cash used in other financing activities 64 30850234.77 378041150.02

Subtotal of cash used in financing

activities 418138867.37 768667640.45

Net cash generated from/used in financing

activities (155350514.60 ) 88864464.34

IV. Effect of foreign exchange rates changes

on cash and cash equivalents (25927560.49 ) 49355682.00

Net increase/(decrease) in cash and cash

V. equivalents 65 (20224063.29 ) 438793914.57

Add: Cash and cash equivalents beginning

of the year 65 1672514611.84 1233720697.27

Cash and cash equivalents end of the year

VI. 65 1652290548.55 1672514611.84

The accompanying notes to the financial statements form an integral part of the financial statements.

148 / 282Balance Sheet

31 December 2024 Expressed in Renminbi Yuan

Assets Note XVI 31 December 2024 31 December 2023

(Restated)

Current assets

Cash and bank balances 698349330.28 522275723.41

Financial assets held for trading 534553587.74 613289983.88

Derivative financial assets - 28707975.72

Note receivable 9765309.28 5606037.02

Accounts receivable 1 236125159.25 190361646.28

Receivables financing 5036303.55 4268677.09

Prepayments 5379122.23 5298841.09

Other receivables 2 504269264.02 654825093.49

Inventories 129915017.16 159389489.31

Contract assets 28814278.05 22201442.67

Current portion of non-current assets 8035336.42 5970000.00

Other current assets 2107492.86 1583542.63

Total current assets 2162350200.84 2213778452.59

Non-current assets

Long-term receivables 4047852.80 4308196.00

Long-term equity investments 3 877527583.14 875978593.12

Other non-current financial assets 226209705.10 148108670.05

Fixed assets 280406246.36 296287511.68

Construction in progress 5440950.00 4273340.82

Right-of-use assets 4610994.41 6238404.20

Intangible assets 60569947.92 55652155.93

Long-term prepaid expenses 3507201.55 4967872.25

Deferred tax assets 161058263.43 174616613.96

Other non-current assets 70238512.50 72919162.50

Total non-current assets 1693617257.21 1643350520.51

Total assets 3855967458.05 3857128973.10

The accompanying notes to the financial statements form an integral part of the financial statements.

149 / 282Balance Sheet (Cont’d)

31 December 2024 Expressed in Renminbi Yuan

Liabilities and equity 31 December 2024 31 December 2023

(Restated)

Current liabilities

Short term loans 1000000.00 20000000.00

Derivative financial liabilities 116513.31 728.57

Notes payable 48838900.00 39577380.86

Accounts payable 76177615.41 65855068.76

Contract liabilities 29456102.15 53704255.92

Employee benefits payable 16248751.40 16801339.01

Tax payable 118064.93 5459697.96

Other payables 41517747.95 103498597.36

Current portion of non-current liabilities 17452778.58 9361216.26

Other current liabilities 5736334.26 588152.27

Total current liabilities 236662807.99 314846436.97

Non-current liabilities

Long term loans 16740000.00 32436000.00

Lease liabilities 3434210.61 5166917.05

Provisions 1111329.09 1418799.52

Deferred income 14790331.66 9956991.66

Total non-current liabilities 36075871.36 48978708.23

Total liabilities 272738679.35 363825145.20

Equity

Share capital 1219046340.00 1240618400.00

Capital surplus 2673989321.44 2745450997.27

Less: Treasury stock 117233041.40 218298532.79

Special reserve 6850427.57 6645318.98

Surplus reserves 51830974.45 51830974.45

Retained earnings (251255243.36 ) (332943330.01 )

Total equity 3583228778.70 3493303827.90

Total liabilities and equity 3855967458.05 3857128973.10

The accompanying notes to the financial statements form an integral part of the financial statements.

150 / 282Income Statement

Year ended 31 December 2024 Expressed in Renminbi Yuan

Note XVI 2024 2023

(Restated)

Operating revenue 4 509032572.25 500581222.34

Less: Cost of sales 4 279619163.19 266150644.19

Taxes and surcharges 6982825.01 6779241.99

Selling expenses 34689263.89 40719564.11

Administrative expenses 77755675.52 93180157.73

R&D expenses 20779949.03 22829162.22

Finance costs (14016252.36 ) (11186446.37 )

Including: Interest expenses 2905626.71 4350360.42

Interest income (16797232.63 ) (13912716.65 )

Add: Other income 2627538.81 3897767.25

Investment income 5 12688014.61 321068620.44

Including: Share of profit or loss of

associates (2444335.91 ) (753369.07 )

Loss on changes in fair value (18748558.70 ) (56253675.31 )

Credit impairment loss (788150.05 ) 284355.09

Asset impairment loss (3960702.44 ) (106669.84 )

Gain on disposal of assets 146022.47 -

Operating profit 95186112.67 350999296.10

Add: Non-operating income 74840.36 713971.52

Less: Non-operating expenses 14515.85 845736.74

Profit before income taxes 95246437.18 350867530.88

Less: Income tax expenses 13558350.53 39933851.09

Net profit 81688086.65 310933679.79

Including: Net profit from continuing

operations 81688086.65 310933679.79

Total comprehensive income 81688086.65 310933679.79

The accompanying notes to the financial statements form an integral part of the financial statements.

151 / 282Statement of Changes in Equity

Year ended 31 December 2024 Expressed in Renminbi Yuan

2024

Less: Treasury

Share capital Capital surplus stock Special reserve Surplus reserves Retained earnings Total equity

I. At 31 December 2023 1240618400.00 2745450997.27 218298532.79 6645318.98 51830974.45 (332943330.01 ) 3493303827.90

II. At 1 January 2024 1240618400.00 2745450997.27 218298532.79 6645318.98 51830974.45 (332943330.01 ) 3493303827.90

III. Changes for the year

(I) Total comprehensive income - - - - - 81688086.65 81688086.65

Shareholder’s contributions

(II) and

reduction in capital

1. Share-based paymentsincluded in equity - 7741755.56 - - - - 7741755.56

2. Others (21572060.00 ) (79203431.39 ) (101065491.39 ) - - - 290000.00

(III) Special reserve

1. Provision in the year - - - 787151.00 - - 787151.00

2. Utilisation in the year - - - (582042.41 ) - - (582042.41 )

IV. At 31 December 2024 1219046340.00 2673989321.44 117233041.40 6850427.57 51830974.45 (251255243.36 ) 3583228778.70

The accompanying notes to the financial statements form an integral part of the financial statements.

152 / 282Statement of Changes in Equity (Cont’d)

Year ended 31 December 2024 Expressed in Renminbi Yuan

2023

Less: Treasury

Share capital Capital surplus stock Special reserve Surplus reserves Retained earnings Total equity

At 31 December 2022 and 1

I. January 2023 1241106400.00 2820661243.26 240255502.45 7200502.88 51830974.45 (643877009.80 ) 3236666608.34

II. Changes for the year

(I) Total comprehensive income - - - - - 310933679.79 310933679.79

Shareholder’s contributions

(II) and

reduction in capital

1. Share-based paymentsincluded in equity - 21203834.59 - - - - 21203834.59

2. Others (488000.00 ) (96414080.58 ) (21956969.66 ) - - - (74945110.92 )

(III) Special reserve

1. Provision in the year - - - 826188.88 - - 826188.88

2. Utilisation in the year - - - (1381372.78 ) - - (1381372.78 )

III. At 31 December 2023 1240618400.00 2745450997.27 218298532.79 6645318.98 51830974.45 (332943330.01 ) 3493303827.90

The accompanying notes to the financial statements form an integral part of the financial statements.

153 / 282Statement of Cash Flows

Year ended 31 December 2024 Expressed in Renminbi Yuan

20242023

I. Cash flows from operating activities

Proceeds from sale of goods and rendering

of services 397362207.24 543144763.30

Receipts of taxes and surcharges refunds 14996286.70 18624572.39

Cash generated from other operating

activities 50391217.39 37082171.29

Subtotal of cash generated from operating

activities 462749711.33 598851506.98

Payments for goods and services 198775741.45 255701960.58

Cash payments to and on behalf of

employees 100106284.64 96818630.04

Payments of all types of taxes and

surcharges 13875987.77 5907970.50

Cash used in other operating activities 34899435.51 145909271.88

Subtotal of cash used in operating

activities 347657449.37 504337833.00

Net cash generated from operating

activities 115092261.96 94513673.98

II. Cash flows from investing activities

Proceeds from disinvestment 868730433.91 1695765692.04

Investment income 49446958.11 72940439.51

Other cash receipts relating to investing

activities 103435000.00 326643514.64

Subtotal of cash generated from investing

activities 1021612392.02 2095349646.19

Payments for the acquisition of fixed

assets intangible assets and other long-

lived assets 6936264.70 49079505.20

Payments for investments 880803895.71 2030963951.96

Other cash payments relating to other

investing activities 49631872.01 -

Subtotal of cash used in investing

activities 937372032.42 2080043457.16

Net cash generated from investing

activities 84240359.60 15306189.03

The accompanying notes to the financial statements form an integral part of the financial statements.

154 / 282Statement of Cash Flows (Cont’d)

Year ended 31 December 2024 Expressed in Renminbi Yuan

20242023

III. Cash flows from financing activities

Borrowings raised 1000000.00 98180000.00

Cash generated from other financing

activities 107345506.70 340829045.67

Subtotal of cash generated from financing

activities 108345506.70 439009045.67

Repayment of borrowings 27696000.00 38048000.00

Interest and dividends paid 1541685.81 5103094.39

Cash used in other financing activities 3154388.60 242155673.21

Subtotal of cash used in financing

activities 32392074.41 285306767.60

Net cash generated from financing

activities 75953432.29 153702278.07

IV. Effect of foreign exchange rates changes

on cash and cash equivalents - -

V. Net increase in cash and cash equivalents 275286053.85 263522141.08

Add: Cash and cash equivalents beginning

of the year 405841967.20 142319826.12

VI. Cash and cash equivalents end of the year 681128021.05 405841967.20

The accompanying notes to the financial statements form an integral part of the financial statements.

155 / 282Notes to the Financial Statements

Expressed in Renminbi Yuan

I. Corporate Background

Guangdong Dongfang Precision Science & Technology Co. Ltd. (the "Company") a joint stock company with

limited liability registered in Guangdong Province of the People's Republic of China and established on 9

December 1996 obtained a Business License for Enterprise Legal Person with a registration number of

440682000040868.

In August 2011 upon the approval by the China Securities Regulatory Commission (CSRC) in the Reply on

Approving the Initial Public Offering of Shares by Guangdong Dongfang Precision Science & Technology Co.Ltd. (ZH.J.X.K. [2011] No. 1237) the Company issued Renminbi-denominated ordinary shares to the public and

was listed on the Shenzhen Stock Exchange in the same month. The Company started to use the unified social

credit code (914406002318313119) in 2016. The Company is headquartered in 2 Qiangshi Road Shishan Town

Nanhai District Foshan City Guangdong Province China.The Group's main business includes four business sectors: smart corrugated packaging equipment industrial

internet industry solutions digital printers and water powerspots equipment.The actual controllers of the Company are Tang Zhuolin and Tang Zhuomian.These financial statements were authorized for issue by the Board of Directors of the Company on 17 March 2025.II. Basis of Preparation of the Financial Statements

1. Basis of preparationThese financial statements have been prepared in accordance with China’s “Accounting Standards for BusinessEnterprises — Basic Standards” promulgated by the Ministry of Finance and the specific accounting standards

interpretations and other relevant regulations issued or amended thereafter (hereafter collectively referred to as

“Accounting Standards for Business Enterprises” or “CAS”). In addition the financial statements also disclose

relevant financial information in accordance with the Rules No. 15 for the Preparation of Information Disclosure

by Companies Offering Securities to the Public - General Provisions on Financial Reports.

2. Going concern

The financial statements are prepared on a going concern basis.

156 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates

The Group has formulated specific accounting policies and accounting estimates according to the characteristics of

its actual production and operation which is mainly embodied in the provision for the bad debt of accounts

receivable provision for write-down of inventories depreciation of fixed assets provision for product warranties

capitalization conditions for expenditure on the development phase of research and development expenses and

recognition and measurement of revenue.

1. Statement of compliance

The financial statements present truly and completely the financial positions of the Group and the Company as at

31 December 2024 and the financial performance and the cash flows for the year then ended in accordance with

Accounting Standards for Business Enterprises.

2. Accounting year

The accounting year of the Group is from 1 January to 31 December of each calendar year.

3. Functional currency

The Group’s functional currency and the currency used in preparing the financial statements were Renminbi. The

amounts in the financial statements were denominated in Renminbi yuan unless otherwise stated.

4. Determination method and selection basis of materiality criteria to be followed in the disclosure of financial

statements

Materiality criteria

Significant construction in progress Budgeted amount for investment exceeds RMB50000000

Significant cash flows from investing Amount exceeds RMB50000000

activities

Subsidiaries with significant minority Net assets of non-wholly owned subsidiaries account for more than 10%

interests of consolidated net assets

Significant associates The carrying amount of long-term equity investments in associates

accounts for more than 5% of the consolidated net assets

157 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

5. Business combination

Business combinations are classified into business combinations involving entities under common control and

business combinations not 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. Assets and liabilities obtained by combining party in the business

combination involving entities under common control (including goodwill arising from the acquisition of the

merged party by the ultimate controller) are recognized on the basis of their carrying amounts at the combination

date recorded on the financial statements of the ultimate controlling party. The difference between the carrying

amount of the consideration paid for the combination (or aggregate face values of the shares issued) and the

carrying amount of the net assets obtained is adjusted to capital surplus. If the capital surplus are not sufficient to

absorb the difference any excess is adjusted to retained earnings.A business combination not involving entities under common control is a business combination in which all of the

combining entities are not ultimately controlled by the same party or parties both before and after the business

combination. The acquiree’s identifiable assets liabilities and contingent liabilities are recognized at their fair

values at the acquisition date. The excess of the sum of the consideration paid (or equities issued) for business

combination and equity interests in the acquiree held prior to the date of acquisition over the share of the

attributable net identifiable assets of the acquiree measured at fair value was recognized as goodwill which is

subsequently measured at cost less cumulative impairment loss. In case the fair value of the sum of the

consideration paid (or equities issued) and equity interests in the acquire held prior to the date of acquisition is less

than the fair value of the share of the attributable net identifiable assets of the acquiree a review of the

measurement of the fair values of the identifiable assets liabilities and contingent liabilities the consideration paid

for the combination (or equity issued) and the equity interests in the acquiree held prior to the date of acquisition is

conducted. If the review indicates that the fair value of the sum of the consideration paid (or equities issued) and

equity interests in the acquiree held prior to the date of acquisition is indeed less than the fair value of the share of

the attributable net identifiable assets of the acquiree the difference is recognized in profit or loss.

6. Consolidated financial statements

The consolidation scope for consolidated financial statements is determined based on the concept of control

including the Company and all subsidiaries’ financial statements. Subsidiaries are those enterprises or entities

which the Company has control over (including enterprises separable components of investee units and structured

entities controlled by the Company). An investor controls an investee when the investor is exposed or has rights

to variable returns from its involvement with the investee and has the ability to affect those returns through its

power over the investee.The financial statements of the subsidiaries are prepared for the same reporting period as the Company using

consistent accounting policies. Any inconsistent accounting policies have been adjusted to become consistent with

the Company’s accounting policies. All assets liabilities equities revenues costs and cash flows arising from

intercompany transactions are eliminated on consolidation.

158 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

6. Consolidated financial statements (Cont’d)

The excess of current loss attributable to non-controlling shareholders of a subsidiary over their entitlements to the

opening balance of equity shall be charged to non-controlling interests.For subsidiaries obtained through a business combination not involving entities under common control the

operating results and cash flows of the acquirees will be recognized in consolidated financial statements from the

date the Group effectively obtains the control until the date that control is terminated. When consolidated financial

statement is prepared the subsidiaries’ financial statements will be adjusted based on the fair values of the

identifiable assets liabilities and contingent liabilities at the acquisition date.For subsidiaries acquired through combination of entities under common control the business results and cash

flows of the combined entities are included in the consolidated financial statements from the beginning of the

period in which the combination occurred. When preparing and comparing the consolidated financial statements

the Group makes adjustments to relevant items of the financial statements of the previous period deeming the

reporting entity formed through combination as existing since initial implementation of control by the ultimate

controlling party.In the event of the change in one or more elements of control as a result of changes in relevant facts and conditions

the Group reassesses whether it has control over the investee.If the control right is not lost the change of minority shareholders' equity shall be regarded as equity transaction.

7. Cash and cash equivalents

Cash comprises cash on hand and deposits readily available for payments. Cash equivalents represent short-term

highly liquid investments which are readily convertible to known amounts of cash and subject to an insignificant

risk of changes in value.

8. Foreign currency translation

For foreign currency transactions the Group translates the foreign currency into its functional currency.Upon initial recognition foreign currency transactions are translated into the functional currency using the spot

exchange rate of the dates on which transactions occur. At the balance sheet date foreign currency monetary items

are translated using the spot exchange rate at the balance sheet date. The translation differences arising from the

settlement and foreign currency monetary items are recognized in profit or loss. Also at the balance sheet date

foreign currency non-monetary items measured at historical cost continue to be translated using the spot exchange

rate at the dates of the transactions and it does not change its carrying amount in functional currency. Foreign

currency non-monetary items measured at fair value are translated using the spot exchange rate. The differences

arising from the above translations are recognized in current profit or loss or other comprehensive income

according to the nature of foreign currency non-monetary items.

159 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

8. Foreign currency translation (Cont’d)

The Group translates the functional currencies of foreign operations into Renminbi when preparing the financial

statements. Asset and liability items in the balance sheet are translated at the spot exchange rate prevailing at the

balance sheet date. Equity items except for retained earnings are translated at the spot exchange rates at the date

when such items arose. Revenue and expense items in the income statement are translated using the average

exchange rate for the periods when transactions occur. Translation differences arising from the aforesaid translation

of financial statements denominated in foreign currency shall be recognized as other comprehensive income. When

foreign operations are disposed other comprehensive income relating to the foreign operation is transferred to

current profit or loss. Partial disposal shall be recognized on a pro-rata basis.Cash flows denominated in foreign currencies and foreign subsidiaries’ cash flows are translated using the average

exchange rate for the period when cash flows occur. The impact on cash by the fluctuation of exchange rates is

presented as a separate line item of reconciliation in the statement of cash flows.

