Luxshare Precision Industry Co., Ltd.
Annual Report 2023
2024-024
April 2024
Annual Report 2023
Section I Important Note, Table of Contents and DefinitionsThe Board of Directors, the Board of Supervisors, directors, supervisors andexecutives of the Company hereby warrant that the information contained in thisAnnual Report is true, accurate and complete and this Annual Report is free fromany misrepresentation, misleading statement or material omission, and agree toassume joint and several liability for this Annual Report.
WANG Laichun, Principal of the Company, CFO WU Tiansong and ChiefAccountant CHEN Huiyong hereby represent that the financial statementscontained in this Annual Report are true, accurate and complete.
All directors of the Company attended the meeting of the Board of Directorsreviewing this Report.
The relevant risks facing the Company are set out in “Section IIIManagement’s Discussion and Analysis - XI. Prospects for future development ofthe Company”.
According to the profit distribution proposal approved by the Board ofDirectors, the Company will distribute a cash dividend of RMB 3 (inclusive of tax)per 10 shares to all shareholders on the basis of 7,178,011,313 shares, and will notdistribute any bonus shares or transfer any capital reserve to the share capital forthe reporting period.
Table of Contents
Section I Important Note, Table of Contents and Definitions ...... 2
Section II Company Profile and Key Financial Indicators ...... 7
Section III Management’s Discussion and Analysis ...... 11
Section IV Corporate Governance ...... 64
Section V Environment and Social Responsibilities ...... 95
Section VI Significant Matters ...... 139
Section VII Changes in shares and shareholders ...... 160
Section VIII Preference Shares ...... 169
Section IX Bonds ...... 170
Section X Financial Report ...... 185
List of References
1. Financial statements signed and chopped by the principal, CFO and Chief Accountant of the Company;
2. Original of the auditor’s report stamped with the seal of the accounting firm and signed and chopped by thecertified public accountants;
3. Originals of all documents of the Company publicly disclosed on the website for information disclosuredesignated by the China Securities Regulatory Commission during the reporting period and related announcements;and
4. Other references.
Definitions
| Terms | means | Definition |
| We/us, the Company or Luxshare-ICT | means | Luxshare Precision Industry Co., Ltd. |
| Luxshare Limited | means | Luxshare Limited, founder and controlling shareholder of Luxshare-ICT. |
| ICT-Lanto | means | ICT-Lanto Limited. |
| LUXSHARE PRECISION | means | Luxshare Precision Limited. |
| Luxshare Jiangsu | means | Luxshare Precision Industry (Jiangsu) Co., Ltd. |
| Luxshare Shanxi | means | Luxshare Precision Industry (Shanxi) Co., Ltd. |
| Luxshare Dongguan | means | Dongguan Luxshare Precision Industry Co., Ltd. |
| Luxshare Suzhou | means | Luxshare Precision Industry (Suzhou) Co., Ltd. |
| Luxshare Chuzhou | means | Luxshare Precision Industry (Chuzhou), Ltd. |
| Luxshare Kunshan | means | Kunshan Luxshare Precision Industry Co., Ltd. |
| Luxshare Baoding | means | Luxshare Precision Industry (Baoding) Co., Ltd. |
| Luxshare Xuancheng | means | Xuancheng Luxshare Precision Industry Co., Ltd. |
| Luxshare Yancheng | means | Yancheng Luxshare Precision Industry Co., Ltd. |
| Luxshare Enshi | means | Luxshare Precision Industry (Enshi) Co., Ltd. |
| Luxshare Vietnam | means | Luxshare-ICT (Vietnam) Limited |
| Luxshare Van Trung | means | Luxshare-ICT (Van Trung) Company Limited |
| Luxshare Nghe An | means | Luxshare-ICT (Nghe An) Limited |
| Luxshare Electroacoustic | means | Shenzhen Luxshare Acoustics Technology Ltd. |
| Luxshare Smart Manufacturing | means | Luxshare iTech (Zhejiang) Co., LTD. |
| Luxshare-Merry | means | Guangdong Luxshare & Merry Electronics Co., Ltd. |
| ASAP Jiangxi | means | ASAP Technology (Jiangxi) Co., Ltd. |
| Xiexun Jiangxi | means | Xiexun Electronic (Ji’an) Co., Ltd. |
| Smart Manufacturing Jiangxi | means | Jiangxi Luxshare Intelligent Manufacture Co., Ltd. |
| Lanto Bozhou | means | Bozhou Lanto Electronic Limited |
| Xuntao Bozhou | means | Bozhou Xuntao Electronic Limited |
| Meite Suzhou | means | Merry Electronics (Suzhou) Co., Ltd. |
| Huzhou Jiuding | means | Huzhou Jiuding Electronic Co., Ltd. |
| Lanto Kunshan | means | Lanto Electronic Limited |
| Kunshan RF | means | Kunshan-Luxshare RF Technology Co., |
Ltd.
| Ltd. | |||
| Liding Dongguan | means | Liding Electronic Technology (Dongguan) Co., Ltd. | |
| Luxcase ICT Yancheng | means | Luxcase Precision Technology (Yancheng) Co., Ltd. | |
| Xiexun Wan’an | means | Wan’an Xiexun Electronic Co., Ltd. | |
| Smart Manufacturing Changshu | means | Luxshare Intelligent Manufacture Technology (Changshu) Co., Ltd. | |
| Fujian JK | means | Fujian JK Wiring Systems Co., Ltd.. | |
| Xingning Electronics | means | Xingning Luxshare Electronic Co., Ltd. | |
| Luxsan Kunshan | means | Luxsan Technology (Kunshan) Co., Ltd. | |
| BCS Suzhou | means | Bisaisi Automotive Technology (Suzhou) Co., Ltd. | |
| SpeedTech | means | SpeedTech Corp. | |
| Luxshare Automation Jiangsu | means | Luxshare Automation (Jiangsu) Ltd. | |
| Dongguan Luxshare Technology | means | Dongguan Luxshare Technology Co., Ltd. | |
| Luxshare Electronic Kunshan | means | Luxshare Electronic Technology (Kunshan) Co., Ltd. | |
| Luxshare Electronic Enshi | means | Luxshare Electronic Technology (Enshi) Co., Ltd. | |
| TIME Interconnect Technology | means | TIME Interconnect Technology Limited | |
| Huarong Technology | means | Shenzhen Huarong Technology Co., Ltd. | |
| BCS Germany | means | BCS Automotive Interface Solutions GmbH(Germany) | |
| BCS USA | means | BCS Automotive Interface Solutions US, LLC (USA) | |
| BCS Romania | means | BCS Automotive Interface Solutions Romania s.r.l.(Romania) | |
| Luxsan Hong Kong | means | LUXSAN TECHNOLOGY LIMITED | |
| Luxsan Investment | means | Luxsan Investment (Jiangsu) Co., Ltd. | |
| Luxsan Equipment | means | Luxsan Intelligent Equipment (Kunshan) Co., Ltd. | |
| Chery Parts | means | Wuhu Chery Auto Purchasing Parts Co., Ltd. | |
| Chery Commercial Vehicle | means | Chery Commercial Vehicle (Anhui) Co., Ltd. | |
| Henan Chery | means | Henan Chery Auto Co., Ltd. | |
| AOA | means | Articles of Association of Luxshare Precision Industry Co., Ltd. | |
Section II Company Profile and Key Financial IndicatorsI. Company profile
| Stock short name | Luxshare-ICT | Stock code | 002475 |
| Stock exchange | Shenzhen Stock Exchange | ||
| Chinese name | 立讯精密工业股份有限公司 | ||
| Chinese short name | 立讯精密 | ||
| English name (if any) | Luxshare Precision Industry Co., Ltd. | ||
| English short name (if any) | Luxshare-ICT | ||
| Legal representative | WANG Laichun | ||
| Registered address | 2/F, Block A, Sanyang New Industrial Zone, West Haoyi, Shajing Street, Baoan District, Shenzhen | ||
| Postal code of registered address | 518104 | ||
| History of changes in registered address | N/A | ||
| Office address | No. 313 Beihuan Road, Qingxi Town, Dongguan, Guangdong | ||
| Postal code of office address | 523642 | ||
| Company website | https://www.luxshare-ict.com/ | ||
| Public@luxshare-ict.com | |||
II. Contact person and contact information
| Board Secretary | Securities Affairs Representative | |
| Name | HUANG Dawei | LI Ruihao |
| Address | No. 313 Beihuan Road, Qingxi Town, Dongguan, Guangdong | No. 313 Beihuan Road, Qingxi Town, Dongguan, Guangdong |
| Telephone | 0769-87892475 | 0769-87892475 |
| Fax | 0769-87732475 | 0769-87732475 |
| David.Huang@luxshare-ict.com | Ray.Li@luxshare-ict.com |
III. Media for information disclosure and place for keeping annual report
| Website of the stock exchange disclosing the Company’s annual report | Shenzhen Stock Exchange (www.szse.cn) |
| Media and website disclosing the Company’s annual report | The Securities Times, the Shanghai Securities News and http://www.cninfo.com.cn |
| Place for keeping annual report | Securities Affairs Office of the Company |
IV. Changes in registration particulars
| Unified social credit code | 91440300760482233Q |
| Changes in main business since the listing of the Company (if | No |
any)
| any) | |
| Changes in controlling shareholder (if any) | No |
V. Other related informationAccounting firm engaged by the Company
| Name of accounting firm | BDO China Shu Lun Pan Certified Public Accountants LLP |
| Office address of accounting firm | Rooms 1, 2 & 3, 4/F, No. 61 East Nanjing Road, Huangpu District, Shanghai |
| Name of accountants signing this report | LI Jing and DAN Jie |
Sponsor engaged by the Company that performs the duties of ongoing supervision over the Company during the reporting period:
□Applicable ?N/A
Financial advisor engaged by the Company that performs the duties of ongoing supervision over the Company during the reportingperiod
□Applicable ?N/A
VI. Key accounting data and financial indicators
Did the Company need to retrospectively adjust or re-state any accounting data of prior accounting years?
□Yes ?No
| 2023 | 2022 | Y/Y % Change | 2021 | |
| Operating income (RMB) | 231,905,459,829.83 | 214,028,394,291.44 | 8.35% | 153,946,097,790.40 |
| Net profit attributable to shareholders of the listed company (RMB) | 10,952,656,702.16 | 9,163,104,849.54 | 19.53% | 7,070,520,386.57 |
| Net profit attributable to shareholders of the listed company after deduction of non-recurring gain or loss (RMB) | 10,185,553,553.99 | 8,442,052,945.85 | 20.65% | 6,015,597,220.13 |
| Net cash flow from operating activities (RMB) | 27,605,060,411.16 | 12,727,610,319.34 | 116.89% | 7,284,766,917.00 |
| Basic earnings per share (RMB/share) | 1.54 | 1.29 | 19.38% | 1.01 |
| Diluted earnings per (RMB/share) | 1.53 | 1.28 | 19.53% | 0.99 |
| Weighted average return on equity | 21.61% | 23.00% | Decrease by 1.39 percentage points | 22.35% |
| December 31, 2023 | December 31, 2022 | Y/Y % Change | December 31, 2021 | |
| Total assets (RMB) | 161,992,099,595.65 | 148,384,319,074.71 | 9.17% | 120,572,098,167.88 |
| Net assets attributable to shareholders of the listed company (RMB) | 56,310,184,510.60 | 45,342,897,318.53 | 24.19% | 35,288,554,748.72 |
Whether the lower of the net profit before and after deduction of non-recurring gain or loss in the past three accounting years has beennegative and the most recent annual auditor’s report indicates that the Company’s ability to continue as a going concern is uncertain?
□Yes ?No
Whether the lower of the net profit before and after deduction of non-recurring gain or loss is negative?
□Yes ?No
VII. Differences in accounting data arising from adoption of Chinese and foreign accountingstandards concurrently
1. Differences in net profit and net assets disclosed in the financial statements prepared according to theinternational accounting standards and the Chinese accounting standards
□Applicable ?N/A
There was no difference in net profit and net assets disclosed in the financial statements for the reporting period prepared according tothe international accounting standards and the Chinese accounting standards.
2. Differences in net profit and net assets disclosed in the financial statements prepared according to theforeign accounting standards and the Chinese accounting standards
□Applicable ?N/A
There was no difference in net profit and net assets disclosed in the financial statements for the reporting period prepared according tothe foreign accounting standards and the Chinese accounting standards.
VIII. Main quarterly financial indicators
In RMB
| First quarter | Second quarter | Third quarter | Fourth quarter | ||
| Operating income | 49,942,325,179.17 | 48,028,855,731.10 | 57,903,635,250.06 | 76,030,643,669.50 | |
| Net profit attributable to shareholders of the listed company | 2,017,931,635.56 | 2,337,794,295.99 | 3,018,448,573.21 | 3,578,482,197.40 | |
| Net profit attributable to shareholders of the listed company after deduction of non-recurring profit or loss | 1,771,547,570.19 | 2,382,825,838.93 | 2,878,274,332.09 | 3,152,905,812.78 | |
| Net cash flow from operating activities | 3,612,281,990.23 | 5,201,747,161.89 | -1,591,995,327.88 | 20,383,026,586.92 | |
Whether there’s any significant difference between the financial indicators set forth above or aggregate amounts thereof and thecorresponding financial indicators contained in any quarterly or semi-annual report already disclosed?
□Yes ?No
IX. Items and amounts of non-recurring gains or losses
? Applicable □ N/A
In RMB
| Item | 2023 | 2022 | 2021 | Remark | |
| Gain or loss on disposal of non-current assets (including allowance for impairment of assets that has been written off) | 106,350,953.11 | 40,397,780.40 | -57,241,855.39 | ||
| Government grants recognized in profit or loss (excluding government grants that are closely related to the business of the Company, in accordance with national policy requirements, enjoyed according to specific criteria, and having a continuous impact on the Company’s profit or loss) | 791,098,788.52 | 602,294,263.90 | 853,542,165.37 | ||
| Fair value changes in financial assets and financial liabilities held by non-financial enterprises and gains or losses from the disposal of financial assets and financial liabilities, except for effective hedging transactions related to the Company's ordinary operating activities | 488,375,997.34 | 543,762,585.57 | 602,993,325.33 | ||
| Gain or loss on assets under entrusted investment or management | 189,969,851.82 | 50,525,057.66 | 95,298,693.93 | ||
| Interest in the fair value of the acquirees’ identifiable net assets at the date of acquisition in excess of the investment cost of the relevant subsidiaries, associates and joint ventures | 16,559,223.33 | ||||
| Gain or loss on assets under entrusted investment or management | 41,640,366.02 | 11,040,674.64 | -12,600,634.71 | ||
| Other non-operating income and expenses | -601,026,495.49 | -377,143,056.77 | -170,939,666.46 | ||
| Less: Effect of income tax | 158,749,222.86 | 100,226,804.81 | 211,043,425.20 | ||
| Effect of minority interest (after tax) | 90,557,090.29 | 49,598,596.90 | 61,644,659.76 | ||
| Total | 767,103,148.17 | 721,051,903.69 | 1,054,923,166.44 | -- | |
Other items of gain or loss within the meaning of non-recurring gains or losses:
?Applicable □N/AMainly for investment income recognized for advance termination of financial assets.If the Company classifies any item of non-recurring gain or loss defined by or listed in the Explanatory Announcement No. 1 onInformation Disclosure for Companies Publicly Offering Securities - Non-recurring Gain or Loss as recurring gain or loss, pleaseexplain the reason.
□Applicable ?N/A
We have not classified any item of non-recurring gain or loss defined by or listed in the Explanatory Announcement No. 1 onInformation Disclosure for Companies Publicly Offering Securities - Non-recurring Gain or Loss as recurring gain or loss in thereporting period.
Section III Management’s Discussion and AnalysisI. Situations of our industry during the reporting periodDuring the reporting period, we are engaged in the research and development (R&D), manufacturing and saleof products in the fields of consumer electronics, communication and data center, automotive electronics andhealthcare, among others. Our products and businesses are diversified and vertically integrated, and covercomponents, modules and system assembly.(I) Consumer electronicsSince 2023, despite the impact of factors such as the global economic downturn and geopolitics, the consumerelectronics industry has been relatively sluggish overall. However, with the release of a series of new products bymajor terminal brands in the second half of the year and the accelerated application of new technologies, terminaldemand has shown signs of recovery, and the industry chain has transitioned from actively destocking to passivelydestocking. According to the "China Wearable Device Market Quarterly Tracking Report" released by the globallyrenowned data research firm IDC, the shipment volume of wearable devices in China in the third quarter of 2023was 34.7 million units, a year-on-year increase of 7.5%. Among them, the shipment volume of smartwatches was
11.4 million units, a year-on-year increase of 5.5%, and the shipment volume of TWS earphones was 15.1 millionunits, a year-on-year increase of 10.6%. A research report from Canalys, a market research institution, pointed outthat in the fourth quarter of 2023, global smartphone shipments increased by 8% year-on-year, reaching 319 millionunits, ending nine consecutive quarters of sluggishness. This indicates that the overall market is entering a stablerecovery phase. Meanwhile, technological innovation and application are important factors driving the continuedgrowth of the consumer electronics industry. With the continuous emergence of emerging technologies such as AI(Artificial Intelligence) and XR (Extended Reality), new development momentum has been brought to the consumerelectronics industry, especially the popularization and application of AI technology in smartphones, personalcomputers, wearable electronic products, and other fields in the future, expanding the industry's growth space.(II) Communication and data centerIn 2023, the telecommunications industry welcomed new development opportunities in the wave of globaldigitization transformation. Significant growth trends were observed in areas such as copper connections, opticalconnections, heat dissipation modules, servers, and communication radio frequency (RF), all of which becameimportant drivers for industry development.Copper connection products have consistently played a crucial role in high-speed interconnection products indata centers, particularly in short-distance transmission scenarios within servers, where copper connections offersignificant advantages in heat dissipation efficiency, signal transmission, and cost-effectiveness. Thus, copperinterconnection remains the most cost-effective solution in many current and future applications. According to a
report on high-speed cables, LPO, and CPO published by the market research firm LightCounting, the market sizeof high-speed cables is expected to grow exponentially in the next five years. With breakthrough opticaltechnologies being introduced and developed, optical connection products enable networks to achieve higherbandwidth and longer transmission distances, with the market size expanding as data centers transition to highercomputational power in the future. LightCounting predicts that the global optical module market will experience acompound annual growth rate of 11% over the next five years (2024-2028).As computational power technologies advance rapidly, the demand and requirements for heat dissipationtechnology at terminals also increase accordingly. Liquid cooling technology is gradually becoming a new solutionfor data center cooling, especially cold plate and immersion liquid cooling technologies, which significantlyimprove heat dissipation efficiency by efficiently exchanging heat with servers through liquid. In the future, as thedemand for efficient and environmentally friendly cooling solutions in data centers increases, the application ofliquid cooling technology will further expand.
Servers, as the core carriers of computational power, are experiencing a sharp growth trend in market demandas AI technologies are increasingly applied. According to data from TrendForce, AI server shipments reached 1.2million units in 2023, accounting for nearly 9% of total server shipments, with a year-on-year growth rate of 38.4%.In the future, the development of AI applications such as large language models will further drive the overall demandfor servers.In terms of communication radio frequency, major economies around the world are increasing investment innetwork infrastructure construction, with many countries accelerating the layout of computational powerinfrastructure. According to the "World Internet Development Report 2023" blue book, the United States and Chinastill lead in internet development, while countries such as Singapore, the Netherlands, South Korea, Finland, andSweden rank relatively high. European countries generally have strong internet development capabilities, whileCentral Asia and Africa still have considerable room for improvement in internet development. Therefore, the basestation RF industry is expected to show strong growth momentum in the coming years.(III) Automotive electronicsIn 2023, the Chinese new energy vehicle (NEV) market continued its strong growth momentum, bothproduction and sales volumes, as well as market penetration rate, have achieved significant improvements.According to statistics from the China Association of Automobile Manufacturers, China's total automobile salesreached 30.09 million units in 2023, a year-on-year increase of 12%, marking a growth rate surpassing 10% for thefirst time in six years. Among them, the production and sales volumes of NEVs in China reached 9.587 million unitsand 9.495 million units respectively, with year-on-year increases of 35.8% and 37.9%, demonstrating the strongmomentum of NEVs in the Chinese market. Additionally, thanks to continuous efforts by Chinese automakers inproduct quality, technological innovation, brand building, and strong support from national policies, China's totalautomobile exports reached 4.91 million units in 2023, a year-on-year increase of 57.9%. Among them, NEV exports
reached 1.203 million units, a year-on-year increase of 77.6%.NEVs represent an important direction for the transformation and upgrading of China's automobile industry.With the continuous improvement of electrification technology and the gradual reduction of manufacturing costsfor vehicles, NEVs have received strong support from national policies and high recognition from the market inrecent years, significantly enhancing their market competitiveness.In terms of smart cabins, with the emergence of more user-friendly and intelligent designs, including featuressuch as high-definition touch screens, voice interaction systems, and personalized settings, the driving and ridingexperience has been greatly enhanced. Through artificial intelligence technology, smart cabins can automaticallyadjust seat positions, air conditioning temperatures, and even detect the driver's fatigue status through facialrecognition technology, issuing timely reminders. Furthermore, with the popularization of 5G technology, theconnection between vehicles and external information has become closer. Smart cabins can receive and processvarious information from the cloud in real-time, providing drivers with richer and more convenient services.In terms of autonomous driving, many current models are equipped with Level 2 or even higher-levelautonomous driving systems, capable of achieving partial autonomous driving functions on highways, urban roads,and other environments, such as automatic following, lane changing, and parking. These systems collectsurrounding environmental information quickly through advanced millimeter-wave radar, cameras, LiDAR, andother high-precision sensors, combined with advanced algorithms and big data analysis, to achieve precise controlof vehicle driving status. To ensure safety, autonomous driving systems are also equipped with multiple safetymonitoring mechanisms to deal with possible emergencies.
In this context, the global automotive market has reached a new breakthrough.(IV) Our position in the industryDuring the reporting period, the Company was honored with titles such as "Fortune Global 500", "Top 500Chinese Private Enterprises", "Top 500 Chinese Manufacturing Private Enterprises", "Top 100 Private Enterprisesin Guangdong Province", "Top 100 Manufacturing Private Enterprises in Guangdong Province", and ranked firstamong the backbone enterprises in the Chinese electronic components industry in 2023.
II. Our main business during the reporting period
As a leading enterprise in the precision manufacturing field, the company is always dedicated to focusing onindustries such as consumer electronics, automotive, and telecommunications. With keen insights into industrytrends and a profound understanding of customer needs, the company has continuously driven product innovation,technological breakthroughs and process optimization, and continuously created values for customers acting as a"middleman", earning high praise and long-term trust from top global clients, and laying a solid foundation for thecompany's high-quality growth.
The company's products mainly cover areas such as consumer electronics, automotive, telecommunications,
industrial, and medical industries. It is committed to providing customers with one-stop multi-category corecomponents, modules, and system-level products, including:
(1) Consumer Electronics Business
| 消费电子 Consumer electronics | 室内应用场景 Indoor application scenarios | ||
| 办公室应用场景案例 Office application scenarios | |||
| 智能显示器 Smart display | TV盒子 TV box | 会议系统 Conference system | |
| MR | 智能音箱 Smart speaker | 转换坞Conversion dock | |
| 控制器 Controller | 平板电脑 Tablet | 智能手写笔 Smart stylus | |
| 智能手机 Smartphone | 笔记本电脑 Laptop | 蓝牙鼠标 Bluetooth mouse | |
| 摄像头 Camera | 无线充电 Wireless charging | 蓝牙键盘 Bluetooth keyboard | |
| 家庭应用场景案例 Home application scenarios | |||
| 吸尘器 Vacuum cleaner | 扫地机器人 Robotic vacuum cleaner | 游戏手柄 Game controller | |
| 智能转接头 Smart adapter | 充电宝 Power bank | 电子烟 E-cigarette | |
| 智能插座 Smart socket | 移动电源 Portable charger | 路由器 Router | |
| 智能锁 Smart lock | 智能音箱 Smart speaker | 电子书 E-reader | |
| 美容仪 Beauty device | 追踪器 Tracker | VR | |
| 消费电子 Consumer electronics | 户外应用场景 Outdoor application scenarios |
| 1、户外电源 Outdoor power source | 7、AR眼镜 AR glasses |
| 2、平衡车 Balance car | 8、骨传导耳机 Bone conduction headphone |
| 3、电动车 Electric scooter | 9、蓝牙耳机 Bluetooth headphone |
| 4、智能车锁 Smart lock | 10、智能指环 Smart ring |
| 5、电动车充电器 Electric vehicle charger | 11、智能手环 Smart wristband |
| 6、智能头盔 Smart helmet | 12、智能手表 Smart watch |
(2) Communication and Data Center Business
| 通讯 Communication | 无线基站应用场景 Wireless base station application scenarios | ||
| 无线基站室外部分（天线、塔放、射频拉远单元等）Outdoor components of base station (antennas, tower amplifiers, remote radio units, etc.) | |||
| 1、基站天线 Base station antenna | 2、塔放/合路器 Tower amplifier/combiner | ||
| 3、射频拉远单元 Remote ratio unit | 4、直放站 Repeater | ||
| 5、AAU | 6、RRU | ||
| 无线基站室内部分（（室分天线、室内线端、电源系统） Indoor components of wireless base station (Distributed antenna, indoor cabling, power supply system) | |||
| 7、室分天线 Distributed antenna | 8CPE | 9、电源系统 power supply system | |
| 企业 Enterprise | 数据中心应用场景 Date center application scenarios | ||
| 电连接（（连接器及连接器模组，线缆及线缆模组） Electrical connectivity (connectors and connector modules, cables and cable modules) | |||
| 1、ACC/DAC | 2、SSIO | 8、挂耳 Earhook | |
| 3、HSIO | 7、线缆模组 Cable module | ||
| 光连接（AOC、光模块、光跳线）Optical connectivity (AOC, optical modules, optical patch cords) | |||
| 4、AOC | 5、Transceiver | 6、光跳线 Optical patch cords | |
| 热管理（（散热器、风扇、液冷板及温控） Thermal management (heat sinks, fans, liquid cooling plates, and temperature control) | |||
| 11、散热器 Heat sink | 10、风扇 Fans | ||
| 9、水冷板 Liquid cooling plates | 12、温控解决方案 Temperature control solution | ||
| 电源模块与电源系统（服务器电源模块、电源柜）Power module and power system (server power module, power cabinet) | |||
| 13、服务器电源模块 Server power module | 14、电源系统 Power supply system | ||
(3) Automotive Business
| 汽车 Vehicle | 应用场景 Application scenarios | ||||||
| 1、电气化-低压/高压线束 Electrification - Low-voltage/High-voltage wiring harness | |||||||
| 车内线束 Vehicle interior wiring harness | 特种线束 Specialized wiring harness | 充电枪 Charging gun | |||||
| 2、连接器-高压/低压/高速连接器 Connectors - High-voltage/Low-voltage/High-speed connectors | |||||||
| 高/低压连接器 High/Low voltage connectors | BMS Busbar | 高速连接器 High-speed connectors | |||||
| 3、智能座舱 Smart cockpit | |||||||
| 驾驶员/乘客监控系统 Driver/Passenger monitoring system | 信息娱乐系统 Infotainment system | AR-HUD | |||||
| 4、车身控制/智能进入 Body control/Smart entry | |||||||
| ZCU | ECU | ETC | 传感器 Sensor | ||||
| UWB/NFC/BLE key | 触摸开关 Touch switch | ||||||
| 5、电源管理 Power management | |||||||
| CCS | PDU | BDU | 逆变器 Inverter | WPC | 整车无线充电 Vehicle wireless charging | ||
| 6、磁性器件模组-电厂&滤波器 Magnetic device module - inductors & filters | |||||||
| Choke | 电感 Inductor | EMI滤波器 EMI filter | |||||
(4) Medical Business
| 医疗 Medical | 应用场景 Application scenarios | ||
| 1、监护类 Monitoring | |||
| 血氧线 Oxygen saturation Cable | 心电线 ECG lead | 温度线 Temperature probe cable | |
| 2、手术类 Surgery | |||
| 吻合器线 Cable used for anastomosis | 电刀线 Cable for electric knife | 吻合器连接器 Anastomosis connector | |
| 3、除颤类 Defibrillation | |||
| 体外除颤线 External defibrillation Cable | 体腔除颤线 Body-controlled defibrillation Cable | 除颤器零件 Defibrillator components | |
| 4、设备内部类 Internal equipment | 5、影像类（超声） Imaging (ultrasound) | 6、影像类（MR） Imaging (MR) | |
| 各类医疗设备机内线 Various types of medical device internal wiring | 超声换能器线 Ultrasound transducer cable | 磁共振成像线圈线缆 MRI imaging coil cable | |
III. Analysis of core competencies
(I) Smart Manufacturing: Deep Integration of Digitalization and AutomationGiven the continuous deep integration of the next generation of information technology and manufacturing, wehave always insisted on intelligent manufacturing as the underlying logic, and devoted great energy to promotingautomated processes and digital applications to empower the process development, personnel organization andproduction modes.
For the digital applications, we have introduced systems such as SAP, PLM, MES and WMS to further optimizethe management processes and production processes throughout the entire lifecycle from design, R&D, productionto marketing, procurement, warehousing and after sales, conduct precise, scientific and intelligent customer-orientedmanagement, and constantly strive to improve our production efficiency and product yield.In terms of automated processes, we actively leverage the significant advantages of machine vision in precision,speed, repeatability, reliability, and information aggregation to achieve precise positioning and error detection ofprecision electronic components in process, active coordination and positioning of parts and fixtures in assembly,and machine AI-assisted inspection of component product appearance. By relying on real-time feedback ofmeasurement data from machine vision, we enhance the deep self-learning ability of automated equipment andcreate a closed-loop control for automated processes.(II) Strategic Layout: Forward-looking Planning to Create a Second Growth CurveUnder the guidance of our “three five-year” strategy, we always grasp the market dynamics, respond to industrygrowth trend, take coordinated development as our fundamental purpose, make forward-looking layouts around themain business, and are dedicated to providing the market with a perfect and integrated solution of industrial chains.On the one hand, capitalizing on our comprehensive capabilities deeply accumulated and continuously optimizedin the consumer electronics field, we have built “process + underlying technology” structure to continuously explorethe mass market of new and old products for core customers and other consumer electronics customers. In addition,we conduct horizontal expansion to empower automotive and communication sectors, which highlights ourdifferentiated advantages in relevant sectors, and effectively supports the implementation of commercial plans,thereby achieving our diversified product layout. On the other hand, with many years of efforts in market segments,we have proprietary key process capabilities, including design and processing of molds/jigs, bare copper wiredrawing, plastic particle molding, stamping/press forging, precision implant molding, surface treatment, SMT, SiPand system-level assembly testing. We make continuous efforts to explore product value by way of verticallyintegrating components, modules, and system-level assembly in a forward or reverse direction.In the era of the internationalization of industrial chains, our globalization layout is developing in depth. Inaddition to Guangdong, Jiangxi, Jiangsu, Zhejiang, Anhui and other provinces in China, we have established matureproduction capacity bases and R&D centers in such countries and regions as Vietnam, India, Mexico and German.While serving customers nearby and enhancing product cost advantages, these bases and centers have gatheredoverseas sophisticated talents and offered strong support for the team to explore high-end markets and provide high-quality services to customers.(III) Research and Development Innovation: Driving Technological Innovation and Product IterationSince inception, our company has consistently regarded research and development (R&D) innovation as acrucial engine for enterprise development. We has increased R&D investment, continuously promoted theinnovation of traditional manufacturing processes, enhanced the level of automation in production, and modularized
various precision manufacturing processes. The company attaches great importance to the research and developmentof underlying materials and process technology. Our in-house R&D team collaborates closely with top global clientsto establish multiple R&D laboratories, enabling the rapid grasp of cutting-edge technological trends. Leveragingits deep understanding of precision manufacturing practices and comprehensive digitization and intelligence, thecompany achieves joint innovation in new materials, processes, and techniques, accelerating the commercializationof its technological innovations.In terms of R&D investment, the company adopts a targeted strategy, dividing R&D resources into two mainareas: investment in cutting-edge technology and investment in product iteration. Approximately 30% of the overallR&D expenditure is allocated to investment in cutting-edge technology, focusing on innovative research anddevelopment in areas such as underlying materials, processes, and techniques. This investment aims to support thecompany's medium- to long-term product and business planning, ensuring that its products maintain a leadingposition in the global industry over the next 20 years. Investment in product iteration focuses on the developmentof process innovation for product iteration and upgrade, from the conceptualization of new products to new productintroduction (NPI), verification, and mass production. This approach enables the company to not only maintain thecompetitiveness of existing products but also seize opportunities in emerging technologies and markets, laying asolid foundation for the company's long-term development and the cultivation of new quality productivity.Over the years, the company's R&D investment and achievements have shown a steady upward trend. In termsof R&D investment, the company has cumulatively invested RMB 23.278 billion in R&D in the past three years,including RMB 8.189 billion during the reporting period. In terms of R&D achievements, the company added 1,527new patents in 2023, bringing its total to 6,202 patents.(IV) Green Development: Achieving Sustainable Development and Environmental ProtectionThe company is committed to integrating the concept of sustainable development into its core business strategy,seizing the transformative trends of sustainable development in the new era. We focus on addressing the challengesand opportunities of climate change, safeguarding employee rights, implementing responsible supply chainmanagement, and upholding business ethics. Internally, we continuously monitor the latest trends in sustainabledevelopment, learn from advanced experiences within the industry, and strive to enhance our level of sustainabledevelopment management. Through ongoing internal training and process optimization, we ensure that the conceptof sustainable development is understood and supported internally and efficiently implemented in daily operations.Externally, we have established regular communication mechanisms to maintain close interaction with variousstakeholders, promptly understand and respond to their needs and expectations. Through open and transparentcommunication, we enhance mutual understanding and trust with investors, customers, and suppliers, jointlypromoting the company's continuous development towards a sustainable future.Based on the decarbonization goals of the SBTi 1.5°C pathway, the company steadily promotes carbonfootprinting, emission reduction, and carbon neutrality action plans according to the climate action planning
roadmap. We regularly review and adjust climate change strategies based on actual business operations. Throughmeasures such as rooftop photovoltaics, direct purchases of green electricity, investments in green energy funds,and procurement of green certificates, we increase the proportion of clean energy use and reduce CO2 emissionsfrom electricity consumption.During the reporting period, the company's proportion of clean energy use increased to 63%, exceeding thetarget of achieving a clean energy use proportion of 50% by 2025. Furthermore, through energy-savingtransformations, we significantly reduced energy consumption and greenhouse gas emissions, resulting in a totalreduction of 1,100,057.45 tCO2e in greenhouse gas emissions. As of the end of the reporting period, a total of 54factories have obtained ISO 14001 environmental management system certification, 10 factories have obtained ISO50001 energy management system certification, and 14 factories have been recognized as national or provincial-level green factories. Additionally, 14 subsidiaries have achieved UL 2799 waste landfill-free certification at theplatinum level.
(V) Talent Strategy: Building an Innovative and Development-Oriented Talent TeamTalent is the foundation of innovation and the driving force behind nurturing new quality productivity.Innovation is essentially driven by talent. Especially, "highly skilled" original research and development talents incraft, materials, and technology, as well as management talents with rich practical experience and industry insight,are crucial elements in propelling Luxshare towards the high end of the industry and value chain. Since itsestablishment, Luxshare has always adhered to the solid foundation of talent resources, relying on talent fordevelopment and growth. Currently, Luxshare boasts a research and development team of nearly 20,000 people.This passionate and creative team brings together elites from different fields, countries, and regions, serving as thebackbone of Luxshare's various technological breakthroughs and innovative achievements. Regarding talentselection, cultivation, and retention, the company adheres to the principle of "achieving success for everyone intheir careers". The rapid development of the company has provided many growth platforms for employees andcadres. New products, new businesses, and new opportunities drive employees to demand higher levels andstandards from themselves, fully inspiring team potential, sense of mission, and sense of honor. Furthermore, thecompany incentivizes everyone financially by providing competitive compensation and benefits, as well as equityincentive plans, significantly enhancing the sense of achievement for employees and cadres and effectivelyimproving their quality of life. A sound and effective talent incentive mechanism strongly promotes the company'stalent "attraction, development, and retention", laying the foundation for the exploration and sustainabledevelopment of new fields and new businesses while ensuring an abundant talent pool for traditional advantageousareas. Lastly, Luxshare aims to emotionally connect with each individual by strengthening employee care, activelylistening to the voices of employees and cadres at all levels, and genuinely caring about their personal needs andfamily happiness. Through this emotional interaction, the company builds and enhances employees' sense ofbelonging and identification with the company.
IV. Analysis of main business
1. Overview
(1) Consumer electronics business
In 2023, the company remained steadfast in its customer-oriented approach, leveraging its advantages in verticalintegration and cost control. As a result, its operational performance saw steady improvement during the reportingperiod. With the release of a series of new products by major terminal brands and the accelerated application of newtechnologies in the latter half of the year, the consumer electronics market showed clear signs of recovery,particularly in major categories such as smartphones, smart wearable devices, and personal computers, whichgradually reversed their sluggish state. In areas such as smart mobile terminals, health wearables, acoustic wearables,smart offices, and smart homes, the company achieved breakthroughs in both quantity and quality during thereporting period. This success was attributed to its solid product development capabilities, leading automationprocess development, efficient lean manufacturing capabilities, and the sincere cooperation of its team members.Products were delivered with high quality as scheduled, earning high praise and recognition from core customers.Furthermore, during the reporting period, the company achieved substantial breakthroughs in enhancing its corecapabilities and expanding its business scale through vertical integration and horizontal mergers and acquisitions.Leveraging its deep experience and technological reserves in areas such as Surface Mount Technology (SMT) andSystem in Package (SiP), the company acquired all assets of Qorvo, a leading RF front-end chip manufacturer inthe United States, located in Beijing and Dezhou, Shandong Province. This acquisition further nurtured thecompany's precision manufacturing capabilities in RF front-end modules, strengthened its vertical integrationservice advantages, and propelled the company to achieve a leapfrog development from system packaging to modulepackaging. Moreover, through joint ventures and high-quality mergers and acquisitions, the company expanded itsexisting business scale, achieving better resource allocation, higher production efficiency, and stronger marketcompetitiveness. Leveraging efficient collaborative advantages with its joint venture partners upstream anddownstream in the industry chain, the company created more room for incremental development in core componentsand precision module businesses in the consumer electronics sector. This strategy also facilitated the expansion of"old customers with new products", creating more possibilities for growth.
(2) Communication and Data Center Business
Since entering the telecommunications and data center industries, the company has continuously deepened itsexpertise in electrical connections, optical connections, air-cooled/liquid-cooled cooling, power management, RF,and other products. With "application generation, development generation, pre-research generation" as the coreproduct strategy, and technological innovation as a crucial driving force, the company has built its uniquecapabilities sandbox in various technical fields. Through extensive patent layouts and deep involvement in industrystandard formulation, the company has gradually established strong technological barriers and market
competitiveness. Especially in the field of high-speed interconnection in data centers, the company has cooperatedproactively with leading chip manufacturers to jointly develop next-generation high-speed connection standardssuch as 800G and 1.6T for global mainstream data centers and cloud service providers. Some products in specificsegments, such as external high-speed copper cables, cables and connector components, backplane connectors andbackplane cables, HSIO, SSIO, etc., have won recognition from customers with leading technology, cost advantages,and excellent product performance. Based on this foundation, the company has comprehensively promoted furthercooperation with leading customers in optical connections, cooling, power modules, and other products. During thereporting period, the company has made breakthrough progress under this strategic guidance.
(3) Auto Business
In 2023, leveraging our robust smart manufacturing platform and drawing on our years of experience in rapiditeration, cost control, global supply chain advantages, and research and development innovation in the consumerelectronics and telecommunications sectors, we rapidly empowered ourselves to enter the automotive industry witha range of products. With a deep understanding of automotive-grade product safety and reliability, we quicklyenabled our offerings to meet the requirements of the automotive industry. Building on deep strategic partnershipswith leading domestic and international OEMs and automotive brands, we successfully opened up vast market spacefor our automotive-related products, including high/low-voltage wiring harnesses, high-speed wiring harnesses,charging guns, automotive connectors, intelligent cockpit domain controllers, LCD instrument panels, three-in-onemotor systems, AR HUD, DMS, and more. During the reporting period, each product line experienced strong marketdemand, resulting in high-speed growth in performance.
2. Revenue and cost
(1) Components of operating revenue
In RMB
| 2023 | 2022 | Y/Y % change | |||
| Amount | % of operating revenue | Amount | % of operating revenue | ||
| Total operating revenue | 231,905,459,829.83 | 100% | 214,028,394,291.44 | 100% | 8.35% |
| By segment | |||||
| Computer interconnect products and precision components | 7,492,410,071.11 | 3.23% | 11,279,925,261.07 | 5.27% | -33.58% |
| Automotive interconnect products and precision components | 9,252,368,552.09 | 3.99% | 6,149,359,869.13 | 2.87% | 50.46% |
| Communication interconnect products and precision components | 14,538,256,002.45 | 6.27% | 12,834,368,214.51 | 6.00% | 13.28% |
| Consumer electronics | 197,183,318,387.02 | 85.03% | 179,666,857,997.07 | 83.95% | 9.75% |
| Other connectors and other business | 3,439,106,817.16 | 1.48% | 4,097,882,949.66 | 1.91% | -16.08% |
By product
| By product | |||||
| Computer interconnect products and precision components | 7,492,410,071.11 | 3.23% | 11,279,925,261.07 | 5.27% | -33.58% |
| Automotive interconnect products and precision components | 9,252,368,552.09 | 3.99% | 6,149,359,869.13 | 2.87% | 50.46% |
| Communication interconnect products and precision components | 14,538,256,002.45 | 6.27% | 12,834,368,214.51 | 6.00% | 13.28% |
| Consumer electronics | 197,183,318,387.02 | 85.03% | 179,666,857,997.07 | 83.95% | 9.75% |
| Other connectors and other business | 3,439,106,817.16 | 1.48% | 4,097,882,949.66 | 1.91% | -16.08% |
| By region | |||||
| Domestic market | 25,149,439,369.07 | 10.84% | 20,224,747,347.20 | 9.45% | 24.35% |
| Overseas market | 206,756,020,460.76 | 89.16% | 193,803,646,944.24 | 90.55% | 6.68% |
| By sales mode | |||||
| Direct sales | 231,905,459,829.83 | 100.00% | 214,028,394,291.44 | 100.00% | 8.35% |
(2) Segments, products, regions or sales models representing more than 10% of operating revenue or profit?Applicable □N/A
In RMB
| Operating income | Operating cost | Gross margin | Y/Y % Change in operating revenue | Y/Y % Change in operating cost | Y/Y % Change in gross margin | |
| By segment | ||||||
| Consumer electronics | 197,183,318,387.02 | 176,289,664,722.15 | 10.60% | 9.75% | 10.83% | -0.87% |
| By product | ||||||
| Consumer electronics | 197,183,318,387.02 | 176,289,664,722.15 | 10.60% | 9.75% | 10.83% | -0.87% |
| By region | ||||||
| Domestic sales | 25,149,439,369.07 | 20,949,932,693.12 | 16.70% | 24.35% | 23.49% | 0.58% |
| Export sales | 206,756,020,460.76 | 184,091,367,765.47 | 10.96% | 6.68% | 7.68% | -0.82% |
| By sales mode | ||||||
| Direct sales | 231,905,459,829.83 | 205,041,300,458.59 | 11.58% | 8.35% | 9.11% | -0.61% |
In case of any adjustment to the statistic scale for main business data, the main business data of the most recent reporting period asadjusted according to the statistic scale applied at the end of the current reporting period
□Applicable ?N/A
(3) Whether the Company’s revenue from sale of tangible goods is higher than the revenue from labor service??Yes □No
| Segment | Item | Unit | 2023 | 2022 | Y/Y % change |
Computerinterconnectproducts andprecisioncomponents
| Computer interconnect products and precision components | Sales volume | KPCS | 339,436 | 651,927 | -47.93% |
| Output | KPCS | 381,866 | 691,581 | -44.78% | |
| Inventories | KPCS | 42,430 | 39,654 | 7.00% | |
| Automotive interconnect products and precision components | Sales volume | 1,000 sets | 289,181 | 323,444 | -10.59% |
| Output | 1,000 sets | 315,470 | 352,333 | -10.46% | |
| Inventories | 1,000 sets | 26,289 | 28,889 | -9.00% | |
| Communication interconnect products and precision components | Sales volume | KPCS | 273,342 | 484,370 | -43.57% |
| Output | KPCS | 287,729 | 522,561 | -44.94% | |
| Inventories | KPCS | 14,386 | 38,191 | -62.33% | |
| Consumer electronics | Sales volume | KPCS | 3,985,052 | 3,727,774 | 6.90% |
| Output | KPCS | 4,336,890 | 4,233,740 | 2.44% | |
| Inventories | KPCS | 351,838 | 505,965 | -30.46% | |
| Other connectors and other business | Sales volume | KPCS | 358,699 | 385,129 | -6.86% |
| Output | KPCS | 386,291 | 416,004 | -7.14% | |
| Inventories | KPCS | 27,592 | 30,874 | -10.63% | |
Analysis of changes in the relevant data over 30% year on year?Applicable □N/A
1. The decrease in computer interconnect quantity is due to both the decline in shipment volume itself andhigher unit prices resulting from internal vertical integration;
2. Revenue from communication interconnects increased, but production and shipment volumes decreased,primarily due to changes in product structure and higher integration levels in shipments;
3. The decrease in end-of-period inventory for consumer electronics is attributed to the realization of sales fromstrategic stocking at the end of 2022, which was carried out for sales in 2023;
(4) Performance of material sales contracts and material purchase contracts by the Company as of the end of the reportingperiod
□Applicable ?N/A
(5) Components of operating cost
SegmentSegment
In RMB
| Segment | Item | 2023 | 2022 | Y/Y % |
Amount
| Amount | % of operating cost | Amount | % of operating cost | change | ||
| Computer interconnect products and precision components | Cost of sales | 5,936,846,692.39 | 2.90% | 8,991,105,125.09 | 4.78% | -33.97% |
| Automotive interconnect products and precision components | Cost of sales | 7,781,748,026.29 | 3.80% | 5,159,940,778.89 | 2.75% | 50.81% |
| Communication interconnect products and precision components | Cost of sales | 12,241,553,918.40 | 5.97% | 11,405,956,391.67 | 6.07% | 7.33% |
| Consumer electronics | Cost of sales | 176,289,664,722.15 | 85.98% | 159,057,762,186.53 | 84.64% | 10.83% |
| Other connectors and other business | Cost of sales | 2,791,487,099.36 | 1.36% | 3,314,115,803.20 | 1.76% | -15.77% |
Remark
None.
(6) Change in the scope of consolidation during the reporting period
?Yes □NoIn 2023, the establishment of new subsidiary companies by the company led to changes in the scope of consolidation as follows:
| Company Name | Establishment Date |
| Luxshare Precision Industry (Huzhou), Ltd. | 2023/1/1 |
| TIME Interconnect Technology Limited | 2023/1/10 |
| Kunshan TIME Interconnect Technology Limited | 2023/1/19 |
| Luxshare Technologies International, Inc. | 2023/3/24 |
| Linkz Cables Mexico S.DE R.L. DE C.W. | 2023/4/14 |
| ICT Legend S. DE R.L. DE C.V. | 2023/5/8 |
| Luxshare Precision Industry (Shantou), Co., Ltd. | 2023/6/19 |
| Luxshare Precision Industry (Anhui), Co., Ltd. | 2023/7/21 |
| Luxshare Technologies Mexico S. de. R.L.de c.v. | 2023/8/14 |
| Luxshare Technologies (Vietnam)Co., ltd | 2023/8/29 |
| Dongguan Luxshare Holdings Co., Ltd. | 2023/9/5 |
| Luxcase Precision Technology (Vietnam)Co., Ltd. | 2023/11/10 |
In 2023, the deregistration of subsidiary companies by the company resulted in changes in the scope ofconsolidation as follows:
| Company Name | Establishment Date |
| Kunshan Luxshare Precision Mould Co., Ltd. | 2023/2/6 |
| Henan Leader Precision Industry Co., Ltd. | 2023/6/21 |
Other changes in the scope of consolidation include the absorption merger of Taiwan Qiao Investment Co., Ltd.by SpeedTech Co., Ltd. SpeedTech Co., Ltd. assumed its debts and liabilities, while Taiqiao Investment Co., Ltd.was deregistered.
(7) Material changes or adjustments in respect of business, products or services of the Company during the reporting period
□Applicable ?N/A
(8) Major customers and suppliers
Major customers of the Company:
| Aggregate sales revenue from top 5 customers (RMB) | 191,203,704,609.15 |
| Proportion of aggregate sales revenue from top 5 customers to annual sales revenue | 82.44% |
| Proportion of aggregate sales revenue from related parties among top 5 customers to annual sales revenue | 0.00% |
Particulars of top 5 customers:
| No. | Name of customer | Sales revenue (RMB) | % of annual sales revenue |
| 1 | Customer 1 | 174,489,981,736.18 | 75.24% |
| 2 | Customer 2 | 6,031,671,165.64 | 2.60% |
| 3 | Customer 3 | 4,877,559,242.24 | 2.10% |
| 4 | Customer 4 | 3,219,651,965.78 | 1.39% |
| 5 | Customer 5 | 2,584,840,499.31 | 1.11% |
| Total | -- | 191,203,704,609.15 | 82.44% |
Other information of major customers:
□Applicable ?N/A
Major suppliers of the Company:
| Aggregate purchase amount from top 5 suppliers (RMB) | 115,275,781,375.25 |
| Proportion of aggregate purchase amount from top 5 suppliers to annual purchase cost | 65.16% |
| Proportion of aggregate purchase amount from related parties among top 5 suppliers to annual purchase cost | 0.00% |
Particulars of top 5 suppliers:
| No. | Name of supplier | Purchase amount (RMB) | % of annual purchase cost |
| 1 | Supplier 1 | 109,487,264,912.33 | 61.89% |
| 2 | Supplier 2 | 1,506,823,978.96 | 0.85% |
| 3 | Supplier 3 | 1,463,571,008.07 | 0.83% |
| 4 | Supplier 4 | 1,438,333,951.40 | 0.81% |
| 5 | Supplier 5 | 1,379,787,524.49 | 0.78% |
| Total | -- | 115,275,781,375.25 | 65.16% |
Other information of major suppliers:
□Applicable ?N/A
3. Expenses
In RMB
| 2023 | 2022 | Y/Y % change | Reason of material change | |
| Sales expenses | 889,024,421.63 | 831,398,139.60 | 6.93% | The growth in personnel compensation and benefits |
| General expenses | 5,542,856,994.26 | 5,075,668,085.35 | 9.20% | Continuing to adhere to the principle of conservatism, some of the research and development expenses not directly attributable are transferred to general and administrative expenses. This is mainly due to increases in personnel compensation and benefits, as well as increases in depreciation expenses and material consumption costs. |
| Financial expenses | 482,869,327.02 | 882,721,138.77 | -45.30% | The increase in interest income and expenses, as well as the impact of exchange rate fluctuations. |
| R&D expenses | 8,188,767,532.85 | 8,447,038,946.21 | -3.06% | Continuing to adhere to the principle of conservatism, some of the research and development expenses not directly attributable are transferred to general and administrative expenses. This is mainly due to increases in personnel compensation and benefits, as well as increases in depreciation expenses and material consumption costs. |
| Income tax expenses | 641,829,343.18 | 667,318,205.34 | -3.82% | The accelerated depreciation of fixed assets and provisions for asset impairment, along with changes in tax loss carryforwards, have led to changes in deferred income taxes. |
4. R&D investments
?Applicable □N/A
| Description of major R&D project | Purpose | Progress | Objectives | Expected effect on the future development of Company |
XC2C New EnergyBattery Pack HarnessAssemblyDevelopment Project
| XC2C New Energy Battery Pack Harness Assembly Development Project | Achieve effective connection of battery modules and accurate transmission of signals to support the development and popularization of new energy vehicles | Mass production delivered | Ensure stable power supply and signal transmission inside the battery pack through the improvement of R&D process technology for new energy battery pack wiring harnesses | Enhanced technological innovation capabilities, expanded market share |
| Development of ADAS and Autonomous Driving Domain Controllers based on TDA4VM Chip | Achieve product development based on high-computing power autonomous driving chips | Prototype in trial production | Achieve production manufacturing of data fusion intelligent driving products | Broadened smart driving product categories, enriched new energy product lines, to accumulate technology for achieving L3 assisted driving |
| Research and development of liquid cooling system for new energy vehicle charging gun | Reduce temperature at cable and connector junctions to enhance operational safety; adding overheat self-power-off function to improve charging efficiency and mitigate charging risks | Pilot testing phase | Insulation performance: 500VDC voltage, insulation resistance ≥ 100MΩ; withstand voltage performance: 2000VAC voltage, leakage current ≤ 5mA; charging gun protection level: IP55 Operating environment temperature T: -20℃≤ T ≤ 60℃; leakage, short circuit, and protection ground loss, control box protection time t: t < 100 ms; charging current: up to 500A | In response to the current development trend, develop core products for the new energy vehicle industry, increase the market share of domestically produced charging guns, promote technological advancement in the industry, with an annual demand of approximately 20 million sets and an annual output value of approximately 300 million yuan, achieving a profit and tax of over 50 million yuan |
| Research and development of NBOX based on Rockchip RK3588 chip | Obtain CCCor gaming console video data through in-car infotainment system, enhancing with 2D/3D rendering, and outputting video data to VR/AR glasses | Sample debugging in progress | Achieve full product functionality development | Broaden the classification of smart driving products and expand the business scope |
| Research and development of low-power hot-swappable optical module based on eight-channel OSFP form factor | 800G optical module, a crucial component in the communication industry, has long been dominated by major companies from Europe and America such as Coherent, Intel, Broadcom, etc., in terms of interface formulation and | Completion of optimized sample production | 1. Master independent intellectual property rights, structural design, PCB paddle card design, optomechanical design; 2. The product supports a signal rate of 53Gbd PAM4 simultaneously, downward compatible with 25.78125Gbps | 1. The company collaborates closely with core customers, enabling early understanding of customer needs, cooperating with customers for rapid research and development, and launching products to |
protocol development.After years ofdevelopment, variousinterfaces such as SFP,QSFP, DSFP, QSFP-DD, OSFP, SFP-DD,etc., have beenestablished to meetdifferent applicationscenarios. Bydeveloping this hot-swappable opticalmodule based on theeight-channel OSFPform factor, we cangrasp key technologies,major technicalpointers, developindependentintellectual propertyrights, design, andmonitor market trends
| protocol development. After years of development, various interfaces such as SFP, QSFP, DSFP, QSFP-DD, OSFP, SFP-DD, etc., have been established to meet different application scenarios. By developing this hot-swappable optical module based on the eight-channel OSFP form factor, we can grasp key technologies, major technical pointers, develop independent intellectual property rights, design, and monitor market trends | NRZ signal/26.5625GBd PAM4 signal; 3. The product supports Independent PLL function, with PAM4 and NRZ data transmission functions, which can be used for bridging and FEC truncation of PAM4/NRZ systems; 4. CDB function can update product firmware on the device, and optimize parameters remotely in unattended equipment rooms; 5. Compatible with existing optical modules, easy to switch | meet the demand for rapid updates of electronic products. The company's ability to solve problems in connector applications is a comprehensive manifestation of the company's research and development advantages. 2. The layout of complete optical transmission products allows the company to provide customers with one-stop procurement, simplifying the customer procurement process and supplier management. 3. Enter the AI market supply chain | ||
| Research and development of OSFP 224G interconnect solution | Research and develop the next-generation high-speed interconnect solution for data centers to enhance signal transmission rates | Optimized sample production completed | 1. Support IEEE802.3DJ specification; 2. Comply with OSFP MSA association standards; 3. Support single-channel 224G PAM4 rate level; 4. ESD meets contact discharge 8KV, air discharge 15KV | Through this project, the company has developed the latest generation of self-developed interfaces in servers, switches, high-performance computing, etc., enhancing the company's position in the industry and meeting widespread customer demands |
| Research and development of PCIe 6.0 CEM connector cable assembly | Develop customized products according to specific customer requirements | Development completed | Product SI testing requirements meet PCIe 6.0 | PCIe 6.0 is the future trend for connectors, and this project will become one of the important products to unlock future markets |
| Research and development of OSFP 224G connector | Collaborate with customers to develop prototypes for next-generation high-speed I/O connectors | Preliminary SI test data for samples completed, currently optimizing details | Explore the SI performance limits of 224G connectors with customers | The development of the first domestic 224G high-speed connector enhances confidence among customers and competitive advantage against top companies in the industry. |
| Research and development of connectors for liquid-cooled environments based on PCIe 6.0 transmission rates | Address the market demand for MCIO PCIe 6.0 connectors | Connector products have been sampled and are undergoing reliability testing | Compliant with SFF-TA-1016 standard, SI testing standards meet PCIe 6.0 specification requirements | 1. As a representative product of the current PCIe 6.0 standard, this project not only improves performance but also meets the |
requirements of liquidcooling technology,gaining a marketadvantage andaccumulating technicalexpertise. 2. Theproject's products haveundergonecomprehensive andrigorous testing bycustomers and havebeen successfullytrialed on new products,laying a solid technicaland market foundationfor future marketpromotion
| requirements of liquid cooling technology, gaining a market advantage and accumulating technical expertise. 2. The project's products have undergone comprehensive and rigorous testing by customers and have been successfully trialed on new products, laying a solid technical and market foundation for future market promotion | ||||
| Development of 140kW high-power fuel cell stack | Develop hydrogen fuel cell stacks suitable for use in 18-ton heavy trucks | Sample stage | The developed 140kW hydrogen fuel cell stack can be used in transportation (commercial vehicles) and energy storage fields | Enter a new field and expand into new product forms, this project serves as a pre-research project |
| Ultra-low-power 800G LPO optical transceiver module based on the eight-channel OSFP form factor | Develop LPO series products targeting customer's ultra-low power application needs, aiming to replace DSP BASED products for short-range applications | Validation has been conducted on equipment from several major customers, and preliminary test data shows good results | Achieve the research and development goal of halving power consumption compared to DSP BASED products while meeting product transmission performance. | Due to its low power consumption advantages, it holds great appeal at the client end. Currently, it primarily awaits market demand to increase. As the first team to develop LPO products, we have an early advantage in the subsequent market increment stage. Additionally, leveraging LPO products can serve as a new product introduction point at target customers |
| Research and development of efficient and environmentally friendly single-phase immersion liquid cooling technology | Through the design of a single-phase immersion liquid cooling cabinet, technical transformation of the existing liquid cooling cabinet inlet and outlet arrangement and flow channel design is conducted to solve the problem of uneven temperature distribution inside the existing liquid cooling cabinet, resulting in | From January 2023 to June 2023: This project has developed a new product, "metal product" water-cooling plate, model: 277176.417T=17AL6063-T5, and the core technical solution of this project has been applied for and authorized patent by Luxshare Thermal Technology (Huizhou) Co., Ltd. Patent name: | 1. High efficiency and energy-saving: Liquid directly contacting with server components enables fast heat transfer, saving over 95% energy. 2. Simple equipment: Supports a maximum server operating power of 8000W. 3. No ultrasound: Minimal fan noise during operation. 4. Space-saving: Enables high- | These aspects are crucial for the company's strategic layout and competitiveness in the liquid cooling field, expected to provide significant support for the company's revenue and benefits in the coming years |
high local temperaturesof some electroniccomponents, whichaffects their normaloperation and servicelife
| high local temperatures of some electronic components, which affects their normal operation and service life | Liquid Cooling Device, Patent number: ZL 2023 2 0381854.3 | density integration of servers, saving over 80% space. 5. No loss of coolant and water: Coolant and cooling water circulate within the system. | ||
| Research and development of temperature-sensitive pipeline technology for liquid cooling systems | Design a fluid-passing and temperature-sensing pipeline device to address the unreliable fixation of temperature-sensitive chips commonly used, which can lead to loosening or detachment, resulting in poor contact and inaccurate temperature monitoring, as well as high costs | 202302-202307: This project resulted in a new product, the "Metallic Product" water-cooling plate, model: 217.4*192*13.7mm. The core technical solution of this project has been applied for and authorized as a patent by Luxshare Heat Transmission Technology (Huizhou) Co., Ltd. Patent title: A fluid-passing and temperature-sensing pipeline device, Patent number: CN 219453680 U | 1. The structure is simple, facilitating self-assembly and reducing costs. The device comprises a temperature-sensing chip module and a water flow module. The water flow module includes slots for chip placement, used to fix the chip in position, ensuring a tight fit between the temperature-sensing chip and the slot of the water flow module.2. The temperature measurement effect is good, with high efficiency and rapid response. After fixation, colloids are used to isolate the chip from the air, allowing the temperature-sensing chip to only conduct temperature changes received from the water flow module, without being affected by surrounding materials or air. | This technology belongs to the critical technology in the field of temperature detection and control for liquid cooling. It holds significant importance for the company's strategic layout and enhancement of competitiveness in liquid cooling products. It is anticipated to provide important support for the company's revenue and profitability in the coming years |
| Research and development of heat exchangers with excellent heat transfer efficiency | Design a two-phase immersion cooling device for mining machines to address the poor air-cooling effect of the air-cooling module in existing two-phase immersion cooling devices, which fails to effectively dissipate heat from phase-change media | 202302-2023010: This project has led to the development of a new product, the "Metallic Product" water-cooling plate, with model number 182*18.5*313mm. Additionally, the core technical solution of this project has been applied for and authorized as a patent by Luxshare Heat Transmission Technology (Huizhou) Co., Ltd. Patent title: | 1. Excellent heat dissipation performance: Based on the size specifications of the chassis, the heat generation of the equipment, and the selection of fans, this design maximizes the arrangement of 5 fans to provide sufficient airflow, effectively removing heat in a timely manner, and meeting the heat dissipation requirements of the | This technology belongs to the critical technology in the field of liquid cooling, particularly in the realm of immersion phase-change heat dissipation. It holds significant importance for the company's strategic layout and enhancement of competitiveness in liquid cooling products. It is anticipated to provide important support for the |
Heat dissipation deviceand mining machine,Patent number: CN219592965 U
| Heat dissipation device and mining machine, Patent number: CN 219592965 U | equipment.2. Minimal loss of air pressure and airflow: Specially designed forced-flow guiding ducts with smooth transitions at bends are implemented. The design of the ducts forms a closed channel with the heat sink, reducing losses in air pressure and airflow. | company's revenue and profitability in the coming years | ||
| Research and development of centrifugal drum fan cooling technology | Design a centrifugal drum fan to address issues with existing centrifugal drum fans, including the speed field biased towards the upper side of the air outlet, hindering heat dissipation and exhaust along the path, as well as uneven speed fields, low air volume, and low air pressure | 202302-2023012: This project has resulted in the development of a new product, the "Computer Peripheral Product" heat dissipation fan, with model number 2B 12038-6000rpm. Additionally, the core technical solution of this project has been applied for and authorized as a patent by Luxshare Heat Transmission Technology (Huizhou) Co., Ltd. Patent title: Centrifugal blower, Patent number: 202322468561.1 | 1. The centrifugal blower distributes the velocity field more uniformly at the outlet. 2. The centrifugal blower provides higher airflow and air pressure, leading to superior gas flow performance and effectively enhancing its overall performance. | This technology belongs to the field of fan technology and holds significant importance for improving the performance and competitiveness of the company's fan products. It is expected to provide important support for the company's revenue and profitability in the coming years |
| Application in the research and development of heat sinks for electrical connectors. | Design a heat dissipation-enhanced electrical connector component and liquid cooling plate to address the weak heat dissipation capability of conventional air-cooled electrical connectors, thereby meeting the high-power heat dissipation demands. | 202303-202309: This project has led to the development of a new product, the "Power Electronic Component" optical module, with model number 0707-EP01-5C025. Additionally, the core technical solution of this project has been applied for and authorized as a patent by Luxshare Heat Transmission Technology (Huizhou) Co., Ltd. Patent title: Electrical connector component, Patent number: 202310693538.4 | 1. Excellent heat dissipation performance: The liquid cooling plate is positioned on the surface of multiple optical modules arranged in parallel, allowing the cooling liquid circulating through the internal channels of the cooling plate to dissipate heat from the optical modules. 2. Low flow resistance: By employing parallel and series channels, where the first and second main channels act as parallel channels, and each main channel is predominantly arranged in a serpentine | This technology belongs to the critical area of liquid cooling, particularly in the key technology of cooling plate heat dissipation. It holds significant importance for the company's strategic layout and enhancement of competitiveness in the field of liquid-cooled optical module products. It is anticipated to provide important support for the company's revenue and profitability in the coming years |
series, internalbidirectional flowchannels are utilized tosignificantly reducefluid flow resistance.
