KINGDEE INTERNATIONAL SOFTWARE GROUP COMPANY LIMITED Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. KINGDEE INTERNATIONAL SOFTWARE GROUP COMPANY LIMITED 金 蝶 國 際 軟 件 集 團 有 限 公 司 （Incorporated in the Cayman Islands with limited liability） (Stock Code: 268) ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2019 AND PAYMENT OF FINAL DIVIDEND OUT OF SHARE PREMIUM ACCOUNT The board (the “Board”) of directors (the “Directors”) of Kingdee International Software Group Company Limited (“Kingdee International” or the “Company”) is pleased to announce the audited consolidated results of the Company and its subsidiaries (the “Group”) for the year ended 31 December 2019, together with the comparative audited consolidated figures for the year ended 31 December 2018 are as follows: Financial highlights for the year ended 31 December 2019 － Revenue increased by approximately 18.4% compared with 2018 to approximately RMB3,325,590,000. － Profit attributable to owners of the Company decreased by approximately 9.6% compared with 2018 to approximately RMB372,580,000. － Net cash generated from operating activities increased by approximately 6.3% compared with 2018 to approximately RMB962,927,000. － Basic earnings per share attributable to owners of the Company during the year decreased by approximately 12.7% to approximately RMB 11.52 cents (2018: RMB13.19 cents). － The Directors recommend the payment of a final dividend of RMB1.1 cents per share for the year ended 31 December 2019 out of the share premium account (2018: RMB1.0 cents per share). - 1 - KINGDEE INTERNATIONAL SOFTWARE GROUP COMPANY LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December Notes 2019 2018 RMB’000 RMB’000 Assets Non-current assets Land use rights - 67,545 Property, plant and equipment 546,524 490,236 Right-of-use assets 4 106,869 - Intangible assets 923,323 899,668 Investment properties 1,856,200 1,816,206 Investments in associates 282,649 234,403 Deferred income tax assets - 49 Financial assets at fair value through profit or loss 428,791 427,456 Trade and other receivables 5 22,000 - Loans to related parties 5 - 464,537 Loans to third parties 5 12,350 18,940 4,178,706 4,419,040 Current assets Inventories 7,357 8,436 Trade and other receivables 5 308,153 286,615 Loans to related parties 5 - 256,976 Loans to third parties 5 230,869 88,720 Contract assets and contract obtaining 3 costs 512,352 494,662 Financial assets at fair value through profit or loss 596,151 211,430 Pledged bank deposits 128 152 Short-term bank deposits 687,667 359,674 Cash and cash equivalents 1,898,770 1,452,848 4,241,447 3,159,513 Total assets 8,420,153 7,578,553 - 2 - KINGDEE INTERNATIONAL SOFTWARE GROUP COMPANY LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED) As at 31 December Notes 2019 2018 RMB’000 RMB’000 Liabilities Non-current liabilities Lease liabilities 4 20,282 - Trade and other payables 9 69,028 - Deferred income tax liabilities 187,079 179,319 276,389 179,319 Current liabilities Trade and other payables 9 615,596 580,716 Contract liabilities 3 996,996 846,755 Borrowings 8 199,625 301,125 Lease liabilities 4 21,341 - Current income tax liabilities 39,085 35,890 Deferred income 125,450 102,081 1,998,093 1,866,567 Total liabilities 2,274,482 2,045,886 Net assets 6,145,671 5,532,667 Equity Equity attributable to owners of the Company Share capital 6 80,037 79,585 Share premium 6 2,963,096 2,903,459 Other reserves 7 686,532 565,259 Retained earnings 2,257,263 1,917,757 5,986,928 5,466,060 Non-controlling interests 158,743 66,607 Total equity 6,145,671 5,532,667 - 3 - KINGDEE INTERNATIONAL SOFTWARE GROUP COMPANY LIMITED CONSOLIDATED INCOME STATEMENT Year ended 31 December Notes 2019 2018 RMB’000 RMB’000 Revenue from contracts with customers 3,10 3,325,590 2,808,658 Cost of sales 11 (652,003) (514,339) Gross profit 2,673,587 2,294,319 Selling and marketing expenses 11 (1,644,384) (1,491,302) Administrative expenses 11 (386,324) (334,342) 11 Net impairment losses on financial assets and contract assets (48,416) (47,697) Research and development costs 11 (586,827) (405,158) Fair value gains on investment properties 39,994 94,516 Other income and gains - net 12 376,157 342,971 Operating profit 423,787 453,307 Finance income 19,768 29,444 Finance costs (14,398) (30,481) Finance income/(costs) - net 13 5,370 (1,037) Share of losses of associates (33,026) (4,240) Profit before income tax 396,131 448,030 Income tax expense 14 (30,333) (38,760) Profit for the year 365,798 409,270 Profit/(loss) attributable to: Owners of the Company 372,580 412,106 Non-controlling interests (6,782) (2,836) 