9. Financial instruments

Financial instruments refer to the contracts which give rise to a financial asset in one entity and a financial liability

or equity instrument in another entity.Recognition and derecognition of financial instruments

The Group recognizes a financial asset or a financial liability when it becomes a party to the contractual provisions

of the financial instrument.A financial asset (or part of it or a part of a group of similar financial asset) is derecognized when one of the

following criteria is met that is when a financial asset previously recognized is transferred out from balance sheet:

(1) The right of receiving the cash flow generated from the financial asset has expired;

(2) The right of receiving cash flow generated by the financial assets is transferred or an obligation of paying

the full amount of cash flow received to third parties in a timely manner has been undertaken under “pass-through”

agreements where (a) substantially all risks and rewards of the ownership of such type of financial assets have

been transferred or (b) control over such type of financial assets has not been retained even though substantially

all risks and rewards of the ownership of such type of financial assets have been neither transferred nor retained.If the obligation of financial liability has been fulfilled cancelled or expired the financial liability is derecognized.If the present financial liability is substituted by the same debtee with another liability differing in substance or the

terms of the present liability have been substantially modified this substitution or modification is treated as

derecognition of a present liability and recognition of a new liability with any arising differences recognized in

profit or loss.Conventional dealings in financial assets are recognized or derecognized under the trade day accounting method.Conventional dealings refer to the receipt or delivery of financial assets within periods stipulated by the law and

according to usual practices. The trade day is the date on which the Group undertakes to buy or sell a financial

asset.

160 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

9. Financial instruments (Cont’d)

Classification and measurement of financial assets

At initial recognition the Group classifies its financial assets into: financial assets at fair value through profit or

loss financial assets at amortized cost or financial assets at fair value through other comprehensive income

according to the Group’s business model for managing financial assets and the contract cash flow characteristics of

the financial assets. When and only when the Group changes its business model of managing financial assets all

relevant financial assets affected will be re-classified.Financial assets are measured at fair value on initial recognition but if the accounts receivable or notes receivable

generated from the sales of goods or provision of services do not contain significant financing components or do

not consider financing components of no longer than one year the initial measurement will be based on the

transaction price.For financial assets at fair value through profit or loss the relevant transaction costs are directly recognized in

profit or loss; for other financial assets the relevant transaction costs are recognized in their initial recognition

amount.The subsequent measurement of financial assets is dependent on its classification:

Debt instruments measured at amortized cost

Financial assets fulfilling all of the following conditions are classified as financial assets at amortized cost: the

objective of the Group’s business management model in respect of such type of financial assets is to generate

contract cash flow; the contract terms of such type of financial assets provide that cash flow generated on specific

dates represents interest payment in relation to principal amounts based on outstanding principal amounts only.Interest income from such type of financial assets are recognized using the effective interest rate method and any

profit or loss arising from derecognition amendments or impairment shall be charged to current profit or loss.Debt instruments at fair value through other comprehensive income

Financial assets fulfilling all of the following conditions are classified as financial assets at fair value through other

comprehensive income: the objective of the Group’s business management model in respect of such type of

financial assets is both to generate contract cash flow and to sell such type of financial assets; the contract terms of

such type of financial assets provide that cash flow generated on specific dates represents interest payment in

relation to principal amounts based on outstanding principal amounts only. Interest income from this type of

financial assets is recognized using the effective interest rate method. Other than interest income impairment loss

and exchange differences which shall be recognized as current profit or loss other fair value changes shall be

included in other comprehensive income. Upon derecognition of the financial assets the cumulative gains or losses

previously included in other comprehensive income shall be transferred from other comprehensive income to

current profit or loss.Financial assets at fair value through profit or loss

Other than financial assets measured at amortized cost and financial assets at fair value through other

comprehensive income as aforementioned all financial assets are classified as financial assets at fair value through

profit or loss which are subsequently measured at fair value any changes of which are recognized in current profit

or loss.

161 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

9. Financial instruments (Cont’d)

Classification and measurement of financial liabilities

The Group classifies its financial liabilities at initial recognition: financial liabilities at fair value through profit or

loss and other financial liabilities. For financial liabilities at fair value through profit or loss the relevant

transaction costs are directly recognized in profit or loss; for other financial liabilities the relevant transaction

costs are recognized in their initial recognition amount.The subsequent measurement of financial liabilities is dependent on its classification:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include mainly financial liabilities held for

trading(comprising derivatives classified as financial liabilities). Financial liabilities held for trading (comprising

derivatives classified as financial liabilities) are subsequently measured at fair value and all changes are recognized

in current profit or loss.Other financial liabilities

Subsequent to initial recognition these financial liabilities are carried at amortized cost using the effective interest

method.Impairment of financial instruments

Determination and accounting treatment of expected credit losses

The Group performs impairment treatment on financial assets at amortized cost debt instruments at fair value

through other comprehensive income and contract assets based on expected credit losses (ECL) and recognizes

allowances for losses.For receivables notes receivable and contract assets that do not contain significant financing components the

Group adopts a simplified measurement method to measure allowances for losses based on an amount equivalent

to the lifetime expected credit losses.Financial assets other than those measured with simplified valuation methods the Group evaluates at each balance

sheet date whether its credit risk has significantly increased since initial recognition. The period during which

credit risk has not significantly increased since initial recognition is considered the first stage at which the Group

shall measure loss allowance based on the amount of expected credit loss for the next 12 months and shall compute

interest income according to the book balance and effective interest rate; the period during which credit risk has

significantly increased since initial recognition although no credit impairment has occurred is considered the

second stage at which the Group shall measure loss allowance based on the amount of expected credit loss for the

entire valid period and shall compute interest income according to the book balance and effective interest rate; The

period during which credit impairment has occurred after initial recognition is considered the third stage at which

the Group shall measure loss allowance based on the amount of the lifetime expected credit loss and shall compute

interest income according to the amortized cost and effective interest rate. If the credit risk of financial instruments

is low at the balance sheet date the Company assumes that the credit risk has not increased significantly since

initial recognition.

162 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

9. Financial instruments (Cont’d)

Impairment of financial instruments (Cont’d)

For the Group’s criteria for judging whether credit risks have significantly increased the definition of assets

subjected to credit impairment and assumptions underlying the measurement of expected credit losses please refer

to Note IX.1.The Group's approach to measuring ECLs on financial instruments reflects factors such as the unbiased

probability-weighted average amount determined by evaluating a range of possible outcomes the time value of

money and reasonable and supportable information about past events current conditions and projections of future

economic conditions available at the balance sheet date without undue additional cost or effort.Classification and determination basis of impairment provision based on credit risk characteristics

The Group considers the credit risk features of different customers and estimates ECLs of financial instruments

based on common risk characteristics and aging portfolio. The Group estimates ECLs individually except for

financial instruments for which the Group estimates ECLs on a group basis.In estimating ECLs the Group considers reasonable and supportable information about past events current

conditions and projections of future economic conditions.Aging calculation method based on the combination of credit risk characteristics recognized by aging

The Group determines the aging based on the invoicing date.Criteria for judging provision for impairment of bad debts made individually

If there is objective evidence that the credit risk of the individual accounts receivable or contract assets is

significantly different from the credit risk of other accounts receivable and contract assets credit impairment losses

are calculated based on the difference between the present value of all contractual cash flows receivable under the

individual contract and the present value of all cash flows expected to be received.Write-off of impairment provision

When the Group no longer reasonably expects to be able to fully or partially recover the contract cash flow of

financial assets the Group directly writes down the book balance of such financial assets.

163 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

9. Financial instruments (Cont’d)

Derivative financial instruments

The Group uses derivative financial instruments. Derivative financial instruments are initially recognized at fair

value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value.Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.Gains or losses arising from changes in the fair value of derivative instruments shall be directly recognized in

current profit or loss.Transfer of financial assets

If the Group has transferred substantially all the risks and rewards associated with the ownership of a financial

asset to the transferee the asset should be derecognized. If the Group retains substantially all the risks and rewards

of ownership of a financial asset the asset should not be derecognized.When the Group has neither transferred nor retained substantially all the risks and rewards of ownership of the

financial asset it may either derecognize the financial asset and recognize any associated assets and liabilities if

control of the financial asset has not been retained; or recognizes the financial asset to the extent of its continuing

involvement in the transferred financial asset and recognizes an associated liability if control has been retained.Assets formed by the continuing involvement by way of the provision of financial guarantee in respect of the

transferred financial assets shall be recognized as the lower of the carrying value of the financial asset and the

amount of financial guarantee. The amount of financial guarantee means the maximum amount among

considerations received to be required for repayment.

10. Inventories

Inventories include raw materials work-in-progress finished goods product deliveries semi-finished goods

materials consigned for processing etc.Inventories are initially recorded at costs. Inventories’ costs include purchasing costs processing costs and other

costs. Actual costs of product deliveries are recognized using the weighted average method. Turnover materials

include low-value consumables packaging materials etc. which are expensed in full.The Group adopts the perpetual inventory system.Inventories on the balance sheet date are stated at the lower of cost or net realisable value. Inventory valuation

allowance is made and recognized in profit or loss when the net realisable value is lower than cost. Net realizable

value is determined based on the estimated selling price in the ordinary course of business less the estimated costs

to completion and estimated costs necessary to make the sale and related taxes. Valuation allowances for raw

materials are established by category and those for finished goods by individual item. For inventories that relate to

products produced and sold in the same region have the same or similar ultimate purpose and are difficult to

separate in measurement valuation allowances are established on a combined basis.

164 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

11. Long-term equity investments

Long-term equity investments include equity investments in subsidiaries joint ventures and associates.Long-term equity investments were recorded at initial investment cost on acquisition. For long-term equity

investments acquired through the business combination of entities under common control the initial investment

cost shall be the share of carrying value of the equity of the merged party at the date of combination as stated in the

consolidated financial statements of the ultimate controlling party. Any difference between the initial investment

cost and the carrying value of the consideration for the combination shall be dealt with by adjusting the capital

surplus(if the capital surplus are insufficient for setting off the difference such difference shall be further set off

against retained earnings). Upon disposal of the investment other comprehensive income prior to the date of

combination shall be dealt with on the same basis as if the relevant assets or liabilities were disposed of directly by

the investee. Equity recognized as a result of changes in equity other than the set-off of profit and loss other

comprehensive income and profit allocation of the investee shall be transferred to current profit and loss upon

disposal of the investment. Items which remain long-term equity investments after the disposal shall be accounted

for on a pro-rata basis while items reclassified as financial instruments following the disposal shall be accounted

for in full. For long-term equity investments acquired through the business combination of entities not under

common control the initial investment cost shall be the cost of combination (for business combinations of entities

not under common control achieved in stages through multiple transactions the initial investment cost shall be the

sum of the carrying value of the equity investment in the acquired party held at the date of acquisition and new

investment cost incurred as at the date of acquisition). The cost of combination shall be the sum of assets

contributed by the acquiring party liabilities incurred or assumed by the acquiring party and the fair value of

equity securities issued. Upon disposal of the investment other comprehensive income recognized under the equity

method held prior to the date of acquisition shall be dealt with on the same basis as if the relevant assets or

liabilities were disposed of directly by the investee. Equity recognized as a result of changes in equity other than

the set-off of profit and loss other comprehensive income and profit allocation of the investee shall be transferred

to current profit and loss upon disposal of the investment. Items which remain long-term equity investments after

the disposal shall be accounted for on a pro-rata basis while items reclassified as financial instruments following

the disposal shall be accounted for in full. The initial investment cost of long-term equity investments other than

those acquired through business combination shall be recognized in accordance with the following: for those

acquired by way of cash payments the initial investment cost shall be the consideration actually paid plus

expenses tax amounts and other necessary outgoings directly related to the acquisition of the long-term equity

investments.In the financial statements of the Company the cost method is used for long term equity investments in investees

over which the Company exercises control. Control is defined as the power exercisable over the investee the

entitlement to variable return through involvement in the activities of the investee and the ability to influence the

amount of return using the power over the investee.When the cost method is used long-term equity investments are measured at initial cost on acquisition. When

additional investments are made or investments are recouped the cost of long-term equity investments shall be

adjusted. Cash dividend or profit distribution declared by the investee shall be recognized as investment income for

the period.

165 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

11. Long-term equity investments (Cont’d)

The equity method is used to account for long-term equity investments when the Group can jointly control or has

significant influence over the invested entity. Joint control is the contractually agreed sharing of control of an

arrangement which exists only when decisions about the relevant activities require the unanimous consent of the

parties sharing control. Significant influence means having the authority to take part in the decision over the

financial and operational policies but not the authority to control or jointly control with other parties the

formulation of such policies.Under the equity method any excess of the initial investment cost over the Company’s share of the net fair value

of the investment’s identifiable assets and liabilities is included in the initial investment cost of the long-term

equity investment. When the carrying amount of the investment is less than the Company’s share of the fair value

of the investment’s identifiable net assets the difference is recognized in profit or loss of the current period and

debited to long-term equity investments.Under the equity method after the long-term equity investments are acquired investment gains or losses and other

comprehensive income are recognized according to the entitled share of net profit or loss and other comprehensive

income of the investee and the carrying amount of the long-term equity investment is adjusted accordingly. When

recognising the Group’s share of the net profit or loss of the invested entity the Group makes adjustments based on

fair values of the investees’ identifiable assets and liabilities at the acquisition date in accordance with the Group’s

accounting policy and accounting period to investee’s net profits eliminating pro-rata profit or loss from internal

transactions with associates and joint ventures attributed to investor (except that loss from inter-group transactions

deemed as asset impairment loss shall be fully recognized) provided that invested or sold assets constituting

businesses shall be excluded. When the invested enterprise declares profit distribution or cash dividends the

carrying amount of investment is adjusted down by the Group’s share of the profit distribution and dividends. The

Group shall derecognize its share of the losses of the investee after the long-term equity investment together with

any long-term interests that in substance forms part of the Group’s net investment in the investee are reduced to

zero except to the extent that the Group has incurred obligations to assume additional losses. The Group also

adjusts the carrying amount of long-term equity investments for other changes in owner’s equity of the investees

(other than the net-off of net profits or losses other comprehensive income and profit distribution of the investee)

and includes the corresponding adjustment in equity.

12. Fixed assets

A fixed asset is recognized when and only when it is probable that future economic benefits that are associated

with the fixed asset will flow to the Group and the cost can be measured reliably. Subsequent expenditures related

to a fixed asset are recognized in the carrying amount of the fixed asset if the above recognition criteria are met

and the carrying value of the replaced part is derecognized; otherwise those expenditures are included in the

current period's profit or loss or the cost of the relevant asset when they occur in accordance with the beneficiary.Fixed assets are initially recognized at cost. Cost of purchased fixed assets includes purchasing price relevant

taxes and any directly attributable expenditure for bringing the asset to working conditions for its intended use.

166 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

12. Fixed assets (Cont’d)

Except for those incurred by using the accrued expenses for safety production fixed assets are depreciated on a

straight-line basis and the respective estimated useful lives estimated residual value ratios and annual depreciation

rates are as follows:

Estimated residual

Useful life Annual depreciation

value ratio rate

Buildings and constructions 20-40 years 5.00% 2.38%-4.75%

Machinery 5-18 years 5.00% 5.28%-19.00%

Transportation equipment 5-10 years 5.00% 9.5%-19.00%

Electronic equipment 3-10 years 5.00% 9.5%-31.67%

Office equipment 3-10 years 5.00% 9.5%-31.67%

Other equipment 5-10 years 5.00% 9.5%-19.00%

The Group reviews at least at each year end useful lives estimated residual values and depreciation methods of

fixed assets and makes adjustments if necessary.

13. Construction in progress

Construction in progress is measured at the actual construction expenditures including necessary project work

expenses incurred during the period while construction is in progress and other related fees.The criteria for construction in progress to be transferred to fixed assets when it is ready for its intended use are as

follows:

Criteria

Buildings and constructions Actual start of use

The earlier of actual start of use/completion of

Machinery installation and acceptance

14. Borrowing costs

The borrowing costs that are directly attributable to the acquisition construction or production of a qualifying asset

are capitalized. The amounts of other borrowing costs incurred are recognised as an expense in the period in which

they are incurred.The capitalisation of borrowing costs commences only when the expenditures for the asset and the borrowing costs

have been incurred and the activities that are necessary to acquire construct or produce the asset for its intended

use or sale have been undertaken.Capitalisation of borrowing costs ceases when the qualifying asset being acquired constructed or produced gets

ready for its intended use or sale. Any borrowing costs subsequently incurred are recognised in profit or loss.III. Principal Accounting Policies and Accounting Estimates (Cont’d)

167 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

14. Borrowing costs (Cont’d)

During the capitalisation period the amount of interest capitalised for each accounting period is determined as

follows: For specific borrowings it is the actual interest expense incurred in the current period minus the

temporary deposit interest income or investment income; there were no borrowing costs within the Group this year

that met the capitalization conditions for general borrowings.Capitalisation of borrowing costs is suspended during periods in which the acquisition construction or production

of a qualifying asset is suspended abnormally by activities other than those necessary to get the asset ready for its

intended use or sale when the suspension is for a continuous period of more than 3 months. Borrowing costs

incurred during these periods are recognised as an expense in profit or loss until the acquisition construction or

production is resumed.

15. Intangible assets

Useful life of intangible assets

Overseas land use rights and trademark rights are intangible assets with indefinite useful lives. Impairment tests

shall be conducted annually regardless of whether there are indications of impairment. Such intangible assets shall

not be amortized and their useful life shall be reviewed during each accounting period. If there is evidence

suggesting that their useful life is limited accounting treatment will be performed according to the above policy on

intangible assets with definite useful life.Other intangible assets are amortised on a straight-line basis over their useful lives as follows:

Useful life Determination basis

Land use rights 40-50 years Term of land use right

The shorter of the term of trademark

Trademark 5-10 years rights/expected term of use

Patent 5-10 years Expected benefit period

The land ownership of Fosber S.p.A. ("Fosber Group") a subsidiary of the Company in Italy has a permanent term

and the Company believes that the land ownership will be used and will bring expected inflows of economic

benefits to the Company in the foreseeable future so its useful life is regarded as indefinite. The trademarks

registered by subsidiaries Fosber Group and Fosber America Inc. ("Fosber America") have a useful life in

accordance with the law but at the expiration of the protection period Fosber Group and Fosber America can

apply for an extension at low service charges so the Company will benefit from the above trademarks in the long

term. Thus the Company recognized the trademark use right as intangible assets with indefinite useful life. The

useful life of intangible assets with indefinite useful life will be reviewed at the end of each year. After review the

useful life of the above intangible assets is still uncertain.

168 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

15. Intangible assets (Cont’d)

Research and development expenses

The Group classifies the expenses for internal research and development as research costs and development costs.All research costs are charged to the current profit or loss as incurred. Expenditure incurred on projects to develop

new products is capitalized and deferred only when the Group can demonstrate the technical feasibility of

completing the intangible asset so that it will be available for use or sale its intention to complete and its ability to

use or sell the asset how the asset will generate future economic benefits (including demonstration that the product

derived from the intangible asset or the intangible asset itself will be marketable or in the case of internal use the

usefulness of the intangible asset as such) the availability of technical and financial resources to complete the

project and procure the use or sale of the intangible asset and the ability to measure reliably the expenditure during

the development. Development costs which do not meet these criteria is recognized in profit or loss when incurred.After meeting the above conditions passing the technical feasibility and economic feasibility study the

corresponding projects of the Group enter the development stage and begin to be capitalized after being reviewed

and approved.