| series, internal bidirectional flow channels are utilized to significantly reduce fluid flow resistance. | ||||
| Research and development of immersion-cooled server cabinets designed for easy disassembly, maintenance, and reassembly. | Design a liquid separator and liquid cooling device to address issues in current immersion-cooled liquid cooling systems, including limited inlet pipe numbers, low coolant flow rates, and uneven heat dissipation. | 202303-202312: This project has resulted in the development of a new product, the "Metallic Product" liquid separator, with model number 86.5*47.3*30mm. Additionally, the core technical solution of this project has been applied for and authorized as a patent by Luxshare Heat Transmission Technology (Huizhou) Co., Ltd. Patent title: A liquid separator and liquid cooling device, Patent number: 2023232842370 | 1. High efficiency and energy saving: Direct contact between the liquid and server components facilitates rapid heat transfer, achieving energy savings of over 95%. 2. Excellent heat dissipation uniformity: Utilizing multiple inlet pipes connected to the liquid cooling chamber enhances the coolant inflow rate by approximately 50%, thereby improving cooling efficiency. 3. Extremely low on-site failure rate and simplified maintenance: Maintenance tasks are significantly reduced, leading to a substantial decrease in on-site maintenance costs compared to air cooling. | This technology belongs to the critical domain of immersion liquid cooling, holding significant importance for the company's strategic positioning and competitiveness in the server liquid cooling product sector. It is anticipated to provide important support for the company's revenue and profitability in the coming years |
| Research and development of liquid cooling heat dissipation technology for energy storage batteries. | Provide a liquid cooling plate and liquid cooling cabinet, to enhance the structural stability and load-bearing capacity of the liquid cooling plate. This addresses the challenge of increased pressure on the liquid cooling plate due to the higher energy density and increased number of battery cells in energy storage batteries. Such pressure often leads to deformation, rupture of the liquid cooling plate's casing, coolant leakage, and potential failures in the cooling circulation system | 202305-202312: This project has resulted in the development of a new product, the "Metallic Product" water-cooling plate, with model number 253.97*192*23.4mm. Additionally, the core technical solution of this project has been applied for and authorized as a patent by Luxshare Heat Transmission Technology (Huizhou) Co., Ltd. Patent title: A liquid cooling plate and liquid cooling cabinet, Patent number: 202322594625.2 | 1. Enhanced load-bearing capacity: The water-cooling plate consists of plate components and partition plates, all made of extruded aluminum. The load-bearing capacity is increased by 30%. 2. Space-saving: Suitable for high-density integration of battery energy and cell quantity, saving over 50% of space. 3. No coolant or water loss: Both the coolant and cooling water circulate within the system, eliminating loss. 4. Cabinet-coupled fire hydrants: Low failure | This technology belongs to the critical domain of liquid cooling for energy storage batteries, holding significant importance for the company's strategic positioning and competitiveness in liquid cooling products. It is anticipated to provide important support for the company's revenue and profitability in the coming years. |
rate and easymaintenance.
| rate and easy maintenance. | ||||
| Research and development of 3D isothermal plate heat dissipation technology. | Design a 3D isothermal plate capable of handling higher power dissipation and achieving lower thermal resistance values to address the increasing heat flux density of electronic components | 202306-202312: This project has led to the development of a new product, the "Metallic Product" VC thermal plate, with model number XQGP-301016730. Additionally, the core technical solution of this project has been applied for and authorized as a patent by Luxshare Heat Transmission Technology (Huizhou) Co., Ltd. Patent title: 3D isothermal plate, Patent number: 202322553002.0 | Reduce thermal resistance and enhance heat conduction efficiency, the internal cavity of the isothermal plate is interconnected with the internal cavity of the pipe body, forming a unified structure. The metal powder or metal braided mesh capillary structures on the inner surface of the pipe body are connected to the metal powder or metal braided mesh capillary structures on the condensation surface panel of the isothermal plate. This facilitates the reflux of the working fluid (pure water or other substances) within the cavity | This technology belongs to the critical domain of 3D isothermal plates, holding significant importance for the company's technological development, optimization, market expansion, and enhancement of competitiveness in 3D isothermal plate products. It is anticipated to provide important support for the company's revenue and profitability in the coming years. |
| Research and development of ultra-lightweight and thin smart AR glasses | Develop diffractive waveguide + MicroLED ultra-lightweight and thin smart AR glasses to meet the current market demand for monochrome AR glasses. | Trial production/mass production | Providing customers with competitive AR glasses products to enhance the company's core competitiveness in the AR industry. | Increase product competitiveness by reducing material and labor costs, thereby bringing greater profitability to the enterprise. |
| Research and development of interactive, ultra-lightweight smart VR headset | Develop the world's lightest and thinnest PC. VR standalone unit, utilizing advanced graphics processing technology, capable of providing users with high-definition, low-latency virtual reality experience, with a 5K-level headset | Trial production/mass production | Based on Micro OLED + Pancake optical scheme, the binocular resolution can reach 5120x2560, supporting two refresh rate modes of 75Hz and 90Hz; supports 6DoF and SteamVR tracking, providing a horizontal field of view of 102°. | Enhance product competitiveness by reducing material and labor costs to bring greater profitability to the enterprise |
| Research and development of wearable GPS-based safety metronome for night running | Enhance product functionality and improve product performance | Completed | Enhance product functionality and improve product performance | Improve the quality and market value of the company's products to increase competitiveness and market share |
Research anddevelopment of UWBtechnology applicationin car digital keys forwearable devices
| Research and development of UWB technology application in car digital keys for wearable devices | Enhance product functionality and improve product performance | Completed | Enhance product functionality and improve product performance | Improve the quality and market value of the company's products to increase competitiveness and market share |
| Research and development of combined wearable device for gaze tracking and eye movement analysis | Enhance product functionality and improve product performance | Completed | Enhance product functionality and improve product performance | Improve the quality and market value of the company's products to increase competitiveness and market share |
| Research and development of acoustic sensor-based wearable device for wrist-based heart rate monitoring | Enhance product functionality and improve product performance | Completed | Enhance product functionality and improve product performance | Improve the quality and market value of the company's products to increase competitiveness and market share |
| Research and development of wearable device application for safe driving monitoring | Enhance product functionality and improve product performance | Completed | Enhance product functionality and improve product performance | Improve the quality and market value of the company's products to increase competitiveness and market share |
| Research and development of wearable device using sensors and machine learning for epilepsy detection | Enhance product functionality and improve product performance | Completed | Enhance product functionality and improve product performance | Improve the quality and market value of the company's products to increase competitiveness and market share |
| Research and development of wearable sensor device combined with gait analysis system | Enhance product functionality and improve product performance | Completed | Enhance product functionality and improve product performance | Improve the quality and market value of the company's products to increase competitiveness and market share |
| Research and development of wearable device application for people with hearing impairments | Enhance product functionality and improve product performance | Completed | Enhance product functionality and improve product performance | Improve the quality and market value of the company's products to increase competitiveness and market share |
| Research and development of non-contact blood glucose detection applied to wearable devices | Enhance product functionality and improve product performance | Completed | Enhance product functionality and improve product performance | Improve the quality and market value of the company's products to increase competitiveness and market share |
| Research and development of camera application for 3D modeling in wearable devices | Enhance product functionality and improve product performance | Completed | Enhance product functionality and improve product performance | Improve the quality and market value of the company's products to increase competitiveness and market share |
Research anddevelopment ofwearable physiologicalsignal measurementsystem for detectingemotional responses inthe elderly
| Research and development of wearable physiological signal measurement system for detecting emotional responses in the elderly | Enhance product functionality and improve product performance | Completed | Enhance product functionality and improve product performance | Improve the quality and market value of the company's products to increase competitiveness and market share |
| Research and development of low-power multi-node wearable motion monitoring system with virtual reality | Enhance product functionality and improve product performance | Incomplete | Enhance product functionality and improve product performance | Improve the quality and market value of the company's products to increase competitiveness and market share |
| Research and development of wireless charging case with automatic wake-up functionality | After the headphones are removed from the charging case, users can activate the automatic wake-up function to obtain information such as the charging case's battery level | Delivery has been completed, and the patent application is in progress | After adding an RF antenna, the wireless charging case can now establish a Bluetooth connection with devices such as smartphones, enabling the display of information such as the battery levels of the charging case and headphones on the phone. Technical specifications: UWB communication has been implemented, bringing along the feature of locating the charging case. The UWB positioning accuracy is less than 0.1 meters, with a data transmission rate of 1 Gbit/s. The pulse duration is short, between 0.2 and 1.5 nanoseconds | With successful product development and obtaining a patent, the company can enhance its competitiveness in the Bluetooth earphone market, aiming to secure more orders and drive company profits |
| Research and development of wireless Bluetooth earphones based on photovoltaic charging and display of battery level | Meet the demand for more convenient and intelligent charging solutions for Bluetooth earphones, thus enhancing user experience | Delivery has been completed, and the patent application is in progress | 1. Solar Charging Reminder: In some situations where there's insufficient light for solar-powered earphones to charge, a low battery alert is automatically triggered to prevent damage or malfunction due to prolonged low battery operation. 2. Solar Charging Doesn't Require Power Supply: Solar charging devices operate solely on solar | The product has been successfully put into production, enhancing the company's competitiveness in the Bluetooth earphone market and bringing substantial profits. |
energy, eliminating theneed for electricalpower supply andconserving a significantamount of energy. 3.Efficient andConvenient Charging:
Solar charging providesan efficient andconvenient chargingmethod, with stablecharging possible forextended periods inample sunlight, thusextending battery life.
| energy, eliminating the need for electrical power supply and conserving a significant amount of energy. 3. Efficient and Convenient Charging: Solar charging provides an efficient and convenient charging method, with stable charging possible for extended periods in ample sunlight, thus extending battery life. | ||||
| Research and development of Bluetooth earphones capable of recording, writing, translating, listening, and speaking | Meet the needs of office professionals, the office headphones offer features tailored for business use | The factory has deployed three production lines, aiming for an annual output of 2 million units. During the production validation and testing phases, no oversights or errors were encountered. The product meets usage requirements, boasting international advanced levels and reliable performance | Utilizing AI technology, the product offers features such as call recording, on-site recording, voice-to-text transcription, multi-language translation, and VIAIMAI generative conference assistant. These functionalities greatly assist in recording important content, swiftly organizing meeting minutes, and overcoming communication barriers posed by various languages and dialects during frequent business trips, thereby significantly improving work efficiency. Moreover, while emphasizing its conference office attributes, the product also seamlessly integrates all features of traditional TWS wireless Bluetooth earphones | With the successful development of the product, it has elevated competitiveness in the Bluetooth earphone market, achieving a significant leap in both sound quality and practicality. This advancement aims to secure more orders for the company, thereby boosting profits. Moreover, it lays a solid foundation of technology and market presence for subsequent market promotion efforts |
Particulars of R&D personnel
| 2023 | 2022 | Y/Y % change | |
| Number of R&D personnel (person) | 19,063 | 18,421 | 3.49% |
| Proportion of R&D personnel to total number of employees | 8.20% | 7.77% | 0.43% |
Education background of R&D personnel
| Education background of R&D personnel | |||
| Undergraduate | 8,947 | 8,327 | 7.45% |
| Master | 381 | 332 | 14.76% |
| Other | 9,735 | 9,762 | -0.28% |
| Age of R&D personnel | |||
| Below 30 | 9,005 | 9,417 | -4.38% |
| 30-40 | 7,533 | 7,706 | -2.25% |
Particulars of R&D expenses:
| 2023 | 2022 | Y/Y % change | |
| Amount of R&D expenses (RMB) | 8,188,767,532.85 | 8,447,038,946.21 | -3.06% |
| Proportion of R&D expenses to operating revenue | 3.53% | 3.95% | -0.42% |
| Amount of R&D expenses capitalized (RMB) | 0.00 | 0.00 | |
| Proportion of capitalized R&D expenses to total R&D expenses | 0.00% | 0.00% |
Analysis of the cause and effect of significant change in the composition of R&D personnel:
□Applicable ?N/A
Analysis of significant change in the proportion of R&D expenses to operating revenue compared with 2022:
□Applicable ?N/A
Analysis and reasonableness of significant change in the proportion of R&D expenses capitalized:
□Applicable ?N/A
5. Cash flows
In RMB
| Item | 2023 | 2022 | Y/Y % change |
| Sub-total of cash inflows from operating activities | 246,049,309,173.22 | 243,587,978,384.02 | 1.01% |
| Sub-total of cash outflows from operating activities | 218,444,248,762.06 | 230,860,368,064.68 | -5.38% |
| Net cash flow from operating activities | 27,605,060,411.16 | 12,727,610,319.34 | 116.89% |
| Sub-total of cash inflows from investing activities | 17,874,274,670.25 | 10,037,921,670.41 | 78.07% |
| Sub-total of cash outflows from investing activities | 37,434,186,876.09 | 23,364,287,513.52 | 60.22% |
| Net cash flows from investing activities | -19,559,912,205.84 | -13,326,365,843.11 | 46.78% |
| Sub-total of cash inflows from financing activities | 93,759,639,627.24 | 76,864,295,489.69 | 21.98% |
| Sub-total of cash outflows from financing activities | 89,689,373,974.63 | 68,708,047,308.24 | 30.54% |
Net cash flows from financingactivities
| Net cash flows from financing activities | 4,070,265,652.61 | 8,156,248,181.45 | -50.10% |
| Net increase in cash and cash equivalents | 12,371,733,891.14 | 8,390,881,701.43 | 47.44% |
Analysis of main causes of material changes in the related data?Applicable □N/A
1. The increase in net cash flows generated from operating activities is attributed to accelerated customerpayments and sales realization with receipts due to the initial strategic stocking in this period;
2. The increase in both inflows and outflows of cash flows from investing activities is due to financial operationsinvolving purchases and redemptions;Analysis of significant difference between net cash flows from operating activities during the reporting period and net profit in currentyear?Applicable □N/AThe difference between the cash flow from operating activities and the profit for the current periodmainly arises from accelerated customer payments, sales realization of inventory stocked as part ofthe initial strategy at the beginning of the period, and a higher amount of long-term assetamortization absorbed within the net profit;V. Analysis of non-main business?Applicable □N/A
In RMB
| Amount | % of total profit | Reason | Whether or not sustainable | |
| Investment income | 1,771,282,791.44 | 13.75% | Investment income from the purchase of financial assets, income from wealth management products, and equity method investment income recognized from associated enterprises. | No |
| Gain or loss on changes in fair value | 210,346,832.18 | 1.63% | Investment income on financial assets at fair value through profit or loss | No |
| Impairment loss on assets | -1,318,867,316.40 | -10.24% | Inventory and fixed asset impairment | No |
| Non-operating income | 93,459,027.40 | 0.73% | Mainly acquisition of default or compensation income | No |
| Non-operating expenses | 68,334,885.79 | 0.53% | Mainly payment of default or compensation, asset scrapping losses, external donations | No |
| Gain on disposal of assets | 122,867,177.52 | 0.95% | Disposal of production equipment | No |
| Other gains | 825,189,115.07 | 6.40% | Government grants related to income | No |
| Loss on credit | 23,273,879.47 | 0.18% | Mainly payment of default or compensation, asset | No |
impairment
| impairment | scrapping losses, external donations |
VI. Analysis of assets and liabilities
1. Material changes in components of assets
In RMB
| December 31, 2023 | January 1, 2023 | Y/Y % Change | Reason of material change | |||
| Amount | % of total assets | Amount | % of total assets | |||
| Cash and bank balances | 33,619,539,457.51 | 20.75% | 19,367,209,441.41 | 13.05% | 7.70% | Increase in cash reserves for safety days and funding requirements to support operations and investments |
| Accounts receivable | 23,504,481,889.07 | 14.51% | 26,043,354,859.19 | 17.55% | -3.04% | Optimization of customer payments |
| Contract assets | 0.00% | 0.00% | 0.00% | |||
| Inventories | 29,757,930,319.35 | 18.37% | 37,363,329,476.66 | 25.18% | -6.81% | Expansion of business scale, realization of sales from initial stocking of inventory at the beginning of the period |
| Investment properties | 23,353,936.24 | 0.01% | 92,782,410.06 | 0.06% | -0.05% | Recovery of house rental for self-use |
| Long-term equity investments | 4,232,941,741.05 | 2.61% | 2,000,007,642.66 | 1.35% | 1.26% | Recognition of investment income from associated enterprises under the equity method |
| Fixed assets | 44,560,506,279.62 | 27.51% | 44,026,022,703.69 | 29.67% | -2.16% | Expansion of business scale |
| Construction in progress | 2,226,217,016.31 | 1.37% | 2,695,377,794.32 | 1.82% | -0.45% | Unaccepted equipment and building structures |
| Right-of-use assets | 648,963,968.09 | 0.40% | 941,749,814.66 | 0.63% | -0.23% | Mainly leased building structures |
| Bank borrowings | 20,514,182,240.47 | 12.66% | 14,911,899,668.93 | 10.05% | 2.61% | Supplementing working capital due to scale increase |
| Contract liabilities | 243,566,923.42 | 0.15% | 501,765,453.24 | 0.34% | -0.19% | Advance payments for goods |
| Long-term borrowings | 12,038,771,289.92 | 7.43% | 9,205,313,060.94 | 6.20% | 1.23% | Supplementing funds required for expansion in scale |
| Lease liabilities | 552,488,888.66 | 0.34% | 800,739,041.51 | 0.54% | -0.20% | Deducting unreceived financing expenses from lease payments for factories |
| Trade payables | 1,720,764,175.32 | 1.06% | 1,353,266,499.91 | 0.91% | 0.15% | Investments in foreign exchange and wealth management, etc. |
| Cash and bank balances | 486,702,941.36 | 0.30% | 586,577,865.23 | 0.40% | -0.10% | Advance payments for materials, water and electricity fees, and customs deposits. |
Accountsreceivable
| Accounts receivable | 322,407,052.71 | 0.20% | 431,123,451.91 | 0.29% | -0.09% | Proceeds from equity transfer, export tax rebates, and deposits and insurance compensation |
| Contract assets | 2,920,078,401.07 | 1.80% | 2,197,204,594.09 | 1.48% | 0.32% | Deferred input tax credits, prepaid income taxes to be refunded, and high-value certificates of deposit with a term not exceeding 1 year |
| Inventories | 590,266,003.15 | 0.36% | 810,913,529.72 | 0.55% | -0.19% | Factory and workshop renovation expenses |
| Investment properties | 872,943,835.40 | 0.54% | 1,208,582,281.01 | 0.81% | -0.27% | Mainly arising from equity payments, unrealized profits from internal asset transactions, government subsidies, and tax-deductible losses, etc., temporal differences |
| Long-term equity investments | 9,931,644,112.92 | 6.13% | 1,676,259,912.33 | 1.13% | 5.00% | Advance payments for equipment, project payments, land payments, and certificates of deposit with a term exceeding 1 year |
| Fixed assets | 492,585,900.03 | 0.30% | 515,054,217.52 | 0.35% | -0.05% | Company note payment transactions |
| Construction in progress | 45,908,515,295.43 | 28.34% | 49,786,483,552.54 | 33.55% | -5.21% | Impact of initial inventory stocking strategy |
| Right-of-use assets | 406,677,940.53 | 0.25% | 472,880,196.48 | 0.32% | -0.07% | Accrued expenses and deposits |
| Bank borrowings | 932,701,803.30 | 0.58% | 3,957,037,125.24 | 2.67% | -2.09% | Short-term payable bonds and inter-company fund transactions |
| Contract liabilities | 595,323,601.05 | 0.37% | 665,910,095.66 | 0.45% | -0.08% | Government subsidies related to assets |
| Long-term borrowings | 883,924,973.73 | 0.55% | 1,606,645,177.00 | 1.08% | -0.53% | Mainly temporary differences resulting from accelerated depreciation of fixed assets and evaluation of appreciation from non-controlling interests in business combinations |
Analysis of high proportion of overseas assets:
□Applicable ?N/A
2. Assets and liabilities at fair value
?Applicable □N/A
In RMB
| Item | Opening balance | Gain or loss on changes in | Aggregate changes in fair value | Impairment loss recognized | Amount acquired in the | Amount sold in the reporting | Other changes | Closing balance |
fair valuein thereportingperiod
| fair value in the reporting period | recorded in equity | in the current period | reporting period | period | ||||
| Financial assets | ||||||||
| 1. Financial assets held for trading (excluding derivative financial assets) | 1,326,226,850.46 | 218,566,877.30 | 16,228,842,058.88 | 16,145,356,751.33 | 1,628,279,035.31 | |||
| 2. Derivative financial assets | 27,039,649.45 | 65,445,490.56 | 92,485,140.01 | |||||
| 4. Other investments in equity instruments | 440,106,992.66 | -174,799,993.98 | 134,424,513.54 | 25,000,000.00 | 41,184,747.36 | 249,122,251.32 | ||
| 5. Other non-current financial assets | 35,700,000.00 | 35,700,000.00 | ||||||
| Subtotal of financial assets | 1,829,073,492.57 | 109,212,373.88 | 134,424,513.54 | 0.00 | 16,253,842,058.88 | 16,186,541,498.69 | 0.00 | 2,005,586,426.64 |
| Investment in equity instruments | 587,585,009.82 | 587,585,009.82 | ||||||
| Total | 1,829,073,492.57 | 109,212,373.88 | 134,424,513.54 | 16,253,842,058.88 | 16,186,541,498.69 | 587,585,009.82 | 2,593,171,436.46 | |
| Financial liabilities | 44,318,321.50 | -73,665,535.68 | -41,436.00 | 117,942,421.18 | ||||
Other changesAccounts receivable financing represents the balance of 6+9 bank acceptance drafts not yet discounted and discontinued for recognition.According to the standards, these balances are reclassified from the accounts receivable bills category to the accounts receivablefinancing category.Whether there’s any material change in the measurement properties of main assets of the Company during the reporting period?
□Yes ?No
3. Encumbrances on assets as of the end of the reporting period
In RMB
Item
| Item | Ending period | |||
| Book balance (CNY) | Book value (CNY) | Restricted type | Restriction status | |
| Cash and cash equivalents | 3,935,387,136.86 | 3,935,387,136.86 | Margin | Restricted due to issuance of bills, letters of credit |
| Notes receivable/Accounts receivable financing | 164,567,477.58 | 164,567,477.58 | Pledge | Pledged financing for notes receivable |
| Accounts receivable | ||||
| Equity investments | ||||
| Fixed assets | 635,803,443.15 | 635,803,443.15 | Mortgage | Mortgaged financing for fixed assets |
| Intangible assets | 401,674,060.39 | 401,674,060.39 | Pledge | Financing through the pledge of land use rights |
| Trading financial assets | ||||
| Other non-current assets | 2,874,097,749.98 | 2,874,097,749.98 | Pledge | Restricted due to issuance of bills, letters of credit |
| Total | 8,011,529,867.96 | 8,011,529,867.96 | ||
VII. Analysis of investments
1. Overall situation
?Applicable □N/A
| Amount of investment in 2023 (RMB) | Amount of investment in 2022 (RMB) | Y/Y % Change |
| 793,376,506.36 | 1,166,241,440.00 | -31.97% |
2. Major equity investments acquired in the reporting period
□Applicable ?N/A
3. Major non-equity investment that have not yet been completed in the reporting period
□Applicable ?N/A
4. Investment in financial assets
(1) Securities investment
?Applicable □N/A
In RMB
| Type of security | Security code | Short name | Initial investment cost | Method of measurement | Opening balance of carrying amount | Gain or loss on changes in fair value in the reporting period | Aggregate changes in fair value recorded in equity | Amount acquired in the reporting period | Amount sold in the reporting period | Gain or loss in the reporting period | Closing balance of carrying amount | Accounting item | Source of funds |
| Stock listed on domestic or overseas market | 603595 | Tony Electronic | 22,500,000.00 | Fair value | 342,379,257.92 | -169,687,586.56 | 133,216,878.48 | 0.00 | 41,212,995.00 | -133,906,489.63 | 172,691,671.36 | Investment in other equity instruments | Self-owned funds |
| Stock listed on domestic or overseas market | 430755 | SDMC | 50,000,000.00 | Fair value | 72,480,000.00 | -44,341,818.18 | -18,582,545.45 | 0.00 | 0.00 | -44,341,818.18 | 28,138,181.82 | Investment in other equity instruments | Self-owned funds |
| Total | 72,500,000.00 | -- | 414,859,257.92 | -214,029,404.74 | 114,634,333.03 | 0.00 | 41,212,995.00 | -178,248,307.81 | 200,829,853.18 | -- | -- | ||
(2) Investment in derivatives
?Applicable □N/A
1) Investment in derivatives for the purpose of hedging during the reporting period
?Applicable □N/A
In RMB 10,000
| Type of derivative | Initial investment cost | Opening balance | Gain or loss on changes in fair value during the reporting period | Aggregate changes in fair value recorded in equity | Amount acquired in the reporting period | Amount sold in the reporting period | Closing amount | End-Term Investment / Net Assets Ratio |
| Forward | 55,577.51 | 55,577.51 | 16,825.61 | 8,068.71 | 1,178,915.16 | 1,018,470.32 | 216,022.35 | 3.84% |
| Option | 21,590.26 | 21,590.26 | 32,143.23 | 12,965.98 | 2,420,158.59 | 2,098,021.54 | 343,727.31 | 6.10% |
| Total | 77,167.77 | 77,167.77 | 48,968.84 | 21,034.68 | 3,599,073.75 | 3,116,491.85 | 559,749.66 | 9.94% |
| Whether there’s any material change in the accounting policies and accounting principles for hedge business in the reporting period as compared with the preceding reporting period | No material change | |||||||
| Actual gain or loss in the reporting period | Explanation of the actual profit and loss situation for the reporting period: During the reporting period (January 1st to December 31st), the company engaged in foreign exchange derivative transactions, with an amount of approximately CNY489.6884 million included in the current period's profit and loss. | |||||||
| Description of hedging effects | Explanation of the hedging effect: The company conducts foreign exchange derivative transactions in accordance with the principles of legality, prudence, safety, and effectiveness, without engaging in speculative or arbitrage transactions. All transactions are based on normal production and operation, aiming to lock in target exchange rates and prevent adverse effects from significant fluctuations in exchange rates. The company strictly conducts hedging transactions based on its foreign currency holdings, with overall risk being controllable. | |||||||
| Source of funds | Self-owned funds | |||||||
| Analysis of risks associated with the derivatives held in the reporting period (including without limitation market risk, liquidity risk, credit risk, operational risk and legal risk) and related risk control measures | 1. We conduct foreign exchange derivative transactions for the purpose of fixing costs, and avoiding and preventing foreign exchange and interest rate risks, and prohibit any speculation. 2. We have established strict business management policy regarding financial derivative transactions, which contain explicit provisions on the principle of operation, approving power, internal operating process, information segregation measures, internal risk controls, information disclosure and other issues relating to financial derivative transactions, to control the risks associated with such transactions. 3. We carefully examine the terms of contracts entered into with the relevant banks, and strictly implement the risk management policy to prevent legal risks. 4. We continuously follow up on the changes in the market price or fair value of the relevant foreign exchange derivatives, promptly assesses the changes in risk exposures of such foreign exchange derivatives, reports to the management on a regular basis, promptly reports the abnormal situations discovered, calls attention to the relevant risks, and takes the appropriate emergency measures. 5. In order to prevent any delay in the delivery of forward exchange contracts, we attach great importance to the management of accounts receivable, and have established safety management measures to prevent any delay in the payment of accounts receivable. 6. Our Internal Audit Department is responsible for supervising and auditing the decision-making, management, execution and other issues in respect of foreign exchange derivative transactions. | |||||||
| Changes in the market price or fair value of the derivatives held in the reporting period | Change in the fair value of a foreign exchange derivative is the difference between its fair market price in the month in which the delivery date determined by the Company falls and | |||||||
(in the analysis of the fair value ofderivatives, the specific approaches,assumptions and parameters used shall bedisclosed)
| (in the analysis of the fair value of derivatives, the specific approaches, assumptions and parameters used shall be disclosed) | its contract price. |
| Whether or not involved in any litigation | N/A |
| Disclosure date of the announcement of the Board of Directors approving the investment in derivatives (if any) | February 22, 2023 |
| Special opinion issued by the independent directors regarding the Company’s investment in derivatives and related risk control measures | The Company conducts foreign exchange derivative transactions for the purpose of avoiding foreign exchange risk arising from fluctuations in the foreign exchange rates of RMB, and effectively controlling the uncertainties of costs caused by foreign exchange risk. The Company has established the Business Management Policy Regarding Financial Derivative Transactions, to enhance risk management and control over foreign exchange derivative transactions. In addition, the Company only provides self-owned funds, rather than any offering proceeds, as deposit for derivative transactions. The review, voting and other procedures relating to such transactions have complied with the Company Law, the AOA and other applicable regulations. We all agree to the company engaging in the aforementioned business. |
2) Investment in derivatives for the purpose of speculation during the reporting period
□Applicable ?N/A
No investment in derivatives for the purpose of speculation existed during the reporting period.
5. Use of offering proceeds
□Applicable ?N/A
None of proceeds has been used during the reporting periodVIII. Sale of material assets and equities
1. Sale of material assets
□Applicable ?N/A
No material asset has been sold during the reporting period.
2. Sale of material equities
□Applicable ?N/A
IX. Analysis of major controlled and investee companies
?Applicable □N/AMajor subsidiaries and investee companies representing more than 10% of the net profit of the Company
In RMB
| Company | Type | Main | Registered | Total assets | Net assets | Operating | Operating | Net profits |
business
| business | capital | income | profit | |||||
| Luxshare Precision Limited | Subsidiary | Purchase and sale of electronic products, data lines, connection lines, connectors, computer and peripherals, plastic and hardware products. | USD 5 million | 84,503,050,646.45 | 11,550,791,180.98 | 190,587,789,169.69 | 3,408,472,700.36 | 3,263,710,994.65 |
| ICT-Lanto Limited | Subsidiary | Sales and services in respect of internal and external connection lines for IT, communication and consumer electronic applications, and precision connectors. | USD 153,290,323 | 58,617,385,650.65 | 6,249,529,661.19 | 58,155,505,976.54 | 1,240,180,241.06 | 1,114,706,521.54 |
| Lanto Electronic Limited | Subsidiary | Computer peripherals, connection lines and connectors; new-type electronic components (electronic devices), instruments and accessories for communication and IT purpose, plastic, rubber and hardware products; research, development, production and sale of | CNY 2,320,000,000 | 22,231,655,308.24 | 7,578,255,507.27 | 22,931,796,475.81 | 524,484,914.22 | 569,846,213.47 |
specialelectronicequipment,testinginstruments, tools,molds,remotecontroldynamicmodels andrelatedsuppliesandcomponents;productionand sale ofpowersupplyunits andwirelesstransmission products;development ofsoftware;import andexport ofgoods andtechnology.Licenseditems:
productionof Class IImedicaldevices;Class IIvalue-addedtelecommunicationsservices.Generalitems:
manufacturing ofautomotivecomponents andaccessories; researchanddevelopment ofautomotivecomponents;
wholesaleofautomotivecomponents andaccessories; sale ofautomotivecomponents andaccessories; sale ofmechanicalcomponents and spareparts;manufacturing of opto-electroniccomponents; sale ofopto-electroniccomponents; researchanddevelopment ofspecialelectronicmaterials;researchanddevelopment ofhouseholdappliances;researchanddevelopment ofmotorcyclecomponents;manufacturing oflightingequipment;manufacturing oftransformers, rectifiersandinductors;manufacturing ofcomputersoftware,
hardwareandperipheraldevices;manufacturing ofpowertransmission,distributionand controlequipment.
| hardware and peripheral devices; manufacturing of power transmission, distribution and control equipment. | ||||||||
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Subsidiary | Technology development, technical consulting and technical services in respect of computer accessories; design, R&D and production of precision stamping molds (precision ≥ 0.02mm), precision cavity molds (precision ≥ 0.05mm), metal product molds, non-metal product molds and standard parts for molds; production of high-temperature resistant molded insulating materials, stamped hardware parts, rivets, shafts, | CNY 6,264,312,960 | 35,394,696,727.13 | 14,807,257,564.66 | 79,079,113,772.15 | 2,117,124,152.49 | 2,005,177,524.24 |
mechanicalcomponents and othercomponents for 3Celectronicsproducts;industrialdesign,productdesign(exteriordesign,structuraldesign,circuitdesign,graphicdesign,etc.); leaseof own idleequipment;wholesale,commission agency(exceptauction),import,export andsupportingservices inrespect oftheaforesaidproductsand relatedcomponents. Generalitems:
Manufacturing ofmobileterminaldevices;manufacturing ofcommunicationequipment;manufacturing ofelectroniccomponents;manufacturing offorgingsand powder
metallurgyproducts;manufacturing ofcomputersoftware,hardware,andperipheraldevices;retail ofcomputersoftware,hardware,andauxiliaryequipment.
metallurgyproducts;manufacturing ofcomputersoftware,hardware,andperipheraldevices;retail ofcomputersoftware,hardware,andauxiliaryequipment.
Subsidiaries acquired and disposed of during the reporting period?Applicable □N/A
| Company name | Method of acquisition or disposal | Effect on the production, operation and results of the Company taken as a whole |
| Luxshare Precision Industry (Huzhou), Ltd. | Newly established | No significant effect on the production, operation and results of the Company taken as a whole |
| Kunshan-Luxshare RF Technology Co., Ltd. Wuzhong Branch | Canceled | No significant effect on the production, operation and results of the Company taken as a whole |
| TIME Interconnect Technology Limited | Newly established | No significant effect on the production, operation and results of the Company taken as a whole |
| Dongguan Leader Precision Industry Co., Ltd. Dongkeng Branch | Newly established | No significant effect on the production, operation and results of the Company taken as a whole |
| Kunshan TIME Interconnect Technology Limited | Newly established | No significant effect on the production, operation and results of the Company taken as a whole |
| Kunshan Luxshare Precision Mould Co., Ltd. | Canceled | No significant effect on the production, operation and results of the Company taken as a whole |
| Luxshare Technologies International,Inc. | Newly established | No significant effect on the production, operation and results of the Company taken as a whole |
| Linkz Cables Mexico S.de R.L.de C.V. | Newly established | No significant effect on the production, operation and results of the Company taken as a whole |
| ICT Legend S.DE R.L.DE C.V. | Newly established | No significant effect on the production, operation and results of the Company taken as a whole |
| Luxshare Precision Technology (Shantou) Co., Ltd. | Newly established | No significant effect on the production, operation and results of |
the Company taken as a whole
| the Company taken as a whole | ||
| Taiqiao Investment Co., Ltd. | Merged | No significant effect on the production, operation and results of the Company taken as a whole |
| Henan Leader Precision Industry Co., Ltd. | Canceled | No significant effect on the production, operation and results of the Company taken as a whole |
| Luxshare Precision Industry (Anhui) Co., Ltd. | Newly established | No significant effect on the production, operation and results of the Company taken as a whole |
| Dongguan Luxshare Holdings Co., Ltd. | Newly established | No significant effect on the production, operation and results of the Company taken as a whole |
| Luxshare Technologies (Vietnam) Co., LTD | Newly established | No significant effect on the production, operation and results of the Company taken as a whole |
| Luxshare Technologies Mexico S. de.R.L.de C.V. | Newly established | No significant effect on the production, operation and results of the Company taken as a whole |
| Luxcase Precision Technology (Vietnam) Co., Ltd. | Newly established | No significant effect on the production, operation and results of the Company taken as a whole |
| Dongguan Luxshare Technologies Co., Ltd. Dalian Branch | Newly established | No significant effect on the production, operation and results of the Company taken as a whole |
| Xuancheng Luxshare Precision Industry Co., Ltd. Kunshan Branch | Newly established | No significant effect on the production, operation and results of the Company taken as a whole |
Particulars of significant controlled and investee companiesN/A
X. Structured entities controlled by the Company
□Applicable ?N/A
XI. Prospects for future development of the Company
1. Situations of the industry
Refer to I. Situations of our industry in the reporting period under Section III Management’s Discussion andAnalysis.
2. Future growth strategy
Currently, the company has established a diversified, integrated, and synergistic strategic framework in thefields of consumer electronics, automotive, telecommunications, and others. The three core business segments areadvancing together, laying a solid foundation for the company's long-term sustainable development. In the future,
facing new environments, markets, and customers, the company will continue to implement the "three five-year"development plan. While consolidating the foundation of the consumer electronics business, it will respond to therapid development trends in the telecommunications market and the new energy vehicle market. It will dynamicallyallocate internal and external resources to fully support the high-quality growth of telecommunications/data centerand automotive businesses. In terms of research and development innovation, the company will continue to build atop-notch R&D talent team and deeply focus on the composite development of underlying technologies, emergingmaterials, and process technologies. Combining accurate understanding of the evolution trends of cutting-edgetechnologies with in-depth analysis of customer product pain points, the company will proactively invest more R&Dresources with the starting point of "thinking beyond customers' imagination." This aims to conduct sufficient pre-research and technical reserves for customers' next-generation products, broaden the company's capabilityboundaries, and thereby create the company's differentiating competitive advantages. In smart manufacturing, thecompany will fully leverage digital applications and AI artificial intelligence to empower the productionmanufacturing end, innovating comprehensively in product design, research and development, mass production,and testing. This will help customers achieve more efficient, high-quality, and cost-effective product implementation.
3. Business plan for the next year
Looking ahead to 2024, the complex and ever-changing external environment will continue to present certainchallenges for the industry in which the company operates. However, in the face of new trends and patterns ineconomic and social development, these challenges often conceal enormous development opportunities. Based onthis understanding, the company will persistently adhere to its core business, pinpoint its role in the industry chain,leverage its unique strengths, and act as a "ferryman" to create more value for both customers and the industry'sdevelopment.Viewed from the perspective of industry development cycles, each boom cycle in the consumer electronicssector is primarily driven by new demand sparked by technological advancements. Whether it's smartphones, smartwearables, smart homes, or virtual reality, the company will continue to deepen its vertical integration capabilitiesfrom core components and modules to complete system assembly. It will optimize the company's developmentcapabilities in underlying technologies and processes. Leveraging years of manufacturing experience and marketinfluence accumulated in the consumer electronics industry, coupled with the extension into various niche fieldsthrough the integration of "AI+", the company aims to continuously empower and differentiate its products, creatingricher ecosystem combinations for specific scenarios.In the telecommunications field, the company will continue to drive technological innovations in products suchas optical/electrical connections, liquid cooling, power supplies, and RF communications. Guided by industrytechnological advancements, through comprehensive preliminary research and scenario simulations, it will deeplygrasp the core value of the industry chain and build core competitiveness with moat advantages. In terms ofexpanding business opportunities, the rapid iteration of AI technology is driving rapid growth in computing power
demand while also imposing higher requirements on hardware performance such as transmission and cooling.Facing new markets and opportunities, the company will accurately position top cloud service customersdomestically and abroad, swiftly forming differentiated competitive advantages, focusing on forging the ability toprovide high-value-added products and services for leading global customers, thus creating more growth momentumfor the company's second growth curve.
In the automotive product field, with more and more traditional OEMs and consumer electronics terminal brandmanufacturers swiftly entering the new energy vehicle ranks, the previously relatively closed supply chain patternis undergoing significant changes. Against this backdrop, manufacturers with experience in both consumerelectronics and automotive industry R&D and manufacturing will be better positioned to adapt to the futureautomotive industry's efficient, responsive development models and rhythms. Currently, the company's team hasaccumulated over a decade of experience in the automotive field, forming four major segmented business sectors:
automotive wiring harnesses/connectors, intelligent cabins, vehicle electronics, and power management. Based onthis, it has created a complete product matrix and vertically integrated service system. In the future, the companywill continue to consolidate its existing capabilities, continuously improve the coverage of its superior productsamong diverse customers at home and abroad, and leverage platform advantages and the outbound resources ofdeep strategic cooperation. This will enable the company's Tier 1 products to continuously refine and enhance theircompetitiveness through real-world practice, laying a solid foundation for achieving the medium- to long-term goalof becoming a global automotive Tier 1 leader in the next fifteen years.
Looking back on the past year, the achievements we have made embody the wisdom and sweat of all colleagues,as well as our unremitting pursuit of high quality and sustainable development, and our firm determination andbelief in building a "century-old shop". Looking ahead, we will adhere to our original aspiration, maintain strategicstability, continuously enhance our ability to seize opportunities, respond to challenges, turn crises into opportunities,and foster opportunities. Through continuous improvement of internal operational management capabilities andtapping into internal potential, we will strive for perfection in various platform operation mechanisms, operationalefficiency, and operational quality with a "craftsman spirit", ensuring adaptation to the development needs of variousindustrial modules. We are committed to realizing the grand blueprint of the "three five-year" strategic plan in anera full of opportunities and challenges.
4. Capital required for future development strategy and capital utilization plan
As of the end of 2023, the company's asset-liability ratio was 56.61%. In 2024, we will continue to promote thehigh-quality development of our business in a solid and orderly manner, and we still have a need for funds in theexpansion of new markets and investments of new projects. Along with the improvement of our position in theindustry and stabilization of our relationship with customers, we have obtained certain competitive advantages. Wewill continue to strictly control capital expenditures in each project, regularly analyze and review the return oninvestment in each capital expenditure project, and continue to improve our management of accounts receivable,
inventories and other areas, to maximize the efficiency of capital utilization. We will fully consider the effective useof financing instruments at different periods according to the requirements of our development strategy andreasonably adjust our asset and liability structure so as to create more value for our shareholders.
5. Future risks
(1) Risk of fluctuation of macro economy
The current global macroeconomic environment is characterized by significant uncertainty, influenced bymultiple challenges such as high US dollar interest rates, geopolitical tensions, weak international trade, andincreasing climate disasters. As a result, the overall global economic recovery is sluggish. If the uncertainties of themacro environment continue for a long time, the industry and the Company will be impacted and face certainchallenges.
(2) Exchange rate risk
At present, our revenue from the overseas market constitutes a large proportion in our total operating revenue,and our overseas transactions are mainly settled in US Dollars. Our sales on the overseas market totaledRMB143,452,850,200 and RMB193,803,646,900 and RMB 206,756,020,500 in 2021, 2022 and 2023, representing
93.18%, 90.55% and 89.16% of our revenue from main business respectively. Because China implements themanaged floating rate system, the foreign exchange rates fluctuate along with the changes in domestic and foreignpolitical and economic environment. If the foreign exchange rates fluctuate greatly, the exchange gains or lossesmay affect our operating results. In order to reduce the uncertainties caused by fluctuations of foreign exchangerates on our operating results, we will strive to keep abreast of the movement of foreign exchange rates, strictlycontrol the proportion of foreign currency denominated assets in our net assets, and through foreign exchangederivative transactions, reduce the effect of the fluctuation of foreign exchange rates.
(3) Management risk
We are committed to promoting the high-quality growth of our business and continuously strengthen thehorizontal expansion and vertical integration in consumer electronics, communication, automotive and other fields.We have a great number of operating entities which are relatively decentralized. Due to the impact of geopolitics,trade frictions between China and the United States and other factors, our major customers will put forwardincreasingly high requirements for the international deployment of our production capacity, which will in turn putforward higher requirements for our operation and management capabilities and pool of outstanding talents. If ourmanagement level cannot satisfy the requirements of the rapid growth of scale of our operations, we may face certainmanagement risks.
(4) Risk of relative concentration of customers
We attach great importance to maintaining long-term and stable cooperation relationships with our majorcustomers. At present, our customers are relatively concentrated, most of whom are engaged in consumer electronics.
Though they are first-class customers in the industry, have strong and leading competencies on the market, and havemaintained years of stable cooperation relationship with us, if any major customer falls into serious difficulties inits operation, we may face certain operating risks. We will further diversify customers, products and business. Witha focus on process + underlying technologies as the supporting point, we will continue to carry out horizontalexpansion and trans-sector empowerment, and strive to explore new markets and new business.XII. Investigation, research, communication, interview and other activities?Applicable □N/A
| Date | Place | Method of communication | Type of guests | Guests | Main topic of discussion and information provided | Particulars of the investigation and research activity available at |
| February 24, 2023 | No. 313 Beihuan Road, Qingxi Town, Dongguan, Guangdong | On-site investigation and research | Institution | Institutional investors | Introduction about Strategic Cooperation Framework Agreement signed between us and Chery Group | Refer to the Record of Investor Relations Activity dated February 24, 2023 published on www.cninfo.com.cn on February 26, 2023 |
| April 28, 2023 | Company meeting room at No. 313 Beihuan Road, Qingxi Town, Dongguan, Guangdong | Communication by telephone | Institution | Institutional investors | Introduction about our operating status in 2022 and the first quarter of 2023 | Refer to the Record of Investor Relations Activity dated April 28, 2023 published on www.cninfo.com.cn on May 3, 2023 |
| May 4, 2023 | Company meeting room at No. 313 Beihuan Road, Qingxi Town, Dongguan, Guangdong | Network platform online communication | Other | Investor | Our performance briefings in 2022 | Refer to the Record of Investor Relations Activity dated May 4, 2023 published on www.cninfo.com.cn on May 5, 2023 |
| May 22, 2023 | Company meeting room at No. 313 Beihuan Road, Qingxi Town, | On-site investigation and research | Other | Investor | Communications at our annual general meeting of shareholders | Refer to the Record of Investor Relations Activity dated May 22, 2023 published on www.cninfo.com.cn on May 24, 2023 |
Dongguan,Guangdong
| Dongguan, Guangdong | ||||||
| August 29, 2023 | Company meeting room at No. 313 Beihuan Road, Qingxi Town, Dongguan, Guangdong | Communication by telephone | Institution | Institutional investors | Introduction about our operating results in the first half of 2023 and general situation | Refer to the Record of Investor Relations Activity dated August 29, 2023 published on www.cninfo.com.cn on August 30, 2023 |
| October 22, 2023 | Company meeting room at No. 313 Beihuan Road, Qingxi Town, Dongguan, Guangdong | Communication by telephone | Institution | Institutional investors | Introduction about our operating status for three quarters of 2023 | Refer to the Record of Investor Relations Activity dated October 22, 2023 published on www.cninfo.com.cn on October 22, 2023 |
XIII. Implementation of the Quality Return Double Improvement Action Plan
Has the company disclosed the Quality Return Double Improvement action plan?
?Yes □No
The company disclosed the Announcement on the Quality Return Double Improvement Action Plan onFebruary 18, 2024. The specific contents and the company's specific measures to implement the action plan are asfollows:
1. Deepen Core Business and Focus on Digital Empowerment
Founded in Shenzhen in 2004, and listed on the Shenzhen Stock Exchange in 2010, the company is a precisionintelligent manufacturing enterprise. Its main products cover various fields such as consumer electronics,automotive, telecommunications, industrial, and medical. It primarily serves leading brands both domestically andinternationally, providing them with a one-stop solution including core components, module products, and systemsolutions across multiple product categories. In the field of consumer electronics, the company focuses on thecomposite development of underlying technologies and processes, enabling and differentiating products such assmartphones, smart wearables, and mixed reality devices. By stacking company products to create scenarios, it aimsto build ecosystems across various scenarios. In different ecosystems, scenarios, and product combinations, Lens
Technology is committed to becoming the most complete solution provider. In the field of telecommunications, thecompany has long been committed to high-speed interconnection products. Leveraging mature process developmentand precision manufacturing capabilities, it starts from core components such as electrical connections, opticalconnections, base station RF, cooling, and power supplies, extending widely to module and system-level products,forming a vertically integrated service capability in the field of communications. In the automotive field, with thecontinuous evolution of the global automotive market towards electrification, intelligence, connectivity, and sharing,the company fully leverages its accumulated capabilities in basic technologies such as sound, light, electricity, heat,magnetic, and radio frequency, as well as process development experience in the fields of consumer electronics andtelecommunications over the years. It applies these to automotive wiring harnesses, automotive connectors,intelligent cabins, and intelligent driving products, achieving cross-domain applications. Meanwhile, under theguidance of the "three five-year" strategic plan, the company's management constantly monitors market dynamics,adapts to industry trends, and focuses on forward-looking layouts around its main business with the fundamentalgoal of coordinated development. It is committed to providing the market with comprehensive and ultimate solutionsfor the entire industry chain.
Since its establishment, the company has always adhered to rooting in the real economy, cultivating its mainbusiness, and refining its expertise to nurture core competitiveness. It emphasizes both staying true to its roots andinnovation. By fully leveraging the synergies within its industries, the company has strengthened its main businessand nurtured forward-looking industries with a steady foundation. With the continuous deep integration of new-generation information technology and manufacturing, the company remains closely aligned with the underlyinglogic of precision intelligent manufacturing. It vigorously promotes the empowerment of intelligent and digitaltechnologies across various key stages of product development, design, mass production, and testing, facilitatingthe company's transformation and upgrading towards digitalization and ensuring high-quality development. Basedon this foundation, the company adheres to prudent investment practices to prevent reckless expansion. Itstrengthens the management of the use of raised funds, strictly controls investments in specific sensitive industriesor purposes subject to regulations or policy restrictions, and avoids shifting focus away from tangible assets towardsspeculative ventures.
2. Uphold Innovation and Stimulate New Growth Drivers
Since its listing, the company has consistently placed research and development (R&D) innovation at theforefront of its corporate development. It has continuously invested significantly in R&D technology, striving toinnovate traditional manufacturing processes, continuously improve automation production levels, and modularizevarious precision manufacturing process platforms. In addition, the company attaches great importance to long-termcultivation in underlying materials and innovative production technologies. Its R&D team consistently delves intothe forefront of technology, exploring advanced precision manufacturing processes and product applications. Itcollaborates with core customers to establish advanced technology development laboratories and jointly develop
cutting-edge technologies.
The company's R&D investment is mainly divided into investment in frontier technology and investment inproduct iteration. Investment in frontier technology mainly revolves around the company's medium and long-termproduct and business planning layout, allocating about 30% of the total R&D expenses to innovative research anddevelopment in areas such as underlying materials, processes, and processes, aiming to propel the company'sproducts into global industry leaders within the next 20 years. Product iteration investment focuses on R&Dinvestment in the process from new concepts to NPI (New Product Introduction) for new solutions and products.Over the years, the company's R&D investment and achievements have steadily increased. In the past three years,it has accumulated R&D investment of RMB 23.278 billion and currently holds 6,202 patents.
3. Standardize Operations and Enhance Governance Levels
Continuously strengthening the company's governance foundation, enhancing internal control systems, andpromoting the accountability of the "three meetings and one layer." Standardizing the rights and obligations of thecompany and shareholders to prevent the abuse of shareholder rights and the exploitation of the management'sdominant position to the detriment of the rights of small and medium-sized investors. Strengthening investorrelations management, expanding channels for institutional investors to participate in corporate governance, guidingsmall and medium-sized investors to actively participate in shareholders' meetings, facilitating various investorentities' participation in decision-making on major matters, and enhancing investors' right to speak and sense ofachievement.
The company will continue to improve its corporate governance structure and internal control system, conductgovernance activities in depth, enhance its corporate governance level, and provide strong guarantees for theprotection of shareholders' legitimate rights and interests. The company's management will further enhance itsoperational management level, continuously improve the company's core competitiveness, profitability, andcomprehensive risk management capabilities, aiming for sustainable development and returning value to investors.
4. Strengthen Disclosure and Efficiently Convey Value
Emphasizing the importance and relevance of information disclosure, actively disclosing useful information forinvestors' investment decisions, strengthening key information disclosure such as industry competition, companybusiness, and risk factors, while reducing redundant information disclosure. Ensuring that information disclosure istrue, accurate, complete, timely, fair, concise, clear, and easy to understand. Conducting regular performancebriefings. Preventing speculative concepts and riding on hot topics, and guarding against stock speculation risks.