365,798 409,270 Earnings per share for profit attributable to owners of the Company (expressed in RMB cents per share) – Basic 16 11.52 13.19 – Diluted 16 11.22 12.45 - 4 - KINGDEE INTERNATIONAL SOFTWARE GROUP COMPANY LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended 31 December 2019 2018 RMB’000 RMB’000 Profit for the year 365,798 409,270 Other comprehensive income: Items that may be reclassified to profit or loss: Currency translation differences 284 67,029 Other comprehensive income for the year, net of tax 284 67,029 Total comprehensive income for the year 366,082 476,299 Total comprehensive income/(losses) attributable to: Owners of the Company 372,864 479,135 Non-controlling interests (6,782) (2,836) 366,082 476,299 5 KINGDEE INTERNATIONAL SOFTWARE GROUP COMPANY LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Attributable to owners of the Company Non- Share Share Other Retained controlling Total Notes capital premium reserves earnings Total interests equity RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Balance at 1 January 2019 79,585 2,903,459 565,259 1,917,757 5,466,060 66,607 5,532,667 Profit for the year - - - 372,580 372,580 (6,782) 365,798 Other comprehensive income Currency translation differences - - 284 - 284 - 284 Total comprehensive income - - 284 372,580 372,864 (6,782) 366,082 Transactions with owners Employees share option scheme: - Value of employee services received - 1,032 - - 1,032 - 1,032 - Proceeds from shares issued 452 53,732 - - 54,184 - 54,184 Share award plan: - Value of employee services received - 86,660 - - 86,660 - 86,660 - Transfer shares to the awardees upon vesting - (81,787) 56,207 - (25,580) - (25,580) Transactions with non-controlling interests 17 - - 64,782 - 64,782 45,218 110,000 Dividend distribution - - - (33,074) (33,074) - (33,074) Contribution from non-controlling interests - - - - - 53,700 53,700 Total transactions with owners, recognised directly in equity 452 59,637 120,989 (33,074) 148,004 98,918 246,922 Balance at 31 December 2019 80,037 2,963,096 686,532 2,257,263 5,986,928 158,743 6,145,671 6 KINGDEE INTERNATIONAL SOFTWARE GROUP COMPANY LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) Attributable to owners of the Company Non- Share Share Other Retained controlling Total Notes capital premium reserves earnings Total interests equity RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Balance at 1 January 2018 71,599 1,681,289 694,402 1,548,051 3,995,341 47,739 4,043,080 Profit for the year - - - 412,106 412,106 (2,836) 409,270 Other comprehensive income Currency translation differences - - 67,029 - 67,029 - 67,029 Total comprehensive income - - 67,029 412,106 479,135 (2,836) 476,299 Transactions with owners Employees share option scheme: - Value of employee services received - 5,290 - - 5,290 - 5,290 - Proceeds from shares issued 987 95,367 - - 96,354 - 96,354 Share award plan: - Value of employee services received - 81,628 - - 81,628 - 81,628 - Transfer shares to the awardees upon vesting - (29,047) 14,937 - (14,110) - (14,110) - Shares purchased for share award plan 7 - - (224,405) - (224,405) - (224,405) Transactions with non-controlling interests 17 - - 13,296 - 13,296 21,704 35,000 Dividend distribution - - - (42,400) (42,400) - (42,400) Conversion of convertible bonds 6,999 1,068,932 - - 1,075,931 - 1,075,931 Total transactions with owners, recognised directly in equity 7,986 1,222,170 (196,172) (42,400) 991,584 21,704 1,013,288 Balance at 31 December 2018 79,585 2,903,459 565,259 1,917,757 5,466,060 66,607 5,532,667 7 KINGDEE INTERNATIONAL SOFTWARE GROUP COMPANY LIMITED CONSOLIDATED CASH FLOW STATEMENT Notes 2019 2018 RMB’000 RMB’000 Cash flows from operating activities Cash generated from operations excluding net cash outflow in loans to third parties from the micro-credit business 1,092,951 1,009,904 Net cash outflow in loans to third parties from the micro-credit business (95,318) (44,293) Interest paid (15,377) (25,946) Income tax paid (19,329) (34,150) Net cash inflow from operating activities 962,927 905,515 Cash flows from investing activities Purchases of property, plant and equipment (38,612) (34,505) Proceeds from disposals of property, plant and equipment 6,064 941 Purchases of intangible assets (476,145) (372,217) Payment for acquisition of a subsidiary (6,200) (2,688) Pledged bank deposits and short-term bank deposits (placed)/withdrawn - net (327,969) 738,248 Interest received 57,942 43,269 Repayments received from entrusted loans - 49,600 Purchases of financial assets at fair value through profit or loss (3,068,500) (3,865,845) Proceeds