169 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

16. Impairment

Impairment of assets (other than the impairment of inventories contract assets and contract cost assets investment

properties measured using the fair value model deferred tax assets and financial assets ) is determined in the

following way: the Group assesses at the balance sheet date whether there is any indication that an asset may be

impaired; if any indication exists that an asset may be impaired the Group estimates the recoverable amount of the

asset and performs impairment testing; goodwill arising from a business combination intangible assets with

indefinite useful lives and intangible assets not yet available for use are tested for impairment at least at each year

end irrespective of whether there is any indication that the asset may be impaired.The recoverable amount is the higher of the asset’s fair value less costs to sell and its present value of estimated

future cash flows. The Group estimates recoverable value for individual assets. When it is difficult to estimate

individually the recoverable value of the cash generating units which the asset belongs to will be estimated. The

definition of cash generating units is determined on the basis of whether the cash generating units generate cash

flows which are largely independent of those from other cash generating units.Where the carrying amount of an asset or a cash generating unit exceeds its recoverable amount the asset or cash

generating unit is considered impaired and is written down to its recoverable amount. The difference between the

carrying amount and recoverable amount is recognized in profit or loss and allowance for impairment is made

accordingly.In connection with impairment tests for goodwill the carrying value of goodwill arising from business

combination is allocated to relevant cash generating units (“CGU”) from the date of acquisition on a reasonable

basis. If it is difficult to allocate such goodwill to a relevant CGU it should be allocated to a relevant CGU group.A relevant CGU or CGU group is defined as one which can benefit from the synergies of the business combination

and is not larger than the reporting segments determined by the Group.In connection with impairment tests for CGUs or CGU groups that comprise goodwill where indications of

impairment exists in a CGU or CGU group related to goodwill impairment tests should be performed first on

CGUs or CGU groups that do not comprise goodwill and recognize impairment loss after estimating the

recoverable amount. Then impairment tests on CGUs or CGU groups that comprise goodwill should be performed

and the carrying value and recoverable amount should be compared. Where the recoverable amount is lower than

the carrying value the impairment loss should first be offset against the carrying value of the goodwill allocated to

CGUs or CGU groups and then against assets in the CGUs or CGU groups other than goodwill in proportion to the

weighting of these assets.Previously recognized impairment losses are not reversed in subsequent periods.

170 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

17. Long-term prepaid expenses

Long-term prepaid expenses are amortized using the straight-line method with the amortization periods as follows:

Amortization period

Decoration expenditures 3-5 years

Amortization of moulds 3 years

Other expenditures 3-5 years

18. Employee benefits

Employee benefits include all kinds of rewards or compensation incurred by the Group in exchange for service

rendered by employees or in the termination of employment other than share-based payment. Employee benefits

include short-term benefits retirement benefits dismission benefits and other long-term employees’ benefits.Benefits provided by the Group to the spouses children and dependents of employees and families of deceased

employees are also a part of employee benefits.Short-term benefits

For accounting periods during which services are rendered by employees short-term benefits that will incur is

recognized as liability and included in profit and loss or related capital costs.Retirement benefits (defined contribution schemes)

Employees of the Group participated in pension insurance and unemployment insurance schemes managed by the

local government. The contribution costs are charged as asset cost or to profit or loss when incurred.Retirement benefits (defined benefit schemes)

The Group operates a defined benefit pension scheme which requires payments to an independently operated fund.No funds have been injected into the scheme. The cost of benefits provided under the defined benefit scheme is

calculated using the expected benefit accrual unit approach.Remeasurement arising from defined benefit pension schemes including actuarial gains or losses changes in the

asset cap effect (deducting amounts included in net interest on net liabilities of the defined benefit schemes) and

return on scheme assets (deducting amounts included in net interest on net liabilities of the defined benefit schemes)

are instantly recognized in the balance sheet and charged to equity through other comprehensive income for the

period during which it is incurred. It will not be reversed to profit and loss in subsequent periods.Previous service costs are recognized as current expenses when: the defined benefit scheme is revised or relevant

restructuring costs or dismission benefits are recognized by the Group whichever earlier.

171 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

18. Employee benefits (cont’d)

Retirement benefits (defined benefit schemes) (cont’d)

Net interest is arrived at by multiplying net liabilities or net assets of defined benefits with a discount rate. Changes

in net obligations of defined benefits are recognized as cost of sales administrative expenses R&D expenses

selling expenses and finance costs in the income statement. Service costs included current services costs past

service costs and settlement of profit or loss. Net interest included interest income from scheme assets interest

expenses for scheme obligations and interest of the asset cap effect.

19. Provisions

Other than contingent consideration and assumed contingent liabilities in a business combination not involving

entities under common control the Group recognizes as provision an obligation that is related to contingent

matters when all of the following criteria are fulfilled:

(1) the obligation is a present obligation of the Group;

(2) the obligation would probably result in an outflow of economic benefits from the Group;

(3) the obligation could be reliably measured.

Provisions are initially measured according to the best estimate of expenses on fulfilling the current liabilities in

connection with the risk uncertainty and timing value of the currency. The carrying value of the provisions would

be reassessed on every balance sheet date. The carrying value will be adjusted to the best estimated value if there is

certain evidence that the current carrying value is not the best estimate.The contingent liabilities obtained from a business combination not involving entities under common control shall

be measured at fair value at the time of initial recognition. After the initial recognition according to the amount

confirmed by provisions and the balance of the initial recognition amount after deducting the accumulated

amortization determined by the revenue recognition principle the higher of the two shall prevail for subsequent

measurements.

20. Share-based payments

Share-based payments can be distinguished into equity-settled share-based payments and cash-settled share-based

payments. Equity-settled share-based payments are transactions of the Group settled through the payment of shares

or other equity instruments in consideration for receiving services.Equity-settled share-based payments made in exchange for services rendered by employees are measured at the fair

value of equity instruments granted to employees. Instruments which are vested immediately upon the grant are

charged to relevant costs or expenses at the fair value on the date of grant and the capital surplus are credited

accordingly. Instruments of which vesting is conditional upon completion of services or fulfillment of performance

conditions are measured by recognising services rendered during the period in relevant costs or expenses and

crediting the capital surplus accordingly at the fair value on the date of grant according to the best estimates of the

number of exercisable equity instruments conducted by the Group at each balance sheet date during the pending

period. The fair value of equity instruments is determined using the closing price of the Company’s stock on the

date of grant.

172 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

21. Revenue generating from contracts with customers

The Group recognizes its revenue upon the fulfilment of contractual performance obligations under a contract

namely when the customer obtains control over the relevant products or services. The acquisition control over

relevant products or services shall mean the ability to direct the use of the products or the provision of the services

and receive substantially all economic benefits derived therefrom.Contract for the sales of products

The product sales contract between the Group and its customers typically includes different contractual

performance obligations for the transfer of products and the rendering of services. With respect to the sales of

products the Group typically recognizes its revenue at the time when the customer takes control over the products

taking into account the following factors: the acquisition of the current right to receive payments for the products

the transfer of major risks and rewards of ownership the transfer of the legal title of the products the transfer of

the physical assets of the products and customers’ acceptance of the products.Contract for the rendering of installation services

The service contract between the Group and its customers includes contractual performance obligations for

installation services. As the customer is able to forthwith obtain and consume the economic benefits brought by the

Group’s contractual performance when the Group performs a contract the Group considers such contractual

performance obligations to be obligations performed over a period of time and revenue shall be recognized on

each balance sheet date according to the progress of installation.Significant financing component

Where a contract contains a significant financing component the Group determines transaction prices based on

amounts payable assumed to be settled in cash by customers immediately upon the acquisition of control over the

products or services. The difference between such transaction price and contract consideration is amortized over

the contract period using the effective interest method based on a ratio that discounts the nominal contractual

consideration to the current selling price of the products or services. The Group shall not give consideration to any

significant financing component in a contract if the gap between the customer’s acquisition of control over the

products or services and payment of consideration is expected to be less than 1 year.

(4) Warranty clauses

The Group provides quality assurance for products sold in accordance with contract terms and laws and regulations.The accounting treatment of quality assurance in the form of warranty assuring customers products sold are in

compliance with required standards is set out in Note III.20. Where the Group provides a service warranty for a

standalone service in addition to the assurance of compliance of products with required standards such warranty is

treated as a standalone contractual performance obligation and a portion of the transaction price shall be allocated

to the service warranty based on a percentage of the standalone price for the provision of product and service

warranty. When assessing whether a warranty is rendering a standalone service in addition to providing guarantee

to customers that all sold goods are in compliance with required standards the Group will consider whether or not

such warranty is a statutory requirement the term of the warranty and the nature of the Group’s undertaking to

perform its obligations.

173 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

22. Contract assets and contract liabilities

The Group presents contract assets or contract liabilities on the balance sheet according to the relationship between

contractual performance obligations and customer payments.Contract assets

The right to receive consideration for the transfer of goods or services to a customer before the customer actually

pays the contract price or before the contract price is due (and such right is dependent on factors other than the

passage of time) is recognised as a contract asset; when an unconditional right to receive payment is subsequently

obtained it is reclassified as a receivable.For details of the Group’s determination and accounting treatment of expected credit losses from contract assets

please refer to Note III.9.Contract liabilities

Before transferring goods or services to a customer if the consideration from the customer has been received or the

right to receive the consideration unconditionally has been obtained but the obligation to transfer the goods or

services to the customer has not yet been fulfilled it shall be recognised as a contract liability.

23. Assets relating to contract cost

The Group’s assets relating to contract costs include the contract acquisition costs and contract performance costs.The costs are presented in inventory other current assets or other non-current assets based on liquidity of the assets.Where the Group expects the incremental costs for acquiring a contract to be recoverable such contract acquisition

costs are recognized as an asset (unless the amortisation period of the asset is not more than 1 year).Costs incurred by the Group for the performance of a contract are recognized as an asset as contract performance

costs if they do not fall under the scope of the relevant standards for inventories fixed assets or intangible assets

but meet all the following conditions:

(1) they are directly related to a current or anticipated contract including direct labour direct materials

manufacturing expenses (or similar expenses) to be borne by customers as specifically stipulated and otherwise

incurred solely in connection with the contract;

(2) they will increase the resources to be utilized in the Company’s future performance of its contractual

obligations;

(3) they are expected to be recoverable.

24. Government grants

Government grants are recognized when there is reasonable assurance that the grant will be received and all

attaching conditions will be complied with. The grant is measured as the amount received or receivable where it

takes the form of a cash asset or at fair value where it is not a cash asset. Where the fair value cannot be reliably

obtained it should be measured at the nominal value.

174 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

24. Government grants (cont’d)

In accordance with the stipulations of the government instruments government grants applied towards acquisition

or the formation of long-term assets in other manners are asset-related government grants; the instruments

unspecifically refer to the exercise of judgement based on the basic conditions for receiving the asset-related grant

applied towards or the formation of long-term assets in other manners. All other grants are recognized as income-

related government grants.Government grants relating to income and applied to make up for related costs or losses in future periods shall be

recognized as deferred income and shall be recognized in profit or loss of the period for which related costs or loss

are recognized. Government grants specifically applied for the reimbursement of incurred related costs and

expenses shall be directly recognized in profit or loss.Government grants relating to assets shall offset the carrying amount of related assets or be recognized as deferred

income and credited to profit or loss over the useful life of the asset concerned by reasonable and systematic

instalments (provided that government grants measured at nominal value shall be directly recognized in profit or

loss). Where the asset concerned is disposed of transferred retired or damaged prior to the end of its useful life

the balance of the deferred income yet to be allocated shall be transferred to “asset disposal” under current profit or

loss.

25. Deferred tax assets

The Group recognizes deferred tax assets and liabilities based on temporary differences using the balance sheet

liability method. Temporary differences are differences between the carrying amount of assets or liabilities in the

balance sheet and their tax base on the balance sheet date. Temporary differences also include the differences

between the carrying values and tax bases of items not recognized as assets or liabilities where the tax base can be

calculated according to the relevant tax regulations.Deferred tax liabilities are recognized for all taxable temporary differences except:

(1) where the taxable temporary difference arises from goodwill or the initial recognition of an asset or liability

in a transaction that is not a business combination and at the time of the transaction affects neither the accounting

profit nor taxable profit or loss;

(2) in respect of taxable temporary differences associated with investments in subsidiaries associates and

interests in joint ventures where the timing of the reversal of the temporary differences can be controlled and it is

probable that the temporary differences will not reverse in the foreseeable future.Deferred tax assets are recognized for all deductible temporary differences carryforward of unused tax credits and

unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible

temporary differences and the carryforward of unused tax credits and unused tax losses can be utilized except:

(1) where the deductible temporary difference arises from transaction that is not a business combination and at

the time of the transaction affects neither the accounting profit nor taxable profit or loss;

(2) deductible temporary differences associated with investments in subsidiaries associates and interests in joint

ventures are recognized when all following conditions are met: it is probable that the temporary differences will

reverse in the foreseeable future it is probable that taxable profit against the deductible temporary differences will

be available.

175 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

25. Deferred tax assets (cont’d)

As at balance sheet date deferred tax assets and liabilities are measured in accordance with relevant tax laws at the

tax rates that are expected to apply to the period when the asset is realized or the liability is settled and reflects the

tax consequences that would follow the manner in which the Group expects at the balance sheet date to recover

the assets or settle the carrying amount of its assets and liabilities.The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the

extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred

tax asset to be utilized. Unrecognized deferred tax assets are reassessed at the end of each reporting period and are

recognized to the extent that it has become probable that sufficient taxable profit will be available to allow all or

part of the deferred tax asset to be recovered.Deferred tax assets and liabilities are offset and presented as a net amount if all of the following conditions are met:

the Group has the legal right to set off the current income tax assets and liabilities and the deferred tax assets and

liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different

taxable entities provided that the taxable entity concerned intends either to settle current income tax liabilities and

assets on a net basis or to realize the assets and settle the liabilities simultaneously in each future period in which

significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

26. Leases

At inception of a contract the Group assesses whether the contract is or contains a lease. A contract is or contains

a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for

consideration.As lessee

The Group recognizes leases as the right-of-use asset and lease liabilities except for short-term leases and leases of

low-value assets.Right-of-use assets

At the commencement date of the lease the Group recognizes a right-of-use asset. The cost of the right-of-use

asset comprises: (1) the amount of the initial measurement of the lease liability; (2) any lease payments made at or

before the commencement date less any lease incentives received; (3) any initial direct cost incurred; (4) an

estimate of costs incurred by the lessee in dismantling and removing the underlying asset restoring the site on

which it is located or restoring the underlying asset to the condition required by the terms and conditions of the

lease. The right-of-use assets are depreciated on a straight-line basis subsequently by the Group. If ownership of

the leased asset transfers to the Group at the end of the lease term depreciation is calculated using the estimated

useful life of the asset. Otherwise the right-of-use assets are depreciated over the shorter of the lease term and the

estimated useful lives of the assets.

176 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

26. Leases (cont’d)

As lessee (cont’d)

Lease liabilities

At the commencement date the Group measures the lease liability at the present value of the lease payments that

are not paid at that date except for short-term leases and low-value asset leases. Lease payments include constant

payments and the substantial constant payments net of lease incentives variable lease payments that depend on an

index or ratio the estimated payables of guaranteed residual value and also include the exercise price of the

purchase option or the amount to be paid upon vest of the termination option provided that the Group is

reasonably certain that the option will be vested or that the lease term reflects that the Group will exercise the

termination option.In calculating the present value of the lease payments the Group uses the interest rate implicit in the lease as the

discount rate. If that rate cannot be readily determined the Group uses the lessee’s incremental borrowing rate. The

Group calculates the interest expenses of the lease liability in each period during the lease term using the constant

periodic rate of interest and recognizes such interest expenses in profit or loss except those that in the related asset

costs as required. Variable lease payments that are not included in the measurement of the lease assets are

recognized in profit or loss as incurred except those that shall be included in the related asset costs as required.After the commencement date the Group increases the book value of the lease liability when interest is recognized

and decreases the book value of the lease liability when lease payments are made. In the event of any change to the

substantial constant payments the estimated payables of guaranteed residual value the index or ratio used to

determine lease payments the assessment results or actual vesting of the purchase option the renewal option or the

termination option the Group remeasures the lease liability at the present value of the modified lease payments.Short-term leases and leases of low-value assets

A short-term lease is a lease that at the commencement date has a lease term of 12 months or less and does not

contains any purchase option. The Group does not recognize the right-of-use assets and lease liabilities for

buildings short-term leases. The Group recognizes lease payments on short-term leases and leases of low-value

assets in the related asset costs or profit or loss on a straight-line basis over the lease term.

(2) As lessor

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership

of an underlying asset except that a lease is classified as an operating lease at the inception date.As a lessor of operating leases

Rental income of operating leases is recognized in current profit or loss over the respective periods during the lease

term on a straight-line basis while variable lease payment not included in lease receipts is charged to profit or loss

as and when incurred. Initial direct costs are capitalised and recognised over the lease term on the same basis as

rental income through profit or loss.

177 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

27. Share repurchase

The consideration and transaction costs paid to repurchase equity instruments are charged against owner’s equity.Except for share-based payments the issue (including refinancing) repurchase disposal or retirement of the

Company’s own equity instruments are accounted for as changes in equity.

28. Expenses for safety production

The expenses for safety production set side as stipulated shall be included in the cost of relevant products or

current profits and losses and included in the special reserve at the same time. When such expenses are used

accounting treatment will be performed according to whether fixed assets are formed. If identified as expense

expenditures the special reserve will be written down directly; if fixed assets are formed the expenses incurred

will be collected fixed assets will be recognized when they reach a predetermined usable state and the equivalent

amount of special reserve will be written down and the equivalent accumulated depreciation will be recognized.

29. Put option related to non-controlling interests

In the process of acquiring majority equity of subsidiaries the Group grants to minority shareholders the option to

sell the shares of subsidiaries held by them to the Group (put option). The Group recognizes the shares of

subsidiaries held by minority shareholders as non-controlling interests in its consolidated financial statements; for

the put option the Group undertakes the obligation to redeem the shares of the subsidiaries held by minority

shareholders in cash. The Group removes the present value of the amount payable to redeem the put option from

its equity (excluding non-controlling interests) and classifies it as financial liability which is remeasured in

subsequent periods at the present value of the the amount payable to redeem the put option and recognized in profit

or loss.

30. Fair value measurement

The fair value hierarchy to which an asset or liability measured or disclosed in the financial statements at fair value

will be determined on the basis of the lowest level of input which is significant for the fair value measurement as a

whole. Input at the first level represents unadjusted quoted prices in an active market for the acquisition of the

same asset or liability on the measurement date. Input at the second level represents directly or indirectly

observable assets or liabilities apart from input at the first level. Input at the third level represents unobservable

input for the asset or liability.At each balance sheet date the Group reassesses assets and liabilities measured at fair value on an ongoing basis

recognized in the financial statements to determine whether the level of fair value measurement should be changed.