The company will actively establish open, fair, transparent, and multidimensional communication channels withinvestors, continuing to communicate with investors through various forms such as the "Interactive Easy" platform,investor email, investor hotline, performance briefings, etc. Deepening investors' understanding of the company'sproduction and operation, better conveying the company's investment value, enhancing investors' identification withthe company, and building market confidence
5. Share Achievements and Actively Rewarding Investors
The company adheres to a people-centered value orientation, insists on investor-centric principles, andremembers the contributions of hundreds of millions of small and medium-sized investors to the development ofChina's capital market over more than 30 years. It firmly establishes a shareholder return consciousness, ensuringthat investors receive returns and a sense of accomplishment. It strengthens corporate culture construction, fostersa distinctive development vision, a positive set of values, honest and trustworthy management principles, fulfillssocial responsibilities, and promotes an enterprising and innovative corporate spirit. Adhering to legal complianceand upholding the public nature of public companies, it actively rewards investors, stabilizes the market, and boostsconfidence. To improve and perfect the company's shareholder return mechanism, increase the transparency andoperability of profit distribution policy decisions, and actively reward investors, the company has formulatedmultiple shareholder return plans in accordance with the Company Law of the People's Republic of China, theRegulatory Guidelines for Listed Companies No. 3 - Cash Dividends of Listed Companies (Revised in 2023), andother laws, regulations, normative documents, as well as the provisions of the Articles of Association. Since itslisting, the company has implemented several "Future Three-Year Shareholder Return Plans". The company hasdistributed a total of RMB 2.48 billion in dividends over the past three years, with an annual dividend ratio of noless than 10%. The cumulative dividend payout over three years accounts for 31.71% (the proportion of profitsdistributed in cash dividends over the past three years to the average distributable profits realized over the past threeyears).
Meanwhile, based on confidence in the company's future development prospects, recognition of the company's long-term value, and ashared responsibility to promote the stable and healthy development of the capital market, Mr. Wang Laisheng, one of the company'sactual controllers and vice-chairman, increased his holdings of the company's shares through centralized bidding trading on theShenzhen Stock Exchange from May 9, 2022, to May 10, 2022. He acquired 7,030,910 shares at a total amount of RMB 200.041million (excluding fees). Please refer to the "Announcement on the Completion of the Term of the Share Increase Plan by One of theCompany's Actual Controllers and Vice Chairmen" (Announcement No.: 2022-085) for details. On October 27, 2023, the companydisclosed the "Announcement on the Share Increase Plan by One of the Company's Actual Controllers and Vice Chairmen"(Announcement No.: 2023-066). Mr. Wang Laisheng intends to increase his holdings of the company's shares through the ShenzhenStock Exchange system within six months from October 26, 2023. The amount of the increase is not less than RMB 100 million andnot more than 200 million yuan. In this current increase plan, as of now, Mr. Wang Laisheng has acquired 3,181,037 shares of thecompany through centralized bidding trading on the Shenzhen Stock Exchange, with a total amount of RMB 100.3883 million(excluding fees). Please refer to the "Progress Announcement on the Mid-term of the Share Increase Plan by One of the Company'sActual Controllers and Vice Chairmen" (Announcement No.: 2024-006) for details.
Section IV Corporate Governance
I. Overview of our corporate governanceWe have always been committed to promoting the establishment and improvement of a modern corporatesystem, regulating the operation of the listed company and improving the corporate governance structure. Duringthe reporting period, we kept on improving our corporate governance structure, established and improved rules andregulations, regulated corporate operations, strengthened information disclosure, actively conducted investorrelations management and improved corporate governance level in strict accordance with the requirements of theCompany Law, the Securities Law, the Rules Governing the Listing of Shares on Shenzhen Stock Exchange (2023Revision), the Guidelines for Articles of Association of Listed Companies, the Code of Corporate Governance forListed Companies, the Guide on Self-regulatory Supervision for Companies Listed on the Shenzhen Stock ExchangeNo. 1 – Code of Operations for Companies Listed on the Main Board and other applicable laws, regulations andnormative documents.(I) Shareholders and general meeting of shareholders We perform the procedures for convening, holding andvoting at shareholders’ meetings in strict accordance with the Company Law, the AOA, the Rules of Procedure ofthe Shareholders’ Meeting and other relevant provisions and requirements, and treat all shareholders fairly. Wepermit shareholders to elect to vote in person or on line at our shareholders’ meetings, so as to enable minorityshareholders to fully exercise their voting rights. When a general meeting of shareholders considers any related-party transaction, we require the interested shareholders to abstain from voting, and ensure that such related-partytransaction is conducted on an arm’s length basis without prejudice to the interests of shareholders. When a generalmeeting of shareholders considers any material matter that affects the interests of minority shareholders, the votescast by them are counted separately. All general meetings of shareholders are convened and held by our Board ofDirectors in the presence of lawyers.
(II) Relationship with the controlling shareholder We are independent of our controlling shareholder inoperation, assets, personnel, organization and finance, and each of our Board of Directors, Board of Supervisorsand other internal bodies operates independently. Our controlling shareholder is strict with itself and has not directlyor indirectly interfered with our decision-making and business activities without the authorization of theshareholders’ meeting, or occupied our funds for non-operating purpose.(III) Directors and Board of Directors: We elect directors and engage independent directors in strict accordancewith the relevant procedures set forth in the Company Law and the AOA. We now have seven directors, includingthree independent directors, who are experts in law, accounting and other areas. The number of members andcomposition of our Board of Directors comply with the requirements of the applicable laws and regulations and theAOA. Our Board of Directors has four committees, including Audit Committee, Strategy Committee, Nomination
Committee and Remuneration and Appraisal Committee, each of which has a reasonable member structure, andprovides scientific and professional opinions and references for the decision-making of the Board of Directors. OurBoard of Directors has convened and held meetings, and implemented the resolutions of the shareholders’ meetingin strict accordance with the AOA and the Rules of Procedure of the Board of Directors. All directors have performedtheir duties diligently, and seriously attended the meetings of the Board of Directors and shareholders, andsafeguarded the legitimate rights and interests of the Company and the shareholders.(IV) Supervisors and the Board of Supervisors: Our Board of Supervisors has elected supervisors in strictaccordance with the relevant procedures set forth in the Company Law and the AOA. We now have three supervisors,including one chairman. The number of members and composition of our Board of Supervisors comply with therequirements of the applicable laws and regulations and the AOA. Our Board of Supervisors has convened and heldmeetings in strict with the AOA and the Rules of Procedure of the Board of Supervisors. All supervisors haveseriously performed their duties, effectively supervised and expressed independent opinions on our financial affairsand the legality and regulatory compliance of the performance of duties by our directors and executives in goodfaith and diligently, and safeguarded the legitimate rights and interests of the Company and the shareholders.(V) Performance appraisal and incentive and restraint mechanisms: In order to establish sound incentivemechanisms, and enhance the concept of joint sustainable development of the Company and the management andkey employees, we have implemented the share incentive plans to enhance the benefit sharing and restrainmechanisms between shareholders and key business personnel, maintain the stability of the management team andkey business personnel, ensure the achievement of our development strategy and business objectives, and seek long-term stable development. The appointment of our executives is open and transparent, and complies with theapplicable laws and regulations.
(VI) Stakeholders: We fully respect the legitimate rights and interests of stakeholders, and strive to coordinateand balance the interests of society, shareholders, the Company, employees and other stakeholders, and jointlypromote our sustained and steady development.
(VII) Information disclosure and transparency: We have performed our information disclosure obligationstruthfully, accurately, timely and completely in strict accordance with the applicable laws and regulations and ourInformation Disclosure Management Measures, and designated the Securities Times, the Shanghai Securities Newsand www.cninfo.com.cn as the media for us to disclose information. We have kept non-public information in strictconfidence, seriously registered and reported the insiders pursuant to our Insider Management Policy, establishedthe filing policy for insiders, and timely submitted the same to the competent regulatory authorities for the recordin accordance with the relevant provisions. We also strictly regulate the reporting of our information to externalinformation users. When receiving specific visitors, we receive them in strict accordance with the relevantrequirements, require each of them to sign a Letter of Commitment, and timely disclose the relevant record ofinvestigation and research activity on the e-interaction platform of the Shenzhen Stock Exchange. During the
reporting period, we did not take advantage of any inside information to trade our shares. We have set up hotlinefor investors and investor relations management section, and designated special persons responsible for timelycommunication with investors. In addition, we take the initiative to timely contact and communicate with, and reportrelevant matters to, the competent regulatory authorities, in order to accurately understand the relevant regulatoryrequirements for information disclosure and further improve the transparency and quality of our informationdisclosure. We have disclosed information in a true, accurate, complete and timely manner in strict accordance withthe requirements for substance and form, to ensure that all shareholders have access to our information throughdifferent channels.Is there any significant difference between the actual circumstance of corporate governance of the Company and the requirements ofthe applicable laws, administrative regulations and the provisions of the CSRC regarding corporate governance of the listed companies?
□Yes ?No
There is no significant difference between the actual circumstance of our corporate governance and the applicable laws, administrativeregulations and the provisions of the CSRC regarding corporate governance of the listed companies.II. The Company’s independence of its controlling shareholder and actual controller in assets,personnel, finance, organization and business
During the reporting period, we operated in strict compliance with the Company Law and the AOA, graduallyimproved our corporate governance structure, were independent of our controlling shareholder in assets, personnel,finance, organization and operation, had our own independent and complete business, were independent inmanagement, and had independent R&D, production and sales systems. During the reporting period, our productionand operation were stable, and we had sound internal bodies and were able to operate independently in compliancewith the applicable regulations.
(I) Integrity of assets
We are a company limited by shares established through an overall change in organization form according tothe law, and have our own independent and complete assets. We have performed the relevant procedures for changesin assets and shareholding according to the law. We have not provided any guarantee for the obligations ofshareholders on the security of our assets or credit, or lent any loan or credit line granted to us to any shareholder.We have full control over all of our assets, and none of our assets or funds is occupied by our controlling shareholderto the detriment of our interest.
(II) Independence in personnel
Our directors, supervisors and executives have been legally appointed in accordance with the Company Law,the AOA and other applicable laws, rules and regulations. All of our executives (except independent directors)exclusively work in and receive remunerations form the Company, and do not hold any post (other than director andsupervisor) concurrently in any affiliate of shareholders or any entity engaging in any business same as or similarto our business. We are independent in employees, manage their remunerations, social security and other affairsindependently, and have sound personnel management policies and system in place.
(III) Independence in financeWe have independent financial accounting department and internal audit department, and independentaccounting system and financial management policies in place that comply with the applicable regulations, andmake financial decisions independently. Since our establishment, we have opened separate bank accounts, filed taxreturns and paid taxes independently according to the law, and executed external contracts independently, and hadnot shared any bank account or paid any tax in combination with any shareholder.(IV) Independence in organizationWe have established a sound governance structure composed of the shareholders’ meeting, the Board ofDirectors and the Board of Supervisors, and independent and complete operation and management bodies that meetour development requirements and conform to our actual situations, each of which performs its powers and functionsindependently in accordance with the AOA and our internal management system. Since our establishment, ourproduction, operation and offices have been totally independent of our shareholders.
(V) Independence in operationWe have complete corporate property rights and independent R&D, production and sales systems, carry outbusiness independently, keep separate accounts, and make decisions and assume liabilities and risks independently,and do not rely on any shareholder or other affiliate in our production and operation activities.
III. Horizontal competition
□Applicable ?N/A
IV. Annual and extraordinary general meetings of shareholders held during the reportingperiod
1. General meetings of shareholders held during the reporting period
| Session | Type of meeting | Parentage of investors attending the meeting | Date of meeting | Date of disclosure | Resolution of the meeting |
| First extraordinary general meeting of shareholders in 2023 | Extraordinary general meeting of shareholders | 54.17% | March 09, 2023 | March 10, 2023 | A total of 2 proposals, including the Proposal on the Forecast of the Company's Daily Connected Party Transactions in 2023, were approved by vote, as disclosed in our Announcement 2023-019. |
Annual general meetingof shareholders in 2022
| Annual general meeting of shareholders in 2022 | Annual general meeting of shareholders | 46.02% | May 22, 2023 | May 23, 2023 | A total of 9 proposals, including 20221 Work Report of the Board of Directors, were approved by vote, as disclosed in our Announcement No. 2023-038. |
2. Extraordinary general meetings of shareholders convened at the request of preferred shareholders withresumed voting rights
□Applicable ?N/A
V. Directors, supervisors and executives
1. Particulars
| Name | Gender | Age | Title | Status | End date of the term of office | End date of the term of office | Opening balance of shares held | No. of additional shares acquired in the reporting period | No. of shares disposed of in the reporting period | Changes in the number of shares held due to other reasons | Closing balance of shares held | Cause of increase or decrease in the number of shares held |
| WANG Laichun | Female | 57 | Chairman and general manager | Incumbent | February 22, 2009 | May 18, 2024 | ||||||
| WANG Laisheng | Male | 60 | Vice Chairman | Incumbent | February 22, 2009 | May 18, 2024 | 12,258,610 | 12,258,610 | ||||
| WANG Tao | Male | 39 | Director, Vice General Manager | Incumbent | May 21, 2021 | May 18, 2024 | 729,656 | 601,627 | 1,331,283 | Additional shares acquired as a result of exercise of incentive share options | ||
| LI Wei | Male | 44 | Director, Vice General Manager | Incumbent | May 21, 2021 | May 18, 2024 | 506,989 | 506,989 | 1,013,978 | Additional shares acquired as a result of exercise of incentive share options | ||
| ZHANG Ying | Female | 61 | Independent Director | Incumbent | May 22, 2018 | May 18, 2024 | ||||||
| LIU | Male | 59 | Independ | Incumbent | May 18, | May 18, |
Zhonghua
| Zhonghua | ent Director | 2021 | 2024 | |||||||||
| SONG Yuhong | Female | 53 | Independent Director | Incumbent | May 18, 2021 | May 18, 2024 | ||||||
| XIA Yanrong | Female | 43 | Chairman of the Supervisory Board | Incumbent | December 19, 2017 | May 18, 2024 | ||||||
| MO Rongying | Female | 44 | Supervisor | Incumbent | May 22, 2018 | May 18, 2024 | ||||||
| YI Peizan | Female | 39 | Supervisor | Incumbent | February 22, 2009 | May 18, 2024 | ||||||
| HUANG Dawei | Male | 52 | Board Secretary, Vice General Manager | Incumbent | May 25, 2018 | May 21, 2024 | 659,085 | 219,695 | 878,780 | Additional shares acquired as a result of exercise of incentive share options | ||
| WU Tiansong | Male | 54 | Chief Financial Officer | Incumbent | April 15, 2019 | May 21, 2024 | 750,843 | 232,015 | 982,858 | Additional shares acquired as a result of exercise of incentive share options | ||
| Total | -- | -- | -- | -- | -- | -- | 14,905,183 | 1,560,326 | 0 | 0 | 16,465,509 | -- |
Whether any director or supervisor retired or any executive was removed during the reporting period?
□Yes ?No
Changes in directors, supervisors and executives:
□Applicable ?N/A
2. Positions held
Professional background and main work experience of our current directors, supervisors and executives and main positions held bythem in the Company
(I) DirectorsMs. WANG Laichun, 57 years old, resident of Hong Kong, China; EMBA, Shenzhen Graduate School ofTsinghua University; a member of the 14th National Committee of the CPPCC; Vice President of the NationalFederation of Industry and Commerce Women Entrepreneurs Association; Vice Chairman of Guangdong Federationof Industry & Commerce; 2022 Guangdong 3.8 Red Flag Bearer; Invited Vice Chairman of China Association ofWomen Entrepreneurs; The founder and controlling shareholder of Luxshare Precision Industry Co., Ltd., servingas Chairman and General Manager.
Mr. WANG Laisheng, 60 years old, resident of Hong Kong, China; Member of the 14th Dongguan MunicipalCommittee of the Chinese People's Political Consultative Conference (CPPCC), is now our Vice Chairman of theBoard of Directors; former Executive Director of the Shenzhen Quality Association and Director of the GuangdongLaboratory Federation. Mr. WANG Laisheng was engaged in individual business since mid-1980s. Mr. WANGLaisheng and Ms. WANG Laichun jointly purchased the shares of Luxshare Limited in 1999 and founded LuxsharePrecision Industry (Shenzhen) Co., Ltd. in 2004, and has worked as the Vice Chairman of our Board of Directorsuntil now.Mr. LI Wei, 44 years old, Chinese nationality, undergraduate; is now chief of our Precision Component BusinessUnit. Mr. LI Wei has nearly 20 years’ experience in precision manufacturing and has been engaged in product design,validation and quality management in many precision manufacturing companies. He joined Luxshare-ICT in July2019, responsible for the operation and management of the Corporate Business Division.Mr. WANG Tao, 39 years old, Chinese nationality, undergraduate; is now chief of our Precision ComponentBusiness Unit. Mr. WANG Tao has rich experience in precision manufacturing of components. He joined Luxshare-ICT in April 2009, responsible for product development and management.Ms. ZHANG Ying, 61 years old, Chinese nationality; Doctor of Laws, Wuhan University; postdoctoralfellowship in law, Chinese Academy of Social Sciences; Current researcher at the Compliance Research Institute ofShenzhen University. Ms. ZHANG Ying joined the China University of Geosciences in 1984 as a lecturer, and theInstitute of Political Science and Law, Wuhan Academy of Social Sciences in 1994 as an assistant researcher, Beganworking at the Law School of Shenzhen University in 2000. Ms. ZHANG Ying has obtained the qualification as anindependent director from the Shenzhen Stock Exchange, and is an Independent Director of our 4th and 5th Boardof Directors.
Mr. LIU Zhonghua, 59 years old, Chinese nationality, without foreign permanent residence, master, professorof accounting; is now professor and tutor of postgraduates of the Guangdong University of Foreign Studies Schoolof Accounting, Director of the Accounting Society of China, Vice Chairman of the Accounting Society for ForeignEconomic Relations & Trade of China, Executive Vice Chairman of the Guangdong Association of ManagementAccountants, and Executive Director of the Accounting Society of Guangdong. Mr. LIU Zhonghua has obtained thequalification as an independent director from the Shenzhen Stock Exchange, and is an Independent Director ofGuangdong Provincial Expressway Development Co., Ltd., GEM Co., Ltd. and Guangzhou Yuexiu CapitalHoldings Group Co., Ltd.
Ms. SONG Yuhong, 53 years old, Chinese nationality; Master of Laws, Wuhan University; Bachelor of Laws,Southwest University of Political Science & Law; MBA, Grandes ?coles de Commerce; is now senior partner ofDeHeng Law Offices (Shenzhen), and mediator of the International Commercial Mediation Center for Belt andRoad Initiative – Luohu Court of Shenzhen Mediation Center. Ms. SONG Yuhong has obtained the qualification asan independent director from the Shenzhen Stock Exchange, and is an Independent Director of our 5th Board of
Directors.(II) SupervisorsMs. XIA Yanrong, 43 years old, Chinese nationality, undergraduate majoring in financial management, is nowour supervisor. Ms. XIA Yanrong worked at the Finance Department of 3CEMS Group Prime Technology(Guangzhou) Co., Ltd. from January 2003 to April 2006, and the Finance Department of Dachang ElectronicTechnology (Suzhou) Co., Ltd., a subsidiary of P-TWO, from April 2006 to April 2009, and joined us since April2009, and served as chief of the Finance Department at Kunshan Lanto, and chief of the Finance Department andchief of the Credit Management Department at Luxshare-ICT, and is now Director of our Central FinanceDepartment and Credit Management Department. Ms. XIA Yanrong is a member of our 4th and 5th Board ofSupervisors.Ms. MO Rongying, 44 years old, Chinese nationality, majoring in business administration, is now our supervisor.She was chief of the Planning Department at Thomson Multimedia (Dongguan) Co., Ltd., before joining us in June2007 as chief of the Central Customs Affairs Department. Ms. MO Rongying is a member of our 4th and 5th Boardof Supervisors.
Ms. YI Peizan, 39 years old, Chinese nationality, joined our Finance Department in 2004, is now our supervisor.Ms. YI Peizan is a member of our 1st through 5th Board of Supervisors.(III) ExecutivesMs. WANG Laichun, whose resume is set out in “Directors” above.Mr. WANG Tao, whose resume is set out in “Directors” above.Mr. LI Wei, whose resume is set out in “Directors” above.Mr. HUANG Dawei, 52 years old, citizen of Chinese Taiwan, graduated from the National Tsing Hua UniversityInstitute of Industrial Engineering, Master of Industrial Engineering, is now our Deputy General Manager and BoardSecretary. Mr. HUANG Dawei worked in a Fortune 500 company, responsible for market development andoperation management, before joining Luxshare Electronic Kunshan as the legal representative, director andGeneral Manager in June 2013. Mr. HUANG obtained a Qualification Certificate for Board Secretary from theShenzhen Stock Exchange in October 2017, and meets the qualifications required in the Rules Governing the Listingof Shares on Shenzhen Stock Exchange (2023 Revision) and other applicable laws and regulations and the AOA.Mr. WU Tiansong, 54 years old, citizen of Chinese Taiwan, received a bachelor’s degree from the NationalTaiwan University of Science and Technology, is now the CFO of Luxshare-ICT. Mr. WU Tiansong served as asenior auditor at the Audit Department of Deloitte Touche Tohmatsu Limited from August 1996 to August 1999,and worked in the Underwriting Department of Taiwan Yuanda Securities Corp., and served as the chief of theAccounting Director at Taiwan P-TWO Industries Inc. and Uniwill Computer Corp., and chief of the FinanceDepartment at Zhongshan Ichia Electronics Co., Ltd. from September 1999 to March 2009. He joined us in 2011.Positions held in shareholders
□Applicable ?N/A
Positions held in other entities?Applicable □N/A
| Name | Entity | Position | Beginning date of term of office | End date of the term of office | Whether or not receive remunerations and subsidies from such entity |
| WANG Laichun | Luxsan Precision Technology (Jiangsu) Co., Ltd. | Director | November 25, 2020 | No | |
| WANG Laichun | Bisaisi Automotive Technology (Suzhou) Co., Ltd. | Chairman | July 18, 2018 | No | |
| WANG LaichunLuxcase Precision Technology (Yancheng) Co., Ltd.ChairmanFebruary 3, 2021No WANG Laichun | Xiexun Electronic (Ji’an) Co., Ltd. | Vice Chairman of the Board of Directors | November 12, 2005 | No | |
| WANG Laichun | Luxsan Precision Technology (Jiangsu) Co., Ltd. | Director | November 25, 2020 | No | |
| WANG Laichun | Fujian JK Wiring Systems Co., Ltd. | Chairman | June 18, 2012 | No | |
| WANG Laichun | TIME Interconnect Technology Limited | Chairman | April 19, 2022 | No | |
| WANG Laichun | Chery Holdings Group Co., Ltd. | Director | June 21, 2023 | No | |
| WANG Laisheng | Luxsan Precision Technology (Jiangsu) Co., Ltd. | Chairman | November 25, 2020 | No | |
| WANG Laisheng | Xunmu Information Technology (Shanghai) Co., Ltd. | General Manager | April 27, 2021 | No | |
| WANG Laisheng | Lishan Smart Manufacturing Technology (Guangdong) Co., Ltd. | Managing Director & Manager | November 18, 2020 | No | |
| WANG Laisheng | BCS Automotive Interface Solutions (Xi’an) Co., Ltd. | Managing Director & General Manager | December 29, 2018 | No | |
| WANG Laisheng | Xiexun Electronic (Ji’an) Co., Ltd. | Chairman | November 12, 2005 | No | |
| WANG Laisheng | Lanto Electronic Limited | Vice Chairman of the Board of Directors | May 12, 2011 | No | |
| WANG Laisheng | Kunshan Luxshare Precision Industry Co., Ltd. | Director | October 25, 2011 | No | |
| WANG Laisheng | Dongguan Leader Precision Industry Co., Ltd. | Chairman | August 16, 2012 | No |
WANGLaisheng
| WANG Laisheng | Kunshan Luxshare Precision Industry Co., Ltd. | Vice Chairman of the Board of Directors | October 25, 2011 | No | |
| WANG Laisheng | Suining Luxshare Precision Industry Co., Ltd. | Managing Director | January 11, 2013 | No | |
| WANG Laisheng | Luxshare Precision Industry (Chuzhou) Co., Ltd. | Managing Director | March 24, 2014 | No | |
| WANG Laisheng | Fengshun Luxshare Precision Industry Co., Ltd. | Managing Director | July 4, 2014 | No | |
| WANG Laisheng | Dongguan Luxshare Precision Industry Co., Ltd. | Chairman | November 27, 2015 | No | |
| WANG Laisheng | Jiangxi Luxshare Intelligent Manufacture Co., Ltd. | Director | December 25, 2015 | No | |
| WANG Laisheng | Chery Automobile Co., Ltd. | Director | April 29, 2022 | No | |
| WANG Laisheng | Lishan Enterprise Management (Zhejiang) Co., Ltd. | Managing Director & General Manager | March 24, 2021 | No | |
| WANG Laisheng | Guangdong Luxshare & Merry Electronics Co., Ltd. | Director | December 7, 2017 | No | |
| WANG Laisheng | Luxshare Holdings (Guangdong) Co., Ltd. | Managing Director & General Manager | November 1, 2021 | No | |
| LIU Zhonghua | Guangdong Provincial Expressway Development Co., Ltd. | Independent director | December 4, 2017 | September 20, 2025 | Yes |
| LIU Zhonghua | GEM Co., Ltd. | Independent director | March 20, 2019 | March 12, 2025 | Yes |
| LIU Zhonghua | Guangzhou Yuexiu Financial Holding Group Co., Ltd. | Independent Director | July 19, 2022 | September 17, 2023 | Yes |
| LI Wei | Luxshare Intelligent Manufacture Technology (Changshu) Co., Ltd. | Managing Director & General Manager | August 16, 2021 | No | |
| LI Wei | Luxshare Intelligent Equipment (Kunshan) Co., Ltd. | Managing Director & General Manager | December 29, 2020 | No | |
| LI Wei | Kunshan Luxshare Enterprise Management Development Co., Ltd. | Managing Director | November 4, 2020 | No | |
| WANG Tao | Lanto Electronic Limited | Chairman | November 20, 2019 | No | |
| WANG Tao | Luxshare Precision Technology (Nanjing) Co., Ltd. | Managing Director & General Manager | October 19, 2021 | No | |
| XIA Yanrong | Luxshare iTech (Zhejiang) Co., LTD. | Supervisor | April 8, 2019 | No | |
| XIA Yanrong | Zhuhai Kinwong Flexible Circuit Co., Ltd. | Supervisor | December 3, 2018 | No | |
| XIA | Luxshare Precision Industry (Suzhou) Co., | Supervisor | February 18, 2019 | No |
Yanrong
| Yanrong | Ltd. | ||||
| XIA Yanrong | Luxshare Electronic (Shanghai) Co., Ltd. | Supervisor | December 2, 2019 | No | |
| XIA Yanrong | Luxshare Precision Industry (Enshi) Co., Ltd. | Supervisor | October 24, 2018 | No | |
| YI Peizan | Xiexun Electronic (Ji’an) Co., Ltd. | Supervisor | August 28, 2017 | No | |
| YI Peizan | Dongguan Luxshare Holdings Co., Ltd. | Supervisor | September 5, 2023 | No | |
| HUANG Dawei | Luxshare Electronic Technology (Kunshan) Co., Ltd. | Director & General Manager | March 17, 2014 | No | |
| WU Tiansong | Luxshare Electronic Technology (Kunshan) Co., Ltd. | Supervisor | March 17, 2014 | No | |
| WU Tiansong | Huzhou Jiuding Electronic Co., Ltd. | Supervisor | December 15, 2015 | No. | |
| Explanation about the posts held at other entities | N/A | ||||
Punishments imposed by the securities regulatory authorities in the past three years on the directors, supervisors and executives of theCompany currently in office or leaving office during the reporting period
□Applicable ?N/A
3. Remunerations of directors, supervisors and executives
Decision-making process, criteria for determination and actual amount in respect of remunerations of directors, supervisors andexecutives
During the reporting period, directors, supervisors and executives were subject to performance appraisal, andtheir annual income consisted of basic annual salaries and long-terms incentives, and include the performancerelated to the sustainable development into assessment, so as to realize our future development strategy and businessobjectives. The Remuneration Committee under the Board of Directors discusses and reviews the remuneration-related issues on an annual basis. The meetings of the Remuneration Committee shall be divided into regularmeetings and interim meetings and each of such meetings shall be held at least once every year. The remunerationsof our independent directors are determined pursuant to the Independent Director Rules for Listed Companies ofthe China Securities Regulatory Commission, the AOA and other relevant regulations, and with reference to theoverall economic environment and the remunerations offered by listed companies in the industry in which theCompany operates, and are then implemented after being reviewed and approved by the Board of Directors and thegeneral meeting of shareholders. At present, our independent directors receive RMB160,000 per year, plusreimbursement of travel, office and other expenses, from us.Compensations of directors, supervisors and executives paid in the reporting period:
In RMB 0’000
Name
| Name | Gender | Age | Title | Status | Total remuneration received from the Company (inclusive of tax) | Whether or not receiving remunerations from any affiliate of the Company |
| WANG Laichun | Female | 57 | Chairman of the Board of Directors & General Manager | Incumbent | 200 | No |
| WANG Laisheng | Male | 60 | Vice Chairman of the Board of Directors | Incumbent | 150 | No |
| WANG Tao | Male | 39 | Director & Deputy General Manager | Incumbent | 144.61 | No |
| LI Wei | Male | 44 | Director & Deputy General Manager | Incumbent | 116.47 | No |
| ZHANG Ying | Female | 61 | Independent Director | Incumbent | 16 | No |
| LIU Zhonghua | Male | 59 | Independent Director | Incumbent | 16 | No |
| SONG Yuhong | Female | 53 | Independent Director | Incumbent | 16 | No |
| XIA Yanrong | Female | 43 | Supervisor | Incumbent | 74.1 | No |
| MO Rongying | Female | 44 | Supervisor | Incumbent | 80.13 | No |
| YI Peizan | Female | 39 | Supervisor | Incumbent | 12.92 | No |
| HUANG Dawei | Male | 52 | Board Secretary & Deputy General Manager | Incumbent | 136.28 | No |
| WU Tiansong | Male | 54 | CFO | Incumbent | 193.79 | No |
| Total | -- | -- | -- | -- | 1,156.3 | -- |
Other descriptions
□Applicable ?N/A
VI. Performance of duties by the directors during the reporting period
1. Meetings of the Board of Directors held during the reporting period
| Session | Date of meeting | Date of disclosure | Resolution of the meeting |
| The 15th meeting of the 5th Board of Directors | February 21, 2023 | February 22, 2023 | Refer to the Announcement on Resolutions of the 15th meeting of the 5th Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-005) |
| The 16th meeting of the 5th Board of Directors | April 27, 2023 | April 28, 2023 | Refer to the Announcement on Resolutions of the 16th meeting of the 5th Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-023) |
| The 17th meeting of the 5th Board of Directors | June 21, 2023 | June 22, 2023 | Refer to the Announcement on Resolutions of the 17th meeting of the 5th Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-043) |
| The 18th meeting of the 5th Board of Directors | August 28, 2023 | August 29, 2023 | Refer to the Announcement on Resolutions of the 18th meeting of the 5th Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-052) |
| The 19th meeting of the 5th Board of Directors | October 20, 2023 | October 21, 2023 | Refer to the Announcement on Resolutions of the 19th meeting of the 5th Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-059) |
| The 20th meeting of the 5th Board of Directors | November 27, 2023 | November 28, 2023 | Refer to the Announcement on Resolutions of the 20th meeting of the 5th Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-069) |
| The 21st meeting of the 5th Board of Directors | December 1, 2023 | December 2, 2023 | Refer to the Announcement on Resolutions of the 15th meeting of the 21st Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-074) |
| The 22nd meeting of the 5th Board of Directors | December 29, 2023 | December 30, 2023 | Refer to the Announcement on Resolutions of the 15th meeting of the 22nd Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-079) |
2. Attendance of the directors at meetings of the Board of Directors and shareholders
| Attendance of the directors at meetings of the Board of Directors and general meetings of shareholders | |||||||
| Director | No. of board meetings attended during the reporting period | No. of board meetings present in person | No. of board meetings present by means of communication equipment | No. of board meetings present by proxy | No. of board meetings absent from | Whether or not having been absent from two consecutive board meetings | No. of general meetings of shareholders attended |
| WANG Laichun | 8 | 1 | 7 | 0 | 0 | No | 1 |
| WANG Laisheng | 8 | 2 | 6 | 0 | 0 | No | 2 |
| LI Wei | 8 | 0 | 8 | 0 | 0 | No | 2 |
| WANG Tao | 8 | 1 | 7 | 0 | 0 | No | 2 |
| ZHANG Ying | 8 | 1 | 7 | 0 | 0 | No | 2 |
| LIU Zhonghua | 8 | 0 | 8 | 0 | 0 | No | 2 |
| SONG Yuhong | 8 | 1 | 7 | 0 | 0 | No | 2 |
Explanation about absence from two consecutive meetings of the Board of DirectorsN/A
3. Objections raised by the directors regarding matters of the Company
Whether any director has raised any objection regarding matters of the Company?
□Yes ?No
No director has raised any objection regarding matters of the Company during the reporting period.
4. Other information regarding the performance of duties by the directors
Whether the suggestions put forward by the directors have been adopted by the Company??Yes □NoExplanation about the adoption or non-adoption by the Company of the suggestions put forward by the directors
During the reporting period, all of our directors have performed their duties diligently in strict accordance withthe Company Law, the Securities Law, the Code of Corporate Governance for Listed Companies, the AOA, theRules of Procedure of the Board of Directors and other relevant provisions and requirements, actively attendedmeetings of the Board of Directors and shareholders; taken the initiative to ask for information about our operation,management, financial position and material events, had deep discussions about all resolutions submitted to theBoard of Directors for consideration, expressed opinions on our material corporate governance issues and businessdecisions, and through sufficient communication and discussions, reached a consensus, to ensure the scientificity,timeliness and effectiveness of decisions, and supervised and urged the implementation of resolutions of the Boardof Directors; actively implemented resolutions of the general meeting of shareholders and the Board of Directors,and safeguarded the legitimate rights and interests of the Company and all shareholders. We will continue to improveour corporate governance structure, further enhance the scientific decision-making level of the Board of Directorsand its committees, give full play to the role of independent directors in our corporate governance, and promote ouroperational compliance and continued healthy development.
VII. Activities of the committees of the Board of Directors during the reporting period
| Committee | Members | No. of meetings held | Date of meeting | Topics | Important opinions and suggestions | Performance of other duties | Objections (if any) |
AuditCommittee
| Audit Committee | LIU Zhonghua, ZHANG Ying, SONG Yuhong and BDO China Shu Lun Pan Certified Public Accountants | 4 | January 10, 2023 | Communication Meeting of Audit Committee on Annual Report Audit Work in 2022 | BDO China Shu Lun Pan Certified Public Accountants introduced the 2022 annual audit plan and arrangements, audit procedures and other issues with respect to the audit of 2022 financial report; and requested the colleagues of the accounting firm to pay special attention to related party transactions, pledged guarantees, capitalization and expensing of intangible assets and other issues. | ||
| Audit Committee | LIU Zhonghua, ZHANG Ying and SONG Yuhong | 4 | April 21, 2023 | Deliberating proposals regarding the 2022 annual report, the reappointment of the accounting firm, the work report of the internal audit department for the year 2022, and the work report of the internal audit department for the first quarter of 2023 | Pursuant to the Company Law, the Code of Corporate Governance for Listed Companies promulgated by the CSRC and the Work Rules of the Audit Committee of the Board of Directors, the Audit Committee performed its duties diligently, supervised our internal audit policies and implementation thereof, reviewed our financial information, guided the work of the Internal Audit Department, supervised and urged the audit conducted by the accounting firm, and through sufficient communication and discussions, unanimously approved all reports considered. | ||
| Audit Committee | LIU Zhonghua, ZHANG Ying and SONG Yuhong | 4 | August 21, 2023 | Deliberating 2023 Interim Report | Pursuant to the Company Law, the Code of Corporate Governance for Listed Companies promulgated by the CSRC and the Work Rules of the Audit Committee of the Board of Directors, the Audit Committee performed its duties diligently, expressed opinions taking into account our actual situation, and through sufficient communication and discussions, unanimously approved the Report. |
AuditCommittee
| Audit Committee | LIU Zhonghua, ZHANG Ying and SONG Yuhong | 4 | October 18, 2023 | Deliberating 2023 Third Quarter Report | Pursuant to the Company Law, the Code of Corporate Governance for Listed Companies promulgated by the CSRC and the Work Rules of the Audit Committee of the Board of Directors, the Audit Committee performed its duties diligently, expressed opinions taking into account our actual situation, and through sufficient communication and discussions, unanimously approved the Report. | ||
| Remuneration and Appraisal Committee | ZHANG Ying, LIU Zhonghua and SONG Yuhong | 1 | January 10, 2023 | Reviewed the implementation of the performance appraisal, remuneration and incentive plan for the directors and executives in the preceding year, put forward a reward proposal for the directors and executives taking into account our actual business situation, and studied the remuneration and appraisal plan for the next year. | Pursuant to the relevant provisions of the Company Law, the Code of Corporate Governance for Listed Companies promulgated by the CSRC and the Work Rules of the Remuneration and Appraisal Committee of the Board of Directors, the Remuneration and Appraisal Committee reviewed the remuneration of the directors, supervisors and executives, and determined that we are developing and improving fair and effective performance appraisal criteria and incentive and restraint mechanisms for executives, and the remuneration of our executives consists of basic monthly salaries and year-end performance-based pay. On the basis of such understanding and proposal, we properly adjusted the basic monthly salaries of certain directors and executives, in order to reflect and produce the effect of incentive and fairness. The remuneration of our directors, supervisors and executives during the reporting period are true, and conform to our performance metrics. |
StrategyCommittee
| Strategy Committee | WANG Laichun, ZHANG Ying and LIU Zhonghua | 1 | March 10, 2023 | Pursuant to the Company Law, the Code of Corporate Governance for Listed Companies promulgated by the CSRC, the Work Rules of the Strategy Committee of the Board of Directors and other relevant provisions, the Strategy Committee reviewed the material events occurred in 2022, reported our 2023 strategic development plan, considered the Proposal on Identification of Climate Risks and Opportunities and Response Strategies; and studied the significant strategic issues in connection with our development. | Pursuant to the Company Law, the Code of Corporate Governance for Listed Companies promulgated by the CSRC, and the Work Rules of the Strategy Committee of the Board of Directors, the Strategy Committee thoroughly analyzed and studied the industry in which we operate, and put forward reasonable suggestions on the planning for and implementation of the development strategies in respect of business, R&D and new products, which produced significant effect. |
VIII. Activities of the Board of Supervisors
Whether the Board of Supervisors has identified any risk involving the Company in its supervisory activities during the reportingperiod?
□Yes ?No
The Board of Supervisors has not raised any objection to the supervisory matters during the reporting period.IX. The performance of the duties by the supervisors during the reporting period(I) Situation of the Board of Supervisors during the Reporting PeriodDuring the reporting period, the company's Board of Supervisors convened a total of eight meetings. Theconvening and voting procedures of the meetings complied with the provisions of the Company Law, the Company'sArticles of Association, and other laws, regulations, and normative documents. The specific details are as follows:
| Session | Date of meeting | Date of disclosure | Resolution of the meeting |
| The 15th meeting of | February 21, 2023 | February 22, 2023 | Refer to the Announcement on Resolutions of the 15th meeting |
the 5th Board ofDirectors
| the 5th Board of Directors | of the 5th Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-006) | ||
| The 16th meeting of the 5th Board of Directors | April 27, 2023 | April 28, 2023 | Refer to the Announcement on Resolutions of the 16th meeting of the 5th Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-024) |
| The 17th meeting of the 5th Board of Directors | June 21, 2023 | June 22, 2023 | Refer to the Announcement on Resolutions of the 17th meeting of the 5th Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-044) |
| The 18th meeting of the 5th Board of Directors | August 28, 2023 | August 29, 2023 | Refer to the Announcement on Resolutions of the 18th meeting of the 5th Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-053) |
| The 19th meeting of the 5th Board of Directors | October 20, 2023 | October 21, 2023 | Refer to the Announcement on Resolutions of the 19th meeting of the 5th Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-060) |
| The 20th meeting of the 5th Board of Directors | November 27, 2023 | November 28, 2023 | Refer to the Announcement on Resolutions of the 20th meeting of the 5th Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-070) |
| The 21st meeting of the 5th Board of Directors | December 1, 2023 | December 2, 2023 | Refer to the Announcement on Resolutions of the 15th meeting of the 21st Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-075) |
| The 22nd meeting of the 5th Board of Directors | December 29, 2023 | December 30, 2023 | Refer to the Announcement on Resolutions of the 15th meeting of the 22nd Board of Directors disclosed on www.cninfo.com.cn and the Securities Times (Announcement No. 2023-080) |
(II) Fulfillment of Relevant Duties by the Board of Supervisors
1. Compliance with Company Operations
During the reporting period, members of the Board of Supervisors attended all meetings of the Board ofDirectors and shareholders' meetings and supervised the company's operations. The company strictly adhered to therequirements of the Company Law, the Securities Law, the Shenzhen Stock Exchange Listing Rules (Revised in2023), the Self-Regulatory Guidelines for Listed Companies on the Shenzhen Stock Exchange Main Board(Guideline No. 1), and the Company's Articles of Association to ensure compliance with regulations. The decision-making procedures of the Board of Directors and shareholders' meetings were lawful and effective. Additionally,the company continued to improve its internal control system. During the reporting period, there were no instancesof directors or senior management violating laws, regulations, or the Company's Articles of Association in the
execution of their duties.
2. Examination of Company Financial Situation
During the reporting period, the Board of Supervisors conducted a meticulous and thorough examination of thecompany's financial system and financial condition. It was concluded that the company's financial management wasstandardized and orderly. The financial reports for the reporting period objectively and truthfully reflected thecompany's financial condition and operating results. The audit report issued by Lixin Certified Public Accountants(Special General Partnership) for the company, which contained an unqualified opinion, was objective and impartial.There were no false records, misleading statements, or significant omissions in the audit report.
3. Related Party Transactions
During the reporting period, the Board of Supervisors supervised the related party transactions of the company.The Board of Supervisors believed that the related party transactions occurred by the company during the reportingperiod complied with relevant provisions of the Company Law, the Securities Law, the Shenzhen Stock ExchangeListing Rules (Revised in 2023), and the Company's Articles of Association. The decision-making procedures werelegal and effective. All related party transactions conducted by the company followed market principles and wereobjective, fair, and impartial. There were no situations that harmed the interests of the company or its shareholders.
4. Storage and Use of Raised Funds
During the reporting period, the company did not utilize any raised funds.
5. Establishment and Implementation of Insider Information Management System
The company has formulated an "Insider Information Management System" in accordance with the "RegulatoryGuidelines No. 5 for Listed Companies - Management System for Insider Information Participants of ListedCompanies" and relevant rules. In the year 2023, the company's management, registration, and reporting of insiderscomplied with relevant regulations. There were no instances during the reporting period of listed companies orrelated individuals engaging in insider trading using insider information.
6. Internal Control Self-Assessment Report
The Board of Supervisors reviewed the company's self-assessment report on internal controls for the year 2023,as well as the construction and operation of the internal control system. The Board believes that: the company hasestablished a relatively sound internal control system based on its actual situation and the requirements of laws,regulations, and normative documents, and it is effectively implemented. The internal control system complies withrelevant laws, regulations, and normative documents as well as the actual needs of the company, playing a good rolein risk prevention and control in the company's management. The 2023 Self-Assessment Report on Internal Controlstruthfully and objectively reflects the construction and operation of the company's internal control.
7. Company Disclosure Situation
During the reporting period, the Board of Supervisors supervised the company's fulfillment of its disclosureobligations and conducted periodic checks on the implementation of the information disclosure management system.
The Board believes that, during the reporting period, the information disclosed by the company was true, accurate,timely, and complete, complying with the relevant laws and regulations as well as the requirements of regulatoryauthorities such as the China Securities Regulatory Commission and the Shenzhen Stock Exchange.(III) Work plan of the Supervisory Board for 2024In 2024, the Board of Supervisors of the company will continue to strictly adhere to the requirements of nationallaws, regulations, and normative documents, effectively fulfill the supervisory responsibilities conferred by thecompany's articles of association and the Rules of Procedure for the Supervisory Board, supervise the company'sstandardized operations, and improve corporate governance. The Board of Supervisors will continue to target thestandardized development of the company, strictly fulfill its supervisory duties on relevant matters, providereasonable improvement suggestions, further enhance the level of corporate governance standardization, andpromote the company's sustainable development.X. Employees
1. Number, structure of profession and education of employees
| Number of current employees of the parent at the end of the reporting period (person) | 523 |
| Total number of current employees of the major subsidiaries at the end of the reporting period (person) | 232,062 |
| Total number of current employees at the end of the reporting period (person) | 232,585 |
| Total number of salaried employees during the reporting period (person) | 232,585 |
| Total number of retired employees to or for whom the parent and the major subsidiaries are obligated to make payments (person) | 0 |
| Structure of profession | |
| Type of profession | Number of employees (person) |
| Production staff | 193,856 |
| Sales staff | 2,806 |
| Technical staff | 19,063 |
| Financial staff | 451 |
| Administrative staff | 5,729 |
| Management staff | 10,680 |
| Total | 232,585 |
| Education | |
| Degree of education | Number of employees (person) |
| Undergraduate | 17,260 |
| College | 23,522 |
| Secondary specialized school, senior middle school and below | 191,803 |
| Total | 232,585 |
2. Remuneration policies
We have established the administrative measures for the salaries, performance-based pay, year-end bonus andother remuneration of employees of the Group, provided employees with competitive and guaranteed remunerationin a scientific an reasonable manner, developed sound remuneration management policies, paid contributions to thesocial insurance packages and housing provident fund for and salaries to the employees on time in strict accordancewith the applicable laws and regulations, and resolutely rejected any bonded labor. In order to help employees betterunderstand the match between their job responsibilities and capabilities, we have developed a multi-dimensionalperformance appraisal system including self-assessment and supervisor’s assessment, in order to objectively andcomprehensively reflect employees’ annual performance. We conduct annual employee performancecommunication activities, to ensure that each employee receives sufficient support and resources for his/her careerdevelopment in Luxshare-ICT, and to enhance and optimize the work experience of each employee. Theremuneration packages provided by us to employees consist of year-end bonuses, project bonuses, share incentivesfor key officers, and bonuses for outstanding employees, among others. During the reporting period, we furtheroptimized performance appraisal, fully appraised the performance of teams and individuals, and effectivelyimproved the execution ability and awareness of responsibility of employees, which will help us retain and attractoutstanding talents, and human resources required for our development.
3. Training programs
We attach great importance to the career development plans of employees, concentrate our efforts on the trainingof personnel, and have established a sound personnel training system, to attract and motivate more excellent talentsand promote common growth of employees and the Group. We have built an integrated online and offline learningplatform, providing multi-dimensional specialty training for different types of employees and new projects. Theplatform provides all employees with hierarchical targeted training of different categories that target different groupsof people and satisfy different needs. For example, with respect to senior, middle and grassroots managers and keyreserve talents with great potentialities, we conduct the “Star Cultivation Series” training, in order to build anefficient and dynamic team; and with respect to the personnel in manufacturing, R&D technology, marketing, supplychain and other critical fields, we conduct the “Juneng Series” training, in order to continuously improve theprofessional capabilities of employees on different posts. In addition, we carry out school-enterprise cooperationprojects, and encourage the employees to obtain certification of professional qualifications from the Company andsociety, in order to enhance our production level and social recognition of us as a whole. We have also built the“Jushi Series”, “Luxshare Classroom”, “Senior Management Forum” and other learning and communicationplatforms, in order to provide excellent Luxshare employees with stages to demonstrate themselves, create a soundlearning environment and promote the integration and communications among all employees. In addition, with aview to promoting the implementation of important strategies and changes, we have conducted the “Jubian Series”
training according to business needs. In order to regulate the employee training, we have established and periodicallyupdated the Administrative Measures for Education and training, the Operating Procedures for Education andtraining, and Administrative Measures for Internal Lecturers, which define the training system covering all stagesfrom induction, orientation, on-the-job, transfer to promotion, and each factory has established the OperatingProcedures for Education and training and relevant administrative measures by reference to the Group’smanagement standards, and annual training plans for the factory and its departments according to its annualdevelopment plan, to effectively enhance the core competencies of employees and the Company, improve theemployees’ professional capabilities and promote the sustainable growth of the Company.
4. Outsourced workers
□Applicable ?N/A
XI. Profit distribution and transfer of capital reserve to the share capitalAdoption, implementation or adjustment of the profit distribution policy, in particular, cash dividend policy, during the reporting period?Applicable □N/APursuant to the resolutions adopted by the 16th meeting of the 5th Board of Directors and the 2022 annualgeneral meeting of shareholders, we proposed to distribute to all shareholders a cash dividend of RMB1.3 (inclusiveof tax) per 10 shares on the basis of the total share capital of 7,130,392,419 shares, totaling RMB926,951,014.47.In case of any change in our total share capital due to any share repurchase, exercise of share incentives, materialasset restructuring, cancellation of repurchased share or otherwise prior to the record date for the relevant equitydistribution, we would adjust the distribution payable per share accordingly on the principle that the total amountdistributable should remain the same.
During the period from the disclosure of such profit distribution proposal to the implementation thereof, ourtotal share capital increased by 1,858,932shares, from 7,130,392,419 shares at the time of disclosure of the proposalto 7,132,251,351 shares as a result of exercise of stock option incentive plan by the relevant grantees at their solediscretion and conversion of the convertible bonds to shares. On the principle that the total amount distributableshould remain the same, our profit distribution proposal for 2022 was adjusted as follows: to distribute to allshareholders a cash dividend of RMB1.299661 (inclusive of tax) per 10 shares on the basis of the total share capitalof 7,132,251,351 shares, totaling RMB926,950,892.30 (inclusive of tax).
| Special explanation about the cash dividend policy | |
| Whether to comply with the provisions of the AOA or requirements of resolutions of the general meeting of shareholders of the Company? | Yes |
| Whether the standard and ratio of cash dividend distribution are clear and definite? | Yes |
| Whether the relevant decision-making process and mechanism | |
are sound?
| are sound? | Yes |
| Whether the independent directors have performed their duties and exercised their functions? | Yes |
| If the company has not conducted cash dividends, it should disclose the specific reasons for this decision and outline the measures it plans to take next to enhance investor returns. | N/A |
| Whether the minority shareholders have sufficient opportunities to express their opinions and requests and their legitimate rights and interests are fully protected? | Yes |
| Whether the conditions and procedures in respect of any adjustment or amendment of the cash dividend policy comply with the applicable regulations and are transparent? | Yes |
Whether the Company has made a profit in the reporting period and the parent has profits available for distribution to the shareholders,but the Company does not propose to distribute cash dividends?
□Applicable ?N/A
Particulars of profit distribution and transfer of capital reserve to the share capital for the reporting period:
?Applicable □N/A
| Number of bonus shares per 10 shares (share) | 0 |
| Amount of cash dividends per 10 shares (RMB) (inclusive of tax) | 3 |
| Share capital based on which the distribution proposal was made (share) | 7,178,011,313 |
| Amount of cash dividends (RMB) (inclusive of tax) | 2,153,403,393.90 |
| Amount of cash dividends distributed in other ways (such as share repurchase) (RMB) | 0.00 |
| Total amount of cash dividends (including other ways) (RMB) | 2,153,403,393.90 |
| Distributable profit (RMB) | 8,981,176,754.23 |
| Proportion of total cash dividends (including other ways) to the distributable profit | 100% |
| Particulars of cash dividends distributed for the reporting period | |
| Others | |
| Particulars of the proposal of profit distribution or for transfer of capital reserve to share capital | |
| Our 2023 Profit Distribution Proposal is as follows: to distribute to all shareholders a cash dividend of RMB3 (inclusive of tax) per 10 shares on the basis of the total share capital of 7,178,011,313 shares, totaling RMB2,153,403,393.90 (inclusive of tax), and to carry forward the retained profits for distribution in subsequent years. In case of any change in our total share capital due to any share repurchase, exercise of share incentives, material asset restructuring, cancellation of repurchased share or otherwise from the disclosure date of this announcement to the record date for the relevant equity distribution, we would adjust the distribution payable per share accordingly on the principle that the total amount distributable should remain the same. | |
XII. Implementation of share incentive plans, employee stock ownership plans and otheremployee incentives granted by the Company?Applicable □N/A
1. Share incentives
(1) 2018 stock option incentive plan
On December 5, 2022, we held the 14th meeting of the fifth Board of Directors and the 14th meeting of thefifth Board of Supervisors, deliberating and approving the Proposal on Achievement of Vesting Conditions for theThird Vesting Period under 2018 Stock Option Incentive Plan. The grantees meeting these vesting conditions mayexercise options in the third vesting period at their sole discretion, and the actual exercisable period is fromDecember 13, 2022 to September 22, 2023. For details, please refer to the Suggestive Announcement (Revised) onExercise at Their Sole Discretion in the Third Vesting Period under 2018 Stock Option Incentive Plan(Announcement No. 2022-110). During the reporting period, the grantees exercised their options to purchase1,573,156 shares in total within the second vesting period in initial grant under the 2019 Stock Option IncentivePlan.On June 21, 2023, due to the implementation of the equity distribution for the year 2022, the company adjustedthe exercise price of the stock options incentive plan issued in 2018. The exercise price for the unexercised stockoptions was adjusted from RMB 10.06 per share to RMB 9.93 per share. For further details, please refer toAnnouncement No. 2023-045 titled Announcement on Adjusting the Exercise Prices of Stock Options IncentivePlans Issued in 2018, 2019, 2021, and 2022, and Cancelling Part of the Stock Options under the 2019 Stock OptionsIncentive Plan.On November 27, 2023, the company held the 20th meetings of the Fifth Board of Directors and the Fifth Boardof Supervisors. The following resolutions were approved: "Proposal on Adjusting the Exercise Quantity andCancelling Part of the Stock Option Incentive Plan for 2018" and "Proposal on Achieving the Conditions for theFifth Exercise Period of the Stock Option Incentive Plan for 2018." Due to reasons such as the departure of incentiverecipients and failure to meet assessment criteria, the company adjusted the exercise quantity of the stock optionincentive plan for 2018, cancelling 1,314,426 unexercised stock options out of 29,883,882 originally granted. Thenumber of incentive recipients was adjusted from 1,607 to 1,553. For those meeting the exercise conditions, theyhave the option to independently exercise their rights during the fifth exercise period, with the actual exercise periodrunning from December 6, 2023, to September 24, 2024. For further details, please refer to the announcements withthe reference numbers 2023-071 and 2023-077 respectively.
(2) 2019 stock option incentive plan
On July 6, 2022, we held the 9
thmeeting of the fifth Board of Directors and the 9
thmeeting of the fifth Boardof Supervisors, deliberating and approving the Proposal on Achievement of Vesting Conditions for the Second
Vesting Period of the Initial Grant under 2019 Stock Option Incentive Plan. The grantees meeting these vestingconditions may exercise options in the second vesting period at their sole discretion, and the actual exercisableperiod is from July 22, 2022 to April 21, 2023. For details, please see the Suggestive Announcement on Exercise atTheir Sole Discretion in the Second Vesting Period in Initial Grant under 2019 Stock Option Incentive Plan(Announcement No. 2022-060).On February 21, 2023, the company convened the 15th meetings of the Fifth Board of Directors and the FifthBoard of Supervisors. The following resolutions were approved Proposal on Adjusting the Reserved Granting andExercising Quantity of Stock Option Incentive Plan for 2019 and Cancelling Part of the Stock Option Incentive Planand Proposal on Achieving the Conditions for the Third Exercise Period of the Stock Option Incentive Plan for 2019.Due to reasons such as the departure of incentive recipients and failure to meet assessment criteria, the companyadjusted the exercising quantity of the reserved granting of the stock option incentive plan for 2019, cancelling847,851 unexercised stock options out of 11,992,940 originally granted. The number of incentive recipients wasadjusted from 239 to 223. For those meeting the exercise conditions, they have the option to independently exercisetheir rights during the third exercise period, with the actual exercise period running from March 1, 2023, toNovember 24, 2023. For further details, please refer to the announcements with the reference numbers 2023-007and 2023-017 respectively.
On June 21, 2023, the company held the 17th meetings of the Fifth Board of Directors and the Fifth Board ofSupervisors. The resolutions approved included the "Proposal on Achieving the Conditions for the Fourth ExercisePeriod of the Stock Option Incentive Plan for 2019." For those meeting the exercise conditions, they have the optionto independently exercise their rights during the fourth exercise period, with the actual exercise period running fromJuly 4, 2023, to April 21, 2024. For further details, please refer to the announcement with the reference number2023-048.
(3) 2021 stock option incentive plan
On February 21, 2023, the company convened the 15th meeting of the Fifth Board of Directors and the 15thmeeting of the Fifth Board of Supervisors. During the meeting, the resolution regarding the achievement of theexercise conditions for the first exercise period of the 2021 Stock Option Incentive Plan was approved. Inaccordance with this resolution, the incentive recipients who meet the exercise conditions are permitted to exercisetheir options independently during the first exercise period, with the actual exercise period spanning from March13, 2023, to December 1, 2023. For further details, please refer to the informational announcement titled Notice onthe Adoption of Independent Exercise Mode for the First Exercise Period of the 2021 Stock Option Incentive Plan(Announcement Number 2023-020).
On June 21, 2023, due to the implementation of the 2022 equity distribution, the company adjusted the exerciseprice of the 2021 stock option incentive plan accordingly. The exercise price of the unexercised stock options under
the plan was revised from RMB 35.76 per share to RMB 35.63 per share. For further details, please refer to theannouncement titled Notice of Adjustment of Exercise Prices for the Stock Option Incentive Plans of 2018, 2019,2021, and 2022, and Partial Cancellation of Stock Options under the 2019 Stock Option Incentive Plan(Announcement Number 2023-045).On October 20, 2023, the company convened the 19th meetings of the Fifth Board of Directors and the FifthBoard of Supervisors. The meetings approved the Proposal on Achieving the Conditions for the First Exercise PeriodReservation of the 2021 Stock Option Incentive Plan. In accordance with this proposal, the eligible incentiverecipients can voluntarily exercise their rights during the first exercise period, which is effective from November 3,2023, to October 18, 2024. For more details, please refer to the Notice Regarding the Use of Voluntary ExerciseMode for the First Exercise Period Reservation of the 2021 Stock Option Incentive Plan (Announcement Number2023-067).
