Shanghai Qingpu Fire Fighting Equipment : 2019/03/27 - ANNUAL REPORT 2018

CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED

GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration.

Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

This report, for which the directors (the "Directors") of Shanghai Qingpu FireFighting Equipment Co. Ltd (the "Company", together with its subsidiaries, the "Group") collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on GEM of the Stock Exchange (the "GEM Listing Rules") for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this report is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this report misleading.

CONTENTS
	Pages
Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . .	2
Chairman's Statement . . . . . . . . . . . . . . . . . . . . . . . . .	3-5
Management Discussion and Analysis . . . . . . . . . . . . . . . . . .	6-8
Profiles of Directors, Supervisors and Senior Management . . . . . . . . . . . . . . . . . . . . .	9-11
Corporate Governance Report . . . . . . . . . . . . . . . . . . . . . .	12-16
Environmental, Social and Governance Report . . . . . . . . . . . . . . .	17-20
Directors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21-27
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28-34
Consolidated Statement of Profit or Loss . . . . . . . . . . . . . . . . . .	35
Consolidated Statement of Comprehensive Income . . . . . . . . . . . . .	36
Consolidated Statement of Financial Position . . . . . . . . . . . . . . . .	37-38
Consolidated Statement of Changes in Equity . . . . . . . . . . . . . . .	39
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . .	40-41
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . .	42-125
Five Year Financial Summary . . . . . . . . . . . . . . . . . . . . . .	126

Shanghai Qingpu Fire-Fighting Equipment Co., Ltd • Annual Report 2018

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CORPORATE INFORMATION

BOARD OF DIRECTORS	PRINCIPAL BANKERS
Executive Directors	China Construction Bank Huaxin Sub-branch
	Shanghai Rural Commercial Bank Co., Ltd
Mr. Zhou Jin Hui	Chonggu branch
Mr. Shi Hui Xing

Mr. Zhou Guo Ping

H SHARE SHARE REGISTRAR AND   TRANSFER OFFICE

Independent Non-Executive Directors

	Computershare Hong Kong Investor
Mr. Wang Guo Zhong	Services Limited
Mr. Yang Chun Bao	46th Floor, Hopewell Centre
Mr. Song Zi Zhang	183 Queen's Road East
	Wanchai, Hong Kong
AUDIT COMMITTEE	REGISTERED OFFICE
Mr. Song Zi Zhang
Mr. Yang Chun Bao	1988 Jihe Road
Mr. Wang Guo Zhong	Hua Xin Town
	Qingpu District, Shanghai
AUTHORISED REPRESENTATIVE	People's Republic of China
Mr. Chan Chi Wai Benny	PRINCIPAL PLACE OF BUSINESS IN
Mr. Shi Hui Xing	HONG KONG
COMPANY SECRETARY	Unit 2605, Island Place Tower
	510 King's Road
Mr. Chan Chi Wai Benny	North Point Hong Kong
AUDITORS
Ascenda Cachet CPA Limited

2	Shanghai Qingpu Fire-Fighting Equipment Co., Ltd • Annual Report 2018

CHAIRMAN'S STATEMENT

RESULTS FOR THE YEAR

For the year ended 31 December 2018, the Group recorded total revenue of RMB69,650,000 and loss for the year of RMB2,346,000. The Group's revenue was derived principally from its manufacture and sale of pressure vessels (including fire-fighting equipment products and pressure vessels products) in the PRC (excluding Hong Kong) and overseas, provision of fire technology inspection services, installation and inspection of marine fire-fighting equipment, commission received on trading of sanitary-ware and sales of aquarium products and other products.

SALES

The Group's revenue decreased by RMB3,013,000 from RMB72,663,000 in 2017 to RMB69,650,000 in 2018.

PROSPECT

Fire safety forms an essential part of national public Security, and the development level of the fire protection industry is an important indicator of the level of national economic and social development. Fire protection products manufacturing is the foundation for the fire protection industry. According to the "Implementation Rules for Compulsory Product Certification" (《強制性產品認證實施規則》) promulgated by the Certification and Accreditation Administration of the PRC on 30 May 2014, fire protection products in China can be mainly divided into four major categories: fire extinguishing products, fire alarm products, fire protection products, and fire-fighting equipment products. At present, there are more than 5,000 fire-fighting product manufacturers in China which shows the large overall size of the fire protection industry. However, there is a lack of industry-leading enterprises showing relatively scattered market share occupied by each company and low industry concentration. China's GDP has maintained a relatively rapid growth rate in recent years; meanwhile the urbanization process has steadily advanced. As economic growth constantly invest in the construction of fire protection systems, the demand for fire protection products will continue to expand. The government at all levels attaches great importance to fire protection, the fire safety supervision system is gradually improved, and the public security awareness is enhanced, all of which create favourable conditions for the development of the fire protection industry. The fire protection industry is ushering in good development opportunities. The Company's fire extinguisher products cover three categories, carbon dioxide, water-based, and dry powder. The wide product range offered by the Company can meet the diversified needs of the customers. The new Guiding Opinion will be a driver for the Group's fire extinguisher products. In addition, the Company's fire extinguishers for non-marine use are granted the Certificate for Product Type Approval by the CCCF and its fire extinguishers for marine use are granted the Certificates of Type Approval by the China Classification Society, Shanghai Branch ("CCS"). The Company's pressure cylinders have obtained the manufacture licence in the PRC and they meet the quality standards or requirements of the USA and the European Union.

Measures have been and will be implemented continuously to improve the operation efficiency and to control production costs. Production will be more focused on higher-margin products. With the economic industry requirements expected to tighten in China, the Company will continue to improve the profitability of the Group by increasing the operation efficiency and seeking for new business opportunities in fire-fighting industry.

Shanghai Qingpu Fire-Fighting Equipment Co., Ltd • Annual Report 2018

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