178 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

31. Significant accounting judgements and estimates

The preparation of financial statements requires judgement and estimation of the management. Such judgement

and estimation will affect the reported amounts of revenue expenses assets and liabilities and the disclosure of

contingent liabilities as at the balance sheet date. However the consequence arising from the uncertain nature of

such estimation may result in significant adjustment to the carrying value of the asset or liability affected in the

future.Judgement

In the process of applying the Group’s accounting policies management has made the following judgements

which have the most significant effect on the amounts recognized in the financial statements:

Determination of standalone contractual performance obligations

The intelligent packaging equipment (printers and corrugators) business of the Group includes four kinds of

product or service commitments i.e. the sale installation transportation and insurance services of machinery. As

the customer can benefit from the individual use of the four kinds of products or services or their use together with

other readily available resources and such product or service commitments are distinctly separable from other

products or service commitments the aforesaid product or service commitments constitute standalone contractual

performance obligations respectively.Business model

The classification of financial assets at initial recognition is dependent on the Group’s business model for

managing the assets. Factors considered by the Group in judging the business model include enterprise valuation

the method of reporting the results of financial assets to key management members risks affecting the results of

financial assets and the method for managing such risks as well as the form of remuneration received by the

management personnel of the businesses concerned. In assessing whether the business model is aimed at receiving

contract cash flow the Group is required to analyse and exercise judgment in respect of the reasons timing

frequency and values of any disposals prior to maturity.Characteristics of contract cash flow

The classification of financial assets at initial recognition is dependent on the characteristics of the contract cash

flow of such type of financial assets. Judgement is required to determine whether the contract cash flow represents

interest payment in relation to principal amounts based on outstanding principal amounts only including

judgement of whether it is significantly different from the benchmark cash flow when assessing modifications to

the time value of currencies and judgement of whether the fair value of early repayment features is minimal where

the financial assets include such early repayment features.Estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet

date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities

within subsequent financial years are discussed below.

179 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

31. Significant accounting judgements and estimates (cont’d)

Estimation uncertainty (cont’d)

Impairment of financial instruments and contract assets

The Group has adopted the expected credit loss model to evaluate the impairment of financial instruments and

contract assets. The application of the expected credit loss model requires significant judgement and estimates and

the consideration of all reasonable and soundly based information including forward-looking information. In

making such judgement and estimates the Group estimates the projected movements of the debtor’s credit risk

according to past repayment records economic policies macro-economic indicators and industry risks. Different

estimates may affect impairment allowances and established impairment allowances may not equal the actual

impairment loss amount in the future.Impairment of non-current assets other than financial assets (exclusive of goodwill)

The Group assesses at each balance sheet date whether there is an indication that a non-current asset other than

financial assets may be impaired. For an intangible asset with an indefinite useful life in addition to the annual

impairment test it is also tested when there is an indication that it may be impaired. Non-current assets other than

financial assets are tested for impairment when there is an indication that the carrying amount is irrecoverable.Where the carrying amount of an asset or an asset group exceeds its recoverable amount—the higher of the asset or

asset group’s fair value less costs to sell and its present value of estimated future cash flows it is considered

impaired. The net amount of the fair value less costs to sell is determined based on the price of a similar asset’s

sales contract in a fair transaction or the observable market price less the incremental cost directly attributable to

the disposal of the asset. When estimating the present value of future cash flows the management must choose a

proper discount rate.Impairment of goodwill

Goodwill must be tested for impairment at least annually. It requires estimating the present value of future cash

flows of an asset group or asset group portfolio allocated with goodwill. When estimating the present value of

future cash flows the Group needs to estimate future cash flows generating from the asset group or asset group

portfolio and at the same time choose a proper discount rate to determine the present value of future cash flows.For details see Note V.20.Fair value of unlisted equity investments

The unlisted equity investments have been valued based on a market-based valuation technique. This valuation

requires the Group to determine the comparable listed companies select the price multiple and make estimates

about the discount for illiquidity and hence they are subject to uncertainty.Deferred tax assets

Deferred tax assets are recognized for all unused tax losses to the extent that it is likely that taxable profit will be

available to utilize these unused tax losses. Significant judgments are needed from management to estimate the

timing and amount of taxable profit in the future with tax planning strategies to determine the amount of the

deferred tax assets that should be recognized.

180 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

31. Significant accounting judgements and estimates (cont’d)

Estimation uncertainty (cont’d)

Lessee’s incremental borrowing rate

If the interest rate implicit in the lease cannot be readily determined the Group measures the lease liability at the

present value of the lease payments that are not paid at that date. The Group discounted the lease payments using

the lessee’s incremental borrowing rate. The Group determines the incremental borrowing rate based on the

economic environment by reference to the observable interest rate. Then the Group adjusts the reference interest

rate based on its own circumstances underlying assets lease terms and amounts of lease liabilities to determine the

applicable incremental borrowing rate.Provisions

The Group estimates and makes corresponding provision for product quality guaranty according to contract terms

existing knowledge and past experience. When such contingencies have formed a present obligation and it is

probable that an outflow of economic benefits from the Group will be required to settle the obligation the Group

recognizes the contingencies as provisions based on the best estimate of the expenditure required to settle the

related present obligation. The recognition and measurement of provisions largely depend on the judgment of

management. In the process of making judgment the Group is required to assess the risks uncertainties time value

of money and other factors related to such contingencies.The Group will undertake the provisions for post-sale quality maintenance provided to customers for the sale

maintenance and renovation of the sold goods. The provisions have been made taking into account the Group’s

recent data of maintenance experience and taking into account the risks uncertainties and other factors related to

maintenance matters. Any increase or decrease in this provision may affect the profit and loss in future years.

32. Changes in accounting policies and estimates

In accordance with the Compilation of Application Guidelines for Accounting Standards for Business Enterprises

2024 the Group has changed the presentation of derivative financial instruments that were originally classified

under "trading financial assets" or "trading financial liabilities" to be reported separately and has retrospectively

adjusted the comparative data of the financial statements accordingly. In accordance with Accounting Standards for

Business Enterprises Interpretation No. 18 the Group has changed the presentation of guarantee-type quality

assurance which was originally classified under "Selling Expenses" to "Cost of Sales" and has retrospectively

adjusted the comparative data of the financial statements accordingly.

181 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

32. Changes in accounting policies and estimates (cont’d)

The effects of retrospective adjustments caused by the above changes in accounting policies on the financial

statements are stated as follows:

The Group

2024

Before changes Changes in accounting policies After changes

Closing balance Closing balance

Trading financial

assets 791404413.35 (2755081.17 ) 788649332.18

Derivative financial

assets - 2755081.17 2755081.17

Trading financial

liabilities 206216239.00 (206216239.00 ) -

Derivative financial

liabilities - 206216239.00 206216239.00

Before changes Changes in accounting policies After changes

Amount for the year Amount for the year

Cost of sales 3259650772.86 80845054.08 3340495826.94

Selling expenses 273249203.69 (80845054.08 ) 192404149.61

2023

Before changes Changes in accounting policies After changes

Closing balance Closing balance

Trading financialassets 682625442.45 （31329174.69 ) 651296267.76Derivative financial

assets - 31329174.69 31329174.69

Trading financial

liabilities 115900827.21 (115900827.21 ) -

Derivative financial

liabilities - 115900827.21 115900827.21

Before changes Changes in accounting policies After changes

Amount for the year Amount for the year

Cost of sales 3359528546.01 78496207.90 3438024753.91

Selling expenses 278840528.93 (78496207.90 ) 200344321.03

182 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

III. Principal Accounting Policies and Accounting Estimates (Cont’d)

32. Changes in accounting policies and estimates (cont’d)

The Company

2024

Before changes Changes in accounting policies After changes

Closing balance Closing balance

Trading financial

liabilities 116513.31 (116513.31 ) -

Derivative financial

liabilities - 116513.31 116513.31

Before changes Changes in accounting policies After changes

Amount for the year Amount for the year

Cost of sales 279926633.62 (307470.43 ) 279619163.19

Selling expenses 34381793.46 307470.43 34689263.89

2023

Before changes Changes in accounting policies After changes

Closing balance Closing balance

Trading financial

assets 641997959.60 (28707975.72 ) 613289983.88

Derivative financial

assets - 28707975.72 28707975.72

Trading financial

liabilities 728.57 (728.57 ) -

Derivative financial

liabilities - 728.57 728.57

Before changes Changes in accounting policies After changes

Amount for the year Amount for the year

Cost of sales 266015344.67 135299.52 266150644.19

Selling expenses 40854863.63 (135299.52 ) 40719564.11

183 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

IV. Taxation

1. Principal tax items and tax rates

Tax basis Tax rate

Value-added tax (VAT) The output tax: taxable income; 22% 13% and 6%

VAT: difference after deducting the input tax which is allowed to

be deducted in the current year

City maintenance and Turnover tax actually paid 7%

construction tax

Education surcharge Turnover tax actually paid 3%

Local education Turnover tax actually paid 2%

Surcharge

Property tax Ad valorem tax: remaining value after deducting 30% from the 1.2% and 12%

original value of the property;

Tax levied from rent: rental income.Corporate income tax Taxable income 15%-30%

The taxpaying entities subject to different corporate income tax rates are as follows:

Income tax rate

Guangdong Dongfang Precision Science & Technology Co. Ltd. 15.0%

Suzhou Parsun Power Machine Co. Ltd. ("Parsun Power") 15.0%

Guangdong Fosber Intelligent Equipment Co. Ltd. ("Fosber Asia") 15.0%

Shenzhen Wonder Printing System Co.Ltd. ("Wonder Printing") 15.0%

Dong Fang Precision (HK) Limited (“Dongfang Precision (HK)”) 16.5%

Dong Fang Precision (Netherland) Cooperatief U.A.(“Dongfang Precision (Netherland)”) 20.0%

Fosber S.p.A. 24.0%

Fosber America Inc. (“Fosber America”) 21.0%

EDF Europe s.r.l. (“EDF”) 24.0%

Tiru?a America inc. (“Tiru?a America”) 21.0%

Quantum Corrugated S.r.l. (“QCorr”) 24.0%

Tiru?a S.L.U. 28.0%

Tiru?a France SARL 15.0%

SCI Candan 15.0%

Fosber Mexico Corrugados S.de R.L (“Fosber Mexico”) 30.0%

184 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

IV. Taxation (Cont’d)

2. Tax concessions

On 28 December 2023 the Company passed the high-tech enterprise review by the Department of Science and

Technology of Guangdong Province Department of Finance of Guangdong Province Guangdong Provincial Tax

Service of State Taxation Administration and Guangdong Provincial Local Taxation Bureau and obtained a High-

tech Enterprise Certificate (certificate no.: GR202344004676) jointly issued by the above authorities with a

validity of three years during which the Company paid the corporate income tax at a reduced rate of 15% so the

preferential tax rate of 15% was applicable to the Company's corporate income tax as at 31 December 2024.Parsun Power. a subsidiary of the Company passed the high-tech enterprise review by the Department of Science

and Technology of Jiangsu Province Department of Finance of Jiangsu Province and Jiangsu Provincial Tax

Service of State Taxation Administration on 18 November 2022 and obtained a High-tech Enterprise Certificate

(certificate no.: GR202232005866) jointly issued by the above authorities with a validity of three years during

which the subsidiary paid the corporate income tax at a reduced rate of 15% so the preferential tax rate of 15%

was applicable to the corporate income tax of Parsun Power as at 31 December 2024.Fosber Aisa a subsidiary of the Company passed the high-tech enterprise review by the Department of Science

and Technology of Guangdong Province Department of Finance of Guangdong Province and Guangdong

Provincial Tax Service of State Taxation Administration on 20 December 2021 and obtained a High-tech Enterprise

Certificate (certificate No.: GR202144003984) jointly issued by the above authorities with a validity of three years

during which the subsidiary paid the corporate income tax at a reduced rate of 15%. On 28 November 2024 Fosber

Aisa passed the review for the renewal of high-tech enterprise certificate (certificate No.: GR202444004278) with

a validity of three years during which the subsidiary paid the corporate income tax at a reduced rate of 15%. so the

preferential tax rate of 15% was applicable to the corporate income tax of Fosber Asia as at 31 December 2024.Wonder Printing System Co. Ltd. a subsidiary of the Company passed the high-tech enterprise review by the

Department of Science and Technology of Guangdong Province Department of Finance of Guangdong Province

and Guangdong Provincial Tax Service of State Taxation Administration on 19 December 2022 and obtained a

High-tech Enterprise Certificate (certificate no.: GR202244206125) jointly issued by the above authorities with a

validity of three years during which the subsidiary paid the corporate income tax at a reduced rate of 15% so the

preferential tax rate of 15% was applicable to the corporate income tax of Wonder Printing as at 31 December

2024.

185 / 282Notes to the Financial Statements

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements

1. Cash and bank balances

20242023

Cash on hand 497855.11 438600.93

Cash at banks 1505877879.48 1491798403.81

Other cash balances 222674648.75 334182899.75

1729050383.341826419904.49

Of which: Total amount deposited overseas 661563660.12 889925365.66

Total restricted amount as

collateral pledge or frozen 76759834.79 153905292.65

As at 31 December 2024 the fund deposited abroad with restrictions on repatriation was equivalent to

RMB10859642.60 (31 December 2023: RMB9020813.02).Current bank deposits earn interest income based on interest rates for current deposits.Note 1: Other cash balances include: 1) a total of RMB76759834.79 in guarantee deposits for letters of guarantee

bank acceptance bill deposits futures margin pledged time deposits and forward exchange settlement and sale

deposits; 2) investment deposits with a book value of RMB145356420.51; 3) RMB 416976.33 of foreign

currency funds pending verification received in the accounts of domestic subsidiaries; 4) RMB141417.12 of

monetary funds are funds in transit generated by internal transfers of the Group's overseas subsidiaries on 30

December 2024. These funds in transit arrived at the relevant accounts on 2 January 2025.

2. Financial assets held for trading

20242023

(Restated)

Financial assets at fair value through profit or loss

Asset management plans 297908542.28 312284352.19

Stocks and Funds 236797596.08 205349301.18

Investments in bank’s wealth management products 233789426.10 133662614.39

Investments in trust products 20153767.72- -

788649332.18651296267.76

3. Derivative financial assets

20242023

(Restated)

Option derivatives - 28707975.72

Foreign currency derivatives 2755081.17 2621198.97

2755081.1731329174.69

186 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

4 Notes receivable

Notes receivable by categories

20242023

Bank acceptance notes 96695760.53 47661412.88

Commercial acceptance notes 1352384.78 -

Less: impairment allowance - -

98048145.3147661412.88

Notes receivable endorsed or discounted but undue at the balance sheet date

Derecognized Un-derecognized

Bank acceptance notes - 57105722.02

-57105722.02

As at 31 December 2024 the Group did not establish impairment allowance for the bank acceptance notes after its

estimation of impairment allowance based on the lifetime ECL. The Group is of opinion that the held bank

acceptance notes do not carry significant credit risk and thus no significant losses may incur due to bank default.

5. Accounts receivable

Aging analysis of accounts receivable

20242023

Within 1 year 671758354.04 797174742.31

1-2 years 64675802.44 97122608.26

2-3 years 26567589.98 30354347.33

3-4 years 7329163.57 3905106.39

4-5 years 2565796.54 4320546.03

Over 5 years 8675651.19 8831175.90

781572357.76941708526.22

Less: allowances for doubtful accounts receivable 35709532.05 37704550.75

745862825.71904003975.47

187 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

(2) The accounts receivable by the method of establishing allowances

2024

Carrying

Gross amount Allowance amount

Amount Percentage Amount Percentage

(%)(%)

Accounts receivable for which allowances

are established individually 1250400.00 0.16 1250400.00 100.00 -

Accounts receivable for which allowances

are established by group with similar

credit risk characteristics 780321957.76 99.84 34459132.05 4.42 745862825.71

781572357.76100.0035709532.05745862825.71

2023

Carrying

Gross amount Allowance amount

Amount Percentage Amount Percentage

(%)(%)

Accounts receivable for which

allowances are established individually 2477303.19 0.26 2477303.19 100.00 -

Accounts receivable for which

allowances are established by group

with similar credit risk characteristics 939231223.03 99.74 35227247.56 3.75 904003975.47

941708526.22100.0037704550.75904003975.47

188 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

5. Accounts receivable (cont’d)

(2) The accounts receivable by the method of establishing allowances (cont’d)

Accounts receivable for which allowances are established individually are as follows:

20242023

Gross amount Allowance ECL Reason for allowance Gross amount Allowance

(%)

Customer 1 - - - 939000.00 939000.00

Customer’s inability to

Customer 2 641600.00 641600.00 100.00 settle the amount due 641600.00 641600.00

Customer’s inability to

Customer 3 608800.00 608800.00 100.00 settle the amount due 608800.00 608800.00

Customer 4 - - - 283000.00 283000.00

Customer 5 - - - 4903.19 4903.19

1250400.001250400.002477303.192477303.19

As at 31 December 2024 accounts receivable for which allowances are established by group with similar credit

risk characteristics are as follows:

Gross amount Allowance ECL(%)

Within 1 year 671758354.04 11631304.76 1.73

1-2 years 64675802.44 3972926.41 6.14

2-3 years 26567589.98 6557735.57 24.68

3-4 years 7329163.57 3151871.03 43.00

4-5 years 2565796.54 1720043.09 67.04

Over 5 years 7425251.19 7425251.19 100.00

780321957.7634459132.05

189 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

5. Accounts receivable (cont’d)

Allowances for doubtful accounts receivable

Recovery or Effect of

Opening Provision in reversal in the Written off in exchange rate Closing

balance the year year the year movements balance

202437704550.758928962.65(6967044.87)(3030162.33)(926774.15)35709532.05

As at 31 December 2024 the top five accounts receivable and contract assets were as follows:

Total closing

balance of

provision for bad

Total closing As a % of the debts of accounts

balance of closing balance receivable and

Closing balance of Closing accounts of total accounts provision for

accounts balance of receivable and receivable and impairment of

receivable contract assets contract assets contract assets contract assets

Customer 6 89819814.13 - 89819814.13 10.70 2345848.98

Customer 7 64898037.71 - 64898037.71 7.73 1994989.84

Customer 8 45583853.57 - 45583853.57 5.43 688231.90

Customer 9 31043843.22 - 31043843.22 3.70 265541.48

Customer 10 26192298.11 - 26192298.11 3.12 181885.97

257537846.74-257537846.7430.685476498.17

6. Receivables financing

20242023

Bank acceptance notes 16303982.64 9365344.07

16303982.649365344.07

7. Prepayments

Aging of prepayments

20242023

Percentage Percentage

Carrying amount Carrying amount

(%)(%)

Within 1 year 20658142.10 73.19 42509851.47 92.93

1-2 years 5496200.81 19.47 2960199.29 6.47

2-3 years 1800946.41 6.38 20968.14 0.05

190 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

Over 3 years 270906.03 0.96 250125.00 0.55

28226195.35100.0045741143.90100.00

191 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

7. Prepayments (cont’d)

Suppliers to which the of top 5 prepayments were paid

As a % of total

2024 prepayments

Supplier 1 2355017.30 8.34

Supplier 2 2230088.44 7.90

Supplier 3 1881425.00 6.67

Supplier 4 1879090.21 6.66

Supplier 5 1778300.00 6.30

10123920.9535.87

8. Other receivables

20242023

Other receivables 40647410.48 51797943.96

40647410.4851797943.96

Other receivables

Aging of other receivables

20242023

Within 1 year 33526337.20 38472808.52

1-2 years 2775908.24 6754108.79

2-3 years 2741627.11 4574557.21

3-4 years 676581.88 2082428.89

4-5 years 1327408.54 138543.93

Over 5 years 1042634.10 1111902.73

42090497.0753134350.07

Less: allowances for doubtful other receivables 1443086.59 1336406.11

40647410.4851797943.96

192 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

8. Other receivables (cont’d)

Other receivables (cont’d)

Other receivables classified by nature

20242023

Prepaid service charges 9002675.21 19593768.86

Security deposits 8642471.46 7956393.69

Government grants 6000000.00 -

Employee loans and petty cash 5500800.82 5078147.88

Export tax refunds 1267848.43 2952066.14

Others 11676701.15 17553973.50

42090497.0753134350.07

Allowances for doubtful other receivables

2024

Carrying

Gross amount Allowance amount

Amount Percentage Amount Percentage

(%)(%)

Other receivables for which

allowances are established by group

with similar credit risk characteristics 42090497.07 100.00 1443086.59 3.43 40647410.48

193 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

8. Other receivables (cont’d)

Other receivables (cont’d)

(3) Allowances for doubtful other receivables (cont’d)

Movements in allowances for doubtful other receivables that are established based on the 12-month ECL and the

lifetime ECL are as follows:

Stage 1 Stage 2 Stage 3 Total

Financial assets

with credit

impairment

12-month ECL Lifetime ECL (lifetime ECL)

Opening balance 836406.11 500000.00 - 1336406.11

Transfer of opening

balances among stages

Provisions in the year 446003.96 - - 446003.96

Reversed in the year (525.55 ) - - (525.55 )

Written off in the year (338797.93 ) - - (338797.93 )

Other changes - - - -

Closing balance 943086.59 500000.00 - 1443086.59

(4) Entities from which the top 5 other receivables were due

As a % of

Closing balance

total other Nature Age of allowance

2024 receivables

Entity 1 6000000.00 14.25 Government grants Within 1 year -

Transactions with third

Entity 2 5425164.01 12.89 parties Within 1 year -

1-2 years

Entity 3 1630476.19 3.87 Deposit 2-3 years -

Transactions with third Within 1 year

Entity 4 1381741.18 3.28 parties -

Transactions with third

Entity 5 1228807.43 2.92 parties Within 1 year -

15666188.8137.21-

194 / 282Error! Unknown document property name.