(4) 2022 stock option incentive plan
With the approval of the 13th meeting of the 5th Board of Directors, the 13th meeting of the 5th Board ofSupervisors and the 3rd extraordinary general meeting of shareholders in 2022, we introduced the 2022 stock optionincentive plan.On December 5, 2022, we held the 14th meeting of the fifth Board of Directors and the 14th meeting of thefifth Board of Supervisors, deliberating and approving the Proposal on Granting Stock Options to Grantees underthe 2022 Stock Option Incentive Plan of Luxshare Precision Industry Co., Ltd., whereby it was determined that thegrant date of stock options would be December 15, 2022 and 172.021 million stock options would be granted to3,759 eligible grantees. For details, please refer to the Announcement on Granting Stock Options to Grantees underthe 2022 Stock Option Incentive Plan (Announcement No. 2022-106).On January 19, 2023, we completed the registration of grant under our 2022 Stock Option Incentive Plan, andgranted 168.513 million registered stock options, representing 2.3671% of our total share capital. There are 3,505grantees, the abbreviation and code of stock options are JLC5 and 037325, respectively. For details, please refer tothe Announcement on Completion of Registration of Grant under the 2022 Stock Option Incentive Plan(Announcement No. 2023-004).
(5) Exercise of options during the reporting period
During the reporting period, the grantees exercised their options at their sole discretion to purchase 45,356,811shares in total under the relevant stock option incentive plans.Share incentives granted to directors and executives?Applicable □N/A
Unit: shares
| Name | Title | Opening balance of stock | No. of additi | No. of shares exercisable during | No. of shares exercised during the | Exercise price of shares exercised | Closing balance of stock options | Market price at the end of the | Opening balance of | No. of shares | No. of additional restricte | Grant price of restricted shares | Closing balance of |
options
held
| options held | onal stock options granted during the reporting period | the reporting period | reporting period | during the reporting period (RMB per share) | held | reporting period (RMB per share) | restricted shares held | vested during the reporting period | d shares granted during the reporting period | (RMB per share) | restricted shares held | ||
| WANG Tao | Director & Deputy General Manager | 506,989 | 0 | 168,996 | 168,996 | 13.48 | 337,993 | 33.14 | 0 | 0 | 0 | 0 | 0 |
| WANG Tao | Director & Deputy General Manager | 865,261 | 0 | 432,631 | 252,631 | 10.06 | 432,630 | 33.14 | 0 | 0 | 0 | 0 | 0 |
| WANG Tao | Director & Deputy General Manager | 0 | 180,000 | 9.93 | 33.14 | 0 | 0 | 0 | 0 | 0 | |||
| WANG Tao | Director & Deputy General Manager | 1,000,000 | 0 | 30.22 | 1,000,000 | 33.14 | 0 | 0 | 0 | 0 | 0 | ||
| LI Wei | Director & Deputy General Manager | 506,989 | 0 | 337,993 | 168,996 | 13.48 | 337,993 | 33.14 | 0 | 0 | 0 | 0 | 0 |
| LI Wei | Director & Deputy General Manager | 675,985 | 0 | 675,985 | 337,993 | 10.06 | 337,992 | 33.14 | 0 | 0 | 0 | 0 | 0 |
| LI Wei | Director & Deputy General Manager | 1,000,000 | 0 | 30.22 | 1,000,000 | 33.14 | 0 | 0 | 0 | 0 | 0 | ||
| HUANG Dawei | Board Secretary & Deputy General Manager | 439,390 | 0 | 439,390 | 219,695 | 10.06 | 219,695 | 33.14 | 0 | 0 | 0 | 0 | 0 |
| HUANG Dawei | Board Secretary & Deputy | 500,000 | 0 | 30.22 | 500,000 | 33.14 | 0 | 0 | 0 | 0 | 0 |
GeneralManager
| General Manager | |||||||||||||
| WU Tiansong | CFO | 263,634 | 0 | 131,817 | 10,000 | 10.06 | 131,817 | 33.14 | 0 | 0 | 0 | 0 | 0 |
| WU Tiansong | CFO | 0 | 121,817 | 9.93 | 33.14 | 0 | 0 | 0 | 0 | 0 | |||
| WU Tiansong | CFO | 320,593 | 0 | 135,198 | 50,198 | 13.48 | 220,395 | 33.14 | 0 | 0 | 0 | 0 | 0 |
| WU Tiansong | CFO | 0 | 50,000 | 13.35 | 33.14 | 0 | 0 | 0 | 0 | 0 | |||
| WU Tiansong | CFO | 400,000 | 0 | 30.35 | 400,000 | 33.14 | 0 | 0 | 0 | 0 | 0 | ||
| Total | -- | 6,478,841 | 0 | 2,322,010 | 1,560,326 | -- | 4,918,515 | -- | 0 | 0 | 0 | -- | 0 |
| Remark (if any) | N/A | ||||||||||||
Performance appraisal and incentives in respect of executives
All of our executives were appointed by the Board of Directors fairly and transparently, in compliance with theapplicable laws and regulations. Our executives report to the Board of Directors and are responsible for achievingthe operating targets set by the Board of Directors. We have established effective incentive and constraintmechanisms, in order to stimulate the executives to perform their duties diligently, and improve our level ofoperation and management and operating results. The performance of our executives is directly linked to theirincome, and assessed by comparing the goals set by us with their actual accomplishment of tasks. The Remunerationand Appraisal Committee of the Board of Directors is responsible for year-end assessment of the achievement ofgoals, working ability and performance of duties in respect of our directors, supervisors and executives, anddeveloping the remuneration and performance appraisal proposals and submitting the same to the Board of Directorsfor approval. During the reporting period, our remuneration and performance appraisal policies for the executiveshave been implemented effectively.
2. Implementation of employee stock ownership plan
□Applicable ?N/A
3. Other employee incentives
□Applicable ?N/A
XIII. Establishment and implementation of internal controls during the reporting period
1. Establishment and implementation of internal controls
We have established a relatively sound internal control system that has run effectively in strict accordance withthe Company Law, the Securities Law, the Basic Internal Control Standards for Enterprises, the Application Guidefor Internal Controls of Enterprises and other applicable laws, regulations and normative documents, taking intoaccount the characteristics of our industry and our actual business situation. From the perspective of corporatemanagement, technology R&D and business processes, we have established effective internal controls, andimproved our corporate governance level and efficiency of decision-making, which guarantees the legal andregulatory compliance of our operation and management, security of our assets and the truthfulness andcompleteness of our financial reports and other information, and effectively promote the steady implementation ofour strategies.Our internal control system has a reasonable structure, can satisfy the requirements of our management anddevelopment, and runs effectively. Our internal controls over financial reporting, non-financial reporting and othermaterial matters are effective, achieve the objectives and protect the interests of the Company and all shareholders.
2. Material weakness in internal control identified during the reporting period
□Yes ?No
XIV. Management and control of subsidiaries during the reporting period
| Company | Integration plan | Progress of integration | Problems encountered during integration | Solutions adopted | Progress of solution | Subsequent solution |
| - | - | - | - | - | - | - |
XV. Self-assessment report on internal controls or auditor’s report on internal controls
1. Self-assessment report on internal controls
| Date of disclose of the self-assessment report on internal controls in its entirety | April 25, 2024 |
| Disclosure reference of the self-assessment report on internal controls in its entirety | Internal Control Certification Report 2023 of Luxshare Precision Industry Co., Ltd. published on www.cninfo.com.cn |
| Ratio of total assets of the entities covered by the assessment to total assets recorded in the consolidated financial statements of the Company | 67.09% |
| Ratio of total operating revenue of the entities covered by the assessment to total | 80.27% |
operating revenue recorded in theconsolidated financial statements of theCompany
| operating revenue recorded in the consolidated financial statements of the Company | |||
| Criteria for determination of deficiencies | |||
| Category | Financial reporting | Non-financial reporting | |
| Qualitative criteria | 1. The material weaknesses in internal control over financial reporting include: (A) fraud on the part of directors, supervisors and executives; (B) failure to correct any material weakness in internal control within a reasonable time after the same was identified and reported to the management; (C) ineffective control environment; (D) any material misstatement in the financial report for the current period that is identified by external auditor but fails to be identified through internal control; (E) any serious violation of the laws and regulations; (F) the Company running at a loss for consecutive years due to any reason other than policy-related loss, which might threaten the Company’s ability to continue as a going concern; and (G) ineffective supervision by the management and related functional departments over the internal control. 2. The significant deficiencies in internal control over financial reporting include: (A) failure to select and apply accounting policies pursuant to the generally accepted accounting principles; (B) failure to establish anti-fraud procedures and controls; (C) absence of or ineffective control system for important business; (D) lack of internal controls in and disorderly management of subsidiaries; and (E) great outflow of or frequent changes in senior officers (especially those in charge of internal control, financial and human resources departments), or great outflow of personnel on the relevant posts. 3. General deficiencies in internal control over financial reporting include deficiencies in control other than material weakness and significant deficiency. | 1. The material weaknesses in internal control over non-financial reporting include: (A) any serious violation of the significant national laws and regulations; (B) great outflow of management and technical personnel on key posts; (C) absence of or ineffective control system for important business relating to the production and operation of the Company; (D) ineffective internal control over information disclosure, resulting in any public condemnation of the Company by any regulatory authority; and (E) failure to correct any problem, in particular, any material weakness or significant deficiency, identified in any assessment of internal controls. 2. The significant deficiencies in internal control over non-financial reporting include: (A) defects in important business policies or system, or unsound internal control system; and (B) failure to review any information disclosed externally and untruthfulness of any information disclosed. 3. General deficiencies in internal control over financial reporting include deficiencies in control other than material weakness and significant deficiency. | |
| Quantitative criteria | 1. Material weakness: (1) amount of misstated operating revenue ≥ 0.5% of total operating revenue; (2) amount of misstated profit ≥ 5% of total profit; (3) amount of misstated assets ≥ 0.5% of total assets; (4) amount of misstated owners’ equity ≥ 0.5% of total owners’ equity. 2. Significant deficiency: (1) 0.2% of total operating revenue ≤ amount of misstated operating revenue < 0.5% of total operating revenue; (2) 2% of total profit ≤ amount of misstated profit < 5% of total profit; (3) 0.2% of total assets ≤ amount of misstated assets < 0.5% of total assets; (4) 0.2% of total owners’ equity ≤ amount of misstated owners’ equity < 0.5% of total owners’ equity. 3. General deficiency: (1) amount of misstated operating revenue < 0.2% of total operating revenue; (2) amount of misstated profit < 2% of total profit; (3) amount of misstated assets < 0.2% of total assets; (4) amount of misstated owners’ equity < 0.2% of total owners’ equity. | 1. Material weakness: resulting in a direct loss of more than RMB12 million and having a material adverse effect on the Company. 2. Significant deficiency: resulting in a direct loss of more than RMB3 million and not more than RMB12 million, and any penalty imposed by any competent government authority of the country, but not having an adverse effect on the Company. 3. General deficiency: resulting in a direct loss of not more than RMB3 million, and any penalty imposed by any competent government authority at the provincial level or below, but not having an adverse effect on the Company. | |
| Number of material weaknesses in financial reporting | 0 | ||
| Number of material weaknesses in non- | 0 | ||
financial reporting
| financial reporting | |
| Number of significant deficiencies in financial reporting | 0 |
| Number of significant deficiencies in non-financial reporting | 0 |
2. Auditor’s report on internal controls
?Applicable □N/A
| Opinion issued in the internal control audit report | |
| Pursuant to the Basic Internal Control Standards for Enterprises promulgated by the Ministry of Finance and other relevant provisions, the Company has maintained effective internal controls in all material respects as of December 31, 2023. | |
| Disclosure of the internal control audit report | Disclosed |
| Date of disclose of the audit report on internal controls in its entirety | April 25, 2024 |
| Disclosure reference of the audit report on internal controls in its entirety | Internal Control Audit Report 2023 of Luxshare Precision Industry Co., Ltd. published on www.cninfo.com.cn |
| Type of opinion issued in the internal control audit report | Standard unqualified opinion |
| Whether there’s any material weakness in non-financial reporting | No |
Whether the accounting firm issued a modified internal control certification report?
□Yes ?No
Whether the internal control audit report issued by the accounting firm conforms to the opinion issued by the self-assessment report ofthe Board of Directors??Yes □NoXVI. Rectification of non-compliance identified in the special self-examination of corporategovernance of the listed companyOur self-examination showed that we operated in compliance with the applicable regulations and was governedwell during the reporting period, and did not identify any material non-compliance in our corporate governance. Wewill continue to improve our level of corporate governance and further promote our high-quality development.
Section V Environment and Social Responsibilities
I. Major environmental issuesWhether the Company or any of its subsidiaries is identified as a major polluter by the environmental protection authority?Yes □NoPolicies and industry standards related to environmental protection
I. Luxcase Precision Technology (Yancheng) Co., Ltd.
1. Emission standards of air pollutants
The sulfuric acid mist, nitric acid mist (measured in NOX) and unit product benchmark exhaust volumegenerated by our anodic oxidation line comply with the standards provided in Tables 5 and 6 of Discharge Standardof Electroplating Pollutants (GB21900-2008); Section 3.9 of the Technical Specification for Application andIssuance of Pollutant Discharge Permit - Electronics Industry (HJ1031-2019) provides that this standard uses non-methane hydrocarbons as a comprehensive control indicator for VOC emissions; after the release andimplementation of the Discharge Standard of Pollutants for Electronic Industry, such Standard shall apply. In thisproject, the particulate matter generated from machining, sulfuric acid mist from aluminum solution concentration,non-methane hydrocarbon from dispensing, gluing and printing and nitric acid mist from cleaning process(measured in NOX) comply with Level 2 provided in the Integrated Emission Standard of Air Pollutants(DB32/4041-2021); the concentration limit for unorganized waste gas monitoring points comply with the standardsprovided in Table 2 of the Integrated Emission Standard of Air Pollutants (DB32/4041-2021); the SO2 and NOXgenerated by the combustion of natural gas boilers comply with the special emission limits for air pollutantsprovided in the Table 3 of the Emission Standards of Boiler Air Pollutants (DB32-4385-2022).
2. Discharge standards of water pollutants
The comprehensive wastewater generated by the said company is discharged to Yancheng Tongqi Water Co.,Ltd., and the takeover standard is implemented according to the management agreement. The heavy metalwastewater reuse index in the anodizing surface treatment process complies with the Discharge Standard ofElectroplating Pollutants (GB21900-2008).
3. Emission standards of noise pollution
During the operation of its plant, it complies with Table 3 of the Standards on Noise Emissions at the Boundariesof Industrial Enterprises (GB12348-2008).
4. Discharge standards of solid wastes
The solid wastes of the said company mainly consist of general solid wastes and hazardous wastes. For storageof general solid wastes, it refers to the environmental protection requirements on anti-seepage, anti-rain, and anti-dust of the General Industrial Solid Waste Storage and Landfill Pollution Control Standards (GB 18599-2020). For
collection, storage and transportation of hazardous wastes, it complies with the requirements of the TechnicalSpecifications for the Collection, Storage and Transportation of Hazardous Wastes (HJ2025-2012), the PollutionControl Standards for the Storage of Hazardous Wastes (GB 18597-2001) and the Amendment (Announcement No.36 of 2013 of the Ministry of Environmental Protection).II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.
1. Emission standards of air pollutants
The oil mist generated by the CNC machines, particulate matter generated from machining, and non-methanehydrocarbon from dispensing and coating processes comply with the corresponding standards provided in Table 3of Integrated Emission Standard of Air Pollutants (DB31_933-2015); the odor generated in the wastewaterbiochemical process complies with the corresponding standards in provided in Table 3 of Emission Standard ofOdor Pollutants (DB311025-2016); the concentration limits at unorganized exhaust monitoring points in the plantcomply with the corresponding standards provided in Appendix A of Control Standard for Unorganized Emissionsof Volatile Organic Compounds (GB37822-2019); the non-methane hydrocarbons and particulate matterconcentrations at unorganized exhaust monitoring points at the plant boundary comply with the special emissionlimits for air pollutants provided in Table 3 of Integrated Emission Standard of Air Pollutants (DB31_933-2015);the odor complies with the corresponding standards provided in Table 3 of Emission Standard of Odor Pollutants(DB311025-2016).
2. Discharge standards of water pollutants
The production wastewater of the said company is discharged to Jinshan Sea Outfall Engineering Co., Ltd., andthe discharge of the sewage treatment plant complies with Level 3 provided in Table 2 of the Integrated Standard ofWastewater Discharge (DB31-199-2018).
3. Emission standards of noise pollution
During the operation of its plant, it complies with Table 3 of the Standards on Noise Emissions at the Boundariesof Industrial Enterprises (GB12348-2008).
4. Discharge standards of solid wastes
The solid wastes of the said company mainly consist of general solid wastes and hazardous wastes. For storageof general solid wastes, it refers to the environmental protection requirements on anti-seepage, anti-rain, and anti-dust of the General Industrial Solid Waste Storage and Landfill Pollution Control Standards (GB18599-2020). Forcollection, storage and transportation of hazardous wastes, it complies with the requirements of the TechnicalSpecifications for the Collection, Storage and Transportation of Hazardous Wastes (HJ2025-2012), the PollutionControl Standards for the Storage of Hazardous Wastes (GB 18597-2001) and the Amendment (Announcement No.36 of 2013 of the Ministry of Environmental Protection).
III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.
1. Emission standards of air pollutants
The emission concentrations of nitrogen oxides and sulfuric acid mist produced by our anode line comply withthe emission limits of air pollutants for new enterprises provided in Table 5 of the Discharge Standard ofElectroplating Pollutants (GB21900-2008), and the benchmark exhaust of the project complies with Table 6. Theemission concentrations of non-methane hydrocarbons from injection molding process complies with the specialemission limits provided in Table 5 of the Emission Standard of Pollutants from Synthetic Resin Industry(GB31572-2015), and the particulate matter, non-methane hydrocarbons, xylene, benzene series, chromium and itscompounds, nickel and its compounds from other processes comply with the emission limits of atmosphericpollutants from organized emissions provided in Table 1 of the Integrated Emission Standard of Air Pollutants(DB32/4041-2021). The emission concentrations of particulate matter, sulfuric acid mist, nitrogen oxides, non-methane hydrocarbons, xylene, benzene series and its compounds, chromium and its compounds, and nickel and itscompounds from unorganized emissions comply with the concentration limits of air pollutant emission monitoringat the boundaries of enterprises provided in Table 3 of the Integrated Emission Standard of Air Pollutants(DB32/4041-2021). The concentrations of unorganized emission of ammonia, hydrogen sulfide and odor complywith Level 2 standards on new renovation and expansion provided in Table 1 of, and the organized emissionconcentrations thereof comply with Table 2 of the Emission Standard of Odorous Pollutants (GB14554-93). Theconcentrations of unorganized emission of non-methane hydrocarbons in the plant comply with Table 2 of theIntegrated Emission Standard of Air Pollutants (DB32/4041-2021). Alkali mist and phosphoric acid mist refer tothe standards provided in Table 1 of Integrated Emission Standard of Air Pollutants (DB31/933-2015). In accordancewith the Notice of the Nantong Municipal Government Office on Issuing the 2020 Air Pollution Prevention andControl Work Plan (Tong Zheng Ban Fa [2020] No. 34), the low-nitrogen transformation task of gas-fired boilershas been fully completed, with the emission concentrations of nitrogen oxides not exceeding 50 milligrams percubic meter. The concentrations of SO2 and particulate matter emitted from the exhaust gas of natural gascombustion in gas-fired boilers comply with the atmospheric pollutant emission concentration limits provided inTable 3 of the Emission Standard of Boiler Air Pollutants (GB13271-2014).
2. Discharge standards of water pollutants
After the nickel-containing wastewater and chromium-containing wastewater in this project are treated by thewastewater pretreatment equipment in the plant, the total chromium and total nickel in wastewater pretreatmentplant outlet comply with the standard limits provided in Table 3 of the Discharge Standard of ElectroplatingPollutants (GB21900-2008); Rugao Fugang Water Treatment Co., Ltd. as the sewage treatment plant in the parkcomplies with Level 3 provided in Table 4 of Integrated Standards of Wastewater Discharge (GB8979-1996) forwater quality management. The ammonia nitrogen, total nitrogen, and total phosphorus comply with themanagement requirements of Rugao Fugang Water Treatment Co., Ltd., and the total aluminum complies with thestandards provided in Table 3 of the Discharge Standard of Electroplating Pollutants (GB21900-2008); thebenchmark drainage of unit products complies with the requirements in Table 2 of the Discharge Standard of
Electroplating Pollutants. The tail water from the sewage treatment plant in the park is discharged into the centralriver after reaching the Level 1A standards provided in the Pollutant Discharge Standards for Municipal WastewaterTreatment Plants (GB18918-2002). The pollutants in the recycled water in the plant are managed in accordancewith standard values of “open circulating cooling water system makeup water and washing water” provided in Table1 of the Water Quality for Urban Sewage Recycling and Industrial Use (GB/T19923-2005).
3. Emission standards for noise pollution
It complies with Class 3 provided in the Standards on Noise Emissions at the Boundaries of IndustrialEnterprises (GB12348-2008) during the operation of our plant, and the Class 2 provided in the Noise Emissions atthe Boundaries of Industrial Enterprises (GB12348-2008) during the day and night in Dongwei Village.
4. Discharge standards of solid wastes
The solid wastes of the said company mainly consist of general solid wastes and hazardous wastes. The storageof general solid wastes in the plant are strictly set up and managed in accordance with the requirements of theGeneral Industrial Solid Waste Storage and Landfill Pollution Control Standards (GB 18599-2020) and itsAmendment. The hazardous waste in the plant is strictly managed in accordance with the Pollution ControlStandards for the Storage of Hazardous Wastes (GB18597-2001) and its Amendment, the Technical Specificationsfor the Collection, Storage and Transportation of Hazardous Wastes (HJ2025-2012) and other documents.
IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.
1. Emission standards of air pollutants
The sulfuric acid mist, nitric acid mist (measured in NOX) and unit product benchmark exhaust volumegenerated by our anodic oxidation line comply with the standards provided in Tables 5 and 6 of Discharge Standardof Electroplating Pollutants (GB21900-2008); Particulate matter generated from machining, and the non-methanehydrocarbons from dispensing and baking comply with the Level 2 provided in the Integrated Emission Standardof Air Pollutants (GB16297-1996); the particulate matter generated from sandblasting processes, and non-methanehydrocarbons from injection molding processes comply with the standard limits provided in Table 5 of the EmissionStandard of Pollutants from Synthetic Resin Industry (GB31572-2015); the non-methane hydrocarbons inunorganized exhaust gas at the plant boundary complies with the Emission Standard of Pollutants from SyntheticResin Industry (GB 31572-2015) and the Control Standards on Unorganized Emissions of Volatile OrganicCompounds (GB37822-2019). Nitrogen oxides, particulate matter, and sulfuric acid mist comply with the IntegratedEmission Standard of Air Pollutants (GB16297-1996); and the odor concentrations comply with the EmissionStandard of Odorous Pollutants (GB 14554-93).
2. Discharge standards of water pollutants
The comprehensive wastewater of the said company is collected and managed by Jiashan County DadiWastewater Treatment Engineering Co., Ltd., and the discharge of such sewage treatment plant comply withPollutants Discharge Standards for Electronic Industry (GB 39731-2020). The heavy metal wastewater reuse index
in the anodizing surface treatment process complies with the Discharge Standard of Electroplating Pollutants(DB33/2260-2020).
3. Emission standards of noise pollution
W comply with Class 3 provided in the Standards on Noise Emissions at the Boundaries of Industrial Enterprises(GB12348-2008) at the east and south boundaries of the plant, and the Class 4 provided in the Noise Emissions atthe Boundaries of Industrial Enterprises (GB12348-2008) at the west and north boundaries of the plant.
4. Discharge standards of solid wastes
The solid wastes of the said company mainly consist of general solid wastes and hazardous wastes. For storageof general solid wastes, it refers to the environmental protection requirements on anti-seepage, anti-rain, and anti-dust of the General Industrial Solid Waste Storage and Landfill Pollution Control Standards (GB18599-2020). Forcollection, storage and transportation of hazardous wastes, it complies with the requirements of the TechnicalSpecifications for the Collection, Storage and Transportation of Hazardous Wastes (HJ2025-2012), the PollutionControl Standards for the Storage of Hazardous Wastes (GB 18597-2023).Environmental protection administrative permits
I. Luxcase Precision Technology (Yancheng) Co., Ltd.
Environmental Impact Assessment Report (Table):
1. Computer component production project (phase I);
2. Computer component production project (phase II);
3. 3C precision mechanical parts production expansion project.
44. Precision component manufacturing project in Zone A;
5. Precision component manufacturing projects in Zones F, G, and H;
6. Precision component manufacturing project in Zone I.
Approval and reply of environmental assessment:
1. Ting Huan Biao Fu [2017] No. 123;
2. Ting Huan Ping Shu [2019] No. 2;
3. Yan Huan Shen [2021] No. 02003;
4. Yan Huan Shen [2022] No. 02003;
5. Yan Huan Shen [2022] No. 02001;
6. Yan Huan Shen [2021] No. 02001.
Acceptance report:
1. Acceptance report of computer component production project (phase I);
2. Acceptance report of computer component production project (phase II);
3. Acceptance report of 3C precision mechanical parts production expansion project.
4. Acceptance report for precision component manufacturing project in Zone A;
5. Acceptance report for precision component manufacturing project in Zone F;
6. Acceptance report for precision component manufacturing project in Zone G;
7. Acceptance report for precision component manufacturing project in Zone H;
8. Acceptance report for precision component manufacturing project in Zone I. Pollution Permit No.:
Pollution Permit No.: 91320900MA1R8A0N2B001V Valid period: From April 25, 2023, to April 24, 2028.
II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.Environmental impact assessment table:
1. Precision electronic component adjustment project (Phase I);
2. Precision electronic component adjustment project (Phase II);
3. Precision electronic component project (Phase III);
4. Precision electronic component technical renovation project;
5. Environmental impact assessment report of Ri Ming watch project.
Approval and reply of environmental assessment:
1. Jin Huan Xu [2014] No. 479;
2. Jin Huan Xu [2015] No. 323;
3. Jin Huan Xu [2018] No. 170;
4. Jin Huan Xu [2019] No. 254;
5. Jin Huan Xu [2020] No. 27;
Acceptance report:
1. Completion acceptance report of precision electronic component adjustment project (phase I);
2. Completion acceptance report of precision electronic component adjustment project (phase II);
3. Completion acceptance report of precision electronic component project (phase III);
4. Completion acceptance report of precision electronic component technical renovation project;
5. Completion acceptance report of Ri Ming watch project.
Pollution Permit No.:
Pollution Permit No.:91310000572654085A001V, Valid period: from January 30, 2022 to January 29, 2027III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.Approval and reply of environmental assessment:
Smart terminal precision module project: Jiang Zheng Huan Shu Fu [2022] No. 2.Pollution discharge permit: October 24, 2023, to October 23, 2028.IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.Environmental Impact Assessment Report (Table):
1. Production project for new 75 million pieces of precision electronic components (Phase I);
2. Production project for new 75 million pieces of precision electronic components (Phase II);
3. 3C product display screen project for new 25 million pieces/set;
4. 3C product display screen project for expanded 47 million pieces/set;
5. Technical renovation project for the original scale (annual production of 25 million units/sets of 3C productdisplays).
Approval and reply of environmental assessment:
1. Shan Huan Han [2016] No. 91;
2. Shan Huan Han [2018] No. 91;
3. Deng Ji Biao Bei [2020] No. 088;
4. Deng Ji Biao Bei [2022] No. 007;
5. Jia Huan (Shan) Jian Bei [2024] No. 11.
Acceptance report:
1. Acceptance report of production project for new 75 million pieces of precision electronic components (phaseI);
2. Acceptance report of production project for the stage 1 of new 75 million pieces of precision electroniccomponents (phase II);
3. Acceptance report of production project for the stage 2 of new 75 million pieces of precision electroniccomponents (phase II);
4. Acceptance report of 3C product display screen project for new 25 million pieces/set;
5. 3C product display screen project for expanded 47 million pieces/set;
Pollution Permit No.:
Pollution Permit No.: 91330421336400470U001Z Valid period: From March 14, 2023 to March 13, 2028.
V. Luxcase Precision Technology (Kunshan) Co., Ltd.Pollution Discharge Permit:
Pollution Discharge Permit Number (91330583MAC1YPEC08001X) is valid from July 7, 2023, to July 6, 2028.Industry standards and discharge of pollutants involved in production and business activities
| Name of the Company or its subsidiaries | Category of main pollutants and characteristic pollutants | Name of main pollutants and characteristic pollutants | Discharge method | Number of discharge outlets | Distribution of discharge outlets | Emission concentration/intensity | Pollutant discharge standards implemented | Total emissions | Total approved emissions | Excessive emissions |
| Luxcase | Air | Nitrogen | Treatme | 11 | Area B, | 19 | The | 6.27005 | 12.9750 | / |
PrecisionTechnology(Yancheng) Co.,Ltd.
| Precision Technology (Yancheng) Co., Ltd. | pollutants | oxide | nt standards, high-altitude emissions | C, A, G, F AND I | Mg/standard cubic meter | emission standards for electroplating pollutants are specified in GB 21900-2008, while the emission standards for atmospheric pollutants from boilers are outlined in DB32-4385-2022. | 8 tons | 37 tons | ||
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Air pollutants | Sulfur dioxide | Treatment standards, high-altitude emissions | 11 | Area B, C, A, G, F AND I | 2.05 Mg/standard cubic meter | Atmospheric Pollutant Comprehensive Emission Standard (DB32/4041-2021) and Boiler Atmospheric Pollutant Emission Standard (DB32-4385-2022) | 0.298583 tons | / | / |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Air pollutants | Total non-methane hydrocarbons | Treatment standards, high-altitude emissions | 69 | AREA B, C, A, G, F, H AND I | 0.67 Mg/standard cubic meter | Atmospheric Pollutant Comprehensive Emission Standard (DB32/4 | 28.31691 tons | / | / |
041-2021)
| 041-2021) | ||||||||||
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Air pollutants | Particulate matter | Treatment standards, high-altitude emissions | 68 | Area B, E, C, A, G, F, H and I | 1.85 Mg/standard cubic meter | Atmospheric Pollutant Comprehensive Emission Standard (DB32/4041-2021) and Boiler Atmospheric Pollutant Emission Standard (DB32-4385-2022) | 18.14775346 tons | / | / |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Air pollutants | Sulfuric acid fog | Treatment standards, high-altitude emissions | 38 | Area B, C, A, G, F, H and I | 0.60Mg/standard cubic meter | Atmospheric Pollutant Comprehensive Emission Standard (DB32/4041-2021) | 2.79799 tons | / | / |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Air pollutants | Nitric acid fog | Treatment standards, high-altitude emissions | 34 | Area B, C, A, G, F, H and I | 4.93 Mg/standard cubic meter | Atmospheric Pollutant Comprehensive Emission Standard (DB32/4041-2021) | 34.328035 tons | / | / |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Water pollutants | Suspended matter | Controlled emission | 1 | Sewage station main outlet | 20.5 mg/l | Sewage Comprehensive Emission Standard GB8978-1996 | 64.181445 tons | / | / |
| Luxcase Precisio | Water pollutant | Ammonia | Controlled | 1 | Sewage station | 2.44 mg/l | / | 11.609786 tons | 151.3535 tons | / |
nTechnology(Yancheng) Co.,Ltd.
| n Technology (Yancheng) Co., Ltd. | s | nitrogen | emission | main outlet | ||||||
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Water pollutants | Petroleum | Controlled emission | 1 | Sewage station main outlet | 0.47 mg/l | Sewage Comprehensive Emission Standard GB8978-1996 | 1.316378 tons | / | / |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Water pollutants | Anionic surfactant | Controlled emission | 1 | Sewage station main outlet | 0.02 mg/l | Sewage Comprehensive Emission Standard GB8978-1996 | 0.049738 tons | / | / |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Water pollutants | Fluoride | Controlled emission | 1 | Sewage station main outlet | 1.02 mg/l | Sewage Comprehensive Emission Standard GB8978-1996 | 3.974054 tons | / | / |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Water pollutants | PH value | Controlled emission | 1 | Sewage station main outlet | 7.55 | Sewage Comprehensive Emission Standard GB8978-1996 | / | / | / |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Water pollutants | Chemical oxygen demand | Controlled emission | 1 | Sewage station main outlet | 25.67 mg/l | Sewage Comprehensive Emission Standard GB8978-1996 | 98.198401 tons | 1618.584 tons | / |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Water pollutants | Total phosphorus | Controlled emission | 1 | Sewage station main outlet | 0.29 mg/l | / | 1.064824 tons | 39.770550 tons | / |
| Luxcase | Water | Total | Controll | 1 | Sewage | 21.53 | / | 76.3771 | 290.202 | / |
PrecisionTechnology(Yancheng) Co.,Ltd.
| Precision Technology (Yancheng) Co., Ltd. | pollutants | nitrogen | ed emission | station main outlet | mg/l | 22 tons | 5 tons | |||
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Heavy metal wastewater recycled | Total nickel | Recycled and not discharged | 4 | Not discharged | 0 | Electroplating Pollutant Emission Standard GB 21900-2008 | 0 | / | / |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Heavy metal wastewater recycled | Total copper | Recycled and not discharged | 4 | Not discharged | 0 | Electroplating Pollutant Emission Standard GB 21900-2008 | 0 | / | / |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Heavy metal wastewater recycled | Total chromium | Recycled and not discharged | 4 | Not discharged | 0 | Electroplating Pollutant Emission Standard GB 21900-2008 | 0 | / | / |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | Heavy metal wastewater recycled | Hexavalent chromium | Recycled and not discharged | 4 | Not discharged | 0 | Electroplating Pollutant Emission Standard GB 21900-2008 | 0 | / | / |
| Ri Ming Computer Accessory (Shanghai) Co., Ltd. | Air pollutants | Oil mist | Treatment standards, high-altitude emissions | 63 | Building roof | 0.2 | Atmospheric Pollutant Comprehensive Emission Standard (DB31_933-2015) | 0.213 | / | / |
| Ri Ming Compute | Air pollutant | Particula | Treatment | 6 | Building | 2.7 | Atmospheric | 0.845 | / | / |
rAccessory(Shanghai) Co.,Ltd.
| r Accessory (Shanghai) Co., Ltd. | s | te matter | standards, high-altitude emissions | roof | Pollutant Comprehensive Emission Standard (DB31_933-2015) | |||||
| Ri Ming Computer Accessory (Shanghai) Co., Ltd. | Air pollutants | VOC | Treatment standards, high-altitude emissions | 3 | Building roof | 3.7 | Atmospheric Pollutant Comprehensive Emission Standard (DB31_933-2015) | 0.037 | / | / |
| Ri Ming Computer Accessory (Shanghai) Co., Ltd. | Air pollutants | Lampblack | Treatment standards, high-altitude emissions | 1 | Building roof | 0.6 | Atmospheric Pollutant Comprehensive Emission Standard (DB31_933-2015) | 0.004 | / | / |
| Ri Ming Computer Accessory (Shanghai) Co., Ltd. | Water pollutants | PH value | Controlled emission | 1 | Sewage station main outlet | 7.4 | Sewage Comprehensive Emission Standard (DB31-199-2018) | / | / | / |
| Ri Ming Computer Accessory (Shanghai) Co., Ltd. | Water pollutants | Suspended matter | Controlled emission | 1 | Sewage station main outlet | 15 | Sewage Comprehensive Emission Standard (DB31-199-2018) | 5.895 | / | / |
| Ri Ming Computer Accessory (Shanghai) Co., | Water pollutants | Petroleum | Controlled emission | 1 | Sewage station main outlet | 0.54 | Sewage Comprehensive Emission Standard (DB31- | 0.124 | / | / |
Ltd.
| Ltd. | 199-2018) | |||||||||
| Ri Ming Computer Accessory (Shanghai) Co., Ltd. | Water pollutants | COD | Controlled emission | 1 | Sewage station main outlet | 49 | Sewage Comprehensive Emission Standard (DB31-199-2018) | 18.69 | 33.842 | / |
| Ri Ming Computer Accessory (Shanghai) Co., Ltd. | Water pollutants | Ammonia nitrogen | Controlled emission | 1 | Sewage station main outlet | 2.13 | Sewage Comprehensive Emission Standard (DB31-199-2018) | 0.233 | 1.0527 | / |
| Ri Ming Computer Accessory (Shanghai) Co., Ltd. | Water pollutants | Anionic surfactant | Controlled emission | 1 | Sewage station main outlet | 0.07 | Sewage Comprehensive Emission Standard (DB31-199-2018) | 0.009 | / | / |
| Ri Ming Computer Accessory (Shanghai) Co., Ltd. | Water pollutants | Total phosphorus | Controlled emission | 1 | Sewage station main outlet | 0.42 | Sewage Comprehensive Emission Standard (DB31-199-2018) | 0.14 | / | / |
| Ri Ming Computer Accessory (Shanghai) Co., Ltd. | Water pollutants | Total nitrogen | Controlled emission | 1 | Sewage station main outlet | 3.1 | Sewage Comprehensive Emission Standard (DB31-199-2018) | 1.358 | 5.25 | / |
| Ri Ming Computer Accessory (Shanghai) Co., Ltd. | Water pollutants | BOD5 | Controlled emission | 1 | Sewage station main outlet | 31.6 | Sewage Comprehensive Emission Standard (DB31-199- | 5.772 | / | / |
2018)
| 2018) | ||||||||||
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Air pollutants | NOx (anode) | Treatment standards, high-altitude emissions | 2 | A2/A14 | 0 | Electroplating Pollutant Emission Standard (GB21900-2008) | 0 | 11.987 | / |
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Air pollutants | NOx (Boiler) | Treatment standards, high-altitude emissions | 3 | A2/A14/Waste treatment station | 26 | (Tong Zheng Ban) {2020} No. 34号 | 1.838 | 11.987 | / |
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Air pollutants | Particulate matter (boiler) | Treatment standards, high-altitude emissions | 3 | A2/A14 /Waste treatment station | 1.9 | Boiler Atmospheric Pollutant Emission Standard (GB13271-2014) Table 3 | 0.147 | 8.698 | / |
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Air pollutants | SO2(Boiler) | Treatment standards, high-altitude emissions | 1 | A2/A14/Waste treatment station | 0 | Boiler Atmospheric Pollutant Emission Standard (GB13271-2014) Table 3 | 0 | 4.854 | / |
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Air pollutants | Particulate matter | Treatment standards, high-altitude emissions | 22 | A2/A3/A14/A15/A16/A17/Waste treatment station and hazardous waste bin | 2.1 | Atmospheric Pollutant Comprehensive Emission Standard (GB31572-2015) | 4.78 | 8.698 | / |
| Rida Intelligent Manufacture Technol | Air pollutants | Total non-methane hydrocarbons | Treatment standards, high-altitude emission | 18 | A1/A2/A3/A14/A16/A17/Waste treatment station | 1.11 | Atmospheric Pollutant Comprehensive Emissio | 5.58 | 8.948 | / |
ogy(Rugao)Co., Ltd.
| ogy (Rugao) Co., Ltd. | s | and hazardous waste bin | n Standard (GB31572-2015) | |||||||
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Air pollutants | Ammonia | Treatment standards, high-altitude emissions | 2 | Waste treatment station/ hazardous waste bin | 0.27 | Odor Pollutant Emission Standard (GB14554-93) | 0.25 | 0.388 | / |
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Air pollutants | Caustic fog | Treatment standards, high-altitude emissions | 1 | Waste treatment station | 0.6 | Atmospheric Pollutant Emission Standard (DB31/933-2015) | 0.067 | 0.099 | / |
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Air pollutants | Sulfuric acid fog | Treatment standards, high-altitude emissions | 4 | A2/A14/Waste treatment station/ hazardous waste bin | 0.25 | Electroplating Pollutant Emission Standard (GB21900-2008) | 0.331 | 0.508 | / |
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Air pollutants | Nickel and its compounds | Treatment standards, high-altitude emissions | 2 | A2/A14 | 0.006 | Air pollutants Emission Standard (GB31572-2015) | 0.002 | 0.00463 | / |
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Air pollutants | Benzene series | Treatment standards, high-altitude emissions | 2 | A1 | 0.068 | Atmospheric Pollutant Comprehensive Emission Standard (GB31572-2015) | 0.003 | 0.034 | / |
| Rida Intelligent Manufacture Technol | Air pollutants | Phosphoric acid fog | Treatment standards, high-altitude emission | 2 | A2/A14 | 0 | Atmospheric Pollutant Comprehensive Emissio | 0 | / | / |
ogy(Rugao)Co., Ltd.
| ogy (Rugao) Co., Ltd. | s | n Standard (DB31/933-2015) | ||||||||
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Water pollutants | PH | Controlled emission | 1 | Sewage station main outlet | 7.1 | Electroplating Pollutant Emission Standard (GB21900-2008) Table 3 Standard, Sewage Comprehensive Emission Standard GB8978-1996 Table 4 Level Three Standard, Requirements for Takeover by Fugang Water Treatment Co., Ltd., Electroplating Pollutant Emission Standard GB21900-2008 Table 3 Standard | / | / | / |
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Water pollutants | Suspended matter | Controlled emission | 1 | Sewage station main outlet | 16 | Electroplating Pollutant Emission Standard (GB21900-2008) Table 3 Standard | 4.659 | 19.791 | / |
, SewageComprehensiveEmissionStandardGB8978-1996Table 4LevelThreeStandard,RequirementsforTakeover byFugangWaterTreatment Co.,Ltd.,ElectroplatingPollutantEmissionStandardGB21900-2008Table 3Standard
| , Sewage Comprehensive Emission Standard GB8978-1996 Table 4 Level Three Standard, Requirements for Takeover by Fugang Water Treatment Co., Ltd., Electroplating Pollutant Emission Standard GB21900-2008 Table 3 Standard | ||||||||||
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Water pollutants | Chemical oxygen demand | Controlled emission | 1 | Sewage station main outlet | 47 | Electroplating Pollutant Emission Standard (GB21900-2008) Table 3 Standard, Sewage Comprehensive Emission Standard GB8978-1996 Table 4 Level Three Standard, Require | 7.598 | 98.956 | / |
mentsforTakeover byFugangWaterTreatment Co.,Ltd.,ElectroplatingPollutantEmissionStandardGB21900-2008Table 3Standard
| ments for Takeover by Fugang Water Treatment Co., Ltd., Electroplating Pollutant Emission Standard GB21900-2008 Table 3 Standard | ||||||||||
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Water pollutants | Ammonia nitrogen | Controlled emission | 1 | Sewage station main outlet | 0.503 | Electroplating Pollutant Emission Standard (GB21900-2008) Table 3 Standard, Sewage Comprehensive Emission Standard GB8978-1996 Table 4 Level Three Standard, Requirements for Takeover by Fugang Water Treatment Co., Ltd., Electroplating Pollutant Emission | 0.790 | 9.896 | / |
StandardGB21900-2008Table 3Standard
| Standard GB21900-2008 Table 3 Standard | ||||||||||
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Water pollutants | Total phosphorus | Controlled emission | 1 | Sewage station main outlet | 0.53 | Electroplating Pollutant Emission Standard (GB21900-2008) Table 3 Standard, Sewage Comprehensive Emission Standard GB8978-1996 Table 4 Level Three Standard, Requirements for Takeover by Fugang Water Treatment Co., Ltd., Electroplating Pollutant Emission Standard GB21900-2008 Table 3 Standard | 0.156 | 0.990 | / |
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Water pollutants | Total nitrogen | Controlled emission | 1 | Sewage station main outlet | 27.6 | Electroplating Pollutant Emission Standard (GB21900-2008) Table 3 | 7.573 | 29.687 | / |
Standard, SewageComprehensiveEmissionStandardGB8978-1996Table 4LevelThreeStandard,RequirementsforTakeover byFugangWaterTreatment Co.,Ltd.,ElectroplatingPollutantEmissionStandardGB21900-2008Table 3Standard
| Standard, Sewage Comprehensive Emission Standard GB8978-1996 Table 4 Level Three Standard, Requirements for Takeover by Fugang Water Treatment Co., Ltd., Electroplating Pollutant Emission Standard GB21900-2008 Table 3 Standard | ||||||||||
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Water pollutants | Biochemical oxygen demand | Controlled emission | 1 | Sewage station main outlet | 15 | Electroplating Pollutant Emission Standard (GB21900-2008) Table 3 Standard, Sewage Comprehensive Emission Standard GB8978-1996 Table 4 Level Three Standard, | 1.961 | 19.791 | / |
RequirementsforTakeover byFugangWaterTreatment Co.,Ltd.,ElectroplatingPollutantEmissionStandardGB21900-2008Table 3Standard
| Requirements for Takeover by Fugang Water Treatment Co., Ltd., Electroplating Pollutant Emission Standard GB21900-2008 Table 3 Standard | ||||||||||
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | Water pollutants | Total aluminum | Controlled emission | 1 | Sewage station main outlet | 1.25 | Electroplating Pollutant Emission Standard (GB21900-2008) Table 3 Standard, Sewage Comprehensive Emission Standard GB8978-1996 Table 4 Level Three Standard, Requirements for Takeover by Fugang Water Treatment Co., Ltd., Electroplating Pollutant Emissio | 0.161 | 0.297 | / |
nStandardGB21900-2008Table 3Standard
| n Standard GB21900-2008 Table 3 Standard | ||||||||||
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | Air pollutants | Sulfuric acid fog | Treatment standards, high-altitude emissions | 8 | Building roof | 1.09 | Atmospheric Pollutant Comprehensive Emission Standard (DB32/4041-2021) | 2.1764 | / | / |
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | Air pollutants | NOx | Treatment standards, high-altitude emissions | 8 | Building roof | 0.164 | Electroplating Pollutant Emission Standard (GB21900-2008) | 0.8186 | 0.903 | / |
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | Air pollutants | Particulate matter | Treatment standards, high-altitude emissions | 9 | Building roof | 12.8 | Atmospheric Pollutant Comprehensive Emission Standard (DB32/4041-2021) Synthetic Resin Industry Pollutant Emission Standard (GB 31572-2015) | 5.00661 | 10.595 | / |
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | Air pollutants | VOCs | Treatment standards, high-altitude emissions | 21 | Building roof | 2.54 | Atmospheric Pollutant Comprehensive Emission Standard (DB32/4041- | 3.28968 | 14.5972 | / |
2021)Synthetic ResinIndustryPollutantEmissionStandard(GB31572-2015)
| 2021) Synthetic Resin Industry Pollutant Emission Standard (GB 31572-2015) | ||||||||||
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | Water pollutants | Ammonia nitrogen | Controlled emission | 1 | Sewage station main outlet | 0.506 | Electronic Industry Water Pollutant Emission Standard (GB 39731-2020) | 2.896 | 49.04 | / |
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | Water pollutants | Total phosphorus | Controlled emission | 1 | Sewage station main outlet | 0.105 | Electronic Industry Water Pollutant Emission Standard (GB 39731-2020) | 0.89 | / | / |
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | Water pollutants | Total nitrogen | Controlled emission | 1 | Sewage station main outlet | 35.567 | Electronic Industry Water Pollutant Emission Standard (GB 39731-2020) | 34.421 | / | / |
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | Water pollutants | Anionic surfactant | Controlled emission | 1 | Sewage station main outlet | 0.4988 | Electronic Industry Water Pollutant Emission Standard (GB 39731-2020) | 0.18 | / | / |
| Ri Shan | Water | Chemica | Controll | 1 | Sewage | 28 | Electroni | 49.717 | 112.172 | / |
ComputerAccessory(Jiashan)Co., Ltd.
| Computer Accessory (Jiashan) Co., Ltd. | pollutants | l oxygen demand | ed emission | station main outlet | c Industry Water Pollutant Emission Standard (GB 39731-2020) | |||||
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | Water pollutants | PH value | Controlled emission | 1 | Sewage station main outlet | 7.4 | Electronic Industry Water Pollutant Emission Standard (GB 39731-2020) | / | / | / |
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | Water pollutants | Suspended matter | Controlled emission | 1 | Sewage station main outlet | 15.5 | Electronic Industry Water Pollutant Emission Standard (GB 39731-2020) | 18.953 | / | / |
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | Water pollutants | Petroleum | Controlled emission | 1 | Sewage station main outlet | 0.39 | Electronic Industry Water Pollutant Emission Standard (GB 39731-2020) | 0.775 | / | / |
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | Heavy metal wastewater | Hexavalent chromium | Controlled emission | 1 | Sewage station main outlet | 0.011 | Electroplating Pollutant Emission Standard GB 21900-2008 | 0.0041 | / | / |
| Ri Shan Computer Accessor | Heavy metal wastewater | Total nickel | Controlled emission | 1 | Sewage station main outlet | 0.025 | Electroplating Pollutant Emissio | 0.001 | 0.02 | / |
y(Jiashan)Co., Ltd.
| y (Jiashan) Co., Ltd. | n Standard GB 21900-2008 | |||||||||
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | Heavy metal wastewater | Total chromium | Controlled emission | 1 | Sewage station main outlet | 0.037 | Electroplating Pollutant Emission Standard GB 21900-2008 | 0.005 | 0.026 | / |
| Luxcase Precision Technology (Kunshan) Co., Ltd. | Sewage | Domestic sewage | Centralized disposal of emissions | 2 | Factory F8/9 - 1 unit, Factory F10/11 - 1 unit | / | Urban Sewage Treatment Plant Pollutant Standard | 5688t/a | 25753t/a | / |
| Luxcase Precision Technology (Kunshan) Co., Ltd. | Waste gas | Tin paste printing, cleaning, reflow soldering, dispensing, curing, maintenance cleaning, laser engraving, cutting | Collect, dispose and then discharge | 9 | 1 unit in Factory F9 and 4 units in Factory F10/11 | / | DB/32/4041-2021 | 0.2736t/a | 0.30042t/a | / |
| Luxcase Precision Technology (Kunshan) Co., Ltd. | Nose | Dispensing machine, laser engraving machine | Sound insulation, shock absorption | / | / | / | GB12348-2008 | / | / | / |
| Luxcase Precision Technology (Kunshan) Co., Ltd. | Solid waste | Packaging, raw material packaging, cleaning, sanitation, tin paste printing, | The collection is entrusted to a qualified unit for disposal | / | / | / | GB18597-2023 | 51.5t/a | / | / |
dispensing,cutting,testing,exhaustgastreatment, staffdomesticwaste
dispensing,cutting,testing,exhaustgastreatment, staffdomesticwaste
Treatment of pollutantsI. Luxcase Precision Technology (Yancheng) Co., Ltd.
1. Prevention measures for exhaust gas pollution:
Exhaust gas from CNC machining is treated by oil mist scrubber through oil mist absorption; exhaust gas fromglue coating, dispensing, and printing is treated through secondary activated carbon adsorption. According to routinemonitoring reports of existing projects, the removal rate of CNC machining exhaust gas after treatment by oil mistscrubber can reach over 85%.According to the secondary adsorption activated carbon manual, with respect to the adsorption capacity ofactivated carbon for various organic substances in the printing and dispensing exhaust gas, the removal efficiencyof organic substances is 70% for primary activated carbon particle adsorption and 90% for secondary activatedcarbon particle adsorption, which can meet the relevant requirements of Level 2 of non-methane hydrocarbons inthe Integrated Emission Standard of Air Pollutants (DB32/4041-2021);Dust generated from sandblasting, drilling, and laser engraving is treated by wet dust collector after collection.The emission concentration and emission rate of dust generated from sandblasting, drilling, and laser engraving canmeet the corresponding limits provided in the Integrated Emission Standard of Air Pollutants (DB32/4041-2021).According to the Industrial Source Coefficient Handbook for the Second National Pollution Source Census as themechanical industry coefficient handbook - pre-treatment - dry pre-treatment - shot blasting, dust can be removedby the single tube (multi-tube parallel) cyclone device with a removal efficiency of 60%. Then after wet dustcollector treatment, the removal efficiency can reach over 90%. Based on the actual operation of the project, theremoval efficiency of sandblasting dust after treatment by its own dust collector and then by wet dust collector canreach over 90%, and the removal efficiency of drilling and laser engraving dust is around 85%. Therefore, the saidcompany’s dust, after treatment by wet dust collector, can be discharged in steady compliance with standards.Natural gas boilers use domestically advanced low-nitrogen combustion technology, which is a feasibletechnology for the Technical Specification for Application and Issuance of Pollutant Discharge Permits - Boilers.According to routine monitoring data of existing projects and low-nitrogen combustion retrofitting andcommissioning reports, the SO2, NOx, and particulate matter in boiler flue gas can meet the corresponding limits
of the Emission Standard of Boiler Air Pollutants (DB32/4385-2022).
2. Prevention measures for wastewater pollution:
The said company implements the principle of “separation of rainwater and sewage, and separation of cleanwater and polluted water”. Different kinds of wastewater enter the corresponding sewage pool through differentpipes. The pipes are overhead and pasted with signs of flow direction. The completeness of the pipes is checkedregularly, and any abnormality, if found, will be handled immediately. All pools and floors of the sewage station arepaved and hardened for anti seepage and anti corrosion. Domestic wastewater is treated using a two-stage septictank system. The two-stage septic tank is composed of two interconnected sealed septic tanks. Feces enter the firsttank through an inlet pipe and flow downstream to the second tank, where suspended organic matter in domesticwastewater is removed by sedimentation and anaerobic fermentation. This treatment facility is a primary transitionaldomestic treatment structure. Comprehensive wastewater is degraded in the A/O biochemical system to removeorganic pollutants such as COD, nitrogen, and phosphorus. The system’s denitrification capacity is strengthenedthrough a two-stage biochemical system, and the treated wastewater is discharged to the sewage treatment plant.According to existing testing reports, the quality of the said company’s effluent meets the relevant standards for thesewage station. Heavy metal wastewater is treated and reused through a process of “sterilization + membranetreatment + evaporation and crystallization + ion exchange." The main process remains unchanged. Theconcentrated water of low-concentration wastewater is subject to ultrafiltration, sand filtration, and reverse osmosis,while high-concentration wastewater is subject to sedimentation and pressure filtration before entering PFETevaporation, and then the purified water is reused in the anodizing process.
3. Measures for noise pollution prevention:
The outdoor equipment, equipment near the plant boundary and cooling towers are environmentally friendly.In the layout plan of the plant, the main workshop with concentrated noise is located in the center of the plant asmuch as possible. Other noise sources are located as far away from the plant boundary as possible to reduce theirimpact on the external environment. Soundproof windows (or double-layer soundproof windows) and soundproofdoors are installed on the side of the workshop adjacent to the plant boundary to reduce the impact of workshopnoise on the external environment by enhancing sound insulation and reducing the strength of the noise source.Vertical greening belts are planted within the plant area to effectively provide certain sound insulation and noisereduction.
4. Prevention measures for hazardous waste pollution:
Hazardous waste warehouses, domestic waste rooms, and solid waste garbage rooms are set up in the plant tocomprehensively manage solid waste from various aspects such as generation, collection, storage, transportation,and disposal. Effective measures are taken to prevent the loss of solid waste in the process of generation, collection,storage, and transportation, and the “three defenses” are implemented. Effective disposal methods and technologiesare adopted, and by focusing on the reuse of useful materials to “turn waste into treasure’, we recycle a part of the
resources and reduce the disposal burden. For those waste materials that cannot be recycled yet, we effectivelydispose of them in light of the principle of “harmlessness”.
II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.
1. Prevention measures for exhaust gas pollution:
(1) A closed operation room is set up for the CNC machining process. All oil mist generated therefrom is treatedthrough a cyclone tower oil mist washing tower and discharged through a 17-meter-high exhaust duct. The oil mistin the discharged exhaust gas meets the emission limits for air pollutants provided in the Integrated EmissionStandard of Air Pollutants (DB31/933-2015); according to routine monitoring reports of existing projects, theremoval rate of CNC machining exhaust gas after treatment by oil mist scrubber can reach over 85%.
(2) A closed operation room is set up for the laser engraving process. All dust generated therefrom is treatedthrough a wet dust collector and then discharged through a 22-meter-high exhaust duct. The removal efficiency canreach more than 75%, and the particulate matter in the discharged waste gas meets the emission limits for airpollutants provided in the Integrated Emission Standard of Air Pollutants (DB31/933-2015);
(3) All waste gas generated in the dispensing and coating process is collected and treated through an activatedcarbon purification box, and then discharged through a 17-meter-high exhaust duct. The removal efficiency canreach more than 90%, and the pollutants in the discharged waste gas meet the emission limits for air pollutants inthe Integrated Emission Standard of Air Pollutants (DB31/933-2015).
2. Prevention measures for wastewater pollution:
The said company implements the principle of “separation of rainwater and sewage, and separation of cleanwater and polluted water”. Different kinds of wastewater enter the corresponding sewage pool through differentpipes. The pipes are overhead and pasted with signs of flow direction. The completeness of the pipes is checkedregularly, and any abnormality, if found, will be handled immediately. All pools and floors of the sewage station arepaved and hardened for anti seepage and anti corrosion. After comprehensive wastewater is treated throughemulsion breaking, precipitation, and biochemical treatment, it is discharged through the same pipeline as the tail-water from pure water preparation and domestic wastewater. Some tail-water from pure water preparation is reusedas domestic facility water, and the intermediate water after treated in the sewage treatment station is reused in thewet polishing process. The wastewater discharge outlet is equipped with online monitoring equipment andconnected to the Environmental Protection Bureau and Water Affairs Bureau. According to existing testing reports,the quality of the said company’s effluent meets the relevant standards for the sewage station.
3. Measures for noise pollution prevention:
The outdoor equipment, equipment near the plant boundary and cooling towers are environmentally friendly.In the layout plan of the plant, the main workshop with concentrated noise is located in the center of the plant asmuch as possible. Other noise sources are located as far away from the plant boundary as possible to reduce theirimpact on the external environment. Soundproof windows (or double-layer soundproof windows) and soundproof
doors are installed on the side of the workshop adjacent to the plant boundary to reduce the impact of workshopnoise on the external environment by enhancing sound insulation and reducing the strength of the noise source.Vertical greening belts are planted within the plant area to effectively provide certain sound insulation and noisereduction.