Notes to the Financial Statements (Cont’d)

Error! Unknown document property name.Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

9. Inventories

(1) Categories of inventories

20242023

Gross amount Valuation allowance Carrying amount Gross amount Valuation allowance Carrying amount

Raw materials 589876070.44 22563941.37 567312129.07 658870239.78 23591282.36 635278957.42

Work-in-progress 374757086.69 20796033.51 353961053.18 422201722.20 20499380.02 401702342.18

Finished goods 70354471.23 4963028.38 65391442.85 75950836.96 3475752.29 72475084.67

Product deliveries 12920671.77 - 12920671.77 31374046.56 - 31374046.56

Semi-finished goods 30449965.16 594060.16 29855905.00 41372916.93 662291.37 40710625.56

Materials consigned for

processing 2458391.15 - 2458391.15 869999.29 - 869999.29

1080816656.4448917063.421031899593.021230639761.7248228706.041182411055.68

195 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

9. Inventories (cont’d)

(2) Movements in inventory valuation allowances

Provision in

Opening balance

the year Decrease in the year Closing balance

Reversed or written off Others

Raw materials 23591282.36 8725824.78 (9343399.01 ) (409766.76 ) 22563941.37

Work-in-progress 20499380.02 523015.40 - (226361.91 ) 20796033.51

Finished goods 3475752.29 2754939.63 (1267663.54 ) - 4963028.38

Semi-finished goods 662291.37 230316.04 (298547.25 ) - 594060.16

48228706.0412234095.85(10909609.80)(636128.67)48917063.42

10. Contract assets

(1) Status of contract assets

20242023

Impairment Carrying Impairment Carrying

Gross amount allowance amount Gross amount allowance amount

Carrying amount 57810489.98 5659318.06 52151171.92 47751792.27 1805415.13 45946377.14

57810489.985659318.0652151171.9247751792.271805415.1345946377.14

196 / 282Error! Unknown document property name.

Notes to the Financial Statements (Cont’d)

Error! Unknown document property name.Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

10. Contract assets (cont’d)

(2) The contract assets by the method of establishing impairment allowances

2024

Impairment Carrying

Gross amount allowance amount

Amount Percentage Amount Percentage

(%)(%)

Contract assets for which

allowances are established by

group with similar credit risk

characteristics 57810489.98 100.00 5659318.06 9.79 52151171.92

2023

Impairment Carrying

Gross amount allowance amount

Amount Percentage Amount Percentage

(%)(%)

Contract assets for which

allowances are established by

group with similar credit risk

characteristics 47751792.27 100.00 1805415.13 3.78 45946377.14

As at 31 December 2024 contract assets for which allowances are established by group with similar credit risk

characteristics are as follows:

Impairment

Gross amount allowance ECL (%)

Within 1 year 43066096.31 594940.95 1.38

1-2 years 8504370.67 673501.60 7.92

2-3 years 3305000.00 1455852.51 44.05

3-4 years 2935023.00 2935023.00 100.00

57810489.985659318.06

Movements in impairment allowances for contract assets are as follows:

Provision in Reversed

Opening balance Other decreases Closing balance

the year in the year

20241805415.134568657.55(715742.14)987.525659318.06

197 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

1805415.134568657.55(715742.14)987.525659318.06

198 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

11. Current portion of non-current assets

20242023

Current portion of long-term receivables 8035336.42 5970000.00

8035336.425970000.00

As at 31 December 2024 there’s no need to establish impairment allowances for the current portion of non-current

assets in the management’s opinion.

12. Other current assets

20242023

Input VAT to be deducted 24869036.74 37973926.46

Overpaid value-added tax (VAT) 20900456.01 19118882.69

Tax repayments 5707002.32 5248796.24

Others 9066601.42 12893050.68

60543096.4975234656.07

199 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

13. Long-term receivables

(1) Status of long-term receivables

Range of discount

2024 2023 rates

Provision for bad Provision for bad

Gross amount debts Carrying amount Gross amount debts Carrying amount

Amounts receivable by

installment for selling goods 4112000.00 64147.20 4047852.80 4382500.00 74304.00 4308196.00

4112000.0064147.204047852.804382500.0074304.004308196.00

(2) Allowances for doubtful long-term receivables

Gross amount Allowance Carrying amount

Amount Percentage Amount Percentage

(%)(%)

Long-term receivables for which allowances

are established by group with similar credit

risk characteristics 4112000.00 100.00 64147.20 1.56 4047852.80

4112000.00100.0064147.201.564047852.80

200 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

13. Long-term receivables (cont’d)

(3) Movements in allowances for doubtful long-term receivables:

Transfer out in the Reversed in Transfer out in Written off

Opening balance year the year the year in the year Closing balance

202474304.00-(10156.80)--64147.20

74304.00-(10156.80)--64147.20

14. Long-term equity investments

Opening Change in the year Closing

balance Return on balance

investment under the equity

method Other comprehensive income

Associates

Jaten Robot 87476726.17 938187.48 - 88414913.65

Talleres Tapre 1759901.46 - (74663.41 ) 1685238.05

Profeta 28029257.21 (4660260.33 ) - 23368996.88

117265884.84(3722072.85)(74663.41)113469148.58

As at 31 December 2024 there’s no need to establish impairment allowances for long-term equity investments in the management’s opinion.

201 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

15. Other non-current financial assets

20242023

Financial assets at fair value through profit or loss 539449588.63 461278259.67

539449588.63461278259.67

Other non-current financial assets mainly refer to the Group’s investment in equity instrument investments and

long-term derivative financial assets.

16. Fixed assets

Buildings and Machinery Transportation Other Total

constructions facility equipment

Gross amount

Opening balance 664484475.58 521052136.63 35511284.44 71533440.95 1292581337.60

Purchases 20024336.07 46906462.30 1008005.73 3712594.10 71651398.20

Transfers from

construction in

progress 6971106.54 50449524.84 - - 57420631.38

Disposal or

retirement - (28674461.35 ) (2154021.34 ) (742724.39 ) (31571207.08 )

Effect of exchange

rate movements (6538622.47 ) (13215107.28 ) 427989.07 (625556.23 ) (19951296.91 )

Closing

balance 684941295.72 576518555.14 34793257.90 73877754.43 1370130863.19

Accumulated

depreciation

Opening balance 221075804.37 394132969.99 19130759.80 46390226.40 680729760.56

Provision 17233030.35 20657519.25 3991745.58 8681484.88 50563780.06

Disposal or

retirement - (25156561.59 ) (2041647.73 ) (685037.78 ) (27883247.10 )

Effect of exchange

rate movements (3806854.73 ) (11602417.09 ) 74550.30 74669.40 (15260052.12 )

Closing balance 234501979.99 378031510.56 21155407.95 54461342.90 688150241.40

Carrying amount

Closing 450439315.73 198487044.58 13637849.95 19416411.53 681980621.79

Opening 443408671.21 126919166.64 16380524.64 25143214.55 611851577.04

202 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

16. Fixed assets (cont’d)

As at 31 December 2024 no registration certificate for properties has been obtained for the new plant with carrying amount of RMB57236634.24 (2023: RMB51528107.01).

17. Construction in progress

(1) Status of construction in progress

20242023

Carrying Carrying

Gross amount Impairmentallowance Gross amount

Impairment

amount allowance amount

Plants and buildings 379310179.88 - 379310179.88 161127696.15 - 161127696.15

Equipment installation 25516415.14 - 25516415.14 34429401.65 - 34429401.65

404826595.02-404826595.02195557097.80-195557097.80

203 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

17. Construction in progress (cont’d)

(2) Movements in substantial construction in progress

Budget Opening balance Increase in Transferred to Other decrease Closing balance Funding Input as

the year fixed assets in source a % of

the year budget

Fosber Group - Plant Construction

Project 334893650.00 16605803.05 148260640.59 - (4535299.01 ) 160331144.63 Self-funded 49.23

Parsun Power - Plant Construction

Project 348503300.00 86863545.66 37215903.85 - - 124079449.51 Self-funded 35.60

Self-funded

loans from

Parsun Power - Plant Construction financial

Project 300000000.00 39727491.84 48880401.61 - - 88607893.45 institutions 29.54

Fosber Asian – Fosber Songgang Plant 32753000.00 4268623.84 1167609.18 - - 5436233.02 Self-funded 16.60

Tiru?a S.L.U.- Corrugated roller

production equipment 71697343.90 25079297.27 47896.86 (22147068.34 ) (493243.17 ) 2486882.62 Self-funded 35.05

Tiru?a Asian-Plant Construction Project 85745627.16 13657520.15 20242574.58 (33048847.44 ) - 851247.29 Self-funded 99.63

Others - 9354815.99 16146284.56 (2224715.60 ) (242640.45 ) 23033744.50 Self-funded -

1173592921.06195557097.80271961311.23(57420631.38)(5271182.63)404826595.02

Percentage of Capitalized amount of interest Ratio of interest capitalized in

completion (%) accumulatively Interest capitalized in the year the year (%)

Fosber Asian – Fosber Songgang Plant 29.54 147075.68 147075.68 100.00

147075.68147075.68

204 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

18. Right-of-use assets

Buildings Vehicles Total

Cost

Opening balance 118754693.52 28790487.11 147545180.63

Increase 711105.56 7322747.52 8033853.08

Disposal (4272892.38 ) - (4272892.38 )

Effect of exchange rate

movements (3420844.28 ) (1472487.35 ) (4893331.63 )

Closing balance 111772062.42 34640747.28 146412809.70

Accumulated depreciation

Opening balance 47297298.40 17905483.40 65202781.80

Provision 16854648.41 5033665.81 21888314.22

Disposal (2327076.00 ) - (2327076.00 )

Effect of exchange rate

movements (1608545.43 ) (889863.20 ) (2498408.63 )

Closing balance 60216325.38 22049286.01 82265611.39

Carrying amount

Closing 51555737.04 12591461.27 64147198.31

Opening 71457395.12 10885003.71 82342398.83

205 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

19. Intangible assets

Land use Land Patented Trademarks

Total

rights ownership technologies and software

Gross amount

Opening

balance 177783228.49 16814786.28 119970675.09 205927442.07 520496131.93

Purchases - - 9360825.89 12683000.69 22043826.58

Internal R&D - - - (525.32 ) (525.32 )

Disposal - (713524.41 ) (4421445.16 ) (7126550.63 ) (12261520.20 )

Effect of

exchange rate

movements

177783228.4916101261.87124910055.82211483366.81530277912.99

Closing

balance

Accumulated

depreciation 28873664.24 - 80633114.94 45034872.70 154541651.88

Opening

balance 3856021.51 - 9452964.48 10390940.55 23699926.54

Provision - - - (525.32 ) (525.32 )

Disposal - - (3108882.51 ) (1418464.04 ) (4527346.55 )

Effect of

exchange rate

movements

32729685.75-86977196.9154006823.89173713706.55

Closing

balance

Carrying amount

Closing 145053542.74 16101261.87 37932858.91 157476542.92 356564206.44

Opening 148909564.25 16814786.28 39337560.15 160892569.37 365954480.05

As at 31 December 2024 the proportion of intangible assets formed through internal research and development to

the carrying amount of intangible assets at the end of the year was 2.88%.As of 31 December 2024 there were no intangible assets without property rights certificates.

206 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

20. Goodwill

(1) Original value of good will

Opening balance Increase in the year Decrease in the year Closing balance

Exchange rate Disposal allocated to

movements disposal groups held

for sale

Fosber Group 161353929.07 (6846948.20 ) - 154506980.87

Parsun Power 208031946.10 - - 208031946.10

Italy EDF 68997515.28 (2927864.33 ) - 66069650.95

Italy QCorr 13680836.70 (580537.34 ) - 13100299.36

Wonder Printing 119422168.56 - - 119422168.56

571486395.71(10355349.87)-561131045.84

(2) Movements in impairment allowances for goodwill

Decrease in the

Opening balance Increase in the year year Closing balance

Allowance Exchange rate Disposal allocated

movements to disposal groups

held for sale

Parsun -

Power 61855054.35 - - 61855054.35

EDF 68997515.28 - (2927864.33 ) - 66069650.95

Wonder

Printing - 8217037.61 - - 8217037.61

130852569.638217037.61(2927864.33)-136141742.91

(3) Information about the asset groups

Corrugator line business asset group of Fosber Group

The corrugator line business asset group is an asset group owned by Fosber Group consistent with the asset group

combination determined on the purchase date and during impairment tests of the previous years. The carrying

amount of the corrugator line business asset group was RMB687.83 million. The recoverable amount is determined

using the present value of the projected future cash flows of the asset group combination according to the cash

flow forecasting based on the financial budget over a five-year period approved by the management. The perpetual

cash flows are determined at the level of the last year of the detailed forecast period and based on the industry

development trend and other factors. The discount rate used in cash flow forecasting was 18.81% (20.59% in

2023).

207 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

20. Goodwill (cont’d)

(3) Information about the asset groups (cont’d)

Power machine business asset group of Parsun Power

The power machine business asset group is an asset group owned by Parsun Power consistent with the asset group

combination determined on the purchase date and during impairment tests of the previous years. The carrying

amount of the power machine business asset group was RMB307.64 million. The recoverable amount is

determined using the present value of the projected future cash flows of the asset group combination according to

the cash flow forecasting based on the financial budget over a five-year period approved by the management. The

perpetual cash flows will be determined at the level of the last year of the detailed forecast period and based on the

industry development trend and other factors. The discount rate used in cash flow forecasting was 10.83% (11.85%

in 2023).Corrugator line business asset group of Italy QCorr

The corrugator line business asset group of Italy QCorr is the only asset group owned by Italy QCorr consistent

with the asset group combination determined on the purchase date. The carrying amount of the corrugator line

asset group was RMB54.41 million. The recoverable amount is determined using the present value of the projected

future cash flows of the asset group combination according to the cash flow forecasting based on the financial

budget over a five-year period approved by the management. The perpetual cash flows will be determined at the

level of the last year of the detailed forecast period and based on the industry development trend and other factors.The discount rate used in cash flow forecasting was 21.27% (19.34% in 2023).Corrugated carton printer business asset group of Italy EDF

For the corrugated carton printer business asset group of Italy EDF impairment allowances for goodwill were

established in full amount in 2019.Corrugated digital printer business asset group of Wonder Printing

The digital printer business asset group is the only asset group owned by Wonder Printing consistent with the asset

group combination determined on the purchase date. The carrying amount of the digital printer business asset

group was RMB 257.30 million. The recoverable amount is determined using the present value of the projected

future cash flows of the asset group combination according to the cash flow forecasting based on the financial

budget over a five-year period approved by the management and the industry development trend and other factors.The perpetual cash flows are determined at the level of the last year of the detailed forecast period and based on the

industry development trend and other factors The discount rate used in cash flow forecasting was 11.88% (12.17%

in 2023).

208 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

20. Goodwill (cont’d)

Where the recoverable amount is determined according to the present value of the expected future cash flows:

Impairment Years ofKey Key Basis for

amount (Notebudget/forecastparameters ofparametersdetermination

Recoverable 1) period budget/forecastof stableof key

amount period period parameters of

Carrying amount stable period

Revenue Based on 0%

growth revenue

Fosber Revenue rate growth rate for

Group 687829991.96 3878307399.01- 5 years growth rate stable period

Revenue Revenue Based on 0%

growth rate growth revenue

Parsun rate growth rate for

Power 307641693.71 930670000.00 - 5 years stable period

Revenue Revenue Based on 0%

growth rate growth revenue

rate growth rate for

Italy QCorr 54408294.55 390779259.00 - 5 years stable period

Revenue Revenue Based on 0%

growth rate growth revenue

Wonder rate growth rate for

Printing 257301838.45 241190000.00 16111838.455 years stable period

1307181818.675440946658.0116111838.45

Note 1: The amount of goodwill impairment attributable to the shareholders of the parent company is

RMB8217037.61.Goodwill acquired in business combinations is allocated to the following asset groups or asset group portfolios for

impairment testing:

Corrugator line business asset group of Fosber Group

Power machine business asset group of Parsun Power

Corrugator line business asset group of Italy QCorr

Corrugated carton printer business asset group of Italy EDF

Corrugated digital printer business asset group of Wonder Printing

The following describes the key assumptions made by the management in determining cash flow forecasting for

goodwill impairment testing:

Revenue growth rate in Developed based on the revenue generated in the year prior to the forecast period taking

forecast period into account the anticipated market development.Budget gross margin - Developed based on the average gross margin of historical operating results and

expectations for market development.

209 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

Discount rate - The discount rate used is the pre-tax discount rate that reflects the specific risks of the

relevant asset group or asset group combination.

210 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

20. Goodwill (cont’d)

The amount of the key assumptions allocated to the above asset group or asset group portfolio is consistent with

the Group's historical experience and external information.