4. Prevention measures for hazardous waste pollution:
Hazardous waste warehouses, domestic waste rooms, and solid waste garbage rooms are set up within the plantarea to comprehensively manage solid waste from various aspects such as generation, collection, storage,transportation, and disposal. Effective measures are taken to prevent the loss of solid waste in the process ofgeneration, collection, storage, and transportation, and the “three defenses” are implemented. Effective disposalmethods and technologies are adopted, and by focusing on the reuse of useful materials to “turn waste into treasure’,we recycle a part of the resources and reduce the disposal burden. For those waste materials that cannot be recycledyet, we effectively dispose of them in light of the principle of “harmlessness”.
III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.
1. Prevention measures for exhaust gas pollution:
I, For the cutting fluid evaporates organic gases (measured in non-methane hydrocarbons) due to high-temperature cutting in the CNC machining process of this project, the organic waste gas is collected by the overallworkshop negative pressure system after being treated by an oil mist separator that is equipped with the equipment,and treated through filtration and absorption by activated carbon, and is then discharged in an organized mannerthrough an exhaust pipe. The removal rate of non-methane hydrocarbons is conservatively estimated to be 75%. Forthe non-methane hydrocarbons generated in processes such as injection molding, gluing, and drying, this projectadopts a treatment measure of “filtration + activated carbon adsorption." For organic waste gases (measured as non-methane hydrocarbons) generated in gluing and drying processes, they are planned to be collected by a gas-collecting hood and then treated by the “filtration + activated carbon adsorption” process before being dischargedin an organized manner. For organic waste gases (measured as particulate matter) generated in spraying and dryingprocesses, they are planned to be collected by a gas-collecting hood and then treated by the “filtration + activatedcarbon adsorption” process before being discharged in an organized manner. Particulate matter is mainly generatedin the sandblasting process, and a two-stage wet dust removal treatment measure is adopted. Through the wet dustremoval technology, the dust particles are removed by being condensed into large particles through strong collisionwith water mist, or being captured by inertia and centrifugal force. By taking two-stage wet dust removal measurein this project, a removal efficiency of particulate matter is about 80%. Two-stage alkaline spraying is used for acidand alkali waste gas in this project. According to the provided waste gas treatment design plan, this system has aremoval efficiency of about 95% for sulfuric acid mist and phosphoric acid mist, and an 85% removal efficiencyfor nitrogen oxides, and ensures that the waste gas meets the emission standards. The sewage station waste gas inthis project includes particulate matter, ammonia, hydrogen sulfide, non-methane hydrocarbons produced in sewage
treatment, as well as sulfuric acid mist, alkaline mist, and non-methane hydrocarbons produced in the tank storagearea. After being collected, the waste gas from the storage tank and sewage treatment is treated by “alkali washing+ water washing + defogging + microwave UV catalysis” before being discharged together with the drying dustgenerated by the “bag filter” treatment. In accordance with the Notice of the Nantong Municipal Government Officeon Issuing the 2020 Air Pollution Prevention and Control Work Plan (Tong Zheng Ban Fa [2020] No. 34), the low-nitrogen transformation task of gas-fired boilers has been fully completed, with the emission concentrations ofnitrogen oxides not exceeding 50 milligrams per cubic meter. Based on the monitoring data of the boiler running atabout 80% load inside the plant, the nitrogen oxide emissions can meet the requirements of the Document (TongZheng Ban Fa) [2020] No. 34, with an emission concentration not exceeding 50 milligrams/cubic meter.
2. Prevention measures for wastewater pollution:
The wastewater generated by this project include process wastewater, wastewater from waste gas treatment,wastewater from workshop and plant floor washing, concentrated wastewater and backwash wastewater, emissionsfrom gas-fired boilers, wastewater from circulating cooling systems, initial rainwater, and domestic wastewater. Thesystem at the wastewater treatment station is mainly divided into five categories: chromium-containing wastewatertreatment system, nickel-containing wastewater treatment system, phosphorus-containing wastewater treatmentsystem, organic wastewater treatment system, and general wastewater treatment system.The condensate from chromium-containing wastewater, after undergoing “reduced pressure evaporation”treatment, is treated with the chromium-containing wastewater through “chemical precipitation + sand and charcoalfiltration + ultrafiltration + ion exchange + two-stage reverse osmosis (RO)” before being reused. The condensatefrom nickel-containing wastewater, after undergoing “reduced pressure evaporation” treatment, is treated with thenickel-containing wastewater through “chemical precipitation + sand and charcoal filtration + ultrafiltration + ionexchange + two-stage RO” before being reused. The condensate from phosphorus-containing wastewater, afterundergoing “two-stage coagulation and sedimentation + pressure filtration” treatment, is treated with phosphorus-containing wastewater and wastewater from phosphorus-containing air pollution control through “two-stagereaction and precipitation” treatment before being discharged into the receiving pool. Wastewater containing oil andcompressor wastewater are pre-treated with “acidification, breaking emulsion, and oil-water separation”, and then,together with acidic wastewater and other wastewater from exhaust gas treatment, undergo “acidification, breakingemulsion, flotation, Fenton oxidation, and coagulation and sedimentation” treatment. Then, together with organicwastewater/liquid, they undergo “coagulation and sedimentation + catalytic oxidation” treatment, and finally,together with alkaline wastewater/liquid that has been pre-treated with “coagulation and sedimentation”, plant floorwashing wastewater, and initial rainwater, they undergo “hydrolysis, acidification, precipitation + anaerobic andaerobic treatment + two-stage sedimentation tank” treatment before being discharged into the receiving pool.General cleaning wastewater, grinding wastewater, and wastewater from pure water preparation are treated with“coagulation and sedimentation + sand and charcoal filtration + ultrafiltration” before being reused.
3. Measures for noise pollution prevention:
When purchasing equipment, it selects equipment with small power and low noise as much as possible; usevibration reduction mounts to weaken the vibration generated when the fan rotates; sets the sound source indoorsas much as possible to achieve sound insulation and noise reduction. It uses double-layer soundproof windows forlighting windows in workshops with high noise equipment; arrange the main noise sources in the overall layout inthe middle of the workshop, away from the plant boundary, and add soundproof covers to equipment such as fans;equip the high-power equipment with special vibration reduction and noise reduction equipment when purchasingit; and strengthen the greening of the factory area and establish a green isolation belt. In addition, it plants trees andshrubs to create a green noise barrier around the factory boundary, absorbing sound and reducing noise.
4. Prevention measures for hazardous waste pollution:
It sets up a hazardous waste warehouse within the plant; establish a hazardous waste ledger management systemto track and record the entire process of hazardous waste circulation within the said company, combine it withproduction records to establish a hazardous waste ledger; set up hazardous waste identification signs for thecontainers and packaging of hazardous waste, as well as for the facilities and places for collecting, storing,transporting, and disposing of hazardous waste; it is forbidden to collect, store, transport, or dispose of hazardouswaste mixed with incompatible substances that have not been disposed of safely, and it is forbidden to mix hazardouswaste into non-hazardous waste for storage and disposal.
IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.
1. Prevention measures for exhaust gas pollution:
It uses the electrostatic oil removal to absorb and treat oil mist of the exhaust gas from CNC machining, anduses secondary activated carbon adsorption to treat exhaust gas from dispensing and injection molding. Accordingto routine monitoring reports of existing projects, the removal efficiency of electrostatic oil removal equipment forCNC machining can reach more than 85%; sulfuric acid mist and nitric acid mist are treated with an alkali spraytower after being collected, and are only discharged after meeting the emission standards.
According to the secondary adsorption activated carbon manual, with respect to the adsorption capacity ofactivated carbon for various organic substances in the dispensing exhaust gas, the removal efficiency of organicsubstances is 70% for primary activated carbon particle adsorption and 90% for secondary activated carbon particleadsorption, which can meet the relevant requirements of Level 2 of non-methane hydrocarbons in the IntegratedEmission Standard of Air Pollutants (GB16297-1996);
The exhaust gases from sandblasting and grinding machines are collected and treated using wet scrubbers. Theemission concentrations and rates of particulate matter from sandblasting and grinding dust meet the correspondingstandard limits specified in Table 2 of the Comprehensive Emission Standards for Air Pollutants (GB16297-1996)and the relevant standards for particulate matter specified in Table 5 of the Emission Standards for Pollutants inSynthetic Resin Industry (GB31572-2015).
2. Prevention measures for wastewater pollution:
The said company implements the principle of “separation of rainwater and sewage, and separation of cleanwater and polluted water”. Different kinds of wastewater enter the corresponding sewage pool through differentpipes. The pipes are overhead and pasted with signs of flow direction. The completeness of the pipes is checkedregularly, and any abnormality, if found, will be handled immediately. All pools and floors of the sewage station arepaved and hardened for anti seepage and anti corrosion. Domestic wastewater is treated using a two-stage septictank system. The two-stage septic tank is composed of two interconnected sealed septic tanks. Feces enter the firsttank through an inlet pipe and flow downstream to the second tank, where suspended organic matter in domesticwastewater is removed by sedimentation and anaerobic fermentation. This treatment facility is a primary transitionaldomestic treatment structure. Comprehensive wastewater is degraded in the A/O biochemical system to removeorganic pollutants such as COD, nitrogen, and phosphorus. The system’s denitrification capacity is strengthenedthrough a two-stage biochemical system, and the treated wastewater is discharged to the sewage treatment plant.According to existing testing reports, the quality of the said company’s effluent meets the relevant standards for thesewage station. Heavy metal wastewater is treated and reused through a process of “sterilization + membranetreatment + evaporation and crystallization + ion exchange." The main process remains unchanged. Theconcentrated water of low-concentration wastewater is subject to ultrafiltration, sand filtration, and reverse osmosis,while high-concentration wastewater is subject to sedimentation and pressure filtration before entering PFETevaporation, and then the purified water is reused in the anodizing process.
3. Measures for noise pollution prevention:
The outdoor equipment, equipment near the plant boundary and cooling towers are environmentally friendly.In the layout plan of the plant, the main workshop with concentrated noise is located in the center of the plant areaas much as possible. Other noise sources are located as far away from the plant boundary as possible to reduce theirimpact on the external environment. Soundproof windows (or double-layer soundproof windows) and soundproofdoors are installed on the side of the workshop adjacent to the plant boundary to reduce the impact of workshopnoise on the external environment by enhancing sound insulation and reducing the strength of the noise source.Vertical greening belts are planted within the plant area to effectively provide certain sound insulation and noisereduction.
4. Prevention measures for hazardous waste pollution:
Hazardous waste warehouses, domestic waste rooms, and solid waste garbage rooms are set up within the plantarea to comprehensively manage solid waste from various aspects such as generation, collection, storage,transportation, and disposal. Effective measures are taken to prevent the loss of solid waste during the process ofgeneration, collection, storage, and transportation, and the “three defenses” are implemented. Effective disposalmethods and technologies are adopted, and by focusing on the recycling of useful materials to “turn waste intotreasure’, it recycles a part of the resources and reduce the disposal burden. For those waste materials that cannot
be recycled yet, it effectively disposes of them in light of the principle of “harmlessness”.
V. Luxcase Precision Technology (Kunshan) Co., Ltd.
1. Waste water pollution control measures: Discharge into the municipal sewage pipe network for treatment atKunsheng Precision Water Purification Co., Ltd. in Kunshan Development Zone.
2. Noise pollution control measures: Use low-noise equipment, and adopt measures such as sound insulation,vibration reduction, and greening of the factory area to achieve sound insulation and noise reduction.
3. Air pollution control measures: According to the secondary adsorption activated carbon manual, theadsorption capacity of activated carbon for various organic substances, the removal efficiency of organic matter byfirst-stage activated carbon particles is 70%, and the adsorption efficiency of two-stage activated carbon particles is90%, both of which can meet the relevant requirements of the Secondary Standard for Non-Methane TotalHydrocarbons in the Comprehensive Emission Standard for Air Pollutants (GB16297-1996).
4. Hazardous waste pollution control measures: Set up hazardous waste warehouses, domestic waste rooms,and solid waste garbage rooms in the factory area, comprehensively manage solid waste from generation, collection,storage, transportation, and disposal, take effective measures to prevent the loss of solid waste during the generation,collection, storage, and transportation process, implement "three defenses", adopt effective disposal schemes andtechnologies, focus on recycling useful materials from waste, "turning waste into treasure", recover some resourceswhile reducing the disposal burden, and for those that cannot be recycled at present, effective disposal should becarried out following the principle of "harmlessness."Environmental self-monitoring program
I. Luxcase Precision Technology (Yancheng) Co., Ltd.
It updates and prepares the self-monitoring plan for next year at the end of each year according to the pollutiondischarge permit and environmental impact assessment requirements, tests the organized exhaust gas at the emissionoutlet once every half a year generally, the unorganized exhaust gas once every half a year, wastewater dischargeoutlets once every quarter, and noise once every six months, with the relevant test reports as data compliance support.
II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.
It updates and prepares the self-monitoring plan for next year at the end of each year according to the pollutiondischarge permit and environmental impact assessment requirements, tests the organized exhaust gas at the emissionoutlet once every half a year generally, the unorganized exhaust gas once every half a year, wastewater dischargeoutlets once every month, and noise once every half quarter, with the relevant test reports as data compliance support.
III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.
It updates and prepares the self-monitoring plan for next year at the end of each year according to theenvironmental impact assessment requirements, tests the organized exhaust gas at the emission outlet once everyquarter, VOC waste gas once every half a year, the unorganized exhaust gas once every half a year, wastewaterdischarge outlets once every month, and noise once every quarter, with the relevant test reports as data compliance
support.
IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.It updates and prepares the self-monitoring plan for next year at the end of each year according to the pollutiondischarge permit and environmental impact assessment requirements, tests the organized exhaust gas at the emissionoutlet once every half a year, the unorganized exhaust gas once every half a year, wastewater discharge outlets onceevery quarter, noise once every quarter and rain outlets once every six months, with the relevant test reports as datacompliance support.
V. Luxcase Precision Technology (Kunshan) Co., Ltd.Sewage
| S/N | Category | Monitoring content | Monitoring position | Conventional monitoring frequency | Executive standard |
| 1 | Domestic sewage | COD, SS, NH3-N, TP | Main discharge outlet of the factory | Once/year | Comprehensive Sewage Discharge Standard GB8978-1996 Table 4 Tertiary Standards Water Quality Standard for Sewage Discharged into Urban Sewers GB-T31962-2015 Table Class 1B Standard |
Noise:
| Category | Monitoring content | Monitoring position | Conventional monitoring frequency | Executive standard |
| Noise | Equivalent continuous A sound level | 1 meter outside the boundary | Once/quarter | Emission Standard for Industrial Enterprise Noise at Boundary GB12348-2008 Class 3 standard |
Waste gas:
| Category | Monitoring | Monitoring | Conventional | Executive |
location
| location | factor | monitoring frequency | standard | |
| Waste gas | Exhaust funnel DA009 | Non-methane hydrocarbon, tin and its compounds | Once/year | Jiangsu Integrated Emission Standard of Air Pollutants （DB32/4041-2021) Table 1 standards |
| Enterprise boundary | Non-methane hydrocarbon, tin and its compounds, and particulate matter | Once/year | Jiangsu Integrated Emission Standard of Air Pollutants （DB32/4041-2021) Table 3 standards | |
| Within the factory | Non-methane hydrocarbon | Once/year | Jiangsu Integrated Emission Standard of Air Pollutants （DB32/4041-2021) Table 2 standards |
Emergency plan for abrupt environmental pollution accidentsI. Luxcase Precision Technology (Yancheng) Co., Ltd.Luxcase Plant has prepared the Emergency Plan for Abrupt Environmental Pollution Accidents (3rd Edition) in2022, and has completed the formalities for expert review and filing with the filing No.: 320902-2022-003-H.II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.Ri Ming Plant has prepared the Emergency Plan for Abrupt Environmental Pollution Accidents (3rd Edition) in2022, and has completed the formalities for expert review and filing with the filing No.: 02-310116-2022-060-L.III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.
Completed in June 2021, with the filing No.: 320682-2021-065-M.IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.Ri Shan Plant has prepared the Emergency Plan for Abrupt Environmental Pollution Accidents (3rd Edition) in2021, and has completed the formalities for expert review and filing with the filing No.: 320421-2021-105-M.Investment in environment governance and protection, and payment of environmental protection taxesI. Luxcase Precision Technology (Yancheng) Co., Ltd.In 2023, approximately CNY 14.8 million was invested in the operation, maintenance, and upkeep ofenvironmental protection equipment. Additionally, the total amount of environmental protection tax paid on aquarterly basis, averaging CNY 19.98 million per month, was reported.II. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.In 2023, approximately CNY 8 million was invested in environmental protection, and the environmentalprotection tax paid amounted to CNY 16,167.34.
III. Ri Shan Computer Accessory (Jiashan) Co., Ltd.In 2023, approximately CNY 30 million was invested in environmental protection equipment, and the totalamount of environmental protection tax paid for quarterly declarations averaged CNY 0.878 million per month.
IV. Luxcase Precision Technology (Kunshan) Co., Ltd.
In 2023, approximately CNY 1 million was invested in environmental management and protection for newprojects, and about CNY 500,000 was invested for expansion projects.Measures taken to reduce carbon emissions during the reporting period and their effects?Applicable □N/AI. Luxcase Precision Technology (Yancheng) Co., Ltd.
| Improvement project | Program | Electricity Saved (kWh) | Reduction in Carbon Emissions (tCO2e) |
| Photovoltaic Power Generation | Constructing a photovoltaic station on the rooftop to generate electricity | 6,261,091 | 3,898.16 |
| Variable Frequency Conversion Retrofit for Air Conditioning Fans | Installing frequency converters to convert the operation of original fixed-frequency fans to variable frequency | 5,136,667 | 3,198.09 |
| Boiler Pipeline Pressure Reduction and Improvement | Lowering the boiler pipeline pressure from 0.75MPa to 0.65MPa | 10,683,867 | 6,651.78 |
II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.
Improvementproject
| Improvement project | Program | Investment (RMB0’000) | Income (0’000 kwh) | Improvement project |
| Compressed air leakage improvement | Compressed air leakage improvement | 0 | 25.2 | 30 |
| CNC machine centralized pressure conversion | Independent small transformer of CNC replaced by centralized pressure conversion | 24 | 28.0 | 35.0 |
| Replacement of air compressors | Conventional adsorption dryers replaced by zero-loss suction dryers | 0 | 54.4 | 68 |
| Replacement by energy saving lamps | Ordinary lamps replaced by high-efficiency LED lamps | 0 | 3.3 | 4.1 |
III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.
| Improvement project | Program | Investment (RMB0’000) | Annual power savings (kwh) | Annual cost savings (RMB) |
| Photovoltaic Revenue | 1: Photovoltaic electricity generation discount revenue, with a 15% discount compared to the market electricity price: 2: Revenue Method: Long-term revenue 3: Photovoltaic Phase 1 starts generating revenue in February of the 23rd year; Phase 2 starts generating revenue in April; Phase 3 starts generating revenue in June. | Contract energy management | 13,252,500 | 10,071,900 |
| Variable Frequency Installation Improves Water | 1: The frequency of the cooling water circulation pump for mechanical seals at the wastewater station is adjusted to run at 50Hz through | 0 | 285,120 | 216,691 |
Pump
| Pump | variable frequency control. The circulation water volume far exceeds the minimum water usage for on-site mechanical seal cooling, resulting in surplus supply and wastage. By adjusting the frequency converter, the operating frequency of the mechanical seal cooling water circulation pump is reduced to 35Hz, meeting the minimum demand standard for on-site mechanical seal cooling and reducing waste. 2: Revenue Method: Long-term revenue (10 months can be saved over 23 years) | |||
| Import of Cold Plates for Air Conditioning in Building A17 | 1: Principle: Based on the unique geographical conditions of Rugao, the cold plate exchange system can be enhanced to utilize outdoor low-temperature air for cooling water towers to provide refrigeration for dust-free workshops, thereby saving energy consumption of air conditioning chiller units. 2: Revenue Method: Long-term revenue, saving 3 months annually (from late November to early February the following year) | 13.3 | 565,488 | 429,771 |
| Installation of Temperature Control for Cooling Water Tower | 1: At the wastewater station, the cooling water tower fan for mechanical seals is manually operated (unable to automatically start and stop based on external temperature changes). Continuous operation for extended | 0.0 | 48,180 | 36,617 |
periods leads to energy wastage. Afterevaluation, it is feasible to install atemperature control device. Atemperature-controlled automatic start-stop controller will be added to thecontrol loop of the cooling water towerfan for mechanical seals. It will be setto start when the water temperatureexceeds 28°C and stop when it fallsbelow 24°C, aiming to achieve energysavings. It is estimated that energyconsumption can be reduced for 6months per year.
| periods leads to energy wastage. After evaluation, it is feasible to install a temperature control device. A temperature-controlled automatic start-stop controller will be added to the control loop of the cooling water tower fan for mechanical seals. It will be set to start when the water temperature exceeds 28°C and stop when it falls below 24°C, aiming to achieve energy savings. It is estimated that energy consumption can be reduced for 6 months per year. | ||||
| Reduced Frequency Operation of Anode Exhaust Tower | Building A2's anode exhaust tower currently operates at 50Hz. By verifying that this adjustment doesn't affect production, it's proposed to lower the frequency to 35Hz to reduce energy consumption costs. This sustainable adjustment can yield benefits throughout the year. | 0.0 | 2,308,800 | 1,754,688 |
EnergyManagement forDust-freeWarehouse inBuilding A7
| Energy Management for Dust-free Warehouse in Building A7 | Building A7's BGA warehouse is currently maintained as a constant temperature and humidity warehouse (control standards: temperature ≤ 12°C & ≥ 25°C, humidity ≤ 32% & ≥ 69%). Based on testing, it's proposed to adjust the warehouse temperature and humidity control standards from constant to ordinary (room temperature management), as it won't impact product quality. According to the analysis of the energy consumption supplied by the constant temperature | 0.0 | 3,783,996 | 2,875,837 |
and humidity air conditioning system inBuilding A7, it's estimated that energyconsumption costs for air conditioningcan be saved for 9 months annually(considering three months of summerwhen the warehouse staff require acomfortable working environment, sothe air conditioning will beoperational). This yields an annualrevenue for 9 months.
| and humidity air conditioning system in Building A7, it's estimated that energy consumption costs for air conditioning can be saved for 9 months annually (considering three months of summer when the warehouse staff require a comfortable working environment, so the air conditioning will be operational). This yields an annual revenue for 9 months. | ||||
| Energy Waste Investigation and Reduction | 1: By conducting regular weekly inspections of energy waste phenomena in the perimeter and workshops of the factory, timely identification and rectification of energy waste can be achieved, reducing the energy waste rate and lowering energy consumption costs. 2: Based on the audit anomalies from May to November of the 22nd year, the average monthly energy savings are calculated using the "Leakage Volume Calculation and Leakage Cost Calculation Tool." 3: Revenue Method: Energy management and control for long-term benefits. | 0.0 | 422,606 | 482,153 |
IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.
| Improvement project | Program | Investment (RMB0’000) | Income (0’000 kwh) | Improvement project |
| Photovoltaic Project | Utilization of the parking lot near Gate 1 and idle rooftops in the Rishan | 0 | 79 | 519.3 |
factory area for the construction ofsolar photovoltaic power generation.The project is funded by themanufacturer, which also includesthe provision of photovoltaic carportsand charging piles.
| factory area for the construction of solar photovoltaic power generation. The project is funded by the manufacturer, which also includes the provision of photovoltaic carports and charging piles. | ||||
| Optimization of Compressed Air and Vacuum Systems | Rational distribution of vacuum systems according to production arrangements. | 36.4 | 179.35 | 219.3 |
| Improvement in Compressed Air Supply | Installation of throttle valves to control air volume in the gas pipeline, resulting in monthly energy savings of 218 kWh per unit. | 0.4 | 2.96 | 3.65 |
| Energy Efficiency in Chiller Units | Implementation of intelligent frequency conversion control for chiller unit systems. | Energy Management Contract | 64.04 | 426.19 |
| Replacement of Vacuum Pumps with Permanent Magnet Motors | Actual operating energy consumption current of vacuum pumps for CNC numerically controlled lathes: the three-phase average current has decreased from 206A to 171A. | 132 | 1.54 | 13.44 |
| Conversion of Screw Air Compressors from Fixed Frequency to Variable Frequency | Conversion of 4 fixed-frequency air compressors to variable frequency | 60 | 47.16 | 64.15 |
| Rectification of Cooling Water Tower Pipelines | Connection of pipelines for cooling water towers on the rooftops of F11 and F3 buildings, saving the number of water pump startups, enabling mutual support between | 120 | 44.57 | 60.4 |
Administrative penalties imposed due to environmental issues during the reporting period
| Name of the Company or its subsidiaries | Reasons for penalties | Violations | Penalty results | Effects on the listed company’s production and operation | Rectification measures of the Company |
| None | None | None | None | None | None |
Other environmental information to be disclosedI. Luxcase Precision Technology (Yancheng) Co., Ltd.The said company takes the initiative to make PRTR information disclosure at the platform of the Institute ofPublic and Environmental Affairs (IPE) to the public, disclosing the emissions of wastewater and exhaust gas andrelated implementation standards every year; and fills out and reports the annual environmental information in thepollution resource management system “One Enterprise and One File” of Jiangsu Province (column of disclosureof enterprise environmental information according to the law).II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.The said company takes the initiative to make PRTR information disclosure at the platform of the Institute of
| multiple devices | ||||
| Conversion of old piping in the cleanroom to new Lipo piping (conversion from compressed air to direct vacuum suction) | For the original automated assembly lines on floors F10 to 1F, each of the 6 lines has 58 vacuum generators per line. During the Lipo transformation, all vacuum suction devices will be replaced with centralized negative pressure machines to reduce energy waste. | 35.19 | 149.87 | 203.87 |
| Energy-saving transformation of cooling fixtures for IPI fixtures in the cleanroom to reduce temperature | The original cooling lines for fixtures used compressed air, resulting in high air consumption and energy consumption. After improvement, each cooling module set will be equipped with 2 air-cooled cooling units and 1 blowing module to rapidly cool down the fixtures, thereby reducing energy consumption. | Energy Management Contract | 20.94 | 29.12 |
Public and Environmental Affairs (IPE) to disclose to the public the emissions of wastewater and exhaust gas andrelated implementation standards every year; and fills out and reports the annual environmental information in thesystem of disclosure of the enterprise environmental information according to the law (Shanghai), and make to thepublic the wastewater, exhaust gas, noise and other pollution emission factors on the national pollution sourceinformation disclosure platform every month.III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.
The said company takes the initiative to make PRTR information disclosure at the platform of the Institute ofPublic and Environmental Affairs (IPE) to the public, disclosing the emissions of wastewater and exhaust gas andrelated implementation standards every year.IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.The said company takes the initiative to make PRTR information disclosure at the platform of the Institute ofPublic and Environmental Affairs (IPE) to the public, disclosing the emissions of wastewater and exhaust gas andrelated implementation standards every year; and fills out and reports the annual environmental information in thesystem of the disclosure of enterprise environmental information according to the law (Zhejiang).Other environmental informationLuxshare-ICT attaches great importance to possible impact of climate changes on the Company, and hasestablished a carbon neutral working group led by the Board of Directors, coordinated by the sustainabledevelopment center and participated in by all plants to respond to issues related to climate changes in acomprehensive manner. Based on our actual business and with reference to the external standards, it identifies theapplicable climate risks and opportunities, rank them according to the increasing probability of occurrence anddegree of impact, and then submit them to the Strategy Committee of the Board of Directors for deliberation andapproval. When necessary, our risk management departments prepare or add the countermeasures for risks andopportunities of higher importance and urgency. In addition, it works out a claim change action plant and implementa low-carbon energy transition plan, and is committed to achieving carbon neutrality by 2025. During the reportingperiod, we actively used clean energy and reduced greenhouse gas emissions by 1,037,334.21 tons of carbon dioxideequivalent through rooftop photovoltaic, green procurement, direct purchase of green power and green energy fundinvestment or otherwise. Meanwhile, we promoted 266 energy-saving renovation projects for five major energy-using modules, including production electricity, gas supply system, central air conditioning, workshop fan and livingoffice, thereby reducing greenhouse gas emissions by a total of 89,691.80 tons of carbon dioxide equivalent.II. Description of social responsibilities
The Company’s 2023 Sustainable Development Report has been published at Cninfo (www.cninfo.com.cn), theinformation disclosure website designated by the Company, together with this report on the same day.
III. Consolidation and expansion of poverty alleviation and rural revitalizationThe Company actively participated in and contributed to the community development and building, andconducted colorful activities to care for special groups and give back to society, and made contribution to aharmonious society. The Company did not carry out the work on poverty alleviation and rural revitalization duringthe reporting period or have subsequent relevant plans.
Section VI Significant MattersI. Fulfillment of commitments
1. Complete and incomplete commitments of the Company and its actual controller, shareholders, relatedparties, acquirers, and other related parties for the commitments by the end of the reporting period.
?Applicable □ N/A
| Commitments | Committed by | Commitment Type | Commitment details | Commitment date | Commitment period | Fulfillment of commitments |
| Commitments relating to any initial public offering or subsequent fund raising | HUANG Dawei; LI Wei; LIU Zhonghua; SONG Yuhong; WANG Laichun; WANG Laisheng; WANG Tao; WU Tiansong; ZHANG Ying | Other commitments | In order to seriously protect the legitimate rights and interests of the Company and all of its shareholders, each of all directors and executives of the Company hereby makes commitments as follows: 1. I promise not to damage the Company’s interest by transferring benefits to any other entity or individual free of charge or under unfair conditions or otherwise; 2. I promise to restrain the duty-related consumption of directors and executives; 3. I promise not to use the Issuer’s assets to engage in investment and consumption irrelevant to their performance of powers and duties; 4. I promise to link the remuneration rules developed by the Board of Directors or the Remuneration Committee and the implementation of the Issuer’s remedial measures for diluted earnings; 5. I promise to link the conditions for the exercise of the Issuer’s stock option incentives to be issued and the implementation of the Issuer’s remedial measures for diluted earnings; and 6. I promise to strictly fulfill the aforesaid commitments to ensure that the Issuer’s remedial measures for diluted earnings can be fulfilled effectively. If I breach or refuse to fulfill any commitments set forth above, I will make explanations and apologies and perform other obligations required by the applicable regulations, and agree to accept any punishment or regulatory action that may be imposed on or taken against me by the CSRC, the Shenzhen Stock Exchange or any other competent securities regulatory authority in accordance with the applicable rules and regulations established or promulgated by such regulatory authorities, and indemnify the Issuer or its | February 21, 2022 | Long-term | Ongoing |
shareholders for the losses (if any) arisingtherefrom according to the law.
7. From the date of issuing this Letter of
Commitment until the completion of this non-public offering of stocks by the Issuer, if theCSRC has issued other new provisions onmeasures to compensate for diluted returns andcommitments, and the aforesaid commitmentsfail to meet such new regulatory provisionsissued by the CSRC, I undertake to givesupplementary commitments in accordance withthe latest provisions of the CSRC.
| shareholders for the losses (if any) arising therefrom according to the law. 7. From the date of issuing this Letter of Commitment until the completion of this non-public offering of stocks by the Issuer, if the CSRC has issued other new provisions on measures to compensate for diluted returns and commitments, and the aforesaid commitments fail to meet such new regulatory provisions issued by the CSRC, I undertake to give supplementary commitments in accordance with the latest provisions of the CSRC. | ||||||
| Commitments relating to any initial public offering or subsequent fund raising | Luxshare Limited; WANG Laichun; WANG Laisheng | Other commitments | In order to seriously protect the legitimate rights and interests of the Company and all of its shareholders, each of the controlling shareholder and actual controllers of the Company hereby makes commitments as follows: 1. We/I will not interfere with management and operation of the Company beyond our/my powers, or infringe on the interest of the Company. 2. We/I promise to strictly fulfill the aforesaid commitments to ensure that the Issuer’s remedial measures for diluted earnings can be fulfilled effectively. If we/I breach or refuse to fulfill any commitment set forth above, I will make explanations and apologies and perform other obligations required by the applicable regulations, and agree to accept any punishment or regulatory action that may be imposed on or taken against me by the CSRC, the Shenzhen Stock Exchange or any other competent securities regulatory authority in accordance with the applicable rules and regulations established or promulgated by such regulatory authorities, and indemnify the Issuer or its shareholders for the losses (if any) arising therefrom according to the law. 3. From the date of issuing this Letter of Commitment until the completion of this non-public offering of stocks by the Company, if the CSRC has issued other new provisions on measures to compensate for diluted returns and commitments, and the aforesaid commitments fail to meet such new regulatory provisions issued by the CSRC, we/I undertake to give supplementary commitments in accordance with the latest provisions of the CSRC. | February 21, 2022 | Long-term | Ongoing |
| Commitments relating to any initial public offering or subsequent fund raising | Luxshare Limited | Commitments relating to horizontal competition, related-party transactions and occupation of | After the completion of the transactions contemplated by the announcement on external investment and related-party transactions disclosed by the Company on November 13, 2020, we and our affiliates will not engage in any business that is the same as or substantially in competition with the business of the Company or any entity controlled by the Company in any | November 13, 2022 | Long-term | Ongoing |
funds
| funds | manner. | |||||
| Commitments relating to any initial public offering or subsequent fund raising | HUANG Dawei; LI Bin; LIN Yifei; WANG Laichun; WANG Laisheng; WU Tiansong; XIONG Tengfang; XU Huaibin, XUE Haigao; YE Yiling; ZHANG Ying | Other commitments | In accordance with the applicable regulations of the CSRC, in order to ensure the effective implementation of the Company’s remedial measures for diluted earnings, each of the directors and executives of the Company hereby makes commitments as follows: 1. I will not transfer benefits to any other entity or individual without compensation or on unfair terms, or otherwise damage the interest of the Company. 2. I will exercise self-discipline in consumption in performing my duties. 3. I will not use the assets of the Company to engage in any investment or consumption activity not in connection with my duties. 4. I will, within my powers, procure the linkage between the remuneration system adopted by the Board of Directors or the Remuneration and Appraisal Committee and the implementation of the Company’s remedial measures for diluted earnings. 5. I will, within my powers, procure the linkage between the vesting conditions in respect of any share incentives granted by the Company and the implementation of the Company’s remedial measures for diluted earnings. 6. I promise to strictly fulfill the aforesaid commitments to ensure that the Company’s remedial measures for diluted earnings can be fulfilled effectively. If I breach or refuse to fulfill any commitment set forth above, I will make explanations and apologies and perform other obligations required by the applicable regulations, and agree to accept any punishment or regulatory action that may be imposed on or taken against me by the CSRC, the Shenzhen Stock Exchange or any other competent securities regulatory authority pursuant to the applicable rules and regulations established or promulgated by such regulatory authorities, and indemnify the Company or its shareholders for the losses (if any) arising therefrom according to the law. | July 11, 2019 | Long-term | Ongoing |
| Commitments relating to any initial public offering or subsequent fund raising | Luxshare Limited; WANG Laichun; WANG Laisheng | Other commitments | In order to seriously protect the legitimate rights and interests of the Company and all of its shareholders, each of the controlling shareholder and actual controllers of the Company hereby commitments as follows: 1. We/I will not interfere with management and operation of the Company beyond our/my powers, or infringe on the interest of the Company. 2. We/I promise to effectively implement the remedial measures for diluted earnings formulated by the Company and fulfill our/my | July 11, 2019 | Long-term | Ongoing |
corresponding commitments on the remedialmeasures for diluted earnings. If we/I breach orfail to perform the commitments set forth above,we/I agree to accept any punishment orregulatory action that may be imposed on ortaken against us/me by the CSRC, the ShenzhenStock Exchange or any other competentsecurities regulatory authority pursuant to theapplicable rules and regulations established orpromulgated by such regulatory authorities. Ifwe/I breach or fail to fulfill the commitments setforth above, resulting in losses to the Companyor the investors, we/I are/am willing tocompensate for such losses according to the law.
3. From the date of this commitment till the date
of completion of this offering, if the CSRC orany other competent securities regulatoryauthority adopts any new regulation regardingthe remedial measures for diluted earnings andcommitments in connection therewith, and thecommitments set forth above do not satisfy therequirements of such new regulation, we/I willmake supplementary commitments pursuant tothe new regulation.
| corresponding commitments on the remedial measures for diluted earnings. If we/I breach or fail to perform the commitments set forth above, we/I agree to accept any punishment or regulatory action that may be imposed on or taken against us/me by the CSRC, the Shenzhen Stock Exchange or any other competent securities regulatory authority pursuant to the applicable rules and regulations established or promulgated by such regulatory authorities. If we/I breach or fail to fulfill the commitments set forth above, resulting in losses to the Company or the investors, we/I are/am willing to compensate for such losses according to the law. 3. From the date of this commitment till the date of completion of this offering, if the CSRC or any other competent securities regulatory authority adopts any new regulation regarding the remedial measures for diluted earnings and commitments in connection therewith, and the commitments set forth above do not satisfy the requirements of such new regulation, we/I will make supplementary commitments pursuant to the new regulation. | ||||||
| Commitments relating to any initial public offering or subsequent fund raising | BAI Rujing; CHEN Chaofei; DONG Jianhai; LI Bin; LI Jing; LI Xiongwei; LIN Yifei; WANG Ji; WANG Laichun; WANG Laisheng; XU Huaibin; YE Yiling; ZHANG Lihua | Other commitments | Each of all directors and executives of the Company hereby commitments as follows: (1) I will not transfer benefits to any other entity or individual without compensation or on unfair terms, or otherwise damage the interest of the Company; (2) I will exercise self-discipline in consumption in performing my duties; (3) I will not use the assets of the Company to engage in any investment or consumption activity not in connection with my duties; (4) I will procure the linkage between the remuneration system adopted by the Board of Directors or the Remuneration and Appraisal Committee and the implementation of the Company’s remedial measures for diluted earnings; (5) If the Company establishes any share incentive plan in the future, I will procure the linkage between the vesting conditions in respect of any share incentives granted by the Company and the implementation of the Company’s remedial measures for diluted earnings. | March 11, 2016 | Long-term | Ongoing |
| Commitments relating to any initial public offering or subsequent fund raising | Luxshare Limited; WANG Laichun; WANG Laisheng | Other commitments | Luxshare Limited, as the controlling shareholder of the Company, and WANG Laichun and WANG Laisheng, as the actual controllers of the Company, hereby make commitments as follows: 1. We, Luxshare Limited, as the controlling shareholder of the Company, undertake not to interfere with management and operation of the | March 11, 2016 | Long-term | Ongoing |
Company beyond our powers, or infringe on theinterest of the Company.
2. I, WANG Laichun, as the actual controller,
Chairman and General Manager of theCompany, undertake to perform my duties inaccordance with the applicable laws andregulations and the articles of association of theCompany, and not to interfere with managementand operation of the Company beyond mypowers, or infringe on the interest of theCompany.
3. I, WANG Laisheng, as the actual controller
and Vice Chairman of the Company, undertaketo perform my duties in accordance with theapplicable laws and regulations and the articlesof association of the Company, and not tointerfere with management and operation of theCompany beyond my powers, or infringe on theinterest of the Company.
| Company beyond our powers, or infringe on the interest of the Company. 2. I, WANG Laichun, as the actual controller, Chairman and General Manager of the Company, undertake to perform my duties in accordance with the applicable laws and regulations and the articles of association of the Company, and not to interfere with management and operation of the Company beyond my powers, or infringe on the interest of the Company. 3. I, WANG Laisheng, as the actual controller and Vice Chairman of the Company, undertake to perform my duties in accordance with the applicable laws and regulations and the articles of association of the Company, and not to interfere with management and operation of the Company beyond my powers, or infringe on the interest of the Company. | ||||||
| Commitments relating to any initial public offering or subsequent fund raising | Luxshare Limited | Commitments relating to horizontal competition, related-party transactions and occupation of funds | The commitments relating to horizontal competition, related-party transactions and occupation of funds are as follows: 1. We and other entities controlled by us will reduce related-party transactions with the Company to the maximum extent practicable. 2. With respect to any related-party transaction between us or any other entity controlled by us and the Company that is unavoidable or exists reasonably, we will carry out such transaction on an arm’s length basis and customary commercial terms, ensure the fairness of the transaction price, perform the relevant decision-making process according to the law, and guarantee that the legitimate rights and interests of the Company and its shareholders will not be damaged as a result of such transaction. 3. We or any other entity controlled by us will not request the Company to offer any terms more favorable than the terms that may be offered by any third party in an arm’s length transaction, or accept any such terms offered by the Company. 4. For so long as we remain the controlling shareholder of Luxshare-ICT, the commitments set forth above shall be unconditional and irrevocable. If we breach any commitment set forth above, we will, jointly and severally, fully, timely and adequately indemnify the losses of the Company arising therefrom. | October 15, 2014 | Long-term | Ongoing |
| Commitments relating to any initial public offering or subsequent fund raising | Luxshare Limited | Commitments relating to horizontal competition, related-party transactions and occupation of | The commitments relating to horizontal competition, related-party transactions and occupation of funds are as follows: 1. We and all other entities controlled by us at present or in the future will not, directly or indirectly, engage in any business or activity that competes, might compete or potentially competes with the main business of the Company. 2. If any amendment of any applicable law or change in any | October 15, 2014 | Long-term | Ongoing |
funds
| funds | applicable policy of the country results in any actual or potential horizontal competition between us or any other entity controlled by us and the Company in any business, the Company shall have the preemptive right on the same terms in respect of any entrusted management (or management under contract or lease) or acquisition in connection with such business. 3. For so long as we remain the controlling shareholder of Luxshare-ICT, the commitments set forth above shall be unconditional and irrevocable. If we breach any commitment set forth above, we will, jointly and severally, fully, timely and adequately indemnify the losses of the Company arising therefrom. | |||||
| Commitments relating to any initial public offering or subsequent fund raising | Luxshare Limited; Shenzhen Zixin Investment Co., Ltd.; WANG Laichun; WANG Laisheng | Commitments relating to horizontal competition, related-party transactions and occupation of funds | The commitments relating to horizontal competition, related-party transactions and occupation of funds are as follows: we/I will not take advantage of our/my position as the controlling shareholder, actual controller or shareholder (as applicable) and our/my affiliation with the Issuer to engage in any act to the detriment of the interest of the Issuer or its other shareholders. With respect to any related-party transaction between us/me or any other entity controlled by us/me and the Issuer, we/I will carry out such transaction on an arm’s length basis and customary commercial terms, and will not request the Issuer to offer any terms more favorable than the terms that may be offered by any third party in an arm’s length transaction, or accept any such terms offered by the Issuer. We/I will strictly perform all related-party transaction agreements (if any) entered into with the Issuer in good faith, and will not seek any interest or benefit in contravention of the commitments set forth above. If we/I breach any commitment set forth above, we/I agree to indemnify the Issuer and its minority shareholders for all losses arising therefrom. | July 30, 2010 | Long-term | Ongoing |
| Commitments relating to any initial public offering or subsequent fund raising | Luxshare Limited; Shenzhen Zixin Investment Co., Ltd. | Commitments relating to horizontal competition, related-party transactions and occupation of funds | The commitments relating to horizontal competition, related-party transactions and occupation of funds are as follows: We are not engaged in any business that is the same as or similar to the business of the Issuer or any entity controlled by the Issuer. For so long as we retain control over the Issuer directly or indirectly, we will strictly comply with the applicable laws, regulations and codes of the country, and will not, directly or indirectly, engage in any business that is the same as, similar to or substantially in competition with the business of the Issuer or any entity controlled by the Issuer, or have substantial or relative control over any other company, organization or economic entity engaging in any business that is the same as, similar to or substantially in competition with | July 30, 2010 | Long-term | Ongoing |
the business of the Issuer or any entity controlledby the Issuer in or outside China. We will use ourcontrol over the other entities controlled by us tocause such entities to fulfill the commitments setforth above in the same manner. If we breach anycommitment set forth above, we agree to assumethe relevant legal liabilities, including withoutlimitation, to indemnify the Issuer and itsminority shareholders for all losses arisingtherefrom.
| the business of the Issuer or any entity controlled by the Issuer in or outside China. We will use our control over the other entities controlled by us to cause such entities to fulfill the commitments set forth above in the same manner. If we breach any commitment set forth above, we agree to assume the relevant legal liabilities, including without limitation, to indemnify the Issuer and its minority shareholders for all losses arising therefrom. | ||||||
| Commitments relating to any initial public offering or subsequent fund raising | WANG Laichun; WANG Laisheng | Commitments relating to horizontal competition, related-party transactions and occupation of funds | The commitments relating to horizontal competition, related-party transactions and occupation of funds are as follows: I and other entities controlled by me are not engaged in any business that is the same as or similar to the business of the Issuer or any entity controlled by the Issuer. For so long as I retain control over the Issuer directly or indirectly, I will strictly comply with the applicable laws, regulations and codes of the country, and will not, directly or indirectly, engage in any business that is the same as, similar to or substantially in competition with the business of the Issuer or any entity controlled by the Issuer, or have substantial or relative control over any other company, organization or economic entity engaging in any business that is the same as, similar to or substantially in competition with the business of the Issuer or any entity controlled by the Issuer in or outside China. I will use my control over the other entities controlled by me to cause such entities to fulfill the commitments set forth above in the same manner. If I breach any commitment set forth above, I agree to assume the relevant legal liabilities, including without limitation, to indemnify the Issuer and its minority shareholders for all losses arising therefrom. | July 30, 2010 | Long-term | Ongoing |
| Other commitments | WANG Laisheng | Commitments on Shareholding Increase | (1) For this shareholding increase plan and subsequent share management, I will not conduct insider trading or short-term trading, or purchase or sell shares during the sensitive period in strict accordance with the relevant provisions of applicable laws, regulations and normative documents. (2) I will not reduce shares of the Company during the period of the shareholding increase and within the statutory period, and will complete this shareholding increase plan during the aforesaid period of implementation. | October 26, 2023, | April 27, 2024 | Completed as scheduled |
| Whether the commitments have been fulfilled on time? | Yes | |||||
| If any commitment | N/A | |||||
is overdue,explainspecificreasons for theincompleteperformanceand detailedplan of nextsteps
is overdue,explainspecificreasons for theincompleteperformanceand detailedplan of nextsteps
2. If the Company has made any profit forecast on its assets or project and the reporting period falls withinthe period of such profit forecast, explanation about whether the goal has been achieved and the relevantreasons
□ Applicable ?N/A
II. Occupation of funds of the listed company by the controlling shareholder and other relatedparties for non-operating purposes
□ Applicable ?N/A
During the reporting period, no controlling shareholder or its related party used capital of the listed company for non-operating purposes.III. Illegal provision of guarantees for external parties
□ Applicable ?N/A
We have not provided any external guarantee in contravention of the applicable regulations during the reporting period.IV. Explanation made by the Board of Directors about the modified audit opinion for the latestperiod
□ Applicable ?N/A
V. Explanation by the Board of Directors, the Board of Supervisors and the independentdirectors (if any) about the modified auditor’s report issued by the accounting firm for thereporting period
□ Applicable ?N/A
VI. Explanation about changes in accounting policies and accounting estimates or correction ofsignificant accounting errors when compared to the previous financial year
?Applicable □N/AOn December 31, 2021, the Ministry of Finance issued the Notice on Issuing the Interpretation No. 15 ofEnterprise Accounting Standards (Cai Kuai [2021] No. 35), hereinafter referred to as Interpretation No. 15,interpreting contents related to Reporting on Centralized Fund Management, etc.
On December 13, 2022, the Ministry of Finance issued the Notice on Issuing the Interpretation No. 16 ofEnterprise Accounting Standards (Cai Kuai [2022] No. 31), hereinafter referred to as Interpretation No. 16,interpreting contents related to Accounting Treatment of Deferred Income Tax not Exempted from InitialRecognition for Assets and Liabilities arising from Single Transactions, Accounting Treatment of Income TaxEffects of Dividends Related to Financial Instruments Classified as Equity Instruments by the Issuer, AccountingTreatment of Changing Share Payments Settled in Cash by Enterprises to Share Payments Settled in Equity, etc.In accordance with the above notifications, the company will make corresponding changes to its currentaccounting policies and implement them from the specified effective date.
VII. Explanation about changes in consolidation scope when compared to the previous financialyear?Applicable □N/A
Refer to “Section X Financial Report” - “IX. Changes in scope of consolidation”.VIII. Appointment and dismissal of accounting firms
Accounting firm currently engaged:
| Name of domestic accounting firm | BDO China Shu Lun Pan Certified Public Accountants LLP |
| Remuneration of domestic accounting firm (in RMB0’000) | 246.33 |
| Consecutive years in which the domestic accounting firm has provided auditing service | 16 |
| Certified public accountant of the domestic accounting firm | LI Jing and DANJie |
| Consecutive years in which the certified public accountant of the domestic accounting firm has provided auditing service | 5 |
Whether a new accounting firm was engaged during the reporting period?
□ Yes ?No
Engagement of accounting firm for auditing internal controls, financial advisor or sponsor:
? Applicable □N/ADuring the reporting period, the company engaged BDO China Shu Lun Pan Certified Public Accountants LLP (Special GeneralPartnership) as the auditor and internal control auditor for the year 2023. The total audit fees paid to RSM China Certified PublicAccountants LLP (Special General Partnership) during the reporting period amounted to RMB 2.4633 million.IX. Possibility of listing suspension and termination after disclosure of the annual report
□ Applicable ?N/A
X. Matters relating to bankruptcy and reorganization
□ Applicable ?N/A
We have not been involved in any bankruptcy or reorganization proceedings during the reporting period.
XI. Material litigation and arbitration proceedings
?Applicable □ N/A
| Background | Amount claimed (RMB0’000) | Whether a provision is recognized | Status | Result and effect | Enforcement of judgment/ award | Date of disclosure | Information disclosure available at |
| Other litigation during the reporting period (arbitration) | 7,375.29 | No | Closed | The case has been settled/ closed by mediation or judgment, and does not have a material effect on us. | Already enforced | N/A | |
| Other litigation during the reporting period (arbitration) | 5,562.66 | No | Pending | The case is pending, and will not have a material effect on us. | Pending | N/A |
XII. Penalty and rectification
□ Applicable ?N/A
We have not been subject to any punishment or required to make any rectification during the reporting period.
XIII. Integrity of the Company, its controlling shareholder and actual controller
?Applicable □N/AThere wasn’t any outstanding court judgment or overdue debt of a large amount involving us or our controlling shareholder or actualcontrollers during the reporting period.XIV. Material related-party transactions
1. Related-party transactions relating to day-to-day operation
?Applicable □ N/A
| Counterparty | Relationship | Type | Related-party transactions | Pricing principle | Transaction price | Amount (in RM | % of the total amount | Approved limit of transacti | Whether or not excee | Method of settlement | Market price available for | Date of disclosure | Information disclosure |
B0，000)
| B0，000) | of the same type of transactions | on amount (in RMB0，000) | d the approved limit | the same type of transactions | available at | ||||||||
| Suzhou Lisheng | Associated legal person | Purchasing goods from affiliates | Purchasing goods | Market pricing | Fair market price | 1,870.07 | 0.01% | 4,500 | No | Bank transfer | Fair market price | February 22, 2023 | Announcement No.:2023-013 |
| BCS Germany | Associated legal person | Purchasing goods from affiliates | Purchasing goods | Market pricing | Fair market price | 3,659.58 | 0.02% | 7,000 | No | Bank transfer | Fair market price | February 22, 2023 | Announcement No.:2023-013 |
| Hong Kong Luxsan | Associated legal person | Purchasing goods from affiliates | Purchasing goods | Market pricing | Fair market price | 119,061.78 | 0.67% | 120,000 | No | Bank transfer | Fair market price | February 22, 2023 | Announcement No.:2023-013 |
| Luxsan Investment | Associated legal person | Purchasing goods from affiliates | Purchasing goods | Market pricing | Fair market price | 3,699.9 | 0.02% | 13,000 | No | Bank transfer | Fair market price | February 22, 2023 | Announcement No.:2023-013 |
| BCS United States | Associated legal person | Purchasing goods from affiliates | Purchasing goods | Market pricing | Fair market price | 9.29 | 0.00% | 10,000 | No | Bank transfer | Fair market price | February 22, 2023 | Announcement No.:2023-013 |
| Suzhou Lisheng | Associated legal person | Selling goods from affiliates | Selling goods | Market pricing | Fair market price | 39,698.38 | 0.17% | 85,000 | No | Bank transfer | Fair market price | February 22, 2023 | Announcement No.:2023-013 |
| Hong Kong Luxsan | Associated legal person | Selling goods from affiliates | Selling goods/providing labor | Market pricing | Fair market price | 855.05 | 0.00% | 180,000 | No | Bank transfer | Fair market price | February 22, 2023 | Announcement No.:2023-013 |
| Hong Kong Gaowei | Associated legal person | Selling goods from affiliates | Selling goods | Market pricing | Fair market price | 4,748.38 | 0.02% | 36,000 | No | Bank transfer | Fair market price | February 22, 2023 | Announcement No.:2023-013 |
| Luxsan | Associat | Selling | Sellin | Market | Fair | 23,0 | 0.10% | 35,000 | No | Bank | Fair | Febru | Anno |
Equipment
| Equipment | ed legal person | goods from affiliates | g goods | pricing | market price | 41.77 | transfer | market price | ary 22, 2023 | uncement No.:2023-013 | |||
| Luxsan Investment | Associated legal person | Selling goods from affiliates | Selling goods | Market pricing | Fair market price | 504.74 | 0.00% | 5,500 | No | Bank transfer | Fair market price | February 22, 2023 | Announcement No.:2023-013 |
| BCS United States | Associated legal person | Selling goods from affiliates | Selling goods | Market pricing | Fair market price | 2,422.68 | 0.01% | 4,000 | No | Bank transfer | Fair market price | February 22, 2023 | Announcement No.:2023-013 |
| Total | -- | -- | 199,571.62 | -- | 500,000 | -- | -- | -- | -- | -- | |||
| Particulars of huge-amount sales returns | N/A | ||||||||||||
| If the total amount of daily related-party transactions that are expected to occur during the reporting period is estimated by type, the actual transactions occurred during the reporting period (if any) | When expecting the annual daily related party transactions, the Company conducts the appraisal and calculation of possible related party transactions according to the market situation, but the actually accrued amount is determined based on market situation, the two parties’ business development, actual demands and specific implementation progress, resulting in certain differences between actually accrued amount and expected amount. The foregoing belongs to the acts of normal business and will not have a significant impact on daily operation and performance of the Company. | ||||||||||||
| Reason of any great difference between transaction price and reference market price (if applicable) | N/A | ||||||||||||
2 Related-party transactions involving acquisition or sales of assets or equities
□ Applicable ?N/A
We have not conducted any related-party transaction involving acquisition or sales of assets or equities during the reporting period.
3. Related-party transactions involving joint external investment
□ Applicable ?N/A
The Company had no related-party transactions on joint investments during the reporting period.
4. Accounts receivable from and payable to related parties
□ Applicable ?N/A
We did not have any accounts receivable from or payable to any related party during the reporting period.
5. Financial business with its related financial companies
□ Applicable ?N/A
There are no deposits, loans, credits or other financial transactions between the Company, its related financial companies and related
parties.
6. Financial business between the financial companies controlled by the Company and related parties
□ Applicable ?N/A
There are no deposits, loans, credits or other financial transactions between the financial companies controlled by the Company andrelated parties.
7. Other significant related-party transactions
□ Applicable ?N/A
We have not conducted any other material related-party transaction during the reporting period.
XV. Significant contracts and performance thereof
1. Trusteeship, contracting and leases
(1) Trusteeship
□ Applicable ?N/A
No such case during the reporting period.
(2) Contracting
□ Applicable ?N/A
No such case during the reporting period.
(3) Leases
□ Applicable ?N/A
No such case during the reporting period.
2. Material guarantees
?Applicable □ N/A
In RMB0,000
| External guarantees provided by the Company and its subsidiaries (excluding those provided for the subsidiaries) | ||||||||||
| Guarantee party | Disclosure date of quota announcement | Amount of guaranteed quota approved | Actual date of occurrence | Actual guarantee amount | Type of guarantee | Collateral (if any) | Counter guarantee (if any) | Term of guarantee | Fully executed or not | Whether or not provided for a related party |
| Guarantees provided by the Company for its subsidiaries | ||||||||||
| Guarante | Disclosur | Amount of | Actual date | Actual | Type of | Collateral | Counter | Term of | Fully | Whether |
e party
| e party | e date of quota announcement | guaranteed quota approved | of occurrence | guarantee amount | guarantee | (if any) | guarantee (if any) | guarantee | executed or not | or not provided for a related party |
| LUXSHARE PRECISION | April 20, 2022 | 70,118.73 | July 28, 2021 | 0 | Joint liability guaranty | Five years | No | Yes | ||
| Total amount of guarantee approved to be provided for subsidiaries as at the end of the reporting period (B3) | 70,118.73 | Total actual guarantee balance for subsidiaries at the end of the reporting period (B4) | ||||||||
| The situation of guarantees provided by subsidiary companies to other subsidiary companies. | ||||||||||
| Guarantee party | Disclosure date of quota announcement | Amount of guaranteed quota approved | Actual date of occurrence | Actual guarantee amount | Type of guarantee | Collateral (if any) | Counter guarantee (if any) | Term of guarantee | Fully executed? | Whether or not provided for a related party |
| TIME Interconnect Server Technology Co., Ltd. | 168.37 | June 21, 2022 | 168.37 | Joint and several guarantee | Six months from the expiration date of main debts | No | Yes | |||
| Dachuang Precision Intelligent Manufacture (Kunshan) Co., Ltd. | 58.9 | December19, 2022 | 58.9 | Joint liability guaranty | Six months from the maturity date of the main debt | No | Yes | |||
| Dachuang Precision Intelligent Manufacture (Kunshan) Co., Ltd. | 11,771.95 | April 11, 2023 | 11,771.95 | Joint liability guaranty | 2025/4/10 | No | Yes | |||
| Linkz International | 9,062.2 | September4, 2020 | 0 | Joint liability guarant | Continuing guarant | No | Yes | |||
LimitedandTIMEInterconnectIndustrial Co.,Ltd.
| Limited and TIME Interconnect Industrial Co., Ltd. | y | ee | ||||||||
| Linkz International Limited | 5,890.43 | December14, 2020 | 0 | Joint liability guaranty | Continuing guarantee | No | Yes | |||
| TIME Interconnect Industrial Co., Ltd. | 3,171.77 | June 27, 2017 | 0 | Joint liability guaranty | Continuing guarantee | No | Yes | |||
| Linkz International Limited, TIME Interconnect Industrial Co., Ltd., TIME Interconnect Wiring Technology Co., Ltd. and TIME Interconnect Server Technology Co., Ltd. | 15,405.74 | September5, 2022 | 0 | Joint liability guaranty | Continuing guarantee | No | Yes | |||
| TIME Interconnect Industrial Co., Ltd. | 2,743.67 | June 25, 2021 | 0 | Joint liability guaranty | Continuing guarantee | No | Yes | |||
| Linkz International Limited, TIME | 10,421.53 | March 21, 2023 | 0 | Joint liability guaranty | Continuing guarantee | No | Yes |
InterconnectIndustrial Co.,Ltd. andTIMEInterconnectServerTechnologyCo.,Ltd.
| Interconnect Industrial Co., Ltd. and TIME Interconnect Server Technology Co., Ltd. | ||||||||||
| Linkz International Limited, TIME Interconnect Industrial Co., Ltd. and TIME Interconnect Server Technology Co., Ltd. | 16,765.07 | February 27, 2023 | 0 | Joint liability guaranty | Continuing guarantee | No | Yes | |||
| Linkz International Limited and TIME Interconnect Industrial Co., Ltd. | 7,249.76 | October 9, 2020 | 0 | Joint liability guaranty | Continuing guarantee | No | Yes | |||
| Linkz International Limited and TIME Interconnect Industrial Co., Ltd. | 815.6 | September27, 2021 | 0 | Joint liability guaranty | Continuing guarantee | No | Yes | |||
| Linkz International | 1,274.89 | September27, 2021 | 0 | Joint liability guarant | Continuing guarant | No | Yes |
LimitedandTIMEInterconnectIndustrial Co.,Ltd.
| Limited and TIME Interconnect Industrial Co., Ltd. | y | ee | ||||||||
| TIME Interconnect Server Technology Co., Ltd. | 7,249.76 | October 18, 2023 | 0 | Joint liability guaranty | Continuing guarantee | No | Yes | |||
| TIME Interconnect Server Technology Co., Ltd. | 815.6 | October 18, 2023 | 0 | Joint liability guaranty | Continuing guarantee | No | Yes | |||
| TIME Interconnect Server Technology Co., Ltd. | 1,274.89 | October 18, 2023 | 0 | Joint liability guaranty | Continuing guarantee | No | Yes | |||
| TIME Interconnect Technology Limited | 6,343.54 | November15, 2021 | 2,945.22 | Joint liability guaranty | Continuing guarantee | No | Yes | |||
| TIME Interconnect Technology (Huizhou) Limited | 5,000 | April 27, 2020 | 168.54 | Joint liability guaranty | Continuing guarantee | No | Yes | |||
| TIME Interconnect Technology (Huizhou) Limited | 6,000 | January 1, 2018 | 1,000 | Joint liability guaranty | 2023/12/31 | No | Yes | |||
| TIME | 10,800 | January 24, | 0 | Joint | 2025/1/ | No | Yes |
InterconnectTechnology(Huizhou)Limited
| Interconnect Technology (Huizhou) Limited | 2022 | liability guaranty | 23 | |||||||
| TIME Interconnect Technology (Huizhou) Limited | 10,000 | June 1, 2022 | 2,920 | Joint liability guaranty | Expired on the debt repayment deadline, there is a grace period of three years | No | Yes | |||
| Huaxun Industrial (Suzhou) Co., Ltd. | 5,000 | July 1, 2021 | 2,000 | Joint liability guaranty | 2024/6/30 | No | Yes | |||
| Huaxun Industrial (Suzhou) Co., Ltd. | 11,000 | January 12, 2022 | 6,579.74 | Joint liability guaranty | Expired on the debt repayment deadline, there is a grace period of three years | No | Yes | |||
| TIME Interconnect Technology (Huizhou) Limited | 8,000 | May 12, 2023 | 1,000 | Joint liability guaranty | 2024/12/31 | No | Yes | |||
| TIME Interconnect Technology (Huizhou) Limited | 10,000 | April 17, 2023 | 0 | Joint liability guaranty | Continuing guarantee | No | Yes | |||
| TIME Interco | 6,000 | June 16, 2023 | 186.13 | Joint liability | 2028/3/9 | No | Yes |
nnectTechnology(Huizhou)Limited
| nnect Technology (Huizhou) Limited | guaranty | |||||||||
| TIME Interconnect Industrial Co., Ltd. | 13,593.3 | June 28, 2023 | 9,062.2 | Joint liability guaranty | Continuing guarantee | No | Yes | |||
| Total guarantee quota approved for subsidiaries within the reporting period (C1) | Total actual amount of guarantees for subsidiaries within the reporting period (C2) | 22,020.28 | ||||||||
| Total guarantee quota approved for the subsidiaries at the end of the reporting period (C3) | 185,876.96 | Total actual guarantee balance for subsidiaries at the end of the reporting period (C4) | 37,861.04 | |||||||
| Total amount of guarantee provided by the Company (the sum of the above three items) | ||||||||||
| Total amount of guarantee approved during the reporting period (A1+B1+C1) | Total actual amount of guarantees within the reporting period (i.e. A2+B2+C2) | 22,020.28 | ||||||||
| Total amount of guarantee approved as at the end of the reporting period (A3+B3+C3) | 255,995.69 | Total actual guarantee balance at the end of the reporting period (A4+B4+C4) | 37,861.04 | |||||||
| Ratio of total amount of guarantee actually provided (A4+B4+C4) to the net assets of the Company | 0.67% | |||||||||
| Among which, | ||||||||||
| Amount of guarantee for shareholders, de facto controller and their related parties (D) | 0 | |||||||||
| Amount of debt guarantee provided for guaranteed party whose asset-liability ratio is not less than 70% directly or indirectly (E) | 0 | |||||||||
| Amount of total guarantee over 50% of net assets (F) | 0 | |||||||||
| Total amount guaranteed (D+E+F) | 0 | |||||||||
Particulars of the guarantees provided using complex method:
N/A
3. Entrusted management of cash assets
(1) Entrusted wealth management
?Applicable □ N/AEntrusted wealth management during the reporting period:
In RMB0’000
| Type | Source of funds | Total amount | Outstanding amount | Overdue amount | Impairment amount made for overdue uncollected wealth management products |
| Bank wealth management amount | Self-owned funds | 306,041.78 | 162,827.9 | 0 | 0 |
| Bank wealth management amount | Fund raising | 0 | 0 | 0 | 0 |
| Total | 306,041.78 | 162,827.9 | 0 | 0 | |
Details of entrusted wealth management with individually significant amount or low safety, poor liquidity, high risk
□ Applicable ?N/A
Entrusted wealth management products the principal of which may be unrecoverable or which may otherwise be impaired:
□ Applicable ?N/A
(2) Entrusted loans
?Applicable □ N/AEntrusted loans during the reporting period:
In RMB0’000
| Total amount | Source of funds | Outstanding amount | Overdue amount |
| 4,381,506.13 | Self-owned funds | 4,381,506.13 | 0 |
Details of entrusted loans with individually significant amount or low safety, poor liquidity, high risk
□ Applicable ?N/A
Entrusted loans the principal of which may be unrecoverable or which may otherwise be impaired:
□ Applicable ?N/A
4. Other significant contracts
□ Applicable ?N/A
We have not entered into any other material contract during the reporting period.
XVI. Other significant matters
□ Applicable ?N/A
The Company has no other significant matters to be explained during the reporting period.
XVII. Significant events of subsidiaries of the Company
□ Applicable ?N/A
Section VII Changes in shares and shareholdersI. Changes in shares
1. Changes in shares
Unit: Share
| Before the change | ＋,－ | After the change | |||||||
| Number | Proportion | New shares issued | Stock dividend | Shares converted from capital reserve | Other | Subtotal | Number | Proportion | |
| I. Restricted Shares | 11,178,887 | 0.16% | 1,170,244 | 1,170,244 | 12,349,131 | 0.17% | |||
| 1. Shares held by the State | |||||||||
| 2. Shares held by State-owned corporations | |||||||||
| 3. Shares held by other domestic investors | 927,484 | 0.01% | 831,462 | 831,462 | 1,758,946 | 0.02% | |||
| Incl.: Shares held by domestic non-State-owned corporations | |||||||||
| Shares held by domestic natural persons | 927,484 | 0.01% | 831,462 | 831,462 | 1,758,946 | 0.02% | |||
| 4. Shares held by foreign investors | 10,251,403 | 0.14% | 338,782 | 338,782 | 10,590,185 | 0.15% | |||
| Incl.: Shares held by foreign corporations | |||||||||
| Shares held by foreign natural persons | 10,251,403 | 0.14% | 338,782 | 338,782 | 10,590,185 | 0.15% | |||
| II. Tradable shares | 7,104,305,121 | 99.84% | 44,027,946 | 44,027,946 | 7,148,333,067 | 99.83% | |||
| 1. RMB-denominated ordinary shares | 7,104,305,121 | 99.84% | 44,027,946 | 44,027,946 | 7,148,333,067 | 99.83% | |||
| 2. Foreign currency-denominated shares listed domestically | |||||||||
| 3. Foreign currency-denominated shares listed overseas | |||||||||
| 4. Others | |||||||||
| III. Total shares | 7,115,484,008 | 100.00% | 45,198,190 | 45,198,190 | 7,160,682,198 | 100.00% | |||
Reasons of changes in shares:
?Applicable □ N/A
1. During the reporting period, the Company issued 45,356,811 shares to the grantees under the stock optionincentive plan exercising their options at their sole discretion, the details of which are shown in “Section IV” - “XI.Implementation of share incentive plans, employee stock ownership plans and other employee incentives grantedby the Company”.
2. The Company publicly offered 30 million convertible corporate bonds (abbreviation: Luxshare ConvertibleBonds; bond code: 128136) on November 3, 2020, and the period for which the convertible corporate bonds can beconverted into shares is from May 10, 2021 to November 2, 2026. During the reporting period, the number of sharesconverted into by bonds was 3,010.Approval of changes in shares:
?Applicable □ N/A
1. Deliberation and approval by the 9th meeting of the fifth Board of Directors and the 9th meeting of the fifthBoard of Supervisors of the Company on July 6, 2022.
2. Deliberation and approval by the 14th meeting of the fifth Board of Directors and the 14th meeting of thefifth Board of Supervisors of the Company on December 5, 2022.
3. Deliberation and approval by the 15th meeting of the fifth Board of Directors and the 15th meeting of thefifth Board of Supervisors of the Company on February 21, 2023.
4. Deliberation and approval by the 17th meeting of the fifth Board of Directors and the 17th meeting of the
fifth Board of Supervisors of the Company on July 21, 2023.
5. Deliberation and approval by the 19th meeting of the fifth Board of Directors and the 19th meeting of the
fifth Board of Supervisors of the Company on October 20, 2023.
6. Deliberation and approval by the 20th meeting of the fifth Board of Directors and the 20th meeting of thefifth Board of Supervisors of the Company on November 27, 2023Transfer of share ownership:
?Applicable □ N/A
1. Period in which the stock options vested in the second vesting period of the initial grant under the 2019 stockoption incentive plan may be exercised by the relevant grantees: From July 22, 2022 to April 21, 2023.
2. Period in which the stock options vested in the third vesting period under the 2018 stock option incentiveplan may be exercised by the relevant grantees: From December 13, 2022 to September 22, 2023.
3. Period in which the stock options vested in the third vesting period in reserved grant under the 2019 stockoption incentive plan may be exercised by the relevant grantees: From March 1, 2023 to November 24, 2023.
4. Period in which the stock options vested in the third vesting period in initial grant under the 2021 stock optionincentive plan may be exercised by the relevant grantees: From March 13, 2023 to December 1, 2023.
5. Period in which the stock options vested in the fourth vesting period in initial grant under the 2021 stockoption incentive plan may be exercised by the relevant grantees: From July 4, 2023 to April 21, 2024.
6. Period in which the stock options vested in the first vesting period in reserved grant under the 2021 stockoption incentive plan may be exercised by the relevant grantees: From November 3, 2023 to October 18, 2024.
7. Period in which the stock options vested in the fifth vesting period under the 2018 stock option incentiveplan may be exercised by the relevant grantees: From December 6, 2023 to September 24, 2024.
Effect of changes in shares on the basic earnings per share, diluted earnings per share, net assets per share attributable to ordinaryshareholders and other financial indicators of the Company in the preceding year and the most recent reporting period:
□ Applicable ?N/A
Other information disclosed as the Company deems necessary or required by the securities regulatory authorities:
□ Applicable ?N/A
2. Changes in non-tradable shares
□Applicable ? N/A
II. Offering and listing of securities
1. Offering of securities (other than preferred shares) during the reporting period
□ Applicable ?N/A
2. Changes in total number of shares, shareholding structure, and structure of assets and liabilities of theCompany?Applicable □ N/A
1. Upon review and approval by the 9th meeting of the fifth Board of Directors, the 14th meeting of the fifth Board of Directors,the 15th meeting of the fifth Board of Directors, the 17th meeting of the fifth Board of Directors, the 19th meeting of the fifth Boardof Directors, and the 20th meeting of the fifth Board of Directors of the Company, the vesting conditions for the third vesting periodin initial grant under 2019 stock option incentive plan, the fourth vesting period under 2018 stock option incentive plan, the thirdvesting period in reserved grant under 2019 stock option incentive plan, the first vesting period in initial grant under 2021 stock optionincentive plan, the fourth vesting period under 2019 stock option incentive plan, the first vesting period in reserved grant under 2021stock option incentive plan and the fifth vesting period under 2018 stock option incentive plan were satisfied, and the Company agreedthat the relevant stock option grantees of the Company exercise options at their sole discretion, and a total of additional 45,356,811shares were issued to the grantees exercising options at their sole discretion during the reporting period.
2. The Company publicly offered 30 million convertible corporate bonds (abbreviation: Luxshare Convertible Bonds; bond code:
128136) on November 3, 2020, and the period for which the convertible corporate bonds can be converted into shares is from May 10,2021 to November 2, 2026. During the reporting period, the number of shares converted into by bonds was 3,010.
3. Outstanding employee shares
□ Applicable ?N/A
III. Shareholders and actual controllers
1. Number of shareholders and shareholding structure of the Company
Unit: Share
| Total number of ordinary shareholders at the end of the reporting period | 238,772 | Total ordinary shareholders as of the end of the month prior to the disclosure date of annual report | 319,082 | Total number of preferred shareholders with voting rights restored at the end of the reporting period (if any) (see note 8) | 0 | Total number of preferred stockholders with voting rights restored at the end of last month before the disclosure date of the annual report (if any) (see note 8) | 0 | |
| Shareholders holding more than 5% of shares or shares of the top 10 shareholders (excluding shares lent through refinancing) | ||||||||
| Name of shareholders | Type of shareholder | Shareholding percentage | Number of shares held at the end of the reporting period | Increase or decrease of shares within the reporting period | Number of restricted shares held | No. of non-tradable ordinary shares held | Pledge, mark or freeze | |
| Status of shares | Qty | |||||||
| Luxshare Co., Ltd. | Foreign legal person | 38.15% | 2,731,537,636 | 0 | 0 | 2,731,537,636 | Pledge | 1,075,610,000.00 |
| Hong Kong Central Clearing Company Limited | Foreign legal person | 5.68% | 406,591,465 | -155,210,803 | 0 | 406,591,465 | N/A | 0 |
| China Securities Finance Corporation Limited | Domestic non-state-owned legal person | 1.18% | 84,428,888 | 0 | 0 | 84,428,888 | N/A | 0 |
| Central Huijin Asset Management Limited Liability Company | State-owned legal person | 0.81% | 58,041,012 | 0 | 0 | 58,041,012 | N/A | 0 |
| Changshuo Technology (Shanghai) Co., Ltd. | Domestic non-state-owned legal person | 0.56% | 39,845,105 | 0 | 0 | 39,845,105 | N/A | 0 |
| E Fund - Agricultural Bank - E Fund CSI Financial Asset Management Plan | Domestic non-state-owned legal person | 0.54% | 38,656,343 | 0 | 0 | 38,656,343 | N/A | 0 |
| Huaxia | Domestic | 0.54% | 38,576,831 | 0 | 0 | 38,576,831 | N/A | 0 |
Fund -Agricultural Bank -Huaxia CSIFinancialAssetManagement Plan
| Fund - Agricultural Bank - Huaxia CSI Financial Asset Management Plan | non-state-owned legal person | ||||||||||
| CITIC-Prudential Fund - Agricultural Bank - CITIC-Prudential CSI Financial Asset Management Plan | Domestic non-state-owned legal person | 0.54% | 38,557,184 | 0 | 0 | 38,557,184 | N/A | 0 | |||
| CITIC-Prudential Fund - Agricultural Bank - CITIC-Prudential CSI Financial Asset Management Plan | Domestic non-state-owned legal person | 0.54% | 38,508,814 | 0 | 0 | 38,508,814 | N/A | 0 | |||
| Shenwan Hongyuan Securities Co., Ltd | State-owned legal person | 0.52% | 37,322,698 | 33,510,673 | 0 | 37,322,698 | N/A | 0 | |||
| Strategic investor or general legal person becomes the top 10 shareholders due to the placement of new shares (if any) (See Note 3) | N/A | ||||||||||
| Affiliates or concert parties among the shareholders listed above | 1. Luxshare Limited is the controlling shareholder of the Company; 2. The Company is not aware of whether there are affiliates or persons acting in concert among the shareholders listed above. | ||||||||||
| Delegation or waiver of voting rights or ownership of voting rights as a proxy in respect of the shareholders listed above | N/A | ||||||||||
| Description (if any) of special repurchase shareholders among top 10 shareholders (refer to Note 10) | N/A | ||||||||||
| Shareholdings of top 10 unrestricted shareholders | |||||||||||
| Name of shareholders | Number of unrestricted shares held at the end of the reporting period | Type | |||||||||
| Type | Qty | ||||||||||
| Luxshare Limited | 2,731,537,636 | RMB ordinary shares | 2,731,537,636 | ||||||||
| Hong Kong Securities Clearing Company Limited | 406,591,465 | RMB ordinary shares | 406,591,465 | ||||||||
| China Securities Finance Corporation Limited | 84,428,888 | RMB ordinary shares | 84,428,888 | ||||||||
| Central Huijin Investment Ltd. | 58,041,012 | RMB ordinary shares | 58,041,012 | ||||||||
| Changshuo Technology (Shanghai) Co., Ltd. | 39,845,105 | RMB ordinary shares | 39,845,105 | ||||||||
E Fund Management Co., Ltd. - Agricultural Bank of China -E Fund CSI Financial Asset Management Plan
| E Fund Management Co., Ltd. - Agricultural Bank of China - E Fund CSI Financial Asset Management Plan | 38,656,343 | RMB ordinary shares | 38,656,343 | |
| Huaxia Fund Management Co., Ltd. - Agricultural Bank of China - Huaxia CSI Financial Asset Management Plan | 38,576,831 | RMB ordinary shares | 38,576,831 | |
| China Europe Fund Management Co., Ltd. - Agricultural Bank of China - China Europe CSI Financial Asset Management Plan | 38,557,184 | RMB ordinary shares | 38,557,184 | |
| Yinhua Fund Management Co., Ltd. - Agricultural Bank of China - Yinhua CSI Financial Asset Management Plan | 38,508,814 | RMB ordinary shares | 38,508,814 | |
| Shenwan Hongyuan Securities Co., Ltd | 37,322,698 | RMB ordinary shares | 37,322,698 | |
| Affiliates or concert parties among top 10 holders of tradable ordinary shares, and among top 10 holders of tradable ordinary shares and top 10 ordinary shareholders | N/A | |||
| Engagement by top 10 ordinary shareholders in margin trading (if any) (Note 4) | N/A | |||
Top ten shareholders participating in securities lending business for the reporting period:
? Applicable ? N/AChanges in the top ten shareholders compared to the previous period:
? Applicable ? N/ADid any top 10 ordinary shareholder or top 10 holder of tradable ordinary shares conduct any transaction under repurchase agreementduring the reporting period?
□ Yes ?No
No top 10 ordinary shareholder or top 10 holder of tradable ordinary shares has conducted any transaction under repurchase agreementduring the reporting period
2. Controlling shareholder of the Company
Nature of controlling shareholder: Controlled by foreign investorType of controlling shareholder: Corporation
| Name of controlling shareholder | Legal representative/ principal | Date of establishment | Change in organization code | Main business |
| Luxshare Limited | WANG Laichun, WANG Laisheng | August 27, 1999 | 686629 | Investment and share holding |
| Shares held by the controlling shareholder in other companies listed on domestic or foreign stock exchanges during the reporting period | None | |||
Change in the controlling shareholder during the reporting period:
□ Applicable ?N/A
Our controlling shareholder has remained unchanged during the reporting period.
3. Actual controllers of the Company and their concerted parties
Nature of actual controllers: Natural personType of actual controllers: Natural person
| Name of actual controller | Relationship with the actual controller | Nationality | Whether or not hold a residence permit in any other country or region |
| WANG Laichun | Herself | Hong Kong | No |
| WANG Laisheng | Himself | Hong Kong | No |
| Main occupations and titles | Ms. WANG Laichun is the Chairman of the Board of Directors & General Manager of the Company. In 1999, Ms. WANG Laichun and Mr. WANG Laisheng jointly purchased the shares of Luxshare Limited. In 2004, she founded Luxshare Precision Industry (Shenzhen) Co., Ltd. (now known as “Luxshare Precision Industry Co., Ltd.”) through Luxshare Limited and acted as its Chairman of the Board of Directors. Mr. WANG Laisheng serves as the Vice Chairman of the Board of Directors of the Company. Mr. WANG Laisheng and Ms. WANG Laichun jointly purchased the shares of Luxshare Limited in 1999, and in 2004, Mr. WANG Laisheng and Ms. WANG Laisheng jointly established founded Luxshare Precision Industry (Shenzhen) Co., Ltd. (now known as “Luxshare Precision Industry Co., Ltd.”). | ||
| Whether or not control any other company listed on a domestic or foreign stock exchange in the past ten years | None | ||
Change in the actual controllers during the reporting period:
□ Applicable ?N/A
Our actual controllers have remained unchanged during the reporting period.Diagram of ownership and control relationship between the Company and its actual controllers:
Whether the actual controllers control the Company through any trust or other ways of asset management?
□ Applicable ?N/A
4. The Company’s controlling shareholder or top 1 shareholder and its persons acting in concert pledgedaccount for 80% in total of the Company’s shares held by them
□ Applicable ?N/A
5. Other institutional shareholders owning over 10% of shares
□ Applicable ?N/A
6. Restrictions on shareholding reduction of the controlling shareholder, actual controller, restructuringparties, and other commitment subjects
□ Applicable ?N/A
IV. Specific implementation of share repurchases during the reporting periodProgress of share repurchase:
□ Applicable ?N/A
Progress of sales of repurchased shares through call auction:
WANG LaichunLuxshare Limited
Luxshare LimitedLuxshare-ICT
Luxshare-ICT
WANG Laisheng
□ Applicable ?N/A
Section VIII Preference Shares
□ Applicable ?N/A
We did not have any preferred share during the reporting period.
Section IX Bonds?Applicable □ N/AI. Enterprise bonds
□ Applicable ?N/A
The Company had no enterprise bonds during the reporting period.
II. Corporate bonds
□ Applicable ?N/A
The Company had no corporate bonds during the reporting period.III. Non-financial corporate debt financing instruments?Applicable □ N/A
1. Basic information of non-financial corporate debt financing instruments
In RMB 10,000
| Bond name | Bond abbreviation | Bond code | Issue date | Start date | Maturity date | Bond balance | Interest rate | Principal and interest payment method | Trading venue |
| Phase IV ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd | 22 Luxshare-ICT SCP004 | 012282152 | June 15, 2022 | June 17, 2022 | March 14, 2023 | 100,000 | 2.40% | A lump sum payment of principal and interest at maturity | Interbank bond market |
| Phase VI ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd | 22 Luxshare-ICT SCP006 | 012282491 | July 14, 2022 | July 15, 2022 | April 11, 2023 | 120,000 | 2.20% | A lump sum payment of principal and interest at maturity | Interbank bond market |
| Phase VII ultra-short-term financing bonds in 2022 of Luxshare | 22 Luxshare-ICT SCP007 | 012282585 | July 21, 2022 | July 22, 2022 | April 18, 2023 | 80,000 | 2.15% | A lump sum payment of principal | Interbank bond market |
PrecisionIndustry Co.,Ltd
| Precision Industry Co., Ltd | and interest at maturity | ||||||||
| Phase VIII ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd | 22 Luxshare-ICT SCP008 | 012282674 | July 28, 2022 | July 29, 2022 | April 25, 2023 | 80,000 | 2.15% | A lump sum payment of principal and interest at maturity | Interbank bond market |
| Phase I ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | 23 Luxshare-ICT SCP001 | 012381657 | April 21, 2023 | April 21, 2023 | July 20, 2023 | 120,000 | 2.77% | A lump sum payment of principal and interest at maturity | Interbank bond market |
| Phase II ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | 23 Luxshare-ICT SCP002 | 012381930 | May 23, 2023 | May 23, 2023 | November 17, 2023 | 80,000 | 2.42% | A lump sum payment of principal and interest at maturity | Interbank bond market |
| Phase III ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | 23 Luxshare-ICT SCP003 | 012384122 | November 14, 2023 | November 15, 2023 | May 10, 2024 | 80,000 | 2.70% | A lump sum payment of principal and interest at maturity | Interbank bond market |
| Investors’ appropriate arrangements (if any) | Institutional investors on the national interbank bond market (except for purchasers prohibited by laws and regulations of China) | ||||||||
| Applicable trading mechanism | Public trading | ||||||||
| Whether there is the risk of termination of listing (if any) and countermeasures | No | ||||||||
Bonds overdue but not yet repaid
□ Applicable ?N/A
2. Trigger and implementation of the issuer or investor option provisions or investor protection provisions
□ Applicable ?N/A
3. Intermediaries
| Name of bond project | Name of intermediary | Office address | Name of accountants signing this report | Contact person of Intermediary | Phone |
| Phase IV ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | Huaxia Bank Co., Ltd. | No. 22 Jianguomennei Avenue, Dongcheng District, Beijing | None | LI Bailu | 010-85237515 |
| Phase IV ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | Shanghai Pudong Development Bank Co., Ltd. | No. 168 Yincheng Middle Road, Shanghai | None | SHI Yuzhou | 021-68476774 |
| Phase IV ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | Han Kun Law Offices (Shenzhen) Beijing Branch | 20th Floor, Tower 3, Kerry Plaza, No. 1 Zhongxin 4th Road, Futian District, Shenzhen | None | TONG Linwen | 0755-36806500 |
| Phase IV ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | RSM China (Special General Partnership) | 10th Floor, Building 7, No. 16 Courtyard, West Fourth Ring Middle Road, Haidian District, Beijing | LI Jing, ZHEN Zhijie | ZHU Jiandi | 010-88210608 |
| Phase IV ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | EASTMONEY Ratings International Credit Assessment Co., Ltd. | Building 1, South Tower, 11th Floor, Units 1101, 1102, 1103, No. 3 Chaowai West Street, Chaoyang District, Beijing | None | XING Dong | 010-62299850 |
| Phase IV ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | China Central Depository & Clearing Co., Ltd. | 33rd-34th Floors, Oriental International Finance Plaza, 318 Zhongshan South Road, Shanghai | None | XIE Zhong | 021-63326662 |
| Phase VI ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | China Merchants Bank Co., Ltd. | China Merchants Bank Tower, No. 7088 Shennan Avenue, Shenzhen | None | LUO Yingying | 0755-88026159 |
| Phase VI ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., | Han Kun Law Offices (Shenzhen) | 20th Floor, Tower 3, Kerry Plaza, No. 1 | None | TONG Linwen | 0755-36806500 |
Ltd.
| Ltd. | Beijing Branch | Zhongxin 4th Road, Futian District, Shenzhen | |||
| Phase VI ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | RSM China (Special General Partnership) | 10th Floor, Building 7, No. 16 Courtyard, West Fourth Ring Middle Road, Haidian District, Beijing | LI Jing, ZHEN Zhijie | ZHU Jiandi | 010-88210608 |
| Phase VI ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | EASTMONEY Ratings International Credit Assessment Co., Ltd. | Building 1, South Tower, 11th Floor, Units 1101, 1102, 1103, No. 3 Chaowai West Street, Chaoyang District, Beijing | None | XING Dong | 010-62299850 |
| Phase VI ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | China Central Depository & Clearing Co., Ltd. | 33rd-34th Floors, Oriental International Finance Plaza, 318 Zhongshan South Road, Shanghai | None | XIE Zhong | 021-63326662 |
| Phase VII ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | Shanghai Pudong Development Bank Co., Ltd. | No. 168 Yincheng Middle Road, Shanghai | None | DU Zhong | 021-68476774 |
| Phase VII ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | Han Kun Law Offices (Shenzhen) Beijing Branch | 20th Floor, Tower 3, Kerry Plaza, No. 1 Zhongxin 4th Road, Futian District, Shenzhen | None | GUO Qilin | 0755-36806500 |
| Phase VII ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | Han Kun Law Offices (Shenzhen) Beijing Branch | 10th Floor, Building 7, No. 16 Courtyard, West Fourth Ring Middle Road, Haidian District, Beijing | LI Jing, ZHEN Zhijie | ZHU Jiandi | 010-88210608 |
| Phase VII ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | EASTMONEY Ratings International Credit Assessment Co., Ltd. | Building 1, South Tower, 11th Floor, Units 1101, 1102, 1103, No. 3 Chaowai West Street, Chaoyang District, Beijing | None | XING Dong | 010-62299850 |
| Phase VII ultra-short-term | China Central | 33rd-34th | None | XIE Zhong | 021-63326662 |
financing bonds in 2022 ofLuxshare Precision Industry Co.,Ltd.
| financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | Depository & Clearing Co., Ltd. | Floors, Oriental International Finance Plaza, 318 Zhongshan South Road, Shanghai | |||
| Phase VIII ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | China Merchants Bank Co., Ltd. | China Merchants Bank Tower, No. 7088 Shennan Avenue, Shenzhen | None | LUO Yingying | 0755-88026159 |
| Phase VIII ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | Han Kun Law Offices (Shenzhen) Beijing Branch | 20th Floor, Tower 3, Kerry Plaza, No. 1 Zhongxin 4th Road, Futian District, Shenzhen | None | TONG Linwen | 0755-36806500 |
| Phase VIII ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | RSM China (Special General Partnership) | 10th Floor, Building 7, No. 16 Courtyard, West Fourth Ring Middle Road, Haidian District, Beijing | LI Jing, ZHEN Zhijie | ZHU Jiandi | 010-88210608 |
| Phase VIII ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | EASTMONEY Ratings International Credit Assessment Co., Ltd. | Building 1, South Tower, 11th Floor, Units 1101, 1102, 1103, No. 3 Chaowai West Street, Chaoyang District, Beijing | None | XING Dong | 010-62299850 |
| Phase VIII ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | China Central Depository & Clearing Co., Ltd. | 33rd-34th Floors, Oriental International Finance Plaza, 318 Zhongshan South Road, Shanghai | None | XIE Zhong | 021-63326662 |
| Phase I ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | Zheshang Bank Co., Ltd. | No. 1788 Hongning Road, Xiaoshan District, Hangzhou City, Zhejiang Province | None | CAI Yingni | 0755-23888727 |
| Phase I ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | Shanghai Pudong Development Bank Co., Ltd. | No. 168 Yincheng Middle Road, Shanghai | None | DU Zhong | 021-68476774 |
| Phase I ultra-short-term financing bonds in 2023 of Luxshare | Han Kun Law Offices | 20th Floor, Tower 3, Kerry | None | TONG Linwen | 0755-36806500 |
Precision Industry Co., Ltd.
| Precision Industry Co., Ltd. | (Shenzhen) Beijing Branch | Plaza, No. 1 Zhongxin 4th Road, Futian District, Shenzhen | |||
| Phase I ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | RSM China (Special General Partnership) | 10th Floor, Building 7, No. 16 Courtyard, West Fourth Ring Middle Road, Haidian District, Beijing | LI Jing, ZHEN Zhijie | ZHU Jiandi | 010-88210608 |
| Phase I ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | EASTMONEY Ratings International Credit Assessment Co., Ltd. | Building 1, South Tower, 11th Floor, Units 1101, 1102, 1103, No. 3 Chaowai West Street, Chaoyang District, Beijing | None | XING Dong | 010-62299850 |
| Phase I ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | EASTMONEY Ratings International Credit Assessment Co., Ltd. | 33rd-34th Floors, Oriental International Finance Plaza, 318 Zhongshan South Road, Shanghai | None | XIE Zhong | 021-63326662 |
| Phase II ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | Shanghai Pudong Development Bank Co., Ltd. | No. 168 Yincheng Middle Road, Shanghai | None | DONG Wenchao | 021-68476774 |
| Phase II ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | Han Kun Law Offices (Shenzhen) Beijing Branch | 20th Floor, Tower 3, Kerry Plaza, No. 1 Zhongxin 4th Road, Futian District, Shenzhen | None | TONG Linwen | 0755-36806500 |
| Phase II ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | RSM China (Special General Partnership) | 10th Floor, Building 7, No. 16 Courtyard, West Fourth Ring Middle Road, Haidian District, Beijing | LI Jing, ZHEN Zhijie | ZHU Jiandi | 010-88210608 |
| Phase II ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | EASTMONEY Ratings International Credit Assessment Co., Ltd. | Building 1, South Tower, 11th Floor, Units 1101, 1102, 1103, No. 3 Chaowai West Street, Chaoyang District, Beijing | None | XING Dong | 010-62299850 |
Phase II ultra-short-termfinancing bonds in 2023 ofLuxshare Precision Industry Co.,Ltd.
| Phase II ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | China Central Depository & Clearing Co., Ltd. | 33rd-34th Floors, Oriental International Finance Plaza, 318 Zhongshan South Road, Shanghai | None | XIE Zhong | 021-63326662 |
| Phase III ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | Shanghai Pudong Development Bank Co., Ltd. | No. 168 Yincheng Middle Road, Shanghai | None | DONG Wenchao | 021-68476774 |
| Phase III ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | Han Kun Law Offices (Shenzhen) Beijing Branch | 20th Floor, Tower 3, Kerry Plaza, No. 1 Zhongxin 4th Road, Futian District, Shenzhen | None | TONG Linwen | 0755-36806500 |
| Phase III ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | RSM China (Special General Partnership) | 10th Floor, Building 7, No. 16 Courtyard, West Fourth Ring Middle Road, Haidian District, Beijing | LI Jing, ZHEN Zhijie | ZHU Jiandi | 010-88210608 |
| Phase III ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | RSM China (Special General Partnership) | Building 1, South Tower, 11th Floor, Units 1101, 1102, 1103, No. 3 Chaowai West Street, Chaoyang District, Beijing | None | XING Dong | 010-62299850 |
| Phase III ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | China Central Depository & Clearing Co., Ltd. | 33rd-34th Floors, Oriental International Finance Plaza, 318 Zhongshan South Road, Shanghai | None | XIE Zhong | 021-63326662 |
Did the above-mentioned intermediaries change during the reporting period?
□ Yes ?No
4. Use of raised funds
In RMB 10,000
| Name of bond project | Total proceeds | Used amount | Unused amount | Operation of special account for | Rectifications of use of the proceeds | Consistent with the usage, use |
proceeds (if
any)
| proceeds (if any) | in violation of laws and regulations (if any) | plan and other agreements as promised in the prospectus or not | ||||
| Phase IV ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | 100,000 | 100,000 | 0 | Normal | N/A | Yes |
| Phase VI ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | 120,000 | 120,000 | 0 | Normal | N/A | Yes |
| Phase VII ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | 80,000 | 80,000 | 0 | Normal | N/A | Yes |
| Phase VIII ultra-short-term financing bonds in 2022 of Luxshare Precision Industry Co., Ltd. | 80,000 | 80,000 | 0 | Normal | N/A | Yes |
| Phase I ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | 120,000 | 120,000 | 0 | Normal | N/A | Yes |
| Phase II ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | 80,000 | 80,000 | 0 | Normal | N/A | Yes |
| Phase III ultra-short-term financing bonds in 2023 of Luxshare Precision Industry Co., Ltd. | 80,000 | 80,000 | 0 | Normal | N/A | Yes |
Use of proceeds in the construction projects
□ Applicable ?N/A
Change by the Company of the usage of the above-mentioned proceeds during the reporting period
□ Applicable ?N/A
5. Adjustment of credit rating results during the reporting period
□ Applicable ?N/A
6. Implementation and changes of guarantees, debt repayment plans and other debt repayment securitymeasures during the reporting period and their effects on bond investors
□ Applicable ?N/A
IV. Convertible corporate bonds
□Applicable ?N/A
1. Historic adjustment of conversion price
I. 2020
(1) The initial conversion price of the company's convertible bonds was set at CNY 58.62 per share.
(2) Due to the voluntary exercise of stock options by incentive recipients under the company's equity incentiveplan from November 3, 2020 (the issuance date of the convertible bonds) to December 10, 2020, the company issuedan additional 3,281,228 shares, resulting in an adjustment of the conversion price from CNY 58.62 per share toCNY 58.60 per share, effective from December 14, 2020.
(3) Due to the voluntary exercise of stock options by incentive recipients under the company's equity incentiveplan on December 25, 2020, the company issued an additional 17,765,322 shares, resulting in an adjustment of theconversion price from CNY 58.60 per share to CNY 58.48 per share, effective from December 30, 2020.
(4) As of the end of the reporting period, the conversion price of the company's convertible bonds stands atCNY 58.48 per share.
II. 2021
(1) The initial conversion price of the company's convertible bonds was set at RMB 58.48 per share.
(2) Due to the exercise of stock options by incentive recipients under the company's 2018 stock option incentiveplan, resulting in the addition of 4,304,601 shares, and the exercise by incentive recipients of the first grant of stockoptions under the 2019 stock option incentive plan, resulting in the addition of 445,471 shares, the conversion pricewas adjusted from RMB 58.48 per share to RMB 58.44 per share, effective from January 13, 2021.
(3) Due to the exercise of stock options by incentive recipients under the company's 2018 stock option incentiveplan, resulting in the addition of 5,459,122 shares, and the exercise by incentive recipients of the first grant of stockoptions under the 2019 stock option incentive plan, resulting in the addition of 3,767,011 shares, the conversionprice was adjusted from RMB 58.44 per share to RMB 58.38 per share, effective from February 24, 2021.
(4) Due to the exercise of stock options by incentive recipients under the company's 2018 stock option incentiveplan, resulting in the addition of 2,649,238 shares, and the exercise by incentive recipients of the first grant of stockoptions under the 2019 stock option incentive plan, resulting in the addition of 967,132 shares, the conversion pricewas adjusted from RMB 58.38 per share to RMB 58.36 per share, effective from March 11, 2021.
(5) Due to the implementation of the 2020 annual equity distribution, with the company's existing total sharecapital of 7,035,428,828 shares as the base, a cash dividend of RMB 1.099999 per 10 shares was distributed to allshareholders, resulting in an adjustment of the conversion price from RMB 58.36 per share to RMB 58.25 per share,effective from July 8, 2021.
(6) Due to the exercise of stock options by incentive recipients under the company's 2018 stock option incentive
plan, resulting in the addition of 1,032,246 shares, and the exercise by incentive recipients of the first grant of stockoptions under the 2019 stock option incentive plan, resulting in the addition of 7,360,758 shares, the conversionprice was adjusted from RMB 58.25 per share to RMB 58.20 per share, effective from July 22, 2021.
(7) Due to the exercise of stock options by incentive recipients under the company's 2018 stock option incentiveplan, resulting in the addition of 374,655 shares, the exercise by incentive recipients of the first grant of stock optionsunder the 2019 stock option incentive plan, resulting in the addition of 3,417,190 shares, and the reservation ofshares for future issuance to incentive recipients, the conversion price was adjusted from RMB 58.20 per share toRMB 58.18 per share, effective from September 6, 2021.
(8) Due to the exercise of stock options by incentive recipients under the company's 2018 stock option incentiveplan, resulting in the addition of 34,828 shares, the exercise by incentive recipients of the first grant of stock optionsunder the 2019 stock option incentive plan, resulting in the addition of 2,501,419 shares, and the reservation ofshares for future issuance to incentive recipients, the conversion price was adjusted from RMB 58.18 per share toRMB 58.16 per share, effective from November 10, 2021.
(9) Due to the exercise of stock options by incentive recipients under the company's 2018 stock option incentiveplan, resulting in the addition of 14,413,326 shares, the exercise by incentive recipients of the first grant of stockoptions under the 2019 stock option incentive plan, resulting in the addition of 1,112,879 shares, and the reservationof shares for future issuance to incentive recipients, the conversion price was adjusted from RMB 58.16 per shareto RMB 58.05 per share, effective from December 29, 2021.
(10) Due to the exercise of stock options by incentive recipients under the company's 2018 stock optionincentive plan, resulting in the addition of 5,184,144 shares, the exercise by incentive recipients of the first grant ofstock options under the 2019 stock option incentive plan, resulting in the addition of 365,642 shares, and thereservation of shares for future issuance to incentive recipients, the conversion price was adjusted from RMB 58.05per share to RMB 58.01 per share, effective from December 31, 2021.
(11) As of the end of the reporting period, the conversion price of the company's convertible bonds stands atRMB 58.01 per share.
III. 2022
(1) As of the beginning of the reporting period, the conversion price of convertible bonds of the Company wasRMB58.48 per share.
(2) The conversion price was adjusted from RMB58.01 per share to RMB57.98 per share, which becameeffective on January 13, 2022, because 3,747,618 shares were added arising from exercise by grantees under 2018stock option incentive plan and 560,728 shares were added arising from exercise by grantees in initial grant under2019 stock option incentive plan of the Company.
(3) The conversion price was adjusted from RMB57.98 per share to RMB57.97 per share, which became
effective on January 25, 2022, because 1,132,798 shares were added arising from exercise by grantees under 2018stock option incentive plan and 270,342 shares were added arising from exercise by grantees in initial grant under2019 stock option incentive plan of the Company.
(4) The conversion price was adjusted from RMB57.97 per share to RMB57.93 per share, which becameeffective on March 8, 2022, because 2,212,582 shares were added arising from exercise by grantees under 2018stock option incentive plan and 508,705 shares were added arising from exercise by grantees in initial grant under2019 stock option incentive plan and 3,011,626 reserved shares were exercised by grantees under 2019 stock optionincentive plan of the Company.
(5) The conversion price was adjusted from RMB57.93 per share to RMB57.92 per share, which becameeffective on March 22, 2022, because 873,526 shares were added arising from exercise by grantees under 2018stock option incentive plan and 233,381 shares were added arising from exercise by grantees in initial grant under2019 stock option incentive plan and 424,954 reserved shares were exercised by grantees under 2019 stock optionincentive plan of the Company.
(6) The conversion price was adjusted from RMB57.92 per share to RMB57.91 per share, which becameeffective on May 25, 2022, because 627.019 shares were added arising from exercise by grantees under 2018 stockoption incentive plan and 148,641 shares were added arising from exercise by grantees in initial grant under 2019stock option incentive plan of the Company.
(7) The conversion price was adjusted from RMB57.91 per share to RMB57.80 per share, which becomeeffective on July 13, 2022 because the Company implemented the annual equity distribution in 2021, and distributedRMB1.099820 in cash per 10 shares to all shareholders based on the Company’s existing total share capital of7,085,454,576 shares.
(8) The conversion price was adjusted from RMB57.80 per share to RMB57.75 per share, which becameeffective on July 27, 2022, because 880,088 shares were added arising from exercise by grantees under 2018 stockoption incentive plan and 7,580,662 shares were added arising from exercise by grantees in initial grant under 2019stock option incentive plan and 79,033 reserved shares were exercised by grantees under 2019 stock option incentiveplan of the Company.
(9) The conversion price was adjusted from RMB57.75 per share to RMB57.73 per share, which becameeffective on September 7, 2022, because 468,709 shares were added arising from exercise by grantees under 2018stock option incentive plan and 2,920,986 shares were added arising from exercise by grantees in initial grant under2019 stock option incentive plan and 139,180 reserved shares were exercised by grantees under 2019 stock optionincentive plan of the Company.
(10) The conversion price was adjusted from RMB57.73 per share to RMB57.71 per share, which becameeffective on November 22, 2022, because 379,470 shares were added arising from exercise by grantees under 2018stock option incentive plan and 1,911,486 shares were added arising from exercise by grantees in initial grant under
2019 stock option incentive plan and 91,549 reserved shares were exercised by grantees under 2019 stock optionincentive plan of the Company.
(11) The conversion price was adjusted from RMB57.71 per share to RMB57.63 per share, which becameeffective on December 20, 2022, because 11,412,022 shares were added arising from exercise by grantees under2018 stock option incentive plan and 294,313 shares were added arising from exercise by grantees in initial grantunder 2019 stock option incentive plan of the Company.
(12) As of the end of the reporting period, the conversion price of convertible bonds of the Company wasRMB57.63 per share.
IV. 2023
(1) At the beginning of the reporting period, the conversion price of the company's convertible bonds was RMB
57.63 per share.
(2) Due to the exercise of stock options by incentive recipients under the company's 2018 stock option incentiveplan, resulting in the addition of 3,752,347 shares, and the exercise by incentive recipients of the first grant of stockoptions under the 2019 stock option incentive plan, resulting in the addition of 116,679 shares, the conversion pricewas adjusted from RMB 57.63 per share to RMB 57.60 per share, effective from January 4, 2023.
(3) Due to the exercise of stock options by incentive recipients under the company's 2018 stock option incentiveplan, resulting in the addition of 9,094,213 shares, and the exercise by incentive recipients of the first grant of stockoptions under the 2019 stock option incentive plan, as well as the reservation of shares for future issuance toincentive recipients, resulting in a total addition of 5,811,753 shares, the conversion price was adjusted from RMB
57.60 per share to RMB 57.50 per share, effective from March 24, 2023.
(4) Due to the implementation of the 2022 annual equity distribution, with the company's existing total sharecapital of 7,132,251,351 shares as the base, a cash dividend of RMB 1.299661 per 10 shares was distributed to allshareholders, resulting in an adjustment of the conversion price from RMB 57.91 per share to RMB 57.37 per share,effective from June 15, 2023.
(5) Due to the exercise of stock options by incentive recipients under the company's 2018 stock option incentiveplan, resulting in the addition of 2,508,221 shares, and the exercise by incentive recipients of the first grant of stockoptions under the 2019 stock option incentive plan, as well as the reservation of shares for future issuance toincentive recipients, resulting in a total addition of 7,575,022 shares, the conversion price was adjusted from RMB
57.37 per share to RMB 57.31 per share, effective from July 26, 2023.
(6) As of the end of the reporting period, the conversion price of the company's convertible bonds stands atRMB 57.31 per share.
2. Accumulative conversion of convertible bonds into shares
?Applicable □ N/A
| Convertible | Beginning | Total | Total issue | Amount of | Number of | Proportion | Amount of | Proportion |
bondabbreviatio
n
| bond abbreviation | and ending dates | issued convertible bonds (piece) | amount | accumulative converted shares (RMB) | accumulative converted shares (share) | of accumulative converted share to the total shares issued by the Company before conversion | unconverted bonds (RMB) | of amount of unconverted bonds to the total issued amount |
| Convertible bonds of Luxshare | May 10, 2021 | 30,000,000 | 3,000,000,000.00 | 174,100.00 | 3,010 | 0.00% | 2,999,088,900.00 | 99.97% |
3. Top 10 holders of convertible corporate bonds
| S.N. | Name of holder of convertible corporate bonds | Nature of holder of convertible corporate bonds | Number of convertible corporate bonds held at the end of the reporting period | Amount of convertible corporate bonds held at the end of the reporting period (RMB) | Percentage of convertible corporate bonds held at the end of the reporting period |
| 1 | China Construction Bank Corporation - Zhong Ou New Blue Chip Flexible Allocation Hybrid Securities Investment Fund | Others | 1,451,370 | 49,999,696.50 | 4.84% |
| 2 | The HongKong and Shanghai Banking Corporation Limited | Foreign legal person | 907,650 | 31,268,542.50 | 3.03% |
| 3 | ICBC Credit Suisse Tianfeng Convertible Bond Fixed Income Pension Product - Bank of China Limited | Others | 888,242 | 30,599,936.90 | 2.96% |
| 4 | China Construction Bank Corporation Limited - Xinhua Zengyi bond securities investment fund | Others | 828,154 | 28,529,905.30 | 2.76% |
| 5 | Fuguo Fuyi Enterprising Fixed Income Pension Product - Industrial and Commercial Bank of China Limited | Others | 711,580 | 24,513,931.00 | 2.37% |
| 6 | China Construction Bank Corporation Limited - Huashang Credit enhanced bond securities investment fund | Others | 696,214 | 23,984,572.30 | 2.32% |
| 7 | China Merchants Bank Co., LTD-Industrial income enhancement bond securities investment fund | Others | 656,139 | 22,603,988.55 | 2.19% |
| 8 | UBS AG | Foreign legal person | 624,992 | 21,530,974.40 | 2.08% |
| 9 | Industrial and Commercial Bank of China – Nu'an Balanced Securities | Others | 441,671 | 15,215,565.95 | 1.47% |
Investment Fund
| Investment Fund | |||||
| 10 | Northeast Securities Co., Ltd. | State-owned legal person | 420,053 | 14,470,825.85 | 1.40% |
4. Significant changes in the profitability, assets and credit status of the guarantors
□ Applicable ?N/A
5. The Company’s liabilities, changes in credit at the end of the reporting period and cash arrangements fordebt repayment in future yearsAccording to the Credit Rating Report (Lian He [2023] No. 4797) issued by China Lianhe Credit Rating Co., Ltd. on June 21,2023, the long-term credit rating of the Company as the entity is AA+ and the credit rating of the convertible bonds of the Company isAA+. There is no significant change in the Company’s liabilities and credit. For main accounting data and financial indicators, pleasesee the “VIII Main Accounting Date and Financial Indicators in the Past Two Years” under Section IX of this report.
V. The loss in the scope of consolidated statements of the Company during the reporting periodexceeded 10% of the net assets at the end of previous reporting period
□ Applicable ?N/A
VI. Overdue interest-bearing debts other than bonds at the end of the reporting period
□ Applicable ?N/A
VII. Was there violations of rules and regulations during the reporting period?
□ Yes ?No
VIII. Main accounting data and financial indicators of the Company for most recent two yearsas of the end of the reporting period
In RMB0’000
| Item | December 31, 2023 | December 31, 2022 | Y/Y% Change |
| Current ratio | 1.2591 | 1.183 | 6.43% |
| Equity-debt ratio | 56.61% | 60.38% | -3.77% |
| Quick ratio | 0.8615 | 0.6824 | 26.25% |
| 2023 | 2022 | Y/Y% Change | |
| Net profit, excluding non-recurring profit and loss | 1,018,555.36 | 844,205.29 | 20.65% |
| EBITDA - total debt ratio | 61.41% | 60.45% | 0.96% |
Interest coverage ratio
| Interest coverage ratio | 10.36 | 11.75 | -11.83% |
| Cash interest coverage ratio | 22.58 | 14.99 | 50.63% |
| EBITDA-to-interest coverage ratio | 17.98 | 19.43 | -7.46% |
| Rate of loans due and repaid | 100.00% | 100.00% | 0.00% |
| Rate of interest due and paid | 100.00% | 100.00% | 0.00% |
Section X Financial ReportI. Auditor’s report
| Audit opinion | Standard Unqualified Opinion |
| Signing date of audit report | April 24, 2024 |
| Auditor | BDO China Shu Lun Pan Certified Public Accountants LLP |
| Auditor report document number | Xin Kuai Shi Bao Zi [2024] No. ZB10481 |
| Name of certified public accountants | LI Jing and DAN Jie |
Main Body of Auditor’s Report
Auditor’s Report
Xin Kuai Shi Bao Zi [2023] No. ZB10828To all shareholders of Luxshare Precision Industry Co., Ltd.,I. Audit opinionWe have audited the financial statements of Luxshare Precision Industry Co., Ltd. (“Luxshare Precision”), whichcomprise the consolidated and parent company’s balance sheets as at December 31, 2023, and the consolidated and parentcompany’s income statements, the consolidated and parent company’s statements of cash flows and the consolidated andparent company’s statements of changes in owners’ equity for the year then ended, and the notes to the financial statements.In our opinion, the accompanying financial statements are prepared in all material respects in accordance with theAccounting Standards for Business Enterprises and fairly present the consolidated and parent company’s financialposition as of December 31, 2023, and the consolidated and parent company’s operating results and cash flows for theyear then ended.II. Basis for opinionWe conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Ourresponsibilities under those standards are further described in the “Auditor’s responsibilities for the audit of the financialstatements” section of our report. We are independent of Luxshare Precision with the Code of Ethics for Chinese CertifiedPublic Accountants, and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.III. Key audit mattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of thefinancial statements of the current period. These matters were addressed in the context of our audit of the financialstatements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matters identified in our audit are summarized as below:
| Key audit matters | How we addressed the matter in our audit |
| (I) Revenue recognition | |
| For details of the accounting policy for and analysis on revenue recognition, please see the accounting policies described in the Item (26) under the Note “III. Significant accounting policies and accounting estimates” and the Item (45) under the Note “V. Notes to consolidated financial statements” to the financial statements (48). In 2023, Luxshare Precision’s operating income presented in its consolidated financial statements | 1. Understand, evaluate and test the design of the key internal controls of the management related to revenue recognition and the operational effectiveness of those controls; 2. Sample the product sales revenue to make test thereof according to different regions and customers: check supporting documents related to revenue recognition; 3. Implement the analytical procedures on income |
amounted to RMB231,905,459,800.00. LuxsharePrecision has a large number of customers at home andabroad. Under different delivery methods, the Companyrecognizes revenue upon the transfer of control of arelated product to a customer. If a customer is also thesupplier of some raw materials, the Company recognizesthe purchase of raw materials and sales of productsrespectively based on the transfer of inventory risks andrewards, product liability, credit risk bearers andbusiness nature, that is, the sales revenue is recognizedbased on the gross amount. The revenue is one of theCompany’s key performance indicators and the mainsource of the Company’s profits, so we identify therevenue from product sales as the key audit matter basedon the importance of the accounting policy for revenuerecognition and the amount involved.
| amounted to RMB231,905,459,800.00. Luxshare Precision has a large number of customers at home and abroad. Under different delivery methods, the Company recognizes revenue upon the transfer of control of a related product to a customer. If a customer is also the supplier of some raw materials, the Company recognizes the purchase of raw materials and sales of products respectively based on the transfer of inventory risks and rewards, product liability, credit risk bearers and business nature, that is, the sales revenue is recognized based on the gross amount. The revenue is one of the Company’s key performance indicators and the main source of the Company’s profits, so we identify the revenue from product sales as the key audit matter based on the importance of the accounting policy for revenue recognition and the amount involved. | and gross profit and determine whether there are abnormal fluctuations in the amount of revenue for the current period; 4. Understand the modes of cooperation between the Company and customers and suppliers, and evaluate the product liability share and the transfer of control; 5. Evaluate the accuracy and completeness of revenue in conjunction with the confirmation procedures for receivables & payables and inventories; and 6. Analyze the post-period recovery of accounts receivable. |
| (II) Provision for decline in value of inventories | |
| Please see the accounting policies described in the Item (11) under the Note “III. Significant accounting policies and accounting estimates” and the Item (7) under the Note “V. Notes to consolidated financial statements” to the financial statements (8). As at December 31, 2023, Luxshare Precision’s inventories and provision for decline in value of inventories presented in its consolidated financial statements amounted to RMB 30,886,474,500.00 and RMB1,128,544,200.00 respectively. Inventories of the Company are stated at the lower of cost or net realizable value. For finished products, their net realizable value is determined at the estimated selling price of these inventories less the estimated costs necessary to make the sale and relevant taxes; for the inventories that need to be processed, in the ordinary production and operation process, their net realizable value is determined at the estimated selling price of finished products less the estimated costs of completion and the estimated costs necessary to make the sale and relevant taxes. The determination of the net realizable value of inventories involves the management’s use of significant accounting estimates and judgments, and the provision for decline in value of inventories is of significance to the consolidated financial statements, so we identify the provision for decline in value of inventories as the key audit matter. | 1. Understand, evaluate and test the design of the key internal controls of the management related to the provision for decline in value of inventories and the operational effectiveness of those controls; 2. Obtain the Company’s calculation sheet of the provision for decline in value of inventories, review the net realizable value of inventories and the provision for decline in value of inventories, and evaluate whether the judgment made by the management in determining the net realizable value of inventories is reasonable; 3. Check the quantity and conditions of inventories, focus on inspecting the long-term inventories, and analyze the adequacy of the provision for decline in value of inventories if any indication exists that such inventories may be impaired, in conjunction with roll-forward procedures; and 4. Check the current changes of the provision for decline in value of inventories made in previous years and analyze the rationality of the changes in the provision for decline in value of inventories. |
IV. Other informationThe management of Luxshare Precision (“management”) is responsible for other information. Other informationcomprises the information included in the 2022 Annual Report of Luxshare Precision, but does not include the financialstatements 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 ofassurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to read the other information and, indoing so, consider whether the other information is materially inconsistent with the financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.If, based on the work we have performed, we conclude that there is a material misstatement of this other information,we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of the management and 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 Accounting Standards for Business Enterprises, and designing, implementing and maintaining internal control thatis necessary to enable the financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing Luxshare Precision’s ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basisof accounting unless the management either intends to liquidate Luxshare Precision or to cease operations, or have norealistic alternative but to do so.Those charged with governance of Luxshare Precision (hereinafter referred to as “those charged with governance”)are responsible for overseeing Luxshare Precision’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 frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with China Standardson Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error andare considered material if, individually or in the aggregate, they could reasonably be expected to influence the economicdecisions of users taken on the basis of these financial statements.
As part of an audit in accordance with China Standards on Auditing, we exercise professional judgment and maintainprofessional 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 appropriateto provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher thanthat resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control;
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances;
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by the management;
(4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting, andmeanwhile, based on the audit evidence obtained, on whether a material uncertainty exists related to events or conditionsthat may cast significant doubts on Luxshare Precision’s ability to continue as a going concern. If we conclude that amaterial uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in thefinancial statements. If such disclosures are inadequate, we are required to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may causeLuxshare Precision to cease to continue as a going concern;
(5) Evaluate the overall presentation (including disclosure), structure and content of the financial statements andwhether the financial statements represent the underlying transactions and events in a manner that achieves fairpresentation; and
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or businessactivities within Luxshare Precision to express an opinion on the consolidated financial statements. We are responsiblefor the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timingof the audit and significant audit findings, including any significant deficiencies in internal control that we identify duringour audit.