21. Long-term prepaid expenses

Increase in

Opening balance Amortization inthe year Closing balancethe year

Amortization of moulds 17021708.05 5798599.74 (8343056.25 ) 14477251.54

Office decoration expenditures 3914240.70 - (1274947.54 ) 2639293.16

Plant decoration expenditures 3119789.38 111926.60 (2059011.28 ) 1172704.70

Expenditures on supporting

engineering for plants 1841048.98 87364.55 (896933.75 ) 1031479.78

CE certification fee 484110.53 349745.62 (418052.07 ) 415804.08

Others 2162683.90 - (180646.97 ) 1982036.93

28543581.546347636.51(13172647.86)21718570.19

22. Deferred tax assets/liabilities

(1) Deferred tax assets before offsetting

20242023

Deductible Deferred Deductible Deferred

temporary tax assets temporary tax assets

differences differences

Deferred tax assets

Deductible loss 47734216.35 8660456.54 41464787.21 7585286.13

Provisions—after-sales

maintenance service charges 48001485.88 11520356.61 31106124.16 7465469.80

Deferred income 1048858286.21 158814236.91 1148967602.00 174998363.51

Accrued expenses 138790149.48 36017710.44 137007925.99 35957989.47

Asset impairment allowances 14790331.66 2218549.75 52411022.56 11682516.17

Equity incentive expenses 66952010.17 11858922.37 48552350.45 9375318.47

Credit impairment loss 8039014.18 1205852.11 1549606.23 237403.35

Internal unrealized profit 36461019.37 7620555.43 41884654.49 9319501.09

Lease liabilities 66292896.00 15265968.52 86124650.56 18077230.45

Others 120546724.93 24174916.88 115360294.07 25693245.48

1596466134.23277357525.561704429017.72300392323.92

211 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

22. Deferred tax assets/liabilities (cont’d)

(2) Deferred tax liabilities before offsetting

20242023

Deductible Deferred Deductible Deferred

temporary tax liabilities temporary tax liabilities

differences differences

Deferred tax liabilities

Financial assets at fair value through profit

or loss 7897264.33 566246.42 1794832.35 233592.92

Increase in value in asset valuation 36211780.48 6266802.33 42559397.20 7565638.16

Depreciation difference of fixed assets 54682485.61 9197111.97 61963523.25 10363510.02

Right-of-use assets 64040183.00 14687786.79 81531113.56 17181306.44

Others 112555579.09 26495758.32 69220019.79 18030160.88

275387292.5157213705.83257068886.1553374208.42

(3) Deferred tax assets or liabilities offset and presented as a net amount:

20242023

Offset amount Offset balance Offset amount Offset balance

Deferred tax assets 55170776.35 222186749.21 44519914.14 255872409.78

Deferred tax liabilities 55170776.35 2042929.48 44519914.14 8854294.28

(4) Schedule of deferred tax assets not recognized

20242023

Deductible temporary differences 2322421.40 3925408.90

Deductible losses 170662463.46 149803433.80

172984884.86153728842.70

212 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

22. Deferred tax assets/liabilities (cont’d)

(5) Analysis of expiration date of deductible temporary differences and tax losses not recognized as deferred tax

assets

20242023

2024-4418846.10

202516306590.0413984168.64

202612841957.3112841957.31

202773324757.6273324757.62

202846744666.6549159113.03

202923766913.24-

172984884.86153728842.70

The Company has accrued deferred tax assets of RMB155138840.62 (2023: RMB168933394.30) for the

accumulated deductible losses of RMB1015146317.47 based on the forecast of its profits in the next five years.

23. Other non-current assets

20242023

Carrying amount Carrying amount

Prepayment for acquisition of long-term assets 82384181.65 87122697.89

Certificates of deposit 10579534.25 10248630.14

Others 60893.15 66274.25

93024609.0597437602.28

213 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

24. Assets with restricted ownership or right of use

2024 2023 Limited type

Deposit pledge andNote 1

Cash and bank balances 76759834.79 153905292.65 freezing

Fixed assets 61309010.26 4460554.82 Mortgage Note 2

138068845.05158365847.47

Note 1: At 31 December 2024 currency funds with carrying amount of RMB76759834.79 were used to obtain

deposits for bank acceptance bills letters of guarantee loans forward settlement and sales of foreign exchange and

other payments (31 December 2023: RMB153905292.65); no currency funds were pledged as time deposits (31

December 2023: currency funds with carrying amount of RMB480000.00 were pledged as time deposits); no

currency funds were legally frozen (31 December 2023: currency funds with carrying amount of RMB267500.00

were legally frozen).Note 2: At 31 December 2024 a carrying amount of RMB61309010.26 (31 December 2023:

RMB4460554.82) of fixed assets was pledged for the Group to obtain bank loans with a maturity until 2032.

25. Short-term borrowings

20242023

Credit loan 59829377.75 89544237.78

Bills discounted 25560751.24 20461553.62

Guaranteed loan - 260544181.40

85390128.99370549972.80

26. Derivative financial liabilities

20242023

Non-controlling interests put options 205222952.29 115900827.21

Foreign currency derivatives 993286.71 -

206216239.00115900827.21

214 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

27. Notes payable

20242023

Bank acceptance notes 144137609.00 152433276.09

144137609.00152433276.09

As at 31 December 2024 outstanding notes payable upon maturity were nil (31 December 2023: nil).

28. Accounts payable

20242023

Purchases of inventories 687235330.65 737544841.42

687235330.65737544841.42

As at 31 December 2024 substantial accounts payable with aging over 1 year were nil (31 December 2023: nil).

29. Contract liabilities

(1) Contract liabilities

20242023

Contract liabilities 373931068.16 645608919.34

373931068.16645608919.34

As at 31 December 2024 there were no significant contract liabilities with aging over one year (31 December 2023:

nil).Information about contractual performance obligations is as follows:

Corrugator line corrugated case printing and packaging equipment and outboard engine sales

Fulfill the contractual performance obligations when relevant products are delivered to the customers and the

control over the equipment is transferred. For all customers the contract price usually expires within 1 to 12

months after relevant products are delivered and the control over the equipment is transferred.

215 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

30. Employee benefits payable

Employee benefits payable

Increase in Decrease in

Opening balance Closing balance

the year the year

Short-term benefits 139561863.20 732273771.13 746436545.42 125399088.91

Retirement benefits (defined 13721068.90 110102677.96 109679823.39 14143923.47

contribution schemes)

153282932.10842376449.09856116368.81139543012.38

Short-term benefits

Increase in Decrease in

Opening balance Closing balance

the year the year

Salaries bonuses

allowances and subsidies 132643220.01 644483702.39 658876388.30 118250534.10

Employee welfare 5755809.78 34308186.17 34063153.64 6000842.31

Social security contributions 295721.94 46179613.92 46124868.02 350467.84

Including: Medical

insurance 242676.82 30978253.16 31003887.92 217042.06

Work injury insurance 36933.13 14586460.47 14505970.32 117423.28

Maternity insurance 16111.99 614900.29 615009.78 16002.50

Housing funds 614072.00 5690007.99 5679514.99 624565.00

Labour union funds and

employee education funds 253039.47 1612260.66 1692620.47 172679.66

139561863.20732273771.13746436545.42125399088.91

Defined contribution schemes

Increase in Decrease in

Opening balance Closing balance

the year the year

Basic endowment insurance 13703110.06 109479702.26 109056483.43 14126328.89

Unemployment insurance 17958.84 622975.70 623339.96 17594.58

13721068.90110102677.96109679823.3914143923.47

216 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

31. Tax payable

20242023

Corporate income tax 51562827.67 45973508.11

Individual income tax 13973593.51 11897332.76

Value-added tax 2649513.81 5649692.90

City maintenance and construction tax 294045.12 430752.88

Property tax 265497.57 2731038.94

Education surcharge 210001.65 307070.00

Land use tax 120185.89 468302.25

Stamp duties 118826.19 151505.57

Others 106.62 -

69194598.0367609203.41

32. Other payables

20242023

Other payables 117617259.50 126415425.61

117617259.50126415425.61

Other payables classified by nature

20242023

Accrued expenses 46653027.39 53166304.73

Equipment engineering 45315052.50 19840309.82

Equity acquisition 8000000.00 31587327.06

Repurchase of restricted shares 720000.00 2290000.00

Security deposits 1780393.50 2557648.92

Payables for settled lawsuit 751998.05 3311817.37

Others 14396788.06 13662017.71

Total 117617259.50 126415425.61

As at 31 December 2024 substantial other payables with aging over 1 year were nil.

217 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

33. Current portion of non-current liabilities

20242023

Current portion of long-term borrowings 61229428.22 35871630.01

Of which: Credit loan 37133116.15 14938682.49

Guaranteed loan 16787017.80 20683642.46

Mortgage loan 7309294.27 249305.06

Current portion of lease liabilities 20401356.43 21129766.43

Total 81630784.65 57001396.44

34. Other current liabilities

20242023

Endorsed notes receivable 31544970.78 5375919.77

Output tax to be written off 10287364.93 3769255.24

Total 41832335.71 9145175.01

35. Long-term borrowings

20242023

Credit loan 91626403.51 57454387.85

Mortgage loan 61866952.89 2150669.29

Guaranteed loan 33218557.13 55374274.02

186711913.53114979331.16

Of which: Current portion of long-term borrowings (61229428.22 ) (35871630.01 )

Total 125482485.31 79107701.15

As at 31 December 2024 the annual interest rates of the above borrowings ranged from 0.0% to 5.38% (31

December 2023: 0.0%-5.65%).As at 31 December 2024 and 31 December 2023 the Group has no loans overdue.

218 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

36. Lease liabilities

20242023

Lease payments 68068158.39 86991207.75

Less: Current portion of non-current liabilities 20401356.43 21129766.43

Total 47666801.96 65861441.32

37. Long-term employee benefits payable

(1) Long-term employee benefits payable

20242023

Net liabilities of defined benefit schemes 13128052.34 13964394.20

Total 13128052.34 13964394.20

(2) Movements in defined benefit obligations

Movements in the present value of defined benefit obligations are as follows:

20242023

Opening balance 13964394.20 13179944.17

Included in profit or loss

Current service cost 847235.35 298718.86

Net interest 417031.86 60856.56

Included in other comprehensive income

Actuarial gains or losses (126738.95 ) 44025.32

Other changes

Benefits paid (1387765.63 ) (394106.12 )

Effect of exchange rate movements (586104.49 ) 774955.41

Closing balance 13128052.34 13964394.20

219 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

37. Long-term employee benefits payable (cont’d)

(2) Movements in defined benefit obligations (cont’d)

Defined benefit schemes refer to retirement compensation (Trattamento di Fine Rapporto for short “TFR”) of the

Group according to Italian regulations. The latest actuarial valuation of the scheme assets and the present value of

the obligation associated with the defined benefit scheme were determined as at 31 December 2024 by Italian

actuarial institution Managers & Partners – Actuarial Services S.p.A. using the expected accumulated benefit unit

method.

(3) Key actuarial assumptions and results of sensitivity analysis of key assumptions used for defined benefit

schemes

Key actuarial assumptions used as at the balance sheet date are as follows:

20242023

Separation rate 2.50% 2.50%

Inflation rate 2.00% 2.00%

Discount rate 3.18% 3.08%

The quantitative sensitivity analysis of key assumptions used is as follows:

2024

Increase/(decrease) in Increase/(decrease) in

Increase obligations of definedDecrease obligations of defined

% benefit scheme % benefit scheme

Separation rate 1.00 23512.47 1.00 (25760.55 )

Inflation rate 0.25 79317.72 0.25 (77996.96 )

Discount rate 0.25 (122870.52 ) 0.25 126839.58

2023

Increase/(decrease) in Increase/(decrease) in

Increase obligations of definedDecrease obligations of defined

% benefit scheme % benefit scheme

Separation rate 1.00 22821.94 1.00 (25101.66 )

Inflation rate 0.25 86826.24 0.25 (85238.92 )

Discount rate 0.25 (134531.35 ) 0.25 139045.20

The above sensitivity analysis is based on an inference of the impact of key assumptions on the defined benefit

scheme obligation at a reasonable change on the balance sheet date. Sensitivity analysis is made according to the

changes in major assumptions on the premise that other assumptions remain unchanged. Since the changes in

assumptions are often not isolated from one another sensitivity analysis may not represent an actual change in the

defined benefit obligation.

220 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

38. Provisions

Increase in Decrease in

Opening balance Closing balance

the year the year

Product quality warranty 135804488.12 86796528.26 83810866.90 138790149.48

Others 32554465.72 2282983.28 26806969.22 8030479.78

168358953.8489079511.54110617836.12146820629.26

39. Deferred income

Increase in Decrease in

Opening balance Closing balance

the year the year

Government grants 9956991.66 6000000.00 1166660.00 14790331.66

Total 9956991.66 6000000.00 1166660.00 14790331.66

40. Other non-current liabilities

20242023

Purchase obligations of non-controlling interest options - 16941926.93

Other 7573539.20 5476927.87

Total 7573539.20 22418854.80

The option repurchase obligation relates to the non-controlling interests of QCorr. At 31 December 2024 the

repurchase obligation period of minority shareholders' put options of QCorr was less than one year which was

transferred from other non-current liabilities to derivative financial liabilities.

221 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

41. Share capital

Opening balance Other changes Closing balance

Others Total

Total share

capital 1240618400.00 (21572060.00 ) (21572060.00 ) 1219046340.00

Total 1240618400.00 (21572060.00 ) (21572060.00 ) 1219046340.00

For the current year the total number of shares cancelled by the Company was 21572060 shares and the total

number of shares of the Company changed from 1240618400 shares to 1219046340 shares after the

cancellation.

42. Capital surplus

Increase in Decrease in

Opening balance the year the year Closing balance

(Note 1) (Note 2)

Share premium 2752232589.91 - 79203431.39 2673029158.52

Others 137696407.30 8256530.70 - 145952938.00

Total 2889928997.21 8256530.70 79203431.39 2818982096.52

Note 1: The increase in capital reserve is as follows:

During the year the Group's share-based payment was included in shareholders' equity and the capital reserve was

increased by RMB8256530.70.Note 2: The decrease in capital reserve is as follows:

During the year the Company cancelled 21572060 shares (as described in Note V.41) and reduced capital reserve

by RMB79203431.39.

222 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

43. Treasury shares

Increase in Decrease in

the year the year

Opening balance (Note) (Note) Closing balance

Share repurchase 218298532.79 - 101065491.39 117233041.40

Total 218298532.79 - 101065491.39 117233041.40

Note: Changes in the year are as follows:

The decrease in treasury shares was mainly driven by the Company’s retirement of shares in the year (as described

in Item 41 of Note V).

44. Other comprehensive income

Cumulative balance of other comprehensive income attributable to shareholders of the Company in the

consolidated balance sheet:

2024

1 January 2024 Change 31 December 2024

Changes due to remeasurement of

defined benefit schemes 1164980.51 126738.95 1291719.46

Differences arising from the translation

of foreign currency-denominated

financial statements 74001070.08 (45439499.73 ) 28561570.35

Others (43972.07 ) - (43972.07 )

Total 75122078.52 (45312760.78 ) 29809317.74

2023

1 January 2023 Change 31 December 2023

Changes due to remeasurement of

defined benefit schemes 1209005.83 (44025.32 ) 1164980.51

Differences arising from the translation

of foreign currency-denominated

financial statements 25347883.31 48653186.77 74001070.08

Others (43972.07 ) - (43972.07 )

Total 26512917.07 48609161.45 75122078.52

V. Notes to the Consolidated Financial Statements (cont’d)

44. Other comprehensive income (cont’d)

223 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

Other comprehensive income:

2024

Before tax Less: Attributable to Attributable to

Income tax owners of the parent non-controlling

interests

Other comprehensive income

that will not be reclassified to

profit or loss

Changes caused by

remeasurements on defined

benefit schemes 126738.95 - 126738.95 -

Other comprehensive income

that will be reclassified to

profit or loss

Differences arising from the

translation of foreign

currency-denominated

financial statements (45283314.18 ) - (45439499.73 ) 156185.55

Total (45156575.23 ) - (45312760.78 ) 156185.55

2023

Before tax Less: Attributable to Attributable to

Income tax owners of the parent non-controlling

interests

Other comprehensive income

that will not be reclassified to

profit or loss

Changes caused by

remeasurements on defined

benefit schemes (44025.32 ) - (44025.32 ) -

Other comprehensive income

that will be reclassified to

profit or loss

Differences arising from the

translation of foreign

currency-denominated

financial statements 48118257.53 - 48653186.77 (534929.24 )

-

Total 48074232.21 - 48609161.45 (534929.24 )

224 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

45. Special reserve

Provision in Ultilisation in

Opening balance Closing balance

the year the year

Expenses for

Safety Production 16229817.03 3183215.00 1306645.28 18106386.75

Total 16229817.03 3183215.00 1306645.28 18106386.75

46. Surplus reserves

Increase in Decrease in

Opening balance the year the year Closing balance

Statutory surplus

reserves 51830974.45 - - 51830974.45

51830974.45--51830974.45

Pursuant to the Company Law when the Company allocates after-tax profits of the year the Company shall set

aside 10% net profit after making up losses in previous years as its statutory surplus reserves. When the

Company’s statutory reserves are not enough to make up losses in previous years the Company shall first make up

the losses with profits in the year before it withdraws statutory surplus reserves according to the above-mentioned

regulation. As there are still losses that can be made up in the Company’s account statutory surplus reserves are

not made in the current year.