We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and communicate with them all relationships and other matters that may reasonablybe thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of mostsignificance in the audit of the financial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter orwhen, in extremely rare circumstances, we determine that a matter should not be communicated in our report because theadverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
| BDO China Shu Lun Pan Certified Public Accountants LLP Shanghai ? China | Chinese CPA: LI Jing (Project Partner) Chinese CPA: DAN Jie April 27, 2023 |
II. Financial statementsStatements in notes to the financial statements are dominated in RMB.
1. Consolidated balance sheet
Prepared by: Luxshare Precision Industry Co., Ltd.
December 31, 2023
In RMB
| Item | December 31, 2023 | January 1, 2023 |
| Current assets: | ||
| Cash and bank balances | 33,619,539,457.51 | 19,367,209,441.41 |
| Balances with clearing agencies | ||
| Placements with banks and other financial institutions | ||
| Held-for-trading financial assets | 1,720,764,175.32 | 1,353,266,499.91 |
| Derivative financial assets | ||
| Notes receivable | 261,073,349.06 | 949,767,020.69 |
| Accounts receivable | 23,504,481,889.07 | 26,043,354,859.19 |
| Receivable financing | 587,585,009.82 | |
| Prepayments | 486,702,941.36 | 586,577,865.23 |
| Premiums receivable | ||
| Amounts receivable under reinsurance contracts | ||
| Reinsurer’s share of insurance contract reserves | ||
| Other receivables | 322,407,052.71 | 431,123,451.91 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Financial assets purchased under resale agreements | ||
| Inventories | 29,757,930,319.35 | 37,363,329,476.66 |
| Contract assets | ||
| Held-for-sale assets | ||
| Non-current assets due within one year | 1,047,566,017.54 | |
| Other current assets | 2,920,078,401.07 | 2,197,204,594.09 |
| Total current assets | 94,228,128,612.81 | 88,291,833,209.09 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Debt investments | 1,739,251,540.45 | |
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investment | 4,232,941,741.05 | 2,000,007,642.66 |
Other investments in equityinstruments
| Other investments in equity instruments | 249,122,251.32 | 440,106,992.66 |
| Other non-current financial assets | 35,700,000.00 | 35,700,000.00 |
| Investment properties | 23,353,936.24 | 92,782,410.06 |
| Fixed assets | 44,560,506,279.62 | 44,026,022,703.69 |
| Construction in progress | 2,226,217,016.31 | 2,695,377,794.32 |
| Bearer biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 648,963,968.09 | 941,749,814.66 |
| Intangible assets | 2,663,069,103.86 | 2,695,684,053.67 |
| Development expenditure | ||
| Goodwill | 1,729,242,734.88 | 1,730,047,190.39 |
| Long-term deferred expenses | 590,266,003.15 | 810,913,529.72 |
| Deferred tax assets | 872,943,835.40 | 1,208,582,281.01 |
| Other non-current assets | 9,931,644,112.92 | 1,676,259,912.33 |
| Total non-current assets | 67,763,970,982.84 | 60,092,485,865.62 |
| Total assets | 161,992,099,595.65 | 148,384,319,074.71 |
| Current liabilities: | ||
| Short-term borrowings | 20,514,182,240.47 | 14,911,899,668.93 |
| Loans from the central bank | ||
| Taking from banks and other financial institutions | ||
| Held-for-trading financial liabilities | 117,942,421.18 | 44,318,321.50 |
| Derivative financial liabilities | ||
| Notes payable | 492,585,900.03 | 515,054,217.52 |
| Accounts payable | 45,908,515,295.43 | 49,786,483,552.54 |
| Receipts in advance | ||
| Contract liabilities | 243,566,923.42 | 501,765,453.24 |
| Financial assets sold under repurchase agreements | ||
| Customer deposits and deposits from banks and other financial institutions | ||
| Funds from securities trading agency | ||
| Funds from underwriting securities agency | ||
| Employee benefits payable | 2,330,318,991.75 | 2,368,135,762.48 |
| Taxes payable | 1,021,324,275.18 | 841,385,173.92 |
| Other payables | 406,677,940.53 | 472,880,196.48 |
| Including: Interest payable | ||
| Dividends payable | 11,894,022.29 | 15,089,486.78 |
| Fees and commissions payable | ||
| Amounts payable under reinsurance contracts | ||
| Held-for-sale liabilities |
Non-current liabilities due within oneyear
| Non-current liabilities due within one year | 2,867,295,870.89 | 1,232,252,431.14 |
| Other current liabilities | 932,701,803.30 | 3,957,037,125.24 |
| Total current liabilities | 74,835,111,662.18 | 74,631,211,902.99 |
| Non-current liabilities: | ||
| Insurance contract reserves | ||
| Long-term borrowings | 12,038,771,289.92 | 9,205,313,060.94 |
| Bonds payable | 2,799,499,850.29 | 2,689,623,546.98 |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 552,488,888.66 | 800,739,041.51 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | 642,733.24 | 682,513.39 |
| Deferred income | 595,323,601.05 | 665,910,095.66 |
| Deferred tax liabilities | 883,924,973.73 | 1,606,645,177.00 |
| Other non-current liabilities | 1,471,770.36 | 324,039.05 |
| Total non-current liabilities | 16,872,123,107.25 | 14,969,237,474.53 |
| Total liabilities | 91,707,234,769.43 | 89,600,449,377.52 |
| Owners’ equity: | ||
| Share capital | 7,148,168,213.00 | 7,099,908,647.00 |
| Other equity instruments | 527,289,020.28 | 527,319,637.88 |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 5,011,944,633.92 | 3,652,626,861.74 |
| Less: Treasury shares | ||
| Other comprehensive income | 148,762,176.88 | 651,458,316.25 |
| Special reserve | 3,528,369.80 | 2,094,879.61 |
| Surplus reserve | 1,443,520,185.47 | 1,121,072,698.83 |
| General risk reserve | ||
| Unappropriated profit | 42,026,971,911.25 | 32,288,416,277.22 |
| Total owners’ equity attributable to equity holders of the parent company | 56,310,184,510.60 | 45,342,897,318.53 |
| Minority interests | 13,974,680,315.62 | 13,440,972,378.66 |
| Total owners’ equity | 70,284,864,826.22 | 58,783,869,697.19 |
| Total liabilities and owners’ equity | 161,992,099,595.65 | 148,384,319,074.71 |
Legal representative: WANG Laichun Chief financial officer: WU Tiansong Head of accounting department: CHEN Huiyong
2. Balance sheet of the parent company
In RMB
| Item | December 31, 2023 | January 1, 2023 |
| Current assets: | ||
| Cash and bank balances | 5,363,878,981.02 | 2,470,873,229.56 |
| Held-for-trading financial assets | 339,580,922.63 | 425,160,741.00 |
| Derivative financial assets | ||
| Notes receivable | 18,385,072.78 | 96,318,451.09 |
| Accounts receivable | 5,232,436,622.29 | 6,130,919,579.55 |
| Receivable financing | 5,119,974.62 | |
| Prepayments | 192,114,139.17 | 153,214,652.87 |
| Other receivables | 575,065,087.05 | 250,596,765.44 |
| Including: Interest receivable | ||
| Dividends receivable | 522,000,000.00 | 150,000,000.00 |
| Inventories | 306,259,656.55 | 365,123,547.22 |
| Contract assets | ||
| Held-for-sale assets | ||
| Non-current assets due within one year | 106,998,410.96 | |
| Other current assets | 14,458,131,132.12 | 6,550,429,892.93 |
| Total current assets | 26,597,969,999.19 | 16,442,636,859.66 |
| Non-current assets: | ||
| Debt investments | 509,574,733.25 | |
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investment | 23,601,999,275.38 | 22,333,083,031.91 |
| Other investments in equity instruments | 244,726,548.92 | 436,416,576.65 |
| Other non-current financial assets | 570,000,000.00 | 614,489,717.42 |
| Investment properties | ||
| Fixed assets | 148,762,324.80 | 156,454,801.57 |
| Construction in progress | 3,826,779.93 | 6,477,655.44 |
| Bearer biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 41,694,063.64 | 60,287,106.95 |
| Intangible assets | 307,619,939.12 | 312,566,547.35 |
| Development expenditure | ||
| Goodwill | 53,174,339.31 | 53,174,339.31 |
| Long-term deferred expenses | 7,326,817.04 | |
| Deferred tax assets | 5,787,962.17 | |
| Other non-current assets | 899,875,137.66 | 2,465,600.00 |
| Total non-current assets | 25,879,005,225.80 | 24,490,778,072.02 |
Total assets
| Total assets | 52,476,975,224.99 | 40,933,414,931.68 |
| Current liabilities: | ||
| Short-term borrowings | 1,981,237,500.00 | 1,000,555,555.56 |
| Held-for-trading financial liabilities | 12,958,840.00 | |
| Derivative financial liabilities | ||
| Notes payable | 3,206,774,263.00 | 1,665,344,848.22 |
| Accounts payable | 2,294,947,814.95 | 3,869,002,157.32 |
| Receipts in advance | ||
| Contract liabilities | 11,589,195.43 | 11,694,420.46 |
| Employee benefits payable | 50,854,577.38 | 49,737,492.15 |
| Taxes payable | 42,236,138.27 | 5,987,485.42 |
| Other payables | 6,064,454,178.70 | 1,568,456,509.82 |
| Including: Interest payable | ||
| Dividends payable | ||
| Held-for-sale liabilities | ||
| Non-current liabilities due within one year | 1,975,796,524.14 | 378,055,420.51 |
| Other current liabilities | 804,229,371.60 | 3,841,635,343.15 |
| Total current liabilities | 16,432,119,563.47 | 12,403,428,072.61 |
| Non-current liabilities: | ||
| Long-term borrowings | 9,676,736,000.00 | 5,645,155,501.44 |
| Bonds payable | 2,799,499,850.29 | 2,689,623,546.98 |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 27,210,286.03 | 45,690,389.15 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 3,619,077.63 | 5,765,818.86 |
| Deferred tax liabilities | 19,506,623.16 | 60,231,489.77 |
| Other non-current liabilities | ||
| Total non-current liabilities | 12,526,571,837.11 | 8,446,466,746.20 |
| Total liabilities | 28,958,691,400.58 | 20,849,894,818.81 |
| Owners’ equity: | ||
| Share capital | 7,148,168,213.00 | 7,099,908,647.00 |
| Other equity instruments | 527,289,020.28 | 527,319,637.88 |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 5,304,433,127.03 | 4,069,645,567.93 |
| Less: Treasury shares | ||
| Other comprehensive income | 113,696,524.40 | 294,991,891.50 |
| Special reserve |
Surplus reserve
| Surplus reserve | 1,443,520,185.47 | 1,121,072,698.83 |
| Unappropriated profit | 8,981,176,754.23 | 6,970,581,669.73 |
| Total owners’ equity | 23,518,283,824.41 | 20,083,520,112.87 |
| Total liabilities and owners’ equity | 52,476,975,224.99 | 40,933,414,931.68 |
3. Consolidated income statement
In RMB
| Item | 2023 | 2022 |
| I. Total operating income | 231,905,459,829.83 | 214,028,394,291.44 |
| Including: Operating income | 231,905,459,829.83 | 214,028,394,291.44 |
| Interest income | ||
| Premiums earned | ||
| Fee and commission income | ||
| II. Total operating costs | 220,679,633,964.41 | 203,642,032,034.98 |
| Including: Operating costs | 205,041,300,458.59 | 187,928,880,285.38 |
| Interest expenses | ||
| Fee and commission expenses | ||
| Surrenders | ||
| Claims and policyholder benefits (net of mounts recoverable from reinsurers) | ||
| Changes in insurance contract reserves (net of reinsurers’ share) | ||
| Insurance policyholder dividends | ||
| Expenses for reinsurance accepted | ||
| Taxes and levies | 534,815,230.06 | 476,325,439.67 |
| Selling expenses | 889,024,421.63 | 831,398,139.60 |
| General expenses | 5,542,856,994.26 | 5,075,668,085.35 |
| R&D expenses | 8,188,767,532.85 | 8,447,038,946.21 |
| Financial expenses | 482,869,327.02 | 882,721,138.77 |
| Including: Interest expenses | 1,376,870,146.38 | 1,038,070,641.24 |
| Interest income | 1,005,580,557.62 | 504,344,274.59 |
| Add: Other income | 825,189,115.07 | 602,294,263.90 |
| Investment income (Loss is indicated by “-”) | 1,771,282,791.44 | 998,278,358.77 |
| Including: Income from investments in associates and joint ventures | 2,044,361,609.89 | 794,759,492.42 |
| Income from derecognition of financial assets | -741,342,548.75 | -400,156,146.02 |
measured at amortized cost
| measured at amortized cost | ||
| Foreign exchange gains (Loss is indicated by “-”) | ||
| Net exposure hedging income (Loss is indicated by “-”) | ||
| Income from changes in fair value (Loss is indicated by “-”) | 210,346,832.18 | 13,625,720.11 |
| Impairment losses of credit (Loss is indicated by “-”) | 23,273,879.47 | -47,181,938.93 |
| Impairment losses of assets (Loss is indicated by “-”) | -1,318,867,316.40 | -846,822,131.05 |
| Income from disposal of assets (Loss is indicated by “-”) | 122,867,177.52 | 47,931,529.63 |
| III. Operating profit (Loss is indicated by “-”) | 12,859,918,344.70 | 11,154,488,058.89 |
| Add: Non-operating income | 93,459,027.40 | 34,312,299.74 |
| Less: Non-operating expenses | 68,334,885.79 | 30,805,374.33 |
| IV. Total profit (Total losses are indicated by “-”) | 12,885,042,486.31 | 11,157,994,984.30 |
| Less: Income tax expenses | 641,829,343.18 | 667,318,205.34 |
| V. Net profit (Net loss is indicated by “-”) | 12,243,213,143.13 | 10,490,676,778.96 |
| (I) Categorized by the nature of continuing operation | ||
| 1. Net profit from continuing operations (Net loss is indicated by “-”) | 12,243,213,143.13 | 10,490,676,778.96 |
| 2. Net profit from discontinued operations (Net loss is indicated by “-”) | ||
| (II) Categorized by ownership | ||
| 1. Net profit attributable to shareholders of the parent company | 10,952,656,702.16 | 9,163,104,849.54 |
| 2. Net profit attributable to non-controlling interests | 1,290,556,440.97 | 1,327,571,929.42 |
| VI. Other comprehensive income, net of tax | -491,540,544.45 | 647,909,759.47 |
| Other comprehensive income attributable to owners of the parent company, net of tax | -464,912,752.55 | 687,259,787.54 |
| (I) Other comprehensive income that cannot be subsequently reclassified to profit or loss | -142,656,996.94 | 131,579,091.87 |
| 1. Changes from re-measurement of defined benefit plans | ||
| 2. Other comprehensive income that cannot be reclassified to profit or loss under the equity method | ||
| 3. Changes in fair value of other investments in equity instruments | -142,656,996.94 | 131,579,091.87 |
| 4. Changes in fair value of |
enterprises’ own credit risks
| enterprises’ own credit risks | ||
| 5. Others | ||
| (II) Other comprehensive income that will be reclassified to profit or loss | -322,255,755.61 | 555,680,695.67 |
| 1. Other comprehensive income that will be reclassified to profit or loss under the equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Amounts of financial assets reclassified into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Reserve for cash flow hedges | ||
| 6. Translation differences of financial statements denominated in foreign currencies | -322,255,755.61 | 555,680,695.67 |
| 7. Others | ||
| Other comprehensive income attributable to minority interests, net of tax | -26,627,791.90 | -39,350,028.07 |
| VII. Total comprehensive income | 11,751,672,598.68 | 11,138,586,538.43 |
| Total comprehensive income attributable to owners of the parent company | 10,487,743,949.61 | 9,850,364,637.08 |
| Total comprehensive income attributable to minority interests | 1,263,928,649.07 | 1,288,221,901.35 |
| VIII. Earnings per share: | ||
| (I) Basic earnings per share | 1.54 | 1.29 |
| (II) Diluted earnings per share | 1.53 | 1.28 |
For any business combination involving enterprises under common control for the reporting period, the net profits of the absorbedparty prior to the combination are RMB0.00 in the reporting period, and were RMB0.00 in prior period.Legal representative: WANG Laichun Chief financial officer: WU Tiansong Head of accounting department: CHEN Huiyong
4. Income statement of the parent company
In RMB
| Item | 2023 | 2022 |
| I. Total operating income | 10,777,958,983.45 | 12,952,813,735.54 |
| Less: Operating costs | 10,090,180,041.66 | 12,051,823,934.39 |
| Taxes and levies | 11,450,527.78 | 12,941,878.95 |
| Selling expenses | 47,016,319.95 | 27,577,223.42 |
| General expenses | 195,484,624.80 | 146,709,569.94 |
| R&D expenses | 359,110,228.82 | 437,028,645.07 |
Financial expenses
| Financial expenses | 374,684,104.32 | 333,162,964.83 |
| Including: Interest expenses | 541,490,816.64 | 462,146,428.54 |
| Interest income | 209,233,345.56 | 117,198,473.67 |
| Add: Other income | 56,987,568.94 | 52,979,889.49 |
| Investment income (Loss is indicated by “-”) | 3,417,911,679.37 | 1,361,112,472.06 |
| Including: Income from investments in associates and joint ventures | -24,693,501.41 | 16,056,804.17 |
| Income from derecognition of financial assets measured at amortized cost (Loss is indicated by “-”) | -39,618,411.95 | -43,522,172.22 |
| Net exposure hedging income (Loss is indicated by “-”) | ||
| Income from changes in fair value (Loss is indicated by “-”) | 46,992,155.68 | 16,705,913.20 |
| Impairment losses of credit (Loss is indicated by “-”) | 11,896,794.95 | -8,375,363.61 |
| Impairment losses of assets (Loss is indicated by “-”) | -15,796,979.97 | -4,468,874.95 |
| Income from disposal of assets (Loss is indicated by “-”) | 54,423.89 | -192,009.60 |
| II. Operating profit (Loss is indicated by “-”) | 3,218,078,778.98 | 1,361,331,545.53 |
| Add: Non-operating income | 10,152,797.38 | 4,192,819.73 |
| Less: Non-operating expenses | 6,700,314.33 | 248,053.30 |
| III. Total profit (Total losses are indicated by “-”) | 3,221,531,262.03 | 1,365,276,311.96 |
| Less: Income tax expenses | -2,943,604.35 | 6,164,389.77 |
| IV. Net profit (Net loss is indicated by “-”) | 3,224,474,866.38 | 1,359,111,922.19 |
| (I) Net profit from continuing operation (Net loss is indicated by “-”) | 3,224,474,866.38 | 1,359,111,922.19 |
| (II) Net profit from discontinued operations (Net loss is indicated by “-”) | ||
| V. Other comprehensive income, net of tax | -143,511,980.28 | 132,040,246.83 |
| (I) Other comprehensive income that cannot be subsequently reclassified to profit or loss | -143,511,980.28 | 132,040,246.83 |
| 1. Changes from re-measurement of defined benefit plans | ||
| 2. Other comprehensive income that cannot be reclassified to profit or loss under the equity method | ||
| 3. Changes in fair value of other investments in equity instruments | -143,511,980.28 | 132,040,246.83 |
| 4. Changes in fair value of |
enterprises’ own credit risks
| enterprises’ own credit risks | ||
| 5. Others | ||
| (II) Other comprehensive income that will be reclassified to profit or loss | ||
| 1. Other comprehensive income that will be reclassified to profit or loss under the equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Amounts of financial assets reclassified into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Reserve for cash flow hedges | ||
| 6. Translation differences of financial statements denominated in foreign currencies | ||
| 7. Others | ||
| VI. Total comprehensive income | 3,080,962,886.10 | 1,491,152,169.02 |
| VII. Earnings per share | ||
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
5. Consolidated statement of cash flows
In RMB
| Item | 2023 | 2022 |
| I. Cash flows from operating activities: | ||
| Cash receipts from the sales of goods and the rendering of services | 233,972,359,867.88 | 231,311,294,189.07 |
| Net increase in customer deposits and deposits from banks and other financial institutions | ||
| Net increase in loans from the central bank | ||
| Net increase in taking from other financial institutions | ||
| Cash payments for claims and policyholders’ benefits under direct insurance contracts | ||
| Net cash receipts from reinsurance business | ||
| Net cash receipts from policyholders’ deposits and investment contract liabilities | ||
| Cash receipts from interest, fees and |
commissions
| commissions | ||
| Net increase in taking from banks and other financial institutions | ||
| Net increase in financial assets sold under repurchase arrangements | ||
| Net cash received from securities trading agency | ||
| Receipts of tax refunds | 7,825,905,318.68 | 9,595,383,015.24 |
| Other cash receipts relating to operating activities | 4,251,043,986.66 | 2,681,301,179.71 |
| Sub-total of cash inflows from operating activities | 246,049,309,173.22 | 243,587,978,384.02 |
| Cash payments for goods purchased and services received | 190,579,479,133.20 | 204,048,286,382.64 |
| Net increase in loans and advances to customers | ||
| Net increase in balance with the central bank and due from banks and other financial institutions | ||
| Cash payments for claims and policyholders’ benefits under direct insurance contracts | ||
| Net increase in placements with banks and other financial institutions | ||
| Cash payments for interest, fees and commissions | ||
| Cash payments for insurance policyholder dividends | ||
| Cash payments to and on behalf of employees | 19,100,916,568.64 | 20,086,575,874.76 |
| Payments of various types of taxes | 2,107,851,414.79 | 1,799,647,577.54 |
| Other cash payments relating to operating activities | 6,656,001,645.43 | 4,925,858,229.74 |
| Sub-total of cash outflows from operating activities | 218,444,248,762.06 | 230,860,368,064.68 |
| Net cash flow from operating activities | 27,605,060,411.16 | 12,727,610,319.34 |
| II. Cash flows from investing activities: | ||
| Cash receipts from disposals and recovery of investments | 16,307,306,597.29 | 8,259,554,985.04 |
| Cash receipts from investment income | 640,454,107.13 | 526,570,852.82 |
| Net cash receipts from disposals of fixed assets, intangible assets and other long-term assets | 498,863,695.83 | 506,778,473.84 |
| Net cash receipts from disposals of subsidiaries and other business entities | ||
| Other cash receipts relating to investing activities | 427,650,270.00 | 745,017,358.71 |
| Sub-total of cash inflows from investing | 17,874,274,670.25 | 10,037,921,670.41 |
activities
| activities | ||
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 11,387,449,010.98 | 13,584,140,261.73 |
| Cash payments to acquire investments | 25,906,263,865.11 | 8,390,295,501.05 |
| Net increase in pledged loans receivables | ||
| Net cash payments for acquisitions of subsidiaries and other business entities | 961,816,227.15 | |
| Other cash payments relating to investing activities | 140,474,000.00 | 428,035,523.59 |
| Sub-total of cash outflows from investing activities | 37,434,186,876.09 | 23,364,287,513.52 |
| Net cash flow from investing activities | -19,559,912,205.84 | -13,326,365,843.11 |
| III. Cash flows from financing activities: | ||
| Cash receipts from capital contributions | 546,698,698.52 | 1,596,922,470.96 |
| Including: Cash receipts from capital contributions from minority owners of subsidiaries | 1,030,300,000.00 | |
| Cash receipts from borrowings | 89,681,515,957.31 | 67,739,900,243.50 |
| Other cash receipts relating to financing activities | 3,531,424,971.41 | 7,527,472,775.23 |
| Sub-total of cash inflows from financing activities | 93,759,639,627.24 | 76,864,295,489.69 |
| Cash repayments of borrowings | 81,148,610,559.40 | 58,773,171,168.15 |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 2,530,927,017.73 | 1,796,754,390.90 |
| Including: Payments for distribution of dividends or profits to minority owners of subsidiaries | 89,877,050.50 | |
| Other cash payments relating to financing activities | 6,009,836,397.50 | 8,138,121,749.19 |
| Sub-total of cash outflows from financing activities | 89,689,373,974.63 | 68,708,047,308.24 |
| Net cash flow from financing activities | 4,070,265,652.61 | 8,156,248,181.45 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | 256,320,033.21 | 833,389,043.75 |
| V. Net increase in cash and cash equivalents | 12,371,733,891.14 | 8,390,881,701.43 |
| Add: Opening balance of cash and cash equivalents | 17,312,418,429.51 | 8,921,536,728.08 |
| VI. Closing balance of cash and cash equivalents | 29,684,152,320.65 | 17,312,418,429.51 |
6. Statement of cash flows of the parent company
In RMB
| Item | 2023 | 2022 |
| I. Cash flows from operating activities: | ||
| Cash receipts from the sales of goods and the rendering of services | 13,856,860,176.69 | 10,929,088,841.65 |
| Receipts of tax refunds | 131,023,274.74 | 169,862,322.46 |
| Other cash receipts relating to operating activities | 26,805,451,217.01 | 12,206,141,292.86 |
| Sub-total of cash inflows from operating activities | 40,793,334,668.44 | 23,305,092,456.97 |
| Cash payments for goods purchased and services received | 18,017,487,335.51 | 12,697,462,668.02 |
| Cash payments to and on behalf of employees | 321,167,044.00 | 224,427,747.93 |
| Payments of various types of taxes | 7,503,228.53 | 21,569,336.18 |
| Other cash payments relating to operating activities | 22,673,942,894.86 | 10,060,056,726.22 |
| Sub-total of cash outflows from operating activities | 41,020,100,502.90 | 23,003,516,478.35 |
| Net cash flow from operating activities | -226,765,834.46 | 301,575,978.62 |
| II. Cash flows from investing activities: | ||
| Cash receipts from disposals and recovery of investments | 6,536,880,258.56 | 2,711,452,000.00 |
| Cash receipts from investment income | 3,348,825,836.10 | 1,448,310,422.70 |
| Net cash receipts from disposals of fixed assets, intangible assets and other long-term assets | 315,031.34 | 467,498.85 |
| Net cash receipts from disposals of subsidiaries and other business entities | 3,319,956.47 | |
| Other cash receipts relating to investing activities | ||
| Sub-total of cash inflows from investing activities | 9,889,341,082.47 | 4,160,229,921.55 |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 76,811,665.74 | 237,037,719.00 |
| Cash payments to acquire investments | 10,673,528,047.25 | 8,385,526,433.53 |
| Net cash payments for acquisitions of subsidiaries and other business entities | ||
| Other cash payments relating to investing activities | ||
| Sub-total of cash outflows from investing activities | 10,750,339,712.99 | 8,622,564,152.53 |
| Net cash flow from investing activities | -860,998,630.52 | -4,462,334,230.98 |
| III. Cash flows from financing activities: |
Cash receipts from capitalcontributions
| Cash receipts from capital contributions | 546,698,698.52 | 566,622,470.96 |
| Cash receipts from borrowings | 12,787,980,000.00 | 9,777,071,023.06 |
| Other cash receipts relating to financing activities | 3,089,161,930.69 | 7,521,511,778.98 |
| Sub-total of cash inflows from financing activities | 16,423,840,629.21 | 17,865,205,273.00 |
| Cash repayments of borrowings | 6,182,849,970.00 | 5,560,227,961.58 |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 1,470,835,061.65 | 1,133,386,845.40 |
| Other cash payments relating to financing activities | 5,986,958,422.03 | 5,344,266,086.84 |
| Sub-total of cash outflows from financing activities | 13,640,643,453.68 | 12,037,880,893.82 |
| Net cash flow from financing activities | 2,783,197,175.53 | 5,827,324,379.18 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | 6,410,280.81 | 114,413,815.11 |
| V. Net increase in cash and cash equivalents | 1,701,842,991.36 | 1,780,979,941.93 |
| Add: Opening balance of cash and cash equivalents | 2,461,535,715.54 | 680,555,773.61 |
| VI. Closing balance of cash and cash equivalents | 4,163,378,706.90 | 2,461,535,715.54 |
7. Consolidated statement of changes in owners’ equity
Current period
In RMB
| Item | 2023 | |||||||||||||||||||||||||||
| Equity attributable to owners of the parent company | Minority interests | Total owners’ equity | ||||||||||||||||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Unappropriated profit | Others | Subtotal | ||||||||||||||||||
| Preferred shares | Perpetual bonds | Others | ||||||||||||||||||||||||||
| I. Closing balance of the preceding year | 7,099,908,647.00 | 527,319,637.88 | 3,652,626,861.74 | 651,458,316.25 | 2,094,879.61 | 1,121,072,698.83 | 32,288,416,277.22 | 45,342,897,318.53 | 13,440,972,378.66 | 58,783,869,697.19 | ||||||||||||||||||
| Add: Changes in accounting policies | ||||||||||||||||||||||||||||
| Corrections of prior period | ||||||||||||||||||||||||||||
errors
| errors | |||||||||||||||
| Business combination involving enterprises under common control | |||||||||||||||
| II. Opening balance of the current year | 7,099,908,647.00 | 527,319,637.88 | 3,652,626,861.74 | 651,458,316.25 | 2,094,879.61 | 1,121,072,698.83 | 32,288,416,277.22 | 45,342,897,318.53 | 13,440,972,378.66 | 58,783,869,697.19 | |||||
| III. Changes for the year (Decrease is indicated by “-”) | 48,259,566.00 | -30,617.60 | 1,359,317,772.18 | -502,696,139.37 | 1,433,490.19 | 322,447,486.64 | 9,738,555,634.03 | 10,967,287,192.07 | 533,707,936.96 | 11,500,995,129.03 | |||||
| (I) Total comprehensive income | -464,912,752.55 | 10,952,656,702.16 | 10,487,743,949.61 | 1,263,928,649.07 | 11,751,672,598.68 | ||||||||||
| (II) Owners’ contributions and reduction in capital | 48,259,566.00 | -30,617.60 | 1,359,317,772.18 | 1,407,546,720.58 | -640,863,408.11 | 766,683,312.47 | |||||||||
| 1. Ordinary shares contributed by owners | 48,256,556.00 | 498,442,142.52 | 546,698,698.52 | 546,698,698.52 | |||||||||||
| 2. Capital contribution from holders of other equity instruments | 3,010.00 | -30,617.60 | 170,204.36 | 142,596.76 | 142,596.76 |
3. Share-based
paymentrecognized inowners’ equity
| 3. Share-based payment recognized in owners’ equity | 731,177,177.72 | 731,177,177.72 | 49,487,751.93 | 780,664,929.65 | |||||||||||
| 4. Others | 129,528,247.58 | 129,528,247.58 | -690,351,160.04 | -560,822,912.46 | |||||||||||
| (III) Profit distribution | 322,447,486.64 | -1,251,884,454.95 | -929,436,968.31 | -89,877,050.50 | -1,019,314,018.81 | ||||||||||
| 1. Transfer to surplus reserve | 322,447,486.64 | -322,447,486.64 | |||||||||||||
| 2. Transfer to general risk reserve | |||||||||||||||
| 3. Distributions to owners (or shareholders) | -926,948,678.85 | -926,948,678.85 | -89,877,050.50 | -1,016,825,729.35 | |||||||||||
| 4. Others | -2,488,289.46 | -2,488,289.46 | -2,488,289.46 | ||||||||||||
| (IV) Transfers within owners’ equity | -37,783,386.82 | 37,783,386.82 | |||||||||||||
| 1. Capitalization of capital reserve (or share capital) |
2.Capitalizationof surplusreserve (orshare capital)
| 2. Capitalization of surplus reserve (or share capital) | |||||||||||||||
| 3. Loss offset by surplus reserve | |||||||||||||||
| 4. Retained earnings carried forward from changes in defined benefit plans | |||||||||||||||
| 5. Retained earnings carried forward from other comprehensive income | |||||||||||||||
| 6. Others | -37,783,386.82 | 37,783,386.82 | |||||||||||||
| (V) Special reserve | 1,433,490.19 | 1,433,490.19 | 519,746.50 | 1,953,236.69 | |||||||||||
| 1. Transfer to special reserve in the current period | 32,093,607.36 | 32,093,607.36 | 30,153,711.05 | 62,247,318.41 | |||||||||||
| 2. Amount utilized in the current period | 30,660,117.1 | 30,660,117.17 | 29,633,964.55 | 60,294,081.72 |
| 7 | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Closing balance of the current period | 7,148,168,213.00 | 527,289,020.28 | 5,011,944,633.92 | 148,762,176.88 | 3,528,369.80 | 1,443,520,185.47 | 42,026,971,911.25 | 56,310,184,510.60 | 13,974,680,315.62 | 70,284,864,826.22 |
Prior period
In RMB
| Item | 2022 | ||||||||||||||
| Equity attributable to owners of the parent company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Unappropriated profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Closing balance of the preceding year | 7,050,485,477.00 | 527,358,025.98 | 2,719,695,281.67 | -35,801,471.29 | 1,018,784.75 | 985,161,506.61 | 24,040,637,144.00 | 35,288,554,748.72 | 10,494,088,800.85 | 45,782,643,549.57 | |||||
Add:
Changesinaccountingpolicies
| Add: Changes in accounting policies | |||||||||||||||
| Corrections of prior period errors | |||||||||||||||
| Business combination involving enterprises under common control |
II.Openingbalanceof thecurrentyear
| II. Opening balance of the current year | 7,050,485,477.00 | 527,358,025.98 | 2,719,695,281.67 | -35,801,471.29 | 1,018,784.75 | 985,161,506.61 | 24,040,637,144.00 | 35,288,554,748.72 | 10,494,088,800.85 | 45,782,643,549.57 | |||||
| III. Changes for the year (Decrease is indicated by “-”) | 49,423,170.00 | -38,388.10 | 932,931,580.07 | 687,259,787.54 | 1,076,094.86 | 135,911,192.22 | 8,247,779,133.22 | 10,054,342,569.81 | 2,946,883,577.81 | 13,001,226,147.62 | |||||
| (I) Total comprehensive income | 687,259,787.54 | 9,163,104,849.54 | 9,850,364,637.08 | 1,288,221,901.35 | 11,138,586,538.43 |
(II)Owners’contributionsandreduction incapital
| (II) Owners’ contributions and reduction in capital | 49,423,170.00 | -38,388.10 | 932,931,580.07 | 982,316,361.97 | 1,658,661,676.46 | 2,640,978,038.43 | |||||||||
| 1. Ordinary shares contributed by owners | 49,419,433.00 | 517,203,037.96 | 566,622,470.96 | 1,030,300,000.00 | 1,596,922,470.96 | ||||||||||
| 2. Capital contribution from holders of other equity instruments | 3,737.00 | -38,388.10 | 213,452.63 | 178,801.53 | 178,801.53 |
3.Share-basedpaymentrecognized inowners’equity
| 3. Share-based payment recognized in owners’ equity | 426,597,450.75 | 426,597,450.75 | 46,691,336.87 | 473,288,787.62 | |||||||||||
| 4. Others | -11,082,361.27 | -11,082,361.27 | 581,670,339.59 | 570,587,978.32 | |||||||||||
| (III) Profit distribution | 135,911,192.22 | -915,325,716.32 | -779,414,524.10 | -779,414,524.10 | |||||||||||
| 1. Transfer to surplus reserve | 135,911,192.22 | -135,911,192.22 |
2.Transfertogeneralriskreserve
| 2. Transfer to general risk reserve | |||||||||||||||
| 3. Distributions to owners (or shareholders) | -779,270,547.26 | -779,270,547.26 | -779,270,547.26 | ||||||||||||
| 4. Others | -143,976.84 | -143,976.84 | -143,976.84 | ||||||||||||
| (IV) Transfers within owners’ equity |
1.Capitalization ofcapitalreserve(or sharecapital)
| 1. Capitalization of capital reserve (or share capital) | |||||||||||||||
| 2. Capitalization of surplus reserve (or share capital) | |||||||||||||||
| 3. Loss offset by surplus reserve |
4.Retainedearningscarriedforwardfromchangesindefinedbenefitplans
| 4. Retained earnings carried forward from changes in defined benefit plans | |||||||||||||||
| 5. Retained earnings carried forward from other comprehensive income | |||||||||||||||
| 6. Others |
(V)Specialreserve
| (V) Special reserve | 1,076,094.86 | 1,076,094.86 | 1,076,094.86 | ||||||||||||
| 1. Transfer to special reserve in the current period | 5,435,469.87 | 5,435,469.87 | 5,435,469.87 | ||||||||||||
| 2. Amount utilized in the current period | 4,359,375.01 | 4,359,375.01 | 4,359,375.01 | ||||||||||||
| (VI) Others |
IV.Closingbalanceof thecurrentperiod
| IV. Closing balance of the current period | 7,099,908,647.00 | 527,319,637.88 | 3,652,626,861.74 | 651,458,316.25 | 2,094,879.61 | 1,121,072,698.83 | 32,288,416,277.22 | 45,342,897,318.53 | 13,440,972,378.66 | 58,783,869,697.19 |
8. Statement of changes in owners’ equity of the parent company
Current period
In RMB
| Item | 2023 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Unappropriated profit | Others | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Closing balance of the preceding year | 7,099,908,647.00 | 527,319,637.88 | 4,069,645,567.93 | 294,991,891.50 | 1,121,072,698.83 | 6,970,581,669.73 | 20,083,520,112.87 | |||||
| Add: Changes in accounting policies | ||||||||||||
| Corrections of prior period errors | ||||||||||||
| Others | ||||||||||||
II. Openingbalance ofthe currentyear
| II. Opening balance of the current year | 7,099,908,647.00 | 527,319,637.88 | 4,069,645,567.93 | 294,991,891.50 | 1,121,072,698.83 | 6,970,581,669.73 | 20,083,520,112.87 | |||||
| III. Changes for the year (Decrease is indicated by “-”) | 48,259,566.00 | -30,617.60 | 1,234,787,559.10 | -181,295,367.10 | 322,447,486.64 | 2,010,595,084.50 | 3,434,763,711.54 | |||||
| (I) Total comprehensive income | -143,511,980.28 | 3,224,474,866.38 | 3,080,962,886.10 | |||||||||
| (II) Owners’ contributions and reduction in capital | 48,259,566.00 | -30,617.60 | 1,234,787,559.10 | 1,283,016,507.50 | ||||||||
| 1. Ordinary shares contributed by owners | 48,256,556.00 | 498,442,142.52 | 546,698,698.52 |
2. Capital
contribution fromholders ofotherequityinstruments
| 2. Capital contribution from holders of other equity instruments | 3,010.00 | -30,617.60 | 170,204.36 | 142,596.76 | ||||||||
| 3. Share-based payment recognized in owners’ equity | 780,664,929.65 | 780,664,929.65 | ||||||||||
| 4. Others | -44,489,717.43 | -44,489,717.43 | ||||||||||
| (III) Profit distribution | 322,447,486.64 | -1,251,663,168.70 | -929,215,682.06 | |||||||||
| 1. Transfer to surplus reserve | 322,447,486.64 | -322,447,486.64 |
2.Distributions toowners (orshareholders)
| 2. Distributions to owners (or shareholders) | -926,948,678.85 | -926,948,678.85 | ||||||||||
| 3. Others | -2,267,003.21 | -2,267,003.21 | ||||||||||
| (IV) Transfers within owners’ equity | -37,783,386.82 | 37,783,386.82 | ||||||||||
| 1. Capitalization of capital reserve (or share capital) | ||||||||||||
| 2. Capitalization of surplus reserve (or share capital) |
3. Loss
offset bysurplusreserve
| 3. Loss offset by surplus reserve | ||||||||||||
| 4. Retained earnings carried forward from changes in defined benefit plans | ||||||||||||
| 5. Retained earnings carried forward from other comprehensive income | ||||||||||||
| 6. Others | -37,783,386.82 | 37,783,386.82 | ||||||||||
| (V) Special reserve |
1. Transfer
to specialreserve inthe currentperiod
| 1. Transfer to special reserve in the current period | ||||||||||||
| 2. Amount utilized in the current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Closing balance of the current period | 7,148,168,213.00 | 527,289,020.28 | 5,304,433,127.03 | 113,696,524.40 | 1,443,520,185.47 | 8,981,176,754.23 | 23,518,283,824.41 |
Last period
In RMB
| Item | 2022 | |||||||||
| Share | Other equity instruments | Capital | Less: | Other | Special | Surplus | Unappropr | Others | Total | |
capital
| capital | Preferred shares | Perpetual bonds | Others | reserve | Treasury shares | comprehensive income | reserve | reserve | iated profit | owners’ equity | ||
| I. Closing balance of the preceding year | 7,050,485,477.00 | 527,358,025.98 | 3,080,149,716.35 | 162,951,644.67 | 985,161,506.61 | 6,526,651,487.02 | 18,332,757,857.63 | |||||
| Add: Changes in accounting policies | ||||||||||||
| Corrections of prior period errors | ||||||||||||
| Others |
II. Openingbalance ofthe currentyear
| II. Opening balance of the current year | 7,050,485,477.00 | 527,358,025.98 | 3,080,149,716.35 | 162,951,644.67 | 985,161,506.61 | 6,526,651,487.02 | 18,332,757,857.63 | |||||
| III. Changes for the year (Decrease is indicated by “-”) | 49,423,170.00 | -38,388.10 | 989,495,851.58 | 132,040,246.83 | 135,911,192.22 | 443,930,182.71 | 1,750,762,255.24 | |||||
| (I) Total comprehensive income | 132,040,246.83 | 1,359,111,922.19 | 1,491,152,169.02 | |||||||||
| (II) Owners’ contributions and reduction in capital | 49,423,170.00 | -38,388.10 | 989,495,851.58 | 1,038,880,633.48 |
1. Ordinary
sharescontributedby owners
| 1. Ordinary shares contributed by owners | 49,419,433.00 | 517,203,037.96 | 566,622,470.96 | |||||||||
| 2. Capital contribution from holders of other equity instruments | 3,737.00 | -38,388.10 | 213,452.63 | 178,801.53 | ||||||||
| 3. Share-based payment recognized in owners’ equity | 473,288,787.62 | 473,288,787.62 | ||||||||||
| 4. Others | -1,209,426.63 | -1,209,426.63 | ||||||||||
| (III) Profit distribution | 135,911,192.22 | -915,181,739.48 | -779,270,547.26 |
1. Transfer
to surplusreserve
| 1. Transfer to surplus reserve | 135,911,192.22 | -135,911,192.22 | ||||||||||
| 2. Distributions to owners (or shareholders) | -779,270,547.26 | -779,270,547.26 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Transfers within owners’ equity | ||||||||||||
| 1. Capitalization of capital reserve (or share capital) |
2.Capitalization ofsurplusreserve (orsharecapital)
| 2. Capitalization of surplus reserve (or share capital) | ||||||||||||
| 3. Loss offset by surplus reserve | ||||||||||||
| 4. Retained earnings carried forward from changes in defined benefit plans |
5. Retained
earningscarriedforwardfrom othercomprehensiveincome
| 5. Retained earnings carried forward from other comprehensive income | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Transfer to special reserve in the current period | ||||||||||||
| 2. Amount utilized in the current period | ||||||||||||
| (VI) Others |
IV. Closingbalance ofthe currentperiod
| IV. Closing balance of the current period | 7,099,908,647.00 | 527,319,637.88 | 4,069,645,567.93 | 294,991,891.50 | 1,121,072,698.83 | 6,970,581,669.73 | 20,083,520,112.87 |
III. Basic information
(I) Company profileLuxshare Precision Industry Co., Ltd. (“Company” or “the Company”) is a company limited by shares established by ShenzhenZixin Investment Co., Ltd. (“Zixin Investment”) and Luxshare Limited as founders after being approved by Shenzhen People’sGovernment and Shenzhen Bureau of Trade and Industry in February 2009. Company’s Uniform Social Credit Code:
91440300760482233Q. The Company was listed on Shenzhen Stock Exchange in September 2010. The Company pertains to thecommunication equipment industry.As of December 31, 2023, the Company issued 7,148,168,213.00 shares in total, with its registered capital amounting toRMB7,148,168,213.00. The Company’s registered office is located at 2/F, Block A, Sanyo New Industrial Zone, West HaoyiCommunity, Shajing Street, Bao’an District, Shenzhen, China, while its place of business is located at No. 313 North Ring Road,Qingxi Town, Dongguan City, Guangdong, China. The main business activities of the Company include production and operation ofconnecting wires, connectors, computer peripherals, and plastic hardware products. The Company’s parent company is LuxshareLimited, and its de facto controllers are WANG Laichun and WANG Laisheng.
The financial statements were approved by the Company’s board of directors on April 24, 2024 for issuance.IV. Basis of preparation of financial statements
1. Basis of preparation
The Company has prepared its financial statements in accordance with the requirements of the Accounting Standards for BusinessEnterprises - Basic Standard promulgated by the Ministry of Finance of the PRC, specific accounting standards, guidelines forapplication of accounting standards for enterprises, interpretation of accounting standards for enterprises and other relevant regulationssuccessively promulgated (collectively, “Accounting Standards for Business Enterprises”) and the Preparation Rules for InformationDisclosure by Companies Offering Securities to the Public No. 15 - General Provisions on Financial Reports issued by China SecuritiesRegulatory Commission.
2. Going concern
The Company prepares its financial statements on a going concern basis. The Company has the ability to continue as a goingconcern within 12 months from the end of the reporting period, and detected no major events that may affect such ability.V. Significant accounting policies and accounting estimatesReminders on specific accounting policies and accounting estimates:
The disclosed content already includes the specific accounting policies and accounting estimates formulated by the company basedon its actual production and operation characteristics. Please refer to Note V, (11) Financial Instruments, Note V, (13) Inventories,Note V, (17) Property, Plant, and Equipment, Note V, (20) Intangible Assets, Note V, (27) Revenue, etc.
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company conform to the requirements of the Accounting Standards for BusinessEnterprises issued by the Ministry of Finance, and truly and completely reflect the consolidated and parent company’s financialpositions as of December 31, 2023, and the consolidated and parent company’s operating results and cash flows for the year then ended.
2. Accounting period
The Company’s accounting year is from January 1 to December 31 of each calendar year.
3. Operating cycle
The Company’s operating cycle is 12 months.
4. Functional currency
The company adopts the Chinese Renminbi (RMB) as the functional currency for accounting purposes. The subsidiary companiesunder our company determine their functional currencies based on the primary economic environment in which they operate. Forsubsidiary companies located within mainland China, the functional currency is the Chinese Renminbi. For subsidiary companieslocated outside mainland China, they independently decide their functional currencies based on their primary economic environment,which mainly include the US Dollar, New Taiwan Dollar, Hong Kong Dollar, Vietnamese Dong, etc. The financial statements arepresented in Chinese Renminbi.
5. Method for determining importance criteria and selection basis
?Applicable □N/A
| Item | Significant Criteria |
| Significant individual provision for doubtful accounts receivable | Individual provision amount accounts for over 10% of the total provision for bad debts of various receivables and exceeds RMB 500 million |
| Significant contract liabilities with an aging of over one year | Individual contract liabilities with an aging of over 1 year account for over 10% of the total contract liabilities and exceed RMB 500 million |
| Significant accounts payable and other payables | Individual accounts payable/other payables with an aging of over 1 year account for over 10% of the total accounts payable/other payables and exceed RMB 1 billion |
| Significant construction in progress | Individual project budget exceeds RMB 500 million |
| Significant goodwill | Individual amount accounts for over 10% of the total goodwill and exceeds RMB 200 million |
| Significant non-wholly-owned subsidiaries | One of the total assets, operating income, or total profit (or absolute value of loss) individually or simultaneously accounts for over 10% of the corresponding item in the consolidated financial statements |
| Significant joint ventures or associates | The carrying amount of long-term equity investments in a single investee entity accounts for over 5% of the group's net assets and exceeds RMB 1 billion, or the investment profit or loss under the equity method for long-term equity investments accounts for over 10% of the group's consolidated net profit |
6. Accounting treatment of business combinations involving enterprises under common control and businesscombinations not involving enterprises under common controlBusiness combination involving enterprises under common control: The assets and liabilities acquired by the absorbing party ina business combination (including goodwill formed through the acquisition by the ultimate controller of the absorbed party) aremeasured according to the carrying amount of the assets and liabilities of the absorbed party in the financial statements of ultimatecontroller on the combination date. The difference between the carrying amount of the net assets obtained in a business combinationand the carrying amount of the consideration paid for the combination (or the aggregate face value of shares issued as consideration)is adjusted to the equity premium in the capital reserve. If the equity premium in the capital reserve is not sufficient to absorb thedifference, any excess shall be adjusted against retained earnings.Business combination not involving enterprises under common control: The cost of combination is the aggregate of the fair values,at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange forcontrol of the acquiree. Where the cost of a business combination exceeds the acquirer’s interest in the fair value of the acquiree’sidentifiable net assets, the difference is recognized as goodwill; where the cost of a business combination is lower than the acquirer’sinterest in the fair value of the acquiree’s identifiable net assets, the difference is recognized in profit or loss for the current period. Theacquiree’s identifiable assets, liabilities and contingent liabilities that are acquired in the combination meeting the recognition criteriaare measured at the fair value on the date of acquisition.The costs incurred directly attributable to the business combination are recognized in profit or loss for the current period whenincurred; the transaction costs for issue of equity securities or debt securities are recognized in the amount initially recognized of equitysecurities or debt securities.
7. Criterion of control and the preparation method of consolidated financial statements
1. Criterion of control
The scope of consolidated financial statements is determined on the basis of control, and includes those of the Company and allof its subsidiaries. “Control” means the power of the Company over the investee, through which the Company will enjoy variablereturns by participating in the relevant activities and has the ability to use the power over the investee to affect the Company’s returnamount.
2. Consolidation procedures
The Company regards the entire enterprise group as an accounting entity and prepares the consolidated financial statementsaccording to the uniformed accounting policies, reflecting the overall financial positions, operating results and cash flows of thisenterprise group. The effects of other intragroup transactions (between the Company and its subsidiaries or between subsidiaries) areeliminated. Where the intragroup transactions show that relevant assets have suffered impairment losses, those losses are recognizedfully. Where the accounting policies and periods adopted by all subsidiaries are not in line with those of the Company, the necessaryadjustments are made to the financial statements of these subsidiaries based on the accounting policies and periods of the Companywhen preparing the consolidated financial statements.
The portions of owner’s equities, net profits or losses and comprehensive income of subsidiaries for the period attributable tominority interests are separately presented in the consolidated balance sheet below the “owners’ equity” line item, and in theconsolidated income statement below the “net profit” and “total comprehensive income” as “minority interests”. When the amount ofloss for the current period attributable to the minority shareholders of a subsidiary exceeds the minority shareholders’ share of theopening balance of owners’ equity of the subsidiary, the excess is allocated against minority interests.
(1) Increase in subsidiaries or businesses
Where a subsidiary or business is acquired during the reporting period through a business combination involving enterprises undercommon control, operating results and cash flows of this subsidiary or business from the beginning of the period in which thecombination takes place to the end of the reporting period are included in the consolidated financial statements. Meanwhile, the
adjustments are made to the opening balances of the consolidated financial statements and the relevant items of the comparativestatement, and the combined reporting entity is deemed to have existed since the time when the ultimate controller begins to exercisecontrol.Where the Company becomes capable of exercising control over an investee under the common control due to additionalinvestments or other reasons, for equity investments held before acquiring control of the absorbed party, the relevant gains or losses,other comprehensive income and other changes in net assets recognized during the period from the later of the date of acquisition oforiginal equity or the date when the absorbing party and the absorbed party are under the common control until the combination dateare respectively offset against opening balances of retained earnings during the comparative reporting period or profit or loss for thecurrent period.
Where a subsidiary or business is acquired during the reporting period through a business combination not involving enterprisesunder common control, it is included in the consolidated financial statements from the date of acquisition based on the fair value ofidentifiable assets, liabilities and contingent liabilities determined on the date of acquisition.Where the Company becomes capable of exercising control over an investee not under common control due to additionalinvestments or other reasons, for the acquiree’s equity held prior to the date of acquisition, the Company remeasures the fair value ofthe equity on the date of acquisition, and the difference between the fair value of the equity and its carrying amount is recognized inprofit or loss for the current period. Where the acquiree’s equity held prior to the date of acquisition involves other comprehensiveincome that can be reclassified to profit or loss and changes in other owners’ equity under equity method, such other comprehensiveincome and changes are transferred to the income of the period in which the date of acquisition falls.
(2) Disposal of subsidiaries
① General disposal
When the Company loses control over the investee due to disposal of partial equity investments or other reasons, for the remainingequity investments after disposal, the Company remeasures the remaining equity investments after disposal at the fair value on the datewhen the Company loses its control. The difference between the sum of the consideration from disposal of equity and the fair value ofremaining equity less the sum of an original subsidiary’s share of net assets and goodwill continuously calculated from the date ofacquisition or combination according to original shareholding ratio is recognized as the investment return for the period in which thecontrol is lost. Other comprehensive income relating to the original subsidiary’s equity investments that will be reclassified to profit orloss and changes in other owners’ equity under the equity method is transferred into the investment income for the period when thecontrol is lost.
② Disposal of subsidiaries by steps
Where the subsidiary’s equity investments are disposed by steps through multiple transactions until the control is lost, and theterms and conditions of all transactions on disposal of the subsidiary’s equity investments and the economic impact thereof fall withinone or more of the following circumstances, it usually indicates that multiple transaction events belong a single package:
i. these transactions are concluded simultaneously or after the influence on each other is considered;
ii. these transactions as a whole can achieve a complete commercial result;
iii. the occurrence of one transaction depends on that of at least one other transaction; and/or
iv. a transaction is not economical alone, but economical when considered together with other transactions.
Where all transactions belong to a single package, the Company accounts for such transactions as one transaction to dispose ofand lose its control over the subsidiary; however, the difference between the proceeds from each disposal before loss of control and theshare owned by the Company in the net assets of the subsidiary in relation to the investment disposed of is recognized in othercomprehensive income in the consolidated financial statements, which is wholly transferred to the profit or loss in the period in whichthe control is lost.
Where all transactions do not belong to a single package, prior to the loss of control, the Company accounts for such transactionsas partial disposal of a subsidiary’s equity investments in the event that the control is not lost; and when the control is lost, the Companyaccounts for such transactions in accordance with the general methods of disposal of subsidiaries.
(3) Acquisition of a subsidiary’s minority equity
The difference between the long-term equity investments newly obtained by the Company due to acquisition of minority equityand its share of the subsidiary’s net assets continuously calculated from the date of acquisition or combination according to newshareholding ratio is adjusted against the equity premium in the capital reserve in the consolidated balance sheet. If the equity premiumin the capital reserve is not sufficient to absorb the difference, any excess shall be adjusted against retained earnings.
(4) Partial disposal of the subsidiary’s equity investments in the event that the control is not lost
The difference between the proceeds from disposal and the share owned by the Company in the net assets of the subsidiary inrelation to the long-term equity investment disposed of that is calculated continuously from the date of acquisition or combination isadjusted against the equity premium in the capital reserve in the consolidated balance sheet. In case the equity premium in the capitalreserve is not sufficient to absorb the difference, the remaining balance is adjusted against the retained earnings.
8. Classification of joint arrangements and accounting treatment of joint operations
Joint arrangements are classified into joint operations and joint ventures.
Where a party to a joint arrangement enjoys relevant assets and assumes relevant liabilities of such an arrangement, this casebelongs to a joint operation.
The Company recognizes the following items relating to its interest in the joint operation:
(1) the assets held individually by the Company, and the Company’s share of the assets held jointly;
(2) the liabilities incurred individually by the Company, and the Company’s share of the liabilities incurred jointly;
(3) the Company’s revenue from the sales of its share of output of the joint operation;
(4) the Company’s share of revenue from the sales of assets by the joint operation; and
(5) the expenses incurred individually by the Company, and the Company’s share of the expenses incurred jointly by the jointoperation.
The Company accounts for investments in joint ventures using the equity method and the details are seen in Note “III. (14) Long-term equity investments”.
9. Recognition of cash and cash equivalents
Cash comprises cash on hand and deposits of the Company that can be readily withdrawn on demand. Cash equivalents compriseshort-term, highly liquid investments held by the Company that are readily convertible into known amounts of cash and which aresubject to an insignificant risk of changes in value.
10. Foreign currency transactions and translation of foreign currency financial statements
1. Foreign currency transactions
The foreign currency transactions are recorded by translating the amount of a foreign currency into RMB at the spot exchangerate prevailing on the 1st of each month.
The balances of foreign currency monetary items are translated using the spot exchange rate at the balance sheet date. Exchangedifferences arising therefrom are recognized in profit or loss for the current period, except for exchange differences generated byspecific-purpose borrowings in a foreign currency related to acquisition of qualifying assets, which should be accounted for accordingto the capitalization principles of borrowing costs.
2. Translation of financial statements denominated in foreign currencies
The asset and liability items in the balance sheet are translated at the spot exchange rates at the balance sheet date. Items of owners’equity except for “unappropriated profit” are translated at the spot exchange rates at the dates on which such items arose. Income andexpenses in the income statement are translated at the exchange rates similar to the spot exchange rates at the dates of the transactions.
When the Company disposes of a foreign operation, it transfers the translation differences relating to translation of the financialstatements of that foreign operation from the owners’ equity to profit or loss for the current period.
11. Financial instruments
When the Company becomes a party to a financial instrument contract, a financial asset, liability or equity instrument is recognized.
1. Classification of financial instruments
Based on the Company’s business model for managing financial assets and the cash flow characteristics of financial assets, thefinancial assets are classified into on initial recognition: financial assets measured at its amortized cost, financial assets at fair valuethrough other comprehensive income, and financial assets at fair value through profit or loss.
The Company classifies financial assets that meet the following criteria at the same time and are not designated as at fair valuethrough profit or loss as the financial assets measured at amortized cost:
－ the business model aims to collect contractual cash flows; and
－ the contractual cash flows are generated only from payment of principal and interest on the outstanding principal.
The Company classifies financial assets that meet the following criteria at the same time and are not designated as at fair valuethrough profit or loss as the financial assets (debt instruments) at fair value through other comprehensive income:
－ the business model aims to collect contractual cash flows and sell such financial assets; and
－ the contractual cash flows are generated only from payment of principal and interest on the outstanding principal.
The Company irrevocably designates the non-trading equity instruments as financial assets (equity instruments) at fair valuethrough other comprehensive income on initial recognition. Such designation is made on the basis of a single investment, and therelevant investments meet the definition of an equity instrument from the issuer’s perspective.