47. Retained earnings

20242023

Opening retained earnings 456258959.55 23018722.11 )

Net profit attributable to owners of the parent 500578449.68 433240237.44

Closing retained earnings 956837409.23 456258959.55

225 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

48. Operating revenue and costs

Operating revenue and costs

20242023

Revenue Costs Revenue Costs

Principal operations 4730539700.76 3310269030.03 4711802008.34 3413751936.36

Other operations 47315901.93 30226796.91 33935313.49 24272817.55

Total 4777855602.69 3340495826.94 4745737321.83 3438024753.91

Operating revenue is as follows:

20242023

Revenue generating from contracts with

customers 4776580603.72 4744476136.89

Rental income 1274998.97 1261184.94

Total 4777855602.69 4745737321.83

Breakdown of operating revenue

Breakdown of operating revenue arising from contracts with customers is as follows:

2024

Reporting segments Total

Principal product type

Goods 4486396868.05

Services 290183735.67

Total 4776580603.72

Principal operating segment

Mainland China 551722648.45

Other regions 4224857955.27

Total 4776580603.72

Timing of revenue recognition

Revenue recognised at a point in time 4486396868.05

Revenue recognised over time 290183735.67

226 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

Total 4776580603.72

227 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

48. Operating revenue and costs (cont’d)

Breakdown of operating revenue (cont’d)

2023

Reporting segments Total

Principal product type

Goods 4345601360.53

Services 398874776.36

Total 4744476136.89

Principal operating segment

Mainland China 744020072.39

Other regions 4000456064.49

Total 4744476136.88

Timing of revenue recognition

Revenue recognised at a point in time 4345601360.53

Revenue recognised over time 398874776.36

Total 4744476136.89

228 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

48. Operating revenue and costs (cont’d)

Breakdown of operating cost

Reporting segments Total

Principal product type

Goods 3190289675.93

Services 150206151.01

Total 3340495826.94

Principal operating segment

Mainland China 441741841.88

Other regions 2898753985.06

Total 3340495826.94

By revenue recognition time

Revenue recognition at a point of time 3190289675.93

Revenue recognition for a period of time 150206151.01

Total 3340495826.94

(4) Performance obligations

The amount of revenue recognized from:

20242023

Contract liabilities at the beginning of the year 574535516.65 581304573.91

229 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

48. Operating revenue and costs (cont’d)

Performance obligations (cont’d)

Information about the Group's performance obligations is as follows:

Timing of Significant Nature of goods Whether the Expected Types of

satisfaction of payment promised to transfer principal refunds to warranties

performance terms customers and related

obligations obligations

50%-90%

payment Sales of machinery

Sales of before and parts Statutory

goods Upon delivery delivery Yes Nil warranties

Provision Installation and

of services During service After service maintenance service Yes Nil Nil

Payment

based on

Provision service Warranties for

of services During service progress services Yes Nil Nil

Allocation of total transaction price to outstanding performance obligations

The expected time for recognizing in revenue the total transaction price allocated to outstanding contractual

performance obligations as at the period-end is as follows:

20242023

Within 1 year 373931068.16 645608919.34

Total 373931068.16 645608919.34

49. Taxes and surcharges

20242023

Property tax 5081416.95 5039330.50

City maintenance and construction tax 5053277.11 4201309.37

Education surcharge 2202488.38 1912550.12

Local education surcharge 1468325.59 1200374.13

Stamp tax 1037733.78 1212137.29

Land use tax 736737.76 800993.84

Vehicle and vessel tax 13745.00 14719.14

Environmental protection tax 2510.77 25023.33

Others 161407.87 146392.37

Total 15757643.21 14552830.09

230 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

50. Selling expenses

20242023

(Restated)

Employee benefits and equity incentive expenses 71189012.20 73673180.14

Commissions and agency fees 66789221.95 65569469.47

Advertising and exhibition expenses 23422239.24 19791182.47

Travel expenses 14159930.73 12198575.02

Office expenses 2263960.48 2469847.27

Depreciation and amortization expenses 2161555.15 2828742.50

Other expenses 12418229.86 23813324.16

Total 192404149.61 200344321.03

51. Administrative expenses

20242023

Employee benefits 177035198.12 178922030.42

Intermediary expenses 48237978.97 35873535.50

Depreciation and amortization expenses 27853560.60 27465333.94

Conference expenses 18623645.94 17171371.14

Office expenses 15382145.16 11643977.90

Travel and reception expenses 15000563.55 15935791.58

Rental expenses 7521836.59 6603503.97

Equity incentives 6771108.33 14812302.40

Property management expenses 3978693.08 5547279.55

Car expenses 1502612.89 1725795.42

Maintenance expenses 1491085.39 1347244.81

Materials consumption 774799.54 2180990.32

Other expenses 35869160.16 24995535.56

Total 360042388.32 344224692.51

231 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

52. R&D expenses

20242023

Employee benefits and equity incentive expenses 73833286.02 79930804.74

Depreciation and amortization expenses 17393986.62 18038231.99

Material expenses 5257081.18 13107475.15

Utilities 739383.48 1939154.97

Assembly testing and debugging expenses 308145.49 770749.65

Other expenses 7992605.91 13780065.92

Total 105524488.70 127566482.42

53. Finance costs

20242023

Interest expenses 23820328.49 24236011.48

Less: Interest income 45289702.90 35308583.52

Exchange losses (7822030.84 ) 3836892.35

Others 4798584.37 6146062.99

Total (24492820.88 ) (1089616.70 )

54. Other income

20242023

Government grants related to routine activities 14143528.16 15006349.35

Refund of handling charges for individual income tax

withheld 432933.77 740944.47

Total 14576461.93 15747293.82

232 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

55. Investment income

20242023

Income from financial assets held for trading 4678879.80 12718052.00

Interest income from certificates of deposit during the

holding period 330904.11 248630.14

Bills discount interest (2887.50 ) -

Income from long-term equity investments measured at

equity method (3722072.85 ) (2259252.98 )

Total 1284823.56 10707429.16

56. Gains and losses on changes in fair value

20242023

Changes in fair value of non-controlling interests call/put

options (2247359.65 ) 8472193.22

Financial assets held for trading (30613618.63 ) 58304955.92

Derivative financial assets (20255707.48 ) (19389244.03 )

Derivative financial liabilities (1157068.01 ) -

Total (54273753.77 ) 47387905.11

57. Credit impairment loss

20242023

Loss on doubtful accounts receivable 1961917.78 10481070.60

Allowances losses for other receivables 445478.41 (2756.83 )

Impairment loss on contract assets (10156.80 ) 63603.00

Total 2397239.39 10541916.77

233 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

58. Asset impairment loss

20242023

Inventory valuation loss 12234095.85 17341157.47

Reversed impairment loss on contract assets 3852915.41 (124060.08 )

Impairment loss for goodwill 8217037.61 -

Total 24304048.87 17217097.39

59. Gains and losses on disposal of assets

20242023

Gain/(loss) on disposal of fixed assets 5496048.68 716995.85

Total 5496048.68 716995.85

60. Non-operating income

Recognized in

exceptional gains and

2024 2023 losses of 2024

Penalty income 63263.69 229338.58 63263.69

Equity compensation - 1686462.38 -

Litigation compensation 950000.00 - 950000.00

Others 5216742.83 4058840.21 5216742.83

Total 6230006.52 5974641.17 6230006.52

61. Non-operating expenses

Recognized in

exceptional gains and

2024 2023 losses of 2024

Donations 372152.23 450624.37 372152.23

Penalty expense 100987.20 14800942.90 100987.20

Loss on disposal of non-

current assets 2205.15 23374.33 2205.15

Others 318470.64 877433.58 318470.64

Total 793815.22 16152375.18 793815.22

234 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

62. Income tax expenses

20242023

Current income tax expenses 168833714.71 194787159.35

Deferred tax expenses 24990429.22 (6389006.63 )

Total 193824143.93 188398152.72

Reconciliation between income tax expenses and gross profit is as follows:

20242023

Gross profit 733942410.23 658736734.34

Income tax calculated at applicable tax rates (Note 1) 110091361.53 98810510.15

Different tax rates for specific provinces or enacted by

local authority 65102485.56 53504528.96

Adjustment to current income tax in previous periods 871757.84 482708.87

Supplementary income tax paid by overseas subsidiaries

(Note 2) - 40581711.74

Over-deduction for R&D (7853681.39 ) (10372245.63 )

Expenses not deductible for tax 10434065.31 9450693.56

Effect of utilization of deductible temporary differences or

deductible losses not recognized as deferred tax assets of

previous periods - (17795959.35 )

Effect of deductible temporary differences or deductible

losses not recognized as deferred tax assets of current year 15178155.08 13736204.42

Income tax expenses 193824143.93 188398152.72

Note 1: The provision for income tax of the Group was recognized based on the estimated taxable income to be

derived from mainland China and applicable tax rate. Taxable income derived from other jurisdictions shall be

taxed based on applicable tax rate in accordance with the current laws interpretations and conventions in the

country/jurisdiction where the Group operates.Note 2: Fosber Group a subsidiary of the Group reached a tax settlement with the Italian Revenue Agency in

October 2023 and paid taxes owed.

235 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

63. Earnings per share

20242023

RMB/share RMB/share

Basic earnings per share

Continuing operations 0.43 0.36

Diluted earnings per share

Continuing operations 0.43 0.36

Basic earnings per share is computed by dividing the net profit attributable to ordinary shareholders of the

Company for the period by the weighted average number of ordinary shares in issue.In the calculation of diluted earnings per share the numerator shall be determined based on the net profit

attributable to ordinary shareholders of the Company for the period after adjusting the following factors: the

interest of diluted potential ordinary shares that have been recognized as expenses in the period; gains or expenses

that will be incurred when the diluted potential ordinary shares are converted; and the income tax impact related to

the above adjustments.In the calculation of diluted earnings per share the denominator shall be the sum of: weighted average number of

ordinary shares of the Company in issue adopted in the calculation of basic earnings per share; and weighted

average number of ordinary shares created assuming conversion of potentially dilutive ordinary shares into

ordinary shares.In calculating the weighted average number of ordinary shares created upon conversion of potentially dilutive

ordinary shares into ordinary shares potentially dilutive ordinary shares issued in previous periods are assumed to

have been converted at the beginning of the current period whereas potentially dilutive ordinary shares issued in

the current period are assumed to have been converted on the date of issue.Calculations of basic and diluted earnings per share are as follows:

20242023

Earnings

Net profit attributable to ordinary shareholders of the

Company for the year

Continuing operations 500578449.68 433240237.43

Shares

Weighted average number of ordinary shares in issue of

the Company 1175417191.33 1202048618.00

Diluting effect——weighted average number of ordinary

shares 898243.37 -

Adjusted weighted average number of ordinary shares in

issue of the Company 1176315434.70 1202048618.00

V. Notes to the Consolidated Financial Statements (cont’d)

236 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

64. Notes to cash flow statement line items

(1) Cash related to operating activities

20242023

Cash generated from other operating activities

Government grants 12870707.26 17630633.82

Interest income 34472003.89 35811051.77

Current accounts and others 9822499.27 5369286.45

Guarantee deposit received 2494430.48 1674968.57

Deposits 380227.29 2600000.00

Total 60039868.19 63085940.61

Cash used in other operating activities

Selling expenses in cash 107900992.58 167635219.01

Administrative expenses in cash 124881822.94 122829444.94

R&D expenses in cash 9040134.88 18407566.42

Security deposits - 2145000.00

Letter of guarantee paid 1524841.60 1821640.29

Tax penalties and interest paid by overseas subsidiaries - 14800942.90

Current accounts and others 14708484.36 15800877.30

Total 258056276.36 343440690.86

237 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

64. Notes to cash flow statement line items (Cont’d)

(2) Cash related to investing activities

20242023

Cash received relating to significant investing activities

Disposal/redemption of financial assets held for trading 1547245820.06 2665803265.78

Total 1547245820.06 2665803265.78

Cash payments relating to significant investing activities

Purchase of financial assets held for trading 1655620603.60 2581570596.21

Purchase of equity investments 101688362.11 50000000.00

Increase in capital of associates - 20000000.00

Total 1757308965.71 2651570596.21

20242023

Cash generated from other investing activities

Investment deposit 42435000.00 -

Total 42435000.00 -

Cash used in other investing activities

Investment deposit 49631872.01 -

Total 49631872.01 -

238 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

64. Notes to cash flow statement line items (cont’d)

(3) Cash related to financing activities

20242023

Cash generated from other financing activities

Receipt of deposits related to financial instruments 107345506.70 397528875.76

Receipt of loan deposits - 17700000.00

Share subscription - 561989.99

Total 107345506.70 415790865.75

Cash used in other financing activities

Share repurchase 6214252.00 101286016.39

Payment of deposits related to financial instruments - 199064994.22

Payment of loan deposits - 17700000.00

Purchase of non-controlling interests - 36698456.01

Payment of lease principal 24635982.77 23291683.40

Total 30850234.77 378041150.02

Changes in liabilities arising from financing activities:

Opening Changes in the current year Closing

balance Changes in cash Non-cash changes balance

Short-term borrowing 370549972.80 (283459043.58 ) (1700800.23 ) 85390128.99

Long-term borrowings

(Including current

portion of long-term

borrowings) 114979331.16 74818116.70 (3085534.33 ) 186711913.53

Lease liabilities

(Including current

portion of non-current

liabilities) 86991207.75 (24635982.77 ) 5712933.41 68068158.39

Total 572520511.71 (233276909.65 ) 926598.85 340170200.91

239 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

64. Notes to cash flow statement line items (cont’d)

(4) Major non-cash transactions

20242023

Non-cash additions to right-of-use assets and lease

liabilities 8033853.08 15851684.86

65. Supplemental information on statement of cash flows

(1) Supplemental information on statement of cash flows

Reconciliation of net profit to net cash generated from/used in operating activities:

20242023

Net profit 540118266.30 470338581.62

Add: Asset impairment allowances 24304048.87 17217097.39

Credit impairment loss 2397239.39 10541916.77

Depreciation of fixed assets 50563780.06 50741679.84

Depreciation of right-of-use assets 21888314.22 22066835.06

Amortization of intangible assets 22662419.14 23060612.28

Amortization of long-term prepaid expenses 13172647.86 12487219.53

Gain on disposal of fixed assets intangible assets and

other long-lived assets (5496048.68 ) (716995.85 )

Loss on retirement of fixed assets 2205.15 14608.43

Loss and gain on changes in fair value 54273753.77 (47387905.11 )

Finance costs 25875971.23 10697674.87

Investment income (1284823.56 ) (10707429.16 )

Decrease/(increase) in deferred tax assets 21023342.37 (11297358.96 )

Increase in deferred tax liabilities 5850953.38 1995917.30

Decrease/(increase) in inventories 135095029.28 (65829716.73 )

Decrease/(increase) in operating receivables 30910568.58 (7194337.99 )

Decrease in operating payables (248524797.35 ) (27468741.59 )

Others 9722510.21 38621080.96

Net cash generated from/used in operating activities 702555380.22 487180738.66

240 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

65. Supplemental information on statement of cash flows (cont’d)

(1) Supplemental information on statement of cash flows (cont’d)

Net change in cash and cash equivalents:

20242023

Closing balance of cash 1652290548.55 1672514611.84

Less: Opening balance of cash 1672514611.84 1233720697.27

Add: Closing balance of cash equivalents - -

Less: Opening balance of cash equivalents - -

Net increase/(decrease) in cash and cash equivalents (20224063.29 ) 438793914.57

(2) Cash and cash equivalents

20242023

Cash 1652290548.55 1672514611.84

Including: Cash on hand 497855.11 438600.93

Bank deposits readily available 1505877879.48 1491798403.81

Other cash and bank balances readily

available 145914813.96 180277607.10

Cash equivalents - -

Closing balance of cash and cash equivalents 1652290548.55 1672514611.84

241 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

66. Monetary items in foreign currencies

Monetary items in foreign currencies

Original Exchange

currency rate RMB equivalent

Cash and bank balances

Including: USD 117471517.55 7.1884 844432256.78

EUR 46991803.03 7.5257 353646212.03

HKD 63907.28 0.9260 59178.14

GBP 975626.86 9.0745 8853325.90

MXN 1302026.55 0.3499 455579.09

Accounts receivable

Including: USD 5845558.67 7.1884 42020213.98

EUR 83917326.55 7.5257 631536624.41

Contract assets

Including: USD 1765765.74 7.1884 12693030.45

EUR 671014.03 7.5257 5049850.29

Other receivables

Including: EUR 2792617.28 7.5257 21016399.86

Accounts payable

Including: EUR 54515529.16 7.5257 410267517.80

Short-term borrowings

Including: EUR 6409553.63 7.5257 48236377.75

Current portion of non-current

liabilities

Including: EUR 6647618.00 7.5257 50027978.78

Long-term borrowings

Including: EUR 4214024.65 7.5257 31713485.31

Lease liabilities

Including: EUR 5438458.58 7.5257 40928207.74

Other payables

Including: USD 577143.00 7.1884 4148734.74

EUR 1695000.23 7.5257 12756063.23

Total 2517841036.28

242 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

V. Notes to the Consolidated Financial Statements (cont’d)

66. Monetary items in foreign currencies (cont’d)

Overseas business entities

The principal places of business overseas the functional currencies and their determination basis of the major

overseas business entities included in the consolidated financial statements are as follows:

Major overseas business Principal place of Functional currency Determination basis

entities business

Fosber Group Italy EUR Settlement currency for local

business activities

Fosber America America USD Settlement currency for local

business activities

Italy EDF Italy EUR Settlement currency for local

business activities

Tiru?a Group Spain EUR Settlement currency for local

business activities

67. Leases

(1) As lessee

20242023

Interest expense on lease liabilities 1352356.96 2382929.15

Short term lease expense through profit or loss adopting

simplified approach 8807492.27 7855599.28

Total cash outflows related to lease 33306127.23 31319311.36

Assets leased by the Group include houses and buildings and transportation equipment used in the course of

business the lease term of houses buildings and machinery is usually 8 years and the lease term of transportation

equipment is usually 3 years. The lease contract does not contain terms such as renewal option termination option

and variable rent. No effect of variable rent terms on potential future cash outflows.For the right-of-use assets see Note V.18; for the simplified approach on short-term leases and leases of assets of

low value see Note III.26; for lease liabilities see Note V.33&36.

243 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

VI. R&D expenditure

1. R&D expenditure by nature

20242023

Employee benefits and equity incentive expenses 73833286.02 81261816.52

Depreciation and amortization expenses 17393986.62 18194502.36

Material expenses 5257081.18 13113046.67

Utilities 739383.48 1939154.97

Assembly testing and debugging expenses 308145.49 770749.65

Other expenses 7992605.91 13919014.47

Total 105524488.70 129198284.64

Of which: Capitalized R&D expenses 105524488.70 127566482.42

Expensed R&D expenditure - 1631802.22

2. R&D expenditures eligible for capitalization

Capitalized R&D projects are as follows:

Expected

economic

benefits Commencement Specific basis for

Expected generation point for commencement of

R&D progress completion date method capitalization capitalization

Product sales Approval of project

Data Platform Closed on Closed on development

Project 2023/8/18 2023/8/18 decision review

2022/12/4 report

Product sales Approval of project

Closed on Closed on development

2023/4/26 2023/4/26 decision review

IoT Platform Project 2022/9/14 report

Approval of project

Closed on Closed on development

Business Platform 2023/4/26 2023/4/26 decision review

Project Product sales 2022/5/31 report

244 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

VII. Interests in Other Entities

1. Interests in subsidiaries

Parent and subsidiaries

Principal place Place of Business Registered The Company’s

of business registration nature capita Interest (%)

Direct Indirect

Subsidiaries acquired by way of incorporation or investment

Dongfang Precision (HK) HK China HK China Trading USD300000 100.00 -

Dongfang Precision (Netherland) Netherland Netherland Trading EUR40000 90.00 10.00

Fosber Asia Foshan Foshan

Guangdong China Guangdong China Manufacturing RMB29581.2 100.00 -

Italy QCorr Italy Italy Manufacturing EUR375000 - 60.00

Suzhou High-Tech Zone Jinquan Business Management Partnership Suzhou Suzhou

(Limited Partnership) *(Note 1) (“High-Tech Zone Jinquan”) Jiangsu China Jiangsu China Investment RMB10553000 - 30.17Suzhou Parsun Power Technology Co. Ltd. (“Parsun Power Suzhou SuzhouTechnology”) Jiangsu China Jiangsu China Manufacturing RMB10 million - 71.14Suzhou Baisheng International Trade Co. Ltd. (“Baisheng Suzhou SuzhouInternational”) Jiangsu China Jiangsu China Trading RMB3 million - 71.14

Haikou Hainan Haikou Hainan China Industrial

Dongfang Digicom Data Technology Co. Ltd. (“Dongfang Digicom”) China Internet RMB100 million 100.00 -Dongfang Digicom Data Technology (Guangdong) Co. Ltd. (“Dongfang Foshan Foshan IndustrialDigicom (Guangdong)”) Guangdong China Guangdong China Internet RMB8 million 100.00 -

Haikou Hainan Haikou Hainan China

Hainan Yineng Investment Co. Ltd. (“Yineng Investment”) China Investment RMB100 million 100.00 -Dongfang Yineng International Holdings Co. Ltd. (“Yineng Foshan FoshanInternational”) Guangdong China Guangdong China Investment RMB50 million 100.00 -

Tianjin Hangchuang Zhijin Investment Partnership (Limited Partnership) Tianjin China Tianjin China Investment RMB21 million 95.24 -

245 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

(“Tianjin Hangchuang”)

Changzhou Xinchen Investment Partnership (Limited Partnership) Changzhou Changzhou

(“Changzhou Xinchen”) Jiangsu China Jiangsu China Investment RMB50.6 million - 94.86

DONGFANG PRECISION LANKE (HK) LIMITED (Note 2) HK China HK China Investment HKD10000 - 100.00

Fobser Mexico (Note 2) Mexico Mexico Manufacturing MXN100000 - 100.00

246 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

VII. Interests in Other Entities (cont’d)

1. Interests in subsidiaries (cont’d)

Parent and subsidiaries (cont’d)

Principal place Place of Business Registered The Company’s

of business registration nature capita Interest (%)

Direct Indirect

Subsidiaries acquired in business combinations not under common

control

Fosber Group Italy Italy Manufacturing EUR1.56 million - 100.00

Fosber America America America Manufacturing USD1.10 million - 100.00

Forsberg (Machinery) Tianjin Co. Ltd. (“Fosber Tianjin”) Tianjin China Tianjin China Manufacturing USD500000 - 100.00

Suzhou Jiangsu Suzhou Jiangsu

Parsun Power China China Manufacturing RMB85.3 million 7.83 63.31

Suzhou Jiangsu Suzhou Jiangsu

Suzhou Shunyi Investment Co. Ltd. .(“Shunyi Investment”) China China Investment RMB10 million 100.00 -

EDF Italy Italy Manufacturing EUR100000 - 100.00

Tiru?a S.L.U. Spain Spain Manufacturing EUR1.44 million - 100.00

Tiru?a FranceSARL France France Manufacturing EUR100000 - 100.00

SCI Candan France France Manufacturing EUR10000 - 100.00

Tiru?a America America America Manufacturing USD3 million - 100.00

Tiru?a (Guangdong) Intelligent Equipment Manufacturing Co. Ltd. Foshan Guangdong Foshan Guangdong

(“Tiru?a (Guangdong)”) China China Manufacturing RMB50 million 100.00 -

Shenzhou Shenzhou

Shenzhen Wonder Printing System Co. Ltd. Guangdong China Guangdong China Manufacturing RMB31172000 51.00 -

Dongguan Dongguan

Dongguan Wonder Digital Machinery Co. Ltd. (“Wonder Digital”) Guangdong China Guangdong China Manufacturing RMB5 million - 51.00

247 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

*Note 1: According to the partnership agreement the general partner of the partnership shall execute partnership affairs and other partners shall not execute partnership affairs. As the

sole general partner the Company forms control over the partnership which is included in the scope of consolidation of the Group.Note 2: DONGFANG PRECISION LANKE (HK) LIMITED and Fobser Mexico are subsidiaries established in the current year.

248 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

VII. Interests in Other Entities (cont’d)

2. Interests in associates

Associates insignificant to the Group

Principal place Place of Business The Company’s

of business registration nature interest (%)

Accounting

Direct Indirect method

Associates

Foshan Foshan

Guangdong Jaten Robot & Guangdong Guangdong Equity

Automation Co. Ltd. China China Manufacturing 19.84 - method

Equity

TalleresTapreS.L. Spain Spain Manufacturing - 20.00 method

Nanjing Nanjing Equity

Nanjing Profeta Jiangsu China Jiangsu China Manufacturing 15.00 5.67 method

Aggregate financial information of associates insignificant to the Group

20242023

Associates

Total carrying amount of investments 113469148.58 117265884.84

Total amounts based on the Company’s interests:

Net loss (3722072.85 ) (2259252.98 )

Total comprehensive loss (3722072.85 ) (2259252.98 )

As there is no obligation to bear additional losses the net losses incurred by the investee are recognized to the

extent that the book value of the long-term equity investment and other long-term interests that substantially

constitute the net investment in the investee are reduced to zero.

249 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

VIII. Government grants

1. Government grants recognized at amounts receivable

The closing balance of government grants included in other receivables was RMB6000000.00.

2. Liabilities related to government grants

Liabilities related to government grants as at 31 December 2024 are as follows:

Recognized in

Opening other income Closing Related to

balance Increase during the year balance asset/income

Related to

Deferred income 9956991.66 6000000.00 1166660.00 14790331.66 assets

3. The government grants recognised in profit or loss

20242023

Government grants related to assets

Recognised as other income 1166660.00 1116660.00

Government grants related to income

Recognised as other income 12976868.16 13889689.35

14143528.1615006349.35

IX. Risks associated with financial instruments

1. Risks of financial instruments

The main risks arising from the Group's financial instruments are credit risk liquidity risk and market risk. The

Group’s policies are summarised below.

(1) Credit risk

The Group transacts only with recognized and reputable third parties. According to the Group's policies credit

checks are needed for all customers that require transactions should be conducted by means of credit. Additionally

the Group performs continuous monitoring of the balance of accounts receivable to ensure that the Group will not

face major bad debt risk. For transactions not settled in the accounting standard currency of the relevant business

unit unless specifically approved by the credit control department of the Group the Group will not provide credit

transaction conditions.

250 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

IX. Risks related to financial instruments (cont’d)

1. Risks of financial instruments (cont’d)

(1) Credit risk (cont’d)

Since the counterparties of cash and bank balances and notes receivable are banks with a good reputation and high

credit rating the credit risk of such financial instruments is low.Other financial assets of the Group mainly include accounts receivable other receivables and contract assets the

credit risk of which arises from counterparty default and the maximum risk exposure is equal to the carrying value

of these instruments.The Group transacts only with recognized and reputable third parties so no collateral is required. Credit risk

concentration is managed by customer/counterparty geographic region and industry. Because the customer base of

accounts receivable of the Group is widely dispersed in different departments and industries there is no major

credit risk concentration within the Group. The Group does not hold any collateral or other credit enhancement on

the balance of accounts receivable.Criteria for judging significant increases in credit risk

The Group assesses whether or not the credit risk of the relevant financial instruments has increased significantly

since the initial recognition at each balance sheet date. The Group's main criteria for determining significant

increase in credit risk are that the number of days past due exceed 30 days or one or more of the following

indicators have changed significantly: significant adverse changes in the operating environment of the debtor

internal and external credit ratings and actual or expected operating results.Definition of credit-impaired financial assets

The Group's main criterion for determining that credit impairment has occurred is that the number of days past due

exceeds 90 days. However in some cases if internal or external information indicates that the contract amount

may not be recovered in full before considering any credit enhancements held the Group will also consider that

credit impairment has occurred.The credit impairment on a financial asset may be caused by the combined effect of multiple events and may not

be necessarily due to a single event.

(2) Liquidity risk

The Group aims to maintain sufficient cash and credit lines to meet its liquidity requirements. The Group finances

its working capital requirements through a combination of funds generated from operations and other borrowings.

251 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

IX. Risks Associated with Financial Instruments (cont’d)

1. Financial instrument risks (cont’d)

(2) Liquidity risk (cont’d)

The maturity profile of financial liabilities based on undiscounted contractual cash flow is summarized as follows:

2024

Within 1 month 1-3 months 3 months-1 year 1-5 years Over 5 years Total

Short-term borrowings 9755080.06 23831227.65 52806765.73 - - 86393073.44

Notes payable - - 144137609.00 - - 144137609.00

Accounts payable - - 687235330.65 - - 687235330.65

Other payables - - 117617259.50 - - 117617259.50

Derivative financial liabilities - - 206216239.00 - - 206216239.00

Current portion of non-current

liabilities 4201388.07 9729436.94 72224493.34 - - 86155318.35

Long-term borrowings - - - 123995771.10 16343486.62 140339257.72

Lease liabilities - - - 47666801.96 - 47666801.96

Other current liabilities - - 41832335.71 - - 41832335.71

Other non-current liabilities - - - 7573539.20 - 7573539.20

13956468.1333560664.591322070032.93179236112.2616343486.621565166764.53

252 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

IX. Risks Associated with Financial Instruments (cont’d)

1. Financial instrument risks (cont’d)

(2) Liquidity risk (cont’d)

2023

Within 1 month 1-3 months 3 months-1 year 1-5 years Over 5 years Total

Short-term borrowings 47649929.46 21673776.48 305994589.47 - - 375318295.41

Notes payable - - 152433276.09 - - 152433276.09

Accounts payable - - 737544841.42 - - 737544841.42

Other payables - - 126415425.61 - - 126415425.61

Financial liabilities held for trading - - 115900827.21 - - 115900827.21

Current portion of non-current

liabilities 2457366.02 4392084.31 52417329.88 - - 59266780.21

Long-term borrowings - - - 84490564.27 836642.77 85327207.04

Lease liabilities - - - 65861441.32 - 65861441.32

Other current liabilities - - 25837473.39 - - 25837473.39

Other non-current liabilities - - - 22418854.80 - 22418854.80

50107295.4826065860.791516543763.07172770860.39836642.771766324422.50

253 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

IX. Risks Associated with Financial Instruments (cont’d)

1. Financial instrument risks (cont’d)

(3) Market Risk

Interest rate risk

The Group’s exposure to risk of changes in market interest rates relates primarily to the Group’s long-term

liabilities with floating interest rates.The sensitivity analysis of interest rate risks is set out in the following table reflecting the impact of reasonable

and probable change in interest rates on net profit or loss (through the impact on floating rate loans) and other

comprehensive income (net of tax) assuming that other variables remain constant

2024

Increase/ Increase/ Increase/ Increase/

(decrease) in basis (decrease) in net (decrease) in other (decrease) in

points profit or loss comprehensive income net total equity

of tax

Loans 0.50 (761230.54 ) - (761230.54 )

Loans (0.50 ) 761230.54 - 761230.54

2023

Increase/ Increase/ Increase/ Increase/

(decrease) in basis (decrease) in net (decrease) in other (decrease) in

points profit or loss comprehensive income net total equity

of tax

Loans 0.50 (435630.76 ) - (435630.76 )

Loans (0.50 ) 435630.76 - 435630.76

Exchange rate risk

The Group is exposed to trading exchange rate risks. Such exposures arise from sales or purchases by business

units in currencies other than the units’ functional currencies.The sensitivity analysis of exchange rate risks is set out in the following table reflecting the impact of reasonable

and probable change in the exchange rates of EUR and USD on net profit or loss and other comprehensive income

(net of tax) assuming that other variables remain constant.

254 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

IX. Risks Associated with Financial Instruments (cont’d)

1. Financial instrument risks (cont’d)

(3) Market Risk (cont’d)

Exchange rate risk (cont’d)

2024

Increase/ Increase/ Increase/ Increase/

(decrease) in (decrease) in (decrease) in (decrease) in

foreign currency net profit or loss other total equity

exchange rate (%) comprehensive

income net of tax

RMB appreciation against

EUR 2.00 (23749786.71 ) - (23749786.71 )

RMB depreciation against

EUR (2.00 ) 23749786.71 - 23749786.71

RMB appreciation against

USD 2.00 (16119960.12 ) - (16119960.12 )

RMB depreciation against

USD (2.00 ) 16119960.12 - 16119960.12

2023

Increase/ Increase/ Increase/ Increase/

(decrease) in (decrease) in (decrease) in (decrease) in

foreign currency net profit or loss other total equity

exchange rate (%) comprehensive

income net of tax

RMB appreciation against

EUR 2.00 (6940212.28 ) - (6940212.28 )

RMB depreciation against

EUR (2.00 ) 6940212.28 - 6940212.28

RMB appreciation against

USD 2.00 (10011216.17 ) - (10011216.17 )

RMB depreciation against

USD (2.00 ) 10011216.17 - 10011216.17

255 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

IX. Risks Associated with Financial Instruments (cont’d)

2. Capital management

The primary objective of the Group’s capital management is to safeguard the Group’s ability to continue as a going

concern and to maintain healthy capital ratios in order to support its business and maximize shareholders’ value.The Group manages its capital structure and makes adjustments in the light of changes in economic conditions and

in the risk profiles of relevant assets. To maintain or adjust the capital structure the Group may adjust the dividend

payment to shareholders return capital to shareholders or issue new shares. The Group is not subject to any

externally imposed capital requirements. No changes were made in the objectives policies or processes for

managing capital during 2024 and 2023.

3. Transfer of financial assets

Transfer Nature of Amount of Derecognition Judgment basis for

method transferred transferred financial derecognition

financial assets assets

Retained the substantial risks

Notes and rewards which include

discounted/ default risks relating to such

endorsed Notes receivable 57105722.02 Not derecognised endorsed/discounted notes

Transferred substantially all

Receivables risks and rewards relating to the

Notes endorsed financing 20397758.07 Derecognised derecognised notes

77503480.09

Financial assets derecognised as a result of the transfer are as follows:

Amount of derecognised Gains or losses related to

Transfer method financial assets derecognition

Notes receivable Receivables financing 20397758.07 -

256 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

IX. Risks Associated with Financial Instruments (cont’d)

3. Transfer of financial assets (cont’d)

Financial assets already transferred but not wholly derecognized

On 31 December 2024 the carrying value of the bank acceptance notes (BAs) discounted by the Group was

RMB25560751.24 (31 December 2023: RMB20461553.62). The Group believed that the Group retained almost

all their risks and rewards including the risk of default associated therewith so the Group continued to confirm

them and recognise in full its and related bank borrowings. After the discounting the Group will no longer reserve

the right to use them including the right to sell transfer or pledge them to other third parties. On 31 December

2024 the carrying amount of bank borrowings recognised by the Group amounted to RMB25560751.24 (31

December 2023: RMB20461553.62).On 31 December 2024 the carrying value of the BAs endorsed by the Group to suppliers for the settlement of

accounts payable was RMB31544970.78 (31 December 2023: RMB5375919.77). The Group believed that the

Group retained almost all their risks and rewards including the risk of default associated therewith so the Group

continued to confirm them and the settled accounts payable associated therewith in full amount. After the

endorsement the Group will no longer reserve the right to use them including the right to sell transfer or pledge

them to other third parties. On 31 December 2024 the carrying value of the accounts payable settled with them

totaled RMB31544970.78 (31 December 2023: RMB5375919.77).Transferred financial assets that have been wholly derecognized but continue to be involved

On 31 December 2024 the carrying value of the BAs endorsed by the Group to suppliers for the settlement of

accounts payable was RMB20397758.07 (31 December 2023: RMB13508608.93). On 31 December 2024 their

maturity date varied from one to 12 months. As stipulated in the Negotiable Instruments Law if the accepting bank

refuses to pay their holders have the right to recourse from the Group ("continue to be involved"). The Group

believed that the Group had transferred almost all their risks and rewards so the Group derecognized the carrying

value of them and the settled accounts payable associated therewith. The maximum loss and undiscounted cash

flows from continuing involvement and repurchase were equal to their carrying value. The Group believed that it

was insignificant to continue to involve in fair value.In 2024 the Group did not confirm the gains or losses on the transfer day. The Group had no income or expenses

recognized in the current year and cumulatively due to continued involvement in derecognized financial assets.Endorsements occurred roughly evenly during the year.

257 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

X. Disclosure of Fair Values

1. Assets and liabilities measured at fair value

2024

Input applied in the measurement of fair value

Quoted prices Significant Significant

in active markets observable inputs unobservable

inputs

(Level 1) (Level 2) (Level 3) Total

Continuous measurement

of fair value

Financial assets held for

trading 788649332.18 - - 788649332.18

Derivative financial 2755081.17 - - 2755081.17

assets

Receivables financing - 16303982.64 - 16303982.64

Other non-current

financial assets 31258001.96 - 508191586.67 539449588.63

Other non-current assets - 10579534.25 - 10579534.25

822662415.3126883516.89508191586.671357737518.87

Input applied in the measurement of fair value

Quoted prices Significant Significant

in active markets observable inputs unobservable

inputs Total

(Level 1) (Level 2) (Level 3)

Continuous measurement

of fair value

Derivative financial - - 206216239.00 206216239.00

liabilities

Other non-current

liabilities 1282812.01 - 5679384.78 6962196.79

1282812.01-211895623.78213178435.79

258 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

X. Disclosure of Fair Values (cont’d)

1. Assets and liabilities measured at fair value (cont’d)

2023

Input applied in the measurement of fair value

Quoted prices Significant Significant

in active markets observable inputs unobservable

inputs

(Level 1) (Level 2) (Level 3) Total

Continuous measurement

of fair value

Financial assets held for

trading 651289983.88 6283.88 - 651296267.76

Derivative financial 31329174.69 - - 31329174.69

assets

Receivables financing - 9365344.07 - 9365344.07

Other non-current

financial assets 31420551.63 - 429857708.04 461278259.67

Other non-current assets - 10248630.14 - 10248630.14

714039710.2019620258.09429857708.041163517676.33

Input applied in the measurement of fair value

Quoted prices Significant Significant

in active markets observable inputs unobservable

inputs Total

(Level 1) (Level 2) (Level 3)

Continuous measurement

of fair value

Derivative financial

liabilities - - 115900827.21 115900827.21

Other non-current

liabilities - - 22418854.80 22418854.80

--138319682.01138319682.01

2. Level 1 fair value measurement

The fair value of the listed equity instrument investment is determined based on the market quotation.

259 / 282Notes to the Financial Statements (Cont’d)

Expressed in Renminbi Yuan

X. Disclosure of Fair Values (cont’d)

3. Level 2 fair value measurement

In a fair transaction the fair value of financial assets and financial liabilities is determined by the amount of

voluntary asset exchange or debt redemption between the parties to the transaction rather than the amount in the

case of force sale or liquidation.The fair value of receivable financing and other equity investment is determined by the discounted future cash

flow method the fair value is similar to their carrying value.The fair value of long-term receivables and long- and short-term borrowings is determined by the discounted

future cash flow method where the market yield of other financial instruments with similar contract terms credit

risks and remaining maturity serves as the discount rate. On 31 December 2024 the result of the self-default risk

assessment of long- and short-term borrowings was not significant.

4. Level 3 fair value measurement

The fair values of unlisted equity investments have been estimated using a market-based valuation technique based

on assumptions that are not supported by observable market prices or rates. The valuation requires the Group to

determine comparable listed companies based on industry size leverage and strategy and to calculate an

appropriate price multiple such as enterprise value multipliers and P/E multipliers for each comparable company