Except for the financial assets measured at amortized cost and the financial assets at fair value through other comprehensiveincome, the Company classifies all of other remaining financial assets as the financial assets at fair value through profit or loss. If theaccounting mismatch can be eliminated or significantly reduced on initial recognition, the Company may irrevocably designate thefinancial assets that should have been classified as those measured at amortized cost or those at fair value through other comprehensiveincome as the financial assets at fair value through profit or loss.
On initial recognition, financial liabilities are classified into the following two categories: financial liabilities at fair value throughprofit or loss and financial liabilities measured at amortized cost.
A financial liability may be designated as at fair value through profit or loss on initial measurement if one of the followingconditions is met:
1) the designation eliminates or significantly reduces accounting mismatch;
2) a group of financial liabilities or a group of financial assets and financial liabilities is managed and its performance is evaluatedon a fair value basis, and information about the group is reported on that basis to the enterprise’s key management personnel accordingto such risk management or investment strategy set out in official written documents; or
3) this financial liability contains embedded derivatives that need to be split separately.
Based on the aforementioned conditions, these financial liabilities designated by the Company mainly include: (to describe thespecific designation in details)
2. Recognition and measurement of financial instruments
(1) Financial assets measured at amortized cost
The financial assets measured at amortized cost, including notes receivable, accounts receivable, other receivables, long-termreceivables and debt investments, are initially measured at fair value, and the relevant transaction costs are charged to the initiallyrecognized amount; the accounts receivable that do not contain any significant financing component and are recognized by theCompany without taking into consideration the significant financing components under the contracts with a term of less than one yearare initially measured at the contractual trading price.
The interest calculated using the effective interest method during the holding period is recognized in the profit or loss for thecurrent period.On recovery or disposal of a financial asset, the difference between the proceeds and the carrying amount of the financial asset isrecognized in profit or loss for the current period.
(2) Financial assets (debt instruments) at fair value through other comprehensive income
Financial assets (debt instruments) at fair value through other comprehensive income, including receivable financing and otherdebt investments, are initially measured at fair value, and the relevant transaction costs are recognized in initially recognized amount.These financial assets are subsequently measured at fair value, and changes in fair value other than the interest calculated using theeffective interest method, impairment loss or gain and profit or loss on exchange are recognized in other comprehensive income.
On derecognition, the cumulative gain or loss previously included in other comprehensive income is removed out from othercomprehensive income and recognized in profit or loss for the current period.
(3) Financial assets (equity instruments) at fair value through other comprehensive income
Financial assets (equity instruments) at fair value through other comprehensive income, including other equity investments, areinitially measured at fair value, and the relevant transaction costs are recognized in initially recognized amount. These financial assetsare subsequently measured at fair value, and changes in fair value are recognized in other comprehensive income. The dividendsreceived are recognized in profit or loss for the current period.
On derecognition, the cumulative gain or loss previously included in other comprehensive income is removed out from othercomprehensive income and included in retained earnings.
(4) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss, including held-for-trading financial assets, derivative financial assets and othernon-current financial assets, are initially measured at fair value, and the relevant transaction costs are included in profit or loss for thecurrent period. These financial assets are subsequently measured at fair value, and changes in fair value are included in profit or lossfor the current period.
(5) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss, including held-for-trading financial liabilities and derivative financialliabilities, are initially measured at fair value, and the relevant transaction costs are recognized in profit or loss for the current period.These financial liabilities are subsequently measured at fair value, and changes in fair value are recognized in profit or loss for thecurrent period.
On derecognition, the difference between their carrying amount and the consideration paid is included in profit or loss for thecurrent period.
(6) Financial liabilities measured at the amortized cost
The financial liabilities measured at the amortized cost, including short-term borrowings, notes payable, accounts payable, otherpayables, long-term borrowings, bonds payable, long-term payables, are initially measured at fair value, and the relevant transactioncosts are charged to the initially recognized amount.
The interest calculated using the effective interest method during the holding period is recognized in the profit or loss for thecurrent period.
On derecognition, the difference between the consideration paid and the carrying amount of these financial liabilities is recognizedin profit or loss for the current period.
3. Termination recognition and transfer recognition of financial assets are based on relevant accounting standards andmeasurement methods
The Company derecognizes a financial asset when one of the following conditions is met:
－ the contractual right to receive cash flows from the financial assets has expired;
－ the financial asset has been transferred and all the risks and rewards of ownership of the financial asset are substantiallytransferred to the transferee; or
－ the financial asset has been transferred, and the Company neither transferred nor retained a substantial portion of all risks andrewards incidental to the ownership of the financial asset, but did not retain control over the financial asset.
If the company modifies or renegotiates a contract with a counterparty, and such modification constitutes a substantivemodification, the original financial asset is derecognized, and a new financial asset is recognized according to the modified terms.
When a financial asset is transferred, if the Company retains substantially all the risks and rewards of ownership of a financialasset, it does not derecognize the financial asset.
When the Company determines whether a transfer of a financial asset satisfies the derecognizing criteria prescribed above, it givesweight to the substance rather than form.
The Company divides a transfer of a financial asset into a transfer of the financial asset in its entirety or a transfer of part of thefinancial asset. For a transfer of a financial asset in its entirety that satisfies the derecognizing criteria, the difference between thefollowing two amounts is recognized in profit or loss for the current period:
(1) the carrying amount of the financial asset transferred; and
(2) the sum of the consideration received from the transfer and (if the financial asset transferred is a financial asset (debt instrument)measured at fair value through other comprehensive income) any cumulative changes in fair value that was originally recognized inowners’ equity.
If part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred financial asset in itsentirety is allocated between the part that continues to be recognized and the part that is derecognized, based on the relative fair valuesof those parts. The difference between the following two amounts is recognized in profit or loss for the current period:
(1) the carrying amount allocated to the part derecognized; and
(2) the sum of the consideration received for the part derecognized and (if the financial asset transferred is a financial asset (debtinstrument) measured at fair value through other comprehensive income) the amount of the part derecognized corresponding to thecumulative changes in fair value that was originally recognized in owners’ equity.
A financial asset that does not qualify for derecognition continues to be recognized, and the consideration received is recognizedas a financial liability.
4. Derecognition of financial liabilities
If the present obligations of a financial liability are discharged in part or whole, the financial liability or any part thereof isderecognized; an agreement between the Company and the creditor to replace the existing financial liability with a new financialliability with substantially different terms is accounted for as an extinguishment of the existing financial liability and the recognitionof a new financial liability.
A substantial modification to the terms of an existing financial liability or any part thereof is accounted for as an extinguishmentof the existing financial liability or any part thereof, and the financial liability with modified terms is recognized as a new financialliability at the same time.
When the Company derecognizes a financial liability or any part thereof, it recognizes the difference between the carrying amountof the financial liability derecognized and the consideration paid (including any non-cash assets transferred or new financial liabilitiesassumed) in profit or loss for the current period.
If the Company repurchases part of a financial liability, it allocates the carrying amount of the financial liability in its entiretybetween the part that continues to be recognized and the part that is derecognized based on the relative fair values of those parts on thedate of the repurchase. The difference between the carrying amount of the financial liability derecognized and the consideration paid(including any non-cash assets transferred or new financial liabilities assumed) is recognized in profit or loss for the current period.
5. Method of determination of the fair value of financial assets and financial liabilities
If there is an active market for a financial instrument, the quoted price in the active market is used to establish the fair value ofthe financial instrument. If there is no active market for a financial instrument, a valuation technique is used to establish the fair valueof the financial instrument. On valuation, the Company adopts the valuation technique which applies to the current circumstances andis supported by sufficient data available and other information, selects the input value consistent with the characteristics of the asset or
liability considered by the market participants in the transaction of the relevant asset or liability, and prioritizes using the relevantobservable input value. The unobservable input value can be used only when the relevant observable input value cannot be obtained orit is impracticable to obtain the relevant observable input value.
6. Test and accounting treatment of impairment of financial tools
The Company estimates the expected credit losses of financial assets measured at amortized cost, financial assets (debt instruments)at fair value through other comprehensive income and financial guarantee contracts on a single or joint basis.
The Company comprehensively considers reasonable and well-founded information about past events, current conditions, andpredictions of future economic conditions as well as the possibility of default to calculate the probability-weighted amount of thepresent value of the difference between cash flows receivable from contracts and cash flows expected to be recovered and include it inthe expected credit loss.
For receivables and contract assets formed by transactions regulated by Enterprise Accounting Standards No. 14 - Revenue,regardless of whether they contain significant financing components, the company always measures their allowance for expected creditlosses equivalent to the amount expected throughout the entire term.
For lease receivables formed by transactions regulated by Enterprise Accounting Standards No. 21 - Leases, the company choosesto measure its allowance for expected credit losses equivalent to the amount expected throughout the entire term.
For other financial instruments, the company evaluates the credit risk of the relevant financial instruments on each balance sheetdate based on changes since initial recognition.
The Company compares the possibility of default at the balance sheet date with the possibility of default upon initial recognition,to determine the relative change in the default risks of financial instrument during the expected lifetime, and assess whether the creditrisk of the financial instruments has increased significantly since initial recognition. If a financial instrument is past due for more than30 days, the Company usually believes that credit risk of the financial instrument has increased significantly, unless there is clearevidence that credit risk of the financial instrument has not increased significantly since initial recognition.
If a financial instrument has low credit risk on the balance sheet date, the Company believes that credit risk of the financialinstrument has not increased significantly since initial recognition.
If the credit risk of a financial instrument has significantly increased since initial recognition, the company measures its allowancefor expected credit losses equivalent to the amount expected throughout the entire term. If the credit risk of a financial instrument hasnot significantly increased since initial recognition, the company measures its allowance for expected credit losses equivalent to theamount expected over the next 12 months. The increase or reversal of allowance for expected credit losses resulting from this isrecognized as impairment losses or gains in the current period's profit or loss. For financial assets (debt instruments) measured at fairvalue with changes recognized in other comprehensive income, the allowance for expected credit losses is recognized in othercomprehensive income, and impairment losses or gains are recognized in the profit or loss for the period without reducing the carryingamount of the financial asset in the balance sheet.
1) The basis for recognizing accounts receivable confirmation combinations is as follows:
| Item | Combination Categories | Basis for determination |
| Accounts receivable | Combination 1: Bank acceptance draft | Acceptance draft types |
| Accounts receivable | Combination 2: Commercial acceptance draft | Acceptance draft types |
Upon recognizing revenue, our company initially recognizes accounts receivable, which are then transferred to settle withcommercial bills. In accordance with the principle of continuous aging calculation, the aging of accounts receivable is traced back tothe corresponding starting date of accounts receivable for aging calculation.
2) The basis for determining the combination of accounts receivable is as follows:
| Item | Combination Categories | Basis for determination |
| Accounts receivable | Combination 1: Individual provision | If there is objective evidence indicating that a financial asset has incurred credit impairment, our company makes an individual provision for impairment on that financial asset. |
| Accounts receivable | Combination 2: Aging combination | Our company refers to historical credit loss experience, combines it with current conditions and forecasts for future economic conditions, and prepares a table comparing the aging of accounts receivable with the expected credit loss rate for the entire duration. This is used to calculate the expected credit loss. |
The company starts calculating the aging of accounts receivable when the conditions for revenue recognition are met and initiallyrecognized. The actual aging period extends from the initial recognition date to the balance sheet date.
3) The basis for determining the combination of other receivables is as follows:
| Item | Combination Categories | Basis for determination |
| Other accounts receivable | Combination 1: Individual provision | If there is objective evidence indicating that a financial asset has incurred credit impairment, our company makes an individual provision for impairment on that financial asset |
| Other accounts receivable | Combination 2: Aging combination | Our company refers to historical credit loss experience, combines it with current conditions and forecasts for future economic conditions, and prepares a table comparing the aging of other receivables with the expected credit loss rate for the entire duration. This is used to calculate the expected credit loss |
The company starts calculating the aging of other receivables when they are initially recorded. The actual aging period extendsfrom the initial recognition date to the balance sheet date.
4) The basis for confirming the combination of accounts receivable financing is as follows:
| Item | Combination Categories | Basis for determination |
| Accounts receivable financing | Combination 1: Bank acceptance draft | Acceptance draft types |
5) Criteria for determining individual provision for bad debt
The company utilizes available reasonable and substantiated forward-looking information to assess the risk of default of financial
instruments at the balance sheet date compared to the risk at the initial recognition date. This assessment involves considering whetherthere have been significant changes in the debtor's operating results, either actual or expected; whether there have been significantadverse changes in regulatory, economic, or technological environments; whether there have been significant changes in the value ofcollateral serving as security for the debt, or in the quality of third-party guarantees or credit enhancements, which are expected toreduce the debtor's economic incentives to repay according to the terms of the contract or affect the probability of default; whetherthere have been significant changes in the debtor's expected performance and repayment behavior, among other factors. Based on thisanalysis, the company determines that credit risk has significantly increased. The company also conducts a comprehensive analysis toassess whether the debtor is experiencing significant financial difficulties, has breached contracts or is in default, or if the debtor'sfinancial difficulties have reduced the asset's liquidity, among other factors, to determine if impairment has occurred. If the company'scustomers or other debtors experience severe financial difficulties, defaults on repayments, and have not provided effective creditenhancements or other safeguards, the company conducts impairment testing separately for them, considering the risk of default andthe expected credit loss rate for the entire duration. A provision for bad debts is then recognized based on the difference between thecarrying amount of the financial asset and the present value of expected future cash flows.The company directly writes down the carrying amount of the financial asset if it no longer reasonably expects to recover all orpart of the contractual cash flows associated with the financial asset.
12. Contract Assets
1. Recognition method and criteria for contract assets
The company recognizes contract assets or contract liabilities on the balance sheet based on the relationship between performanceobligations and customer payments. The right to consideration for goods transferred or services provided to customers (and where thatright is conditional on factors other than the passage of time) is recognized as a contract asset. Contract assets and contract liabilitiesfor the same contract are presented as a net amount. The unconditional right to consideration from customers (based solely on thepassage of time) that the company holds is separately presented as accounts receivable.
2. Method for determining expected credit losses on contract assets and the accounting treatment
The method for determining expected credit losses on contract assets and the accounting treatment thereof are detailed in Note X6 Methods for Testing and Accounting Treatment of Financial Instrument Impairment in this attachment.13 Inventories
1. Classification and cost of inventories
Inventories are classified into: materials in transit, raw materials, revolving materials, goods on hand, products in process, goodssold, work in process - outsourced, contract performance cost, etc.
Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversion and otherexpenditures incurred in bringing the inventories to their present location and condition.
2. Pricing methods of inventories transferred out
The Company delivers inventories at the price calculated using the weighted-average system monthly in arrears.
3. Inventory system
Adopts a perpetual inventory system.
4. Amortization method for low-value consumables and packaging materials
The company's inventory includes low-value consumables, packaging materials, etc. For high-value turnover materials, monthlyamortization is carried out based on the estimated useful life upon issuance; for other low-value consumables, one-time amortizationis carried out upon issuance; packaging materials are amortized using the one-time amortization method upon issuance.
5. Criteria for recognition and provision method of inventory impairment
At the balance sheet date, inventories are measured at the lower of cost or net realizable value. If the cost of inventories is higherthan the net realizable value, a provision for decline in value of inventories is made. Net realizable value is the estimated selling pricein the ordinary course of business less costs expected to be incurred until completion and the estimated costs necessary to make thesale and relevant taxes.
For finished products, goods on hand, materials available for sales and other merchandise inventories available for sales, in theordinary production and operation process, their net realizable value is determined at the estimated selling price of these inventoriesless the estimated costs necessary to make the sale and relevant taxes; and for the inventories that need to be processed, in the ordinaryproduction and operation process, their net realizable value is determined at the estimated selling price of finished products less thecosts to be incurred until completion and the estimated costs necessary to make the sale and relevant taxes. The net realizable value ofthe inventories held to satisfy sales or service contracts is based on the contract price. If the quantity of inventories held is more thanthe quantity ordered in the sales contracts, the net realizable value of the excess portion of inventories is based on general selling prices.
After the provision for decline in value of inventories is made, if the circumstances that previously caused inventories to be writtendown below cost no longer exist so that the net realizable value is higher than the carrying amount of inventories, the reversal is madeto the extent of the amount originally provided for the decline in value of inventories. The amount of the reversal is recognized in profitor loss for the current period.
14. Held-for-sale assets
1. Hold-for-sale
The assets of which carrying amount is recovered mainly through sales (including through exchange of non-monetary assets withcommercial substance) rather than continuous use of non-current assets or disposal groups are classified as the held-for-sale assets.
The Company classifies the non-current assets or disposal groups which meet all the following conditions as the held-for-saleassets:
(1) they can be sold immediately under current conditions according to the practice of sales of such assets or disposal groups insimilar transactions; and
(2) the sale is very likely to happen, that is, the Company has made a resolution on a sale plan and obtained a confirmed purchasecommitment, and such sale is expected to be completed within one year. The sale has been approved by the relevant authority orregulatory department of the Company if it is required to be so approved by the relevant provisions.
2. Termination of operations
Termination of operations is a distinguishable component that meets one of the following conditions and has been disposed of orclassified as held for sale by the company:
(1) The component represents a separate major business or a separate major operating area.
(2) The component is part of a related plan to dispose of a separate major business or a separate major operating area.
(3) The component is a subsidiary acquired solely for resale.
Profit or loss from continuing operations and profit or loss from termination of operations are separately presented in the incomestatement. Impairment losses and reversals, operating losses, and gains from disposal related to termination of operations are reportedas profit or loss from termination of operations. For termination of operations reported in the current period, the company reclassifiesthe information previously reported as profit or loss from continuing operations as profit or loss from termination of operations in thefinancial statements for the current period.
15.Long-term equity investments
1. Judgment criteria of joint control and significant influence
Joint control is the agreed sharing of control over an arrangement, and the relevant activities of such arrangement must be decidedupon the unanimous consent of the parties sharing control. If the Company can exercise joint control over the investee along with otherparties to joint ventures and enjoy rights over net assets of the investee, the investee is a joint venture of the Company.Significant influence is the power to participate in the financial and operating policy decisions of an investee, but is not control orjoint control with other parties over the establishment of those policies. If the Company can have significant influence over the investee,the investee is an associate of the Company.
2. Determination of initial investment cost
(1) Long-term equity investments formed by business combination
In case of a long-term equity investment of a subsidiary acquired through a business combination involving entities under commoncontrol, the initial investment cost of the long-term equity investment is the Company’s share of the carrying amount of the owners’equity of the absorbed party in the consolidated financial statements of the ultimate controller at the date of combination. The differencebetween the initial investment cost of the long-term equity investment and the carrying amount of the consideration paid for thecombination is treated as an adjustment to the equity premium in the capital reserve. In case the equity premium in the capital reserveis not sufficient to absorb the difference, the remaining balance is adjusted against the retained earnings. Where the Company becomescapable of exercising control over an investee under the common control due to additional investments or other reasons, the differencebetween the initial investment cost of the long-term equity investment recognized in the light of above principles and the sum of thecarrying amount of the long-term equity investment prior to combination plus the carrying amount of new consideration paid for furtheracquisition of shares on combination date is adjusted to the equity premium. If the equity premium is not sufficient to absorb thedifference, any excess is adjusted against retained earnings.
In case of a long equity investment acquired through a business combination not involving enterprises under common control, theCompany regards the cost of combination determined on the date of acquisition as the initial investment cost of the long-term equityinvestment. If the Company becomes capable of exercising control over an investee not under common control due to additionalinvestments or other reasons, the initial investment cost is the sum of the carrying amount of the equity investment originally held andthe new investment cost.
(2) Long-term equity investments obtained through forms other than business combination
For a long-term equity investment acquired by paying cash, the initial investment cost is the actual purchase price.
For a long-term equity investment acquired by the issue of equity securities, the initial investment cost is the fair value of equitysecurities issued.
3. Subsequent measurement and determination of profit or loss
(1) Long-term equity investments accounted for using the cost method
The Company accounts for the long-term equity investments of the subsidiaries using the cost method, unless these investmentsmeet the held-for-sale conditions. Except for cash dividends or profit distributions declared but undistributed included in the price orconsideration actually paid on acquisition of investments, the Company recognizes its cash dividends or profit distributions declaredby the investee as investment income in the current period.
(2) Long-term equity investments accounted for using the equity method
The long-term equity investments of associates and joint ventures are accounted for using the equity method. Where the initialinvestment cost of a long-term equity investment exceeds the Company’s interest in the fair values of the investee’s identifiable netassets at the acquisition date, no adjustment is made to the initial investment cost of the long-term equity investment. Where the initialinvestment cost is less than the Company’s interest in the fair values of the investee’s identifiable net assets at the acquisition date, thedifference is charged to profit or loss for the current period, and the cost of the long-term equity investment is adjusted accordingly.
The Company respectively recognizes its share of the net profits or losses and other comprehensive income made by the investee
as investment income and other comprehensive income, and adjusts the carrying amount of the long-term equity investment accordingly.The carrying amount of the long-term equity investment is reduced by the portion of any profit distributions or cash dividends declaredby the investee that is attributed to the Company. The Company adjusts the carrying amount of the long-term equity investment forother changes in owners’ equity of the investee other than net profits or losses, other comprehensive income and profit distributions(“changes in other owners’ equity”), and includes the corresponding adjustment in owners’ equity.
For recognition of its share of the investee’s net profits or losses or other comprehensive income and changes in other owners’equity, the Company recognizes its share of the investee’s net profits and other comprehensive income after making appropriateadjustments based on the fair value of the investee’s identifiable net assets at the date of acquisition in accordance with its accountingpolicies and period.
For unrealized profits or losses resulting from intragroup transactions between the Company and associates or joint ventures, theportion attributable to the Company is eliminated, and based on this, the investment income is recognized, unless the invested or soldassets constitute the business. The impairment loss of assets in the unrealized losses resulting from intragroup transactions between theCompany and the investee is fully recognized.
The Company discontinues recognizing its share of net losses of the associate or joint venture after the carrying amount of thelong-term equity investment together with any long-term interests that in substance form part of the Company’s net investment in theassociate or joint venture are reduced to zero, except to the extent that the Company has incurred obligations to assume additionallosses. Where the associate or joint venture makes net profits subsequently, the Company resumes recognizing its share of those profitsonly after its share of the profits equals the share of losses not recognized.
(3) Disposal of long-term equity investments
On disposal of a long term equity investment, the difference between the proceeds actually received and the carrying amount isrecognized in profit or loss for the current period.
If, on partial disposal of long-term equity investments accounted for using the equity method, the remaining equity is stillaccounted for using the equity method, the portion previously included in other comprehensive income is accounted for on a pro-ratabasis, with the same basis as the relevant assets or liabilities directly disposed of by the investee, and changes in other owners’ equityare transferred to profit or loss for the current period on a pro-rata basis.
When the Company loses joint control or significant influence on the investee due to disposal of equity investments or otherreasons, the original equity investment included in other comprehensive income due to the use of equity method is accounted for onthe same basis as the relevant assets or liabilities directly disposed of by the investee when the equity method discontinues, and thechanges in other owners’ equity are fully transferred to profit or loss for the current period when the equity method discontinues.
Where the Company loses control over the investee due to disposal of partial equity investments, if in preparing separate financialstatements, the Company can exercise joint control or significant influence on the investee by virtue of its remaining equity, theremaining equity switches to the equity method for accounting, and is adjusted as if it is accounted for using the equity method sinceacquisition. Other comprehensive income recognized prior to acquisition of the control on the investee is carried forward proportionallyon the same basis as the investee’s direct disposal of related assets or liabilities, and changes in other owners’ equity recognized usingthe equity method are transferred to profit or loss for the current period on a pro-rata basis; if the Company cannot exercise joint controlor significant influence on the investee by virtue of its remaining equity, the remaining equity is recognized as financial assets, and thedifference between the fair value and the carrying amount on the date when the Company loses control is recognized in profit or lossfor the current period, and other comprehensive income and changes in other owners’ equity recognized prior to acquisition of thecontrol on the investee are fully carried forward.
Where all transactions from disposal of equity investments in a subsidiary through multiple transactions by steps until the loss ofcontrol belong to a single package, the Company accounts for each transaction as a disposal of equity investments in a subsidiary andthe loss of control; however, the difference between the proceeds from each disposal before loss of control and the carrying amount ofthe long-term equity investments corresponding to the equity disposed of is first recognized in other comprehensive income in separatefinancial statements and then transferred to the profit or loss in the period in which the control is lost. Where all transactions do not
belong to a single package, the Company accounts for each transaction respectively.
16. Investment properties
Measurement of investment propertiesMeasured at costDepreciation or amortization methods
The Company’s investment property is property held to earn rentals or for capital appreciation or both, including land use rightsthat have been leased out, land use rights that are held and ready to be transferred after appreciation, and buildings that have beenleased out (including those that are available for rental after being built by the Company itself or completion of development activities,and are being built or in progress for rental in the future).Subsequent costs incurred for an investment property are included in the cost of the investment property when it is probable thatthe associated economic benefits will flow to the Company and the cost of the asset can be measured reliably. Subsequent costs thatfail to meet the recognition criteria above are recognized in profit or loss in the period in which they are incurred.The Company measures the existing investment properties using the cost model. For investment properties measured using costmodel for measurement - the buildings available for rental follow the same depreciation policies as those of the Company’s fixed assets,and land use rights available for rental follow the same amortization policies as those of intangible assets.
17. Fixed assets
(1) Recognition of fixed assets
Fixed assets are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes,and have useful lives more than one accounting year. A fixed asset is recognized only when both of the following conditions are met:
(1) it is probable that economic benefits associated with the fixed asset will flow to the enterprise; and
(2) the cost of fixed assets can be measured reliably.
A fixed asset of the Company is initially measured at its cost, and in determining the cost of a fixed asset, the Company considersthe effect of any expected costs of abandoning the asset at the end of its use.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable that the associatedeconomic benefits will flow to the Company and the cost of the asset can be measured reliably; the carrying amount of the part to bereplaced is derecognized; and all of other subsequent expenditures are recognized in profit or loss in the period in which they areincurred.
(2) Method of depreciation
| Category | Method of depreciation | Estimated useful life (year) | Residual value rate | Annual depreciation rate (%) |
| Buildings | Straight-line method | 20, 30 and 43 | 0, 1, 10 | 2.35-5 |
| Machinery equipment | Straight-line method | 3-15 | 1, 10 | 6-33 |
| Auxiliary production equipment | Straight-line method | 5-10 | 10 | 9-18 |
| Transportation equipment | Straight-line method | 3-5 | 1, 10 | 18-33 |
Mould equipment
| Mould equipment | Straight-line method | 3-10 | 10 | 9-30 |
| Office equipment | Straight-line method | 3-5 | 1, 10 | 18-33 |
| Computer equipment | Straight-line method | 3-10 | 1, 10 | 10-33 |
| Other equipment | Straight-line method | 3-15 | 1, 10 | 6-33 |
The Company provides for depreciation of fixed assets by category using the straight-line method, and determines thedepreciation rate on the category, estimated useful life and estimated net residual value of fixed assets. For fixed assets with theprovision for impairment, the depreciation amount will be determined in the future based on the carrying amount after deduction ofthe provision for impairment and remaining useful life. If a fixed asset has various component parts which have different useful livesor provide benefits to the enterprise in different manners, these component parts are depreciated separately by selecting differentdepreciation rates or methods.The depreciation methods, useful life, residual value rate, and annual depreciation rate for various types of fixed assets are asfollows:
(3) Disposal of fixed assets
A fixed asset is derecognized when it is disposed of or when no future economic benefits are expected to be generated from itsuse or disposal. When a fixed asset is sold, transferred, retired or damaged, the Company recognizes the amount of any proceeds ondisposal net of the carrying amount and related taxes and fee in profit or loss for the current period.
18. Construction in progress
A construction in progress is measured at the actual cost incurred. Actual cost includes construction and installation fees,qualifying borrowing costs and other necessary expenses necessarily incurred for bringing the asset to working condition for itsintended use. The construction in progress is transferred to fixed assets when meeting working conditions for its intended use and theCompany begins to make provision from next month.
The standard and timing for capitalizing construction in progress into fixed assets for our company are as follows:
| Category | Criteria and timing for transferring construction in progress to fixed assets |
| Real estate and buildings | (1) The main construction project and supporting projects have substantially completed. (2) The construction project meets the predetermined design requirements and has been accepted by survey, design, construction, and supervision units. (3) It has passed inspections by external departments such as fire, land, and planning. (4) If the construction project reaches the predetermined usable state but has not yet undergone final settlement, it will be transferred to fixed assets based on the actual construction cost according to the estimated |
Category
| Category | Criteria and timing for transferring construction in progress to fixed assets |
| value from the date it reaches the predetermined usable state. | |
| Machinery and equipment requiring installation and commissioning | (1) Relevant equipment and other supporting facilities have been fully installed. (2) The equipment has been debugged and can maintain normal stable operation for a period of time. (3) Production equipment is capable of producing qualified products steadily for a period of time. (4) The equipment has been accepted by asset management personnel and users. |
19. Borrowing costs
1. Recognition of capitalization of borrowing costs
Borrowing costs incurred by the company that are directly attributable to the acquisition, construction or production of aqualifying asset are capitalized as part of the cost of the relevant asset. The amounts of other borrowing costs incurred are recognizedas an expense in the period in which they are incurred, and recorded into profit or loss for the current period.Qualifying assets are assets (fixed assets, investment property, inventories, etc.) that necessarily take a substantial period of timefor acquisition, construction or production to get ready for their intended use or sale.
2. Capitalization period of borrowing costs
Capitalization period is the period from the date of commencement of capitalization of borrowing costs to the date of cessationof capitalization, excluding any period over which capitalization is suspended.
The capitalization of borrowing costs can commence only when all of the following conditions are satisfied:
(1) expenditures for the asset are being incurred, and such expenditures include those expenditures incurred for the acquisition,construction or production of the qualifying asset that have resulted in payments of cash, transfer of non-cash assets, or the assumptionof interest-bearing liabilities;
(2) borrowing costs are being incurred; and
(3) activities relating to the acquisition, construction or production of the asset that are necessary to prepare the asset for itsintended use or sale have commenced.
When the qualifying asset being acquired, constructed or produced has become ready for its intended use or sale, the capitalizationceases.
3. Period over which capitalization is suspended
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production of a qualifyingasset is interrupted abnormally, when the interruption is for a continuous period of more than 3 months. However, capitalization ofborrowing costs continues when the interruption is a necessary part of the process of preparing that asset for its intended use or sale.The borrowing costs incurred during these periods of interruption are recognized as profit or loss for the current period, and thecapitalization of borrowing costs does not continue until the acquisition, construction or production of that asset is resumed.
4. Calculation methods of rate and amount of capitalization of borrowing cost
Where funds are borrowed under a specific-purpose borrowing for the acquisition, construction or production of a qualifyingasset, the amount of borrowing costs to be capitalized is the actual borrowing costs incurred for the current period less any bankinterest earned from depositing the borrowed funds before being used on the asset or any investment income on the temporaryinvestment of those funds.Where funds are borrowed under general-purpose borrowings and are utilized for the acquisition, construction or production ofa qualifying asset, the Company determines the amount of borrowing costs to be capitalized on such borrowings by multiplying acapitalization rate of the utilized general-purpose borrowings by the weighted average of the excess amounts of cumulativeexpenditures on the asset over and above the amounts of specific-purpose borrowings. The capitalization rate is the weighted averageof the actual interest rates applicable to the general-purpose borrowings.During the capitalization period, exchange differences related to the principal and interest on a specific-purpose borrowingdenominated in foreign currency are capitalized as part of the cost of the qualifying asset. The exchange differences arising fromforeign currency borrowings and interest thereon other than specific-purpose borrowings denominated in foreign currency arerecognized in profit or loss for the current period.
20. Intangible assets
(1) Service life of assets and its determination basis, estimation, amortization method, or review procedures
1. Pricing methods of intangible assets
(1) The Company initially measures an intangible asset at cost of acquisition;
The cost of a separately acquired intangible asset comprises its purchase price, related taxes and any directly attributableexpenditure for preparing the asset for its intended use.
(2) Subsequent measurement
The Company analyzes and assesses the useful life of an intangible asset on its acquisition.
A finite-lived intangible asset is amortized during the period over which the asset generates economic benefits for the enterprise;an intangible asset is regarded as having an indefinite useful life when there is no foreseeable limit to the period over which the assetis expected to generate economic benefits for the enterprise, and is not be amortized.
2. Estimated useful lives of intangible assets with finite life
| Item | Estimated useful life (year) | Amortization method | Residual value rate | Basis |
| Software | 3-10 | Straight-line method | None | Estimated period of benefit |
Land use right
| Land use right | 50 | Straight-line method | None | Certificate of land use rights |
| Patent right | 10 | Straight-line method | None | Right term |
| Non-patent technology | 10 | Straight-line method | None | Estimated period of benefit |
| Others | 6-18 | Straight-line method | None | Estimated period of benefit |
3. Basis for judgement of an intangible asset with indefinite useful life and procedures for review of useful life
The Company reviews the useful life of the indefinite intangible assets at the end of each period.
(2) Scope of capitalization for research and development (R&D) expenses and related accounting treatmentmethods.
1. The scope of capitalization for research and development (R&D) expenses includes personnel salaries related to R&D activities,materials consumed, related depreciation and amortization expenses, utilities, and other related expenses incurred during the R&Dprocess.
2. Specific criteria for an internal research and development project that are classified into the research phase and the developmentphaseExpenditure on an internal research and development project is classified into expenditure on the research phase and expenditureon the development phase.Research phase: The company considers preparatory activities for further development activities as the research phase andexpenses related to intangible asset research phase are recognized in the current period's profit or loss when incurred.
Development Phase: Activities conducted after completing the research phase are considered as the development phase.
3. Specific criteria of expenditure on the development phase qualifying for capitalization
Expenditure on the research phase is recognized in profit or loss for the period in which it is incurred. Expenditure on thedevelopment phase is recognized as an intangible asset only when the Company demonstrates that all of the following conditions aremet; otherwise, it is recognized in profit or loss for the current period:
(1) the technical feasibility of completing the intangible asset so that it will be available for use or sale;
(2) the intention to complete the intangible asset and use or sell it;
(3) how the intangible asset will generate economic benefits. Among other things, the Company can demonstrate the existenceof a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of theintangible asset;
(4) the availability of adequate technical, financial and other resources to complete the development of and the ability to use orsell the intangible asset; and
(5) its ability to measure reliably the expenditure attributable to the intangible asset during its development phase.
If the Company fails to discriminate between expenditure on the research phase and expenditure on the development phase, allexpenditures on research and development are recognized in the profit or loss for the current period.
21. Impairment of long-term assets
Where any indication exists that long-term equity investments, investment properties measured at the cost model, fixed assets,construction in progress, right-of-use assets, intangible assets with finite useful life, oil and gas assets and other long-term assets maybe impaired at the balance sheet date, the Company performs an impairment test thereon. If the result of the impairment test showsthat the recoverable amount of an asset is lower than its carrying amount, the provision for impairment is made for the difference andthe difference is included in the impairment loss. The recoverable amount of an asset is the higher of its fair value less disposal costsor the present value of the future cash flows expected to be derived from the asset. The provision for impairment of assets is calculatedand recognized for an individual asset, and if it is not possible to estimate the recoverable amount of the individual asset, the Companydetermines the recoverable amount of the asset group to which the asset belongs. An asset group is the smallest identifiable group ofassets that generates cash inflows.
Goodwill generated in a business combination, indefinite-lived intangible assets and intangible assets which do not meet theworking conditions for its use are tested for impairment at least at the end of each year, irrespective of whether there is any indicationthat the asset may be impaired.
For the purpose of impairment testing of the Company, the carrying amount of goodwill generated in a business combination is,from the acquisition date, allocated on a reasonable basis to each of the related asset groups. If it is not possible to allocate to therelated asset groups, it is allocated to each of the related sets of asset groups. Each of the related asset groups or sets of asset groups
shall be an asset group or a set of asset groups that is able to benefit from the synergies of the business combination.In testing an asset group or a set of asset groups to which goodwill has been allocated for impairment, there may be an indicationthat a related asset group or set of asset groups may be impaired. In such circumstances, the Company firstly tests the asset group orset of asset groups excluding the amount of goodwill allocated for impairment, calculates its recoverable amount, compares therecoverable amount with the related carrying amount and recognizes any impairment loss. Then, the Company tests the asset groupor set of asset groups to which goodwill has been allocated for impairment and compares its carrying amount and recoverable amount.When the recoverable amount is less than its carrying amount, the amount of impairment loss first reduces the carrying amount of anygoodwill allocated to the asset group or set of asset groups, and then reduces the carrying amount of other assets (other than goodwill)within the asset group or set of asset groups, pro rata on the basis of the carrying amount of each asset.Once an impairment loss on the asset above is recognized, it will not be reversed in a subsequent period.
22. Long-term deferred expenses
Long-term deferred expenses mean those that have been incurred but should be amortized in the current period and the subsequentperiods of more than one year.
The amortization period and method of expenses are shown as follows:
| Item | Amortization method | Amortization period |
Housing decoration fees
| Housing decoration fees | Straight-line method | Period of benefit |
| Others | Straight-line method | Period of benefit |
23. Contract liabilities
The Company presents the contract assets or liabilities in the balance sheet based on the relationship between performanceobligations and customer payments. The Company presents the obligations to transfer goods or offer services to customers as theconsideration received or receivable from customers as the contract liabilities. The Company lists the contract assets and liabilitiesunder the same contract as net amount.
24. Employee benefits
(1) Accounting treatment of short-term benefits
The Company recognizes the short-term benefits actually incurred during the accounting period when the employees serve theCompany as liabilities, and includes the same as part of the cost of related assets or in profit or loss for the current period.
The employee benefits corresponding to payments of social security contributions and housing funds for employees by theCompany and the appropriation to labor union funds and employee education fees are determined on such provision basis and at suchprovision rate as stipulated during the period when the employees provide services for the Company.
The staff welfare incurred by the Company is stated as the amount actually incurred and recorded into profit or loss for the currentperiod or cost of related assets; non-monetary benefits are measured at fair value.
(2) Accounting treatment of post-employment benefits
(1) Defined contribution plans
The Company pays basic endowment insurance and unemployment insurance for employees pursuant to the relevant regulationsof the local government. The amounts payable therefor, during the accounting period when the employees serve the Company, are
calculated according to the payment base and proportion stipulated by the local regulations, which are recognized in profit or loss forthe current period or the cost of related assets as liabilities.
(3) Accounting treatment of termination benefits
The Company recognizes the employment remuneration liabilities generated by termination benefits and records them into theprofit or loss for the current period on the earlier of: when the Company cannot unilaterally withdraw the severance benefits providedas a result of the labor relationship termination plan or layoff proposal, or when it recognizes the costs or expenses related to therestructuring of the severance benefits payment.
25. Provisions
The Company recognizes an obligation related to a contingency as a provision when all of the following conditions are satisfied:
(1) the obligation is a present obligation of the Company;
(2) it is probable that an outflow of economic benefits from the Company will be required to settle the obligation; and
(3) the amount of the obligation can be measured reliably.
Provisions are initially measured at the best estimate of the expenditure required to settle the related present obligation.
Factors pertaining to a contingency such as the risks, uncertainties and time value of money are taken into account as a wholewhen the Company reaches the best estimate. Where the effect of the time value of money is material, the best estimate is determinedby discounting the related future cash outflows.
Where there is a continuous range of the expenditure required, and each possible outcome in that range is as likely as any other,the best estimate is the mid-point of that range. Under any other circumstances, the best estimate is accounted for as follows:
? where the contingency involves a single item, the best estimate is the most likely amount; or
? where the contingency involves a large population of items, the best estimate is determined by weighting all possible outcomesby their associated probabilities.
Where all or some of the expenditure required to settle an estimated liability is expected to be reimbursed by a third party, thereimbursement is recognized as a separate asset when it is virtually certain that reimbursement will be received. The amountrecognized for the reimbursement does not exceed the carrying amount of the estimated liability.
The Company reviews the carrying amount of a provision at the balance sheet date. Where there is clear evidence that the carryingamount of a provision does not reflect the current best estimate, the carrying amount is adjusted to the current best estimate.
26. Share-based payment
A share-based payment of the Company is a transaction in which the Company grants equity instruments, or incurs liabilities foramounts that are determined based on the price of equity instruments, in return for services rendered by employees or other parties. Ashare-based payment of the Company is classified as either an equity-settled share-based payment or a cash-settled share-basedpayment.
1. Equity-settled share-based payment and equity instruments
An equity-settled share-based payment in exchange for services received from the employees is measured at the fair value ofequity instruments granted to the employees. If the right under the share-based payment vests immediately following the grant, theCompany, on grant date, recognizes related costs or expenses at an amount equal to the fair value of the equity instruments, with acorresponding increase in capital reserve. If the rights under the share-based payment do not vest until the completion of services fora vesting period, or until the achievement of a specified performance condition, at each balance sheet date during the vesting period,the Company makes the best estimate of the number of equity instruments expected to vest, and based on this, recognizes the servicesreceived in the current period in the related costs or expenses at an amount equal to the fair value on the grant date, with a
corresponding increase in capital reserve.If the terms of equity-settled share-based payment are modified, the services received are recognized at least pursuant to theunmodified terms. In addition, any modifications that increase the fair value of the equity instruments, or changes that are beneficialto employees on the modification date are recognized as an increase in services.If the granted equity instrument is cancelled within the vesting period, the Company treats the cancellation of equity instrumentgranted as the accelerated exercise, and the amount to be recognized during the remaining vesting period is immediately charged toprofit or loss for the current period, and the capital reserve is recognized at the same time. However, if a new equity instrument isgranted, and on the grant date thereof, is deemed to replace the cancelled equity instrument, the substitute equity instrument grantedis accounted for pursuant to the terms and conditions for accounting for original equity instrument.
27. Revenue
Disclosure of revenue recognition and measurement accounting policies adopted by business type.The revenue is recognized at the time when the Company has discharged the performance obligations in the contract, that is,when the customer obtains the control of the related goods or services. Obtainment of the control of the related goods or servicesmeans the ability to direct the use of such goods or services and obtain substantially all of economic benefits from them.If the contract has two or more performance obligations, the Company allocates the transaction price to each individualperformance obligation on the inception of the contract by reference to relative standalone selling prices of goods or services promisedthereby. The Company measures revenue based on the transaction price allocated to each individual performance obligation.The transaction price is the amount of consideration to which the Company is entitled arising from the transfer of goods orservices to the customer, excluding the amount collected on behalf of a third party and expected to be returned to the customer. TheCompany determines the transaction price with reference to the contract terms and in conjunction with past customary practices, andin doing so, considers variable consideration, significant financing components in the contract, non-cash consideration, considerationpayable to customers and other factors. The Company determines the transaction price including variable consideration to the extentthat it is highly probable that its inclusion will not result in a significant revenue reversal of accumulatively recognized revenue in thefuture when the uncertainty has been subsequently resolved. If there is a significant financing component in the contract, the Companydetermines the transaction price based on the presumed amount payable in cash when the customer obtains the control of goods orservices, and amortizes the differences between the transaction price and the contract consideration using the actual interest methodwithin the term of the contract.
When meeting one of the following criteria, it belongs to the obligation performed over time, otherwise it constitutes theobligation performed at a point in time:
? the customer obtains and consumes the economic benefits generated by the Company’s performance when the Companyperforms the contract;
? the customer can control the products in progress in the performance of the contract by the Company; or
? the products produced in the process of the Company’s performance have irreplaceable uses, and the Company has the rightto collect payment for the cumulative performance that has been completed up to date throughout the term of the contract.
For the obligation performed over time, the Company recognizes the revenue based on the performance progress over time,unless the performance progress cannot be reasonably determined. The Company determines the progress of performance obligationby taking the nature of goods or services and using the output/input method. When the performance progress cannot be reasonablydetermined, and the costs incurred are expected to be recoverable, the Company recognizes the revenue to the extent of costs incurreduntil the performance progress can be reasonably determined.
For the obligation performed at a point in time, the Company recognizes the revenue at the point in time when the customerobtains the control of the related goods or services. When judging whether the customer has obtained the control of goods or services,the Company considers the following signs:
? the Company has the current right to receive payment for such goods or services, that is, the customer has the currentobligation to make payment for such goods or services;
? the Company has transferred the legal ownership of such goods to the customer, that is, the customer has the legal ownershipof such goods;
? the Company has transferred such goods to the customer physically, that is, the customer has taken possession of suchgoods physically;
? the Company has transferred major risks and rewards of ownership of such goods to the customer, that is, the customer hasobtained major risks and rewards of ownership of such goods; and
? the customer has accepted such goods or services.
The company determines its role as a principal or agent based on whether it has control over the goods or services beforetransferring them to customers. If the company can control the goods or services before transferring them to customers, it acts as aprincipal and recognizes revenue based on the total amount received or receivable. Otherwise, if the company acts as an agent, itrecognizes revenue based on the amount of commission or fees expected to be entitled to.
Different revenue recognition methods and measurement methods are applied for similar businesses with different operatingmodels.
The Company organizes the production according to the sales contracts signed with or the orders placed by customers, andidentifies the following models based on different geographical locations of customers and inventory management methods:
(1) General sales
For domestic sales, the Company ships goods to the delivery location designated by a customer, and recognizes the revenue afterthe customer has signed the receipt of the products; and for foreign sales, the goods are delivered according to specific trade terms,and the revenue is recognized at a point in time when the control is transferred.
(2) Supplier management inventory
Under this model, the Company ships the goods to the designated warehouse, the customer picks up the goods from the warehouse,and the revenue is recognized at a point in time when the control is transferred.
28. Contract costs
Contract costs include contract performance cost and contract acquisition costs.The cost incurred by the Company to perform a contract is not be governed by the standards on inventories, fixed assets orintangible assets, and if meeting the following criteria, is recognized as an asset as the contract performance cost:
? such cost is directly related to an existing or expected contract;? such cost increases the Company’s future resources for fulfilling its performance obligations; and? such cost is expected to be recovered.If the incremental cost incurred by the Company to obtain a contract is expected to be recovered, it is recognized as an asset asthe cost for contract acquisition.The Company amortizes the asset related to the contract cost on the same basis as the recognition of the revenue of the goods orservices related to the asset; provided that if the cost for contract acquisition is amortized for not more than one year, the Companyincludes it into the profit or loss for the current period in which it is incurred.If the carrying amount of the asset related to the contract cost is higher than the difference between the following two amounts,the Company makes a provision for impairment of the excess and recognizes it as an impairment loss for the asset:
1. the remaining consideration expected to be obtained due to the transfer of the goods or services related to the asset; and
2. the cost to be incurred due to the transfer of the relevant goods or services.
If the impairment factors for prior periods have changed afterwards so that the above difference is higher than the carrying amount ofthe asset, the Company reverses a provision for impairment originally made and includes it in the profit or loss for the current period,
provided that the carrying amount after reverse should not exceed the carrying amount the asset would have reached on the date ofreverse had the provision for impairment been not made.
29. Government grants
1. Category
Government grants are monetary assets or non-monetary assets from the government to the Company at no consideration.Government grants are classified into government grants related to assets and government grants related to income.
Government grants related to assets are government grants whose primary condition is that the Company should purchase,construct or otherwise acquire long-term assets. Government grants related to income are government grants other than those relatedto assets.
The specific standard based on which the Company classifies a grant as a government grant related to assets is that: the grantobtained by the Company is used to purchase, construct or otherwise acquire long-term assets.
The specific standard based on which the Company classifies a grant as a government grant related to income is that: governmentgrants related to income are government grants other than those related to assets.
When classifying a grant whose subsidy object is not clearly specified in the government documents as a government grantrelated to assets or a government grant related to income, the Company judges whether the grant is used to purchase, construct orotherwise acquire long-term assets.
2. Recognition time point
When the Company actually receives the government grant, a government grant related to assets of the Company is recognized,and since the long-term assets are available for use, the Company equally amortizes the deferred income based on the estimated usefullife of long-term assets and then transfers the same to the profit or loss for the current period.
When the Company actually receives the government grant, a government grant related to income of the Company is recognized,and the Company recognizes it in the non-operating income or other income over the periods in which the related costs are recognizedif the grant is a compensation for related expenses or losses to be incurred by the Company in subsequent periods, and directlyrecognizes it in the non-operating income or other income for the current period on acquisition if the grant is a compensation forrelated expenses or losses incurred by the Company. The government grant is recognized when the Company meets the conditionsattaching to the government grant and can receive the government grant.
3. Accounting treatment
The government grants related to assets are offset against the carrying amount of the related assets or recognized as deferredincome. If a grant is recognized as deferred income, it is charged to profit or loss for the current period in a reasonable and systematicmanner within the useful life of related assets (the grant related to the daily activities of the Company is recognized in other income,otherwise it is recognized in non-operating income);
The government grant related to income which is a compensation for related expenses or losses to be incurred by the Companyin subsequent periods is recognized as the deferred income and charged to the profit or loss over the period when related costs orlosses are recognized (the grant related to the daily activities of the Company is recognized in other income, otherwise it is recognizedin non-operating income) or offset against related costs or losses; and the government grant related to income which is a compensationfor related expenses or losses incurred by the Company is directly recognized in profit or loss for the current period (the grant relatedto the daily activities of the Company is recognized in other income, otherwise it is recognized in non-operating income) or offsetagainst related costs or losses.
The policy-related preferential loan interest discounts obtained by the Company are accounted for separately according to thefollowing two circumstances:
(1) If the finance department allocates the interest discount funds to the lending bank, and then the lending bank offers a loan tothe Company at the policy-based preferential interest rate, the Company recognizes the loan amount actually received as the recorded
amount of the loan, and calculates the borrowing costs according to the loan principal and such policy-based preferential interest rate.
(2) If the finance department directly allocates the interest discount funds to the Company, the Company offsets the correspondinginterest subsidy against the related borrowing costs.
30. Deferred tax assets/deferred tax liabilities
Income tax includes current and deferred tax. Except for the income tax arising from business combinations and transactions orevents recognized directly in owners’ equity (including other comprehensive income), the Company recognizes current tax anddeferred tax in profit or loss for the current period.
The deferred tax assets and deferred tax liabilities are calculated and recognized based on the difference (temporary difference)between the tax base of assets and liabilities and the carrying amount of assets and liabilities.
A deferred tax asset is recognized for the deductible temporary difference to the extent that it is probable that future taxableincome amounts will be available against which the deductible temporary difference can be utilized. A deferred tax asset is recognizedfor the carryforward of unused deductible losses and tax credits to the extent that it is probable that future taxable income amountswill be available against which the deductible losses and tax credits can be utilized.
A deferred tax liability is recognized for taxable temporary difference, except for special circumstances.
Special circumstances under which the deferred tax assets or deferred tax liabilities are not recognized for the taxable temporarydifference include:
? the initial recognition of goodwill; and
? Transactions or events that neither constitute business combinations nor affect accounting profits and taxable income (ordeductible losses) at the time of occurrence, and where the initial recognition of assets and liabilities does not result in the creation oftemporary taxable differences and deductible temporary differences.
A deferred tax liability is recognized for the taxable temporary difference related to investments in subsidiaries, associates andjoint ventures, unless the Company is able to control the timing of the reversal of the temporary difference and it is probable that thetemporary difference will not reverse in the foreseeable future. A deferred tax asset is recognized for the deductible temporarydifference related to investments in subsidiaries, associates and joint ventures when it is probable that the temporary difference willreverse in the foreseeable future and taxable income amounts will be available in the future against which the deductible temporarydifference can be utilized.
At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to applyto the period when the asset is realized or the liability is settled, according to the requirements of tax laws.
The Company reviews the carrying amount of the deferred tax assets at the balance sheet date. The Company reduces the carryingamount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable income amounts will be available infuture periods to allow the benefit of the deferred tax asset to be utilized. Any such reduction in amount is reversed to the extent thatit becomes probable that sufficient taxable income amounts will be available.
The current tax assets and current tax liabilities are offset and presented on a net basis when the Company has the statutory rightto settle on a net basis, and intends to settle on a net basis or to obtain assets and settle liabilities simultaneously.
At the balance sheet date, deferred tax assets and deferred tax liabilities are offset and presented on a net basis when both of thefollowing conditions are satisfied:
? the taxpayer has the statutory right to settle the current tax assets and current tax liabilities on a net basis; and
? the deferred tax assets and deferred tax liabilities are related to income taxes levied by the same tax authority on the sametaxpayer or different taxpayers, provided that during the period in which each material deferred tax asset and liability will be reversed,the taxpayer involved intends to settle the current tax assets and liabilities on a net basis or obtain assets and settle liabilitiessimultaneously.
31. Leases
(1) Accounting treatment method for lessees leasing
The term “lease” refers to an agreement whereby the lessor conveys to the lessee the right to use an asset for consideration in anagreed period of time. The Company shall assess whether a contract is a lease contract or contains a lease at the commencement dateof the contract, which can be identified if one party to the contract conveys the right to use one or more identified assets for exchangeof consideration in an agreed period of time.
If a contract contains several individual leases, the Company will split the contract and account for each individual lease separately.If a contract contains both lease and non-lease components, the lessee and the lessor will separate the lease and non-lease components.
1. The Company as a lessee
(1) Right-of-use assets
At the commencement date of the lease, the Company recognizes right-of-use assets for leases excluding short-term leases andleases of low-value assets. The right-of-use assets are initially measured at cost comprising the following:
the amount of the initial measurement of lease liability;
any lease payments made at or before the commencement date less any lease incentives received (if any);
any initial direct costs incurred to the Company; and
costs expected to be incurred to the Company for disassembly and removal of leased assets, restoration of the site where theleased asset is located, or recovery of the leased asset to the condition agreed upon under the terms of the lease, excluding costsincurred to produce inventories.
The right-of-use assets are depreciated by using a straight-line method subsequently. A leased asset is depreciated over itsremaining useful life if the ownership of this leased asset can be reasonably obtained at the maturity date of the lease term, otherwise,the leased asset is depreciated over the shorter of its remaining useful life or the lease term.
The Company determines whether the right-of-use assets are impaired and accounts for the identified impairment losses inaccordance with the principles stated in Note “III. (20) Impairment of long-term assets”.
(2) Lease liabilities
At the commencement date of the lease, the Company recognizes lease liabilities for leases excluding short-term leases and leasesof low-value assets. The lease liabilities are initially measured at the present value of the outstanding lease payments including:
fixed payments (including in-substance fixed payments), less any lease incentives receivable (if any);
variable lease payments that are based on an index or a rate;
amounts expected to be payable by the Company for the guaranteed residual value;
the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and
payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, theCompany’s incremental borrowing rate is applied.
Interest expenses incurred to the lease liabilities over the term of the relevant lease are calculated by the Company based on fixedperiodic interest rate, and recognized in the current profit or loss or the cost of the related assets.
Variable lease payments excluded from the measurement of lease liabilities are charged to profit or loss in the period when theyare incurred or included in cost of related assets.
After the commencement date of the lease term, the Company will re-measure the lease liabilities and adjust relevant right-of-use assets in one of the following cases, and charge the difference to the current profit or loss if the carrying amount of the right-of-use assets is decreased to zero but that of the lease liabilities needs to be deducted further:
When there is a change in the assessment of a purchase option, lease renewal option or termination option, or the actual exerciseof the aforementioned options is not consistent with the original assessment, the Company will re-measure the lease liabilities at the
present value of the modified lease payments discounted by using the revised discount rate; or
When there is a change in the in-substance fixed payments, the expected payable for the guaranteed residual value, or the indexor rate used to determine the lease payments, the Company will re-measure the lease liabilities at the present value of the modifiedlease payments discounted by using the original discount rate. However, if the change in the lease payments is caused by the fluctuationof the floating interest, the present value shall be discounted by using the revised discount rate.
(3) Short-term leases and leases of low-value assets
The Company chooses not to recognize the right-of-use assets and lease liabilities for short-term leases and leases of low-valueassets, and recognize in the current profit or loss or the cost of the related assets payments associated with short-term leases and leasesof low-value assets on a straight-line basis over the term of the relevant lease. Short-term leases are leases with a lease term of 12months or less without a purchase option at the commencement date of leases. Leases of low-value assets are leases for which thesingle leased asset is of low value when it is brand new. The company classifies leases for individual lease assets with a fair value ofno more than 40,000 yuan when new as low-value asset leases. Lease of an asset that is sub-leased or that is expected to be sub-leasedby the Company is not included in the lease of low-value assets.
(4) Lease modification
The Company accounts for a lease modification as a separate lease if both of the following conditions exist:
The modification has increased the scope of the lease by adding the right to use one or more leased assets; and
The consideration for the lease increases equals to the standalone price for the increase in scope of lease and any appropriateadjustments to that standalone price to reflect the circumstances of the particular contract.
For a modification that is not accounted for as a separate lease, at the effective date of the modification, the Company will allocatethe consideration in the modified contract, determine the lease term of the modified lease and re-measure the lease liabilities at thepresent value of the modified lease payments discounted by using the revised discount rate.
For modifications that decrease the scope of the lease or shorten the lease term, the Company decreases the carrying amount ofthe right-of-use asset accordingly, and recognizes a gain or loss arising from the partial or full termination of the lease into the currentprofit or loss. For other modifications resulting to a re-measurement of lease liabilities, the Company makes a correspondingadjustment to the carrying amount of right-of-use assets.
2. Accounting treatment method for lessors leasing
At the commencement date of the lease, the Company classifies leases as finance leases and operating leases. Finance leases referto the leases to which the Company has transferred substantially all the risks and rewards of ownership of the leased assets regardlesswhether the ownership has transferred or not. All other leases are classified as operating leases. The Company, when acting as a sub-lease lessor, classifies the sub-leases based on the right-of-use assets arising from the original leases.
(1) Accounting treatment for operating lease
Rent receipts from operating lease are recognized as rental income on a straight-line basis over the term of the relevant lease.Initial direct costs related to operating lease are capitalized when incurred, and are allocated to profit or loss on the same basis asrental income over the lease term. Variable lease payments not included in the rent receipts are recognized in profit or loss whenincurred actually. An operating lease, if modified, is accounted for as a new lease from the effective date of the modification, withreceipts in advance or rent receivables related to the lease before the modification recognized as the rent receipts of the new lease.
(2) Accounting treatment for finance lease
At the commencement date of the lease, the Company recognizes finance lease receivables and derecognizes assets held underfinance leases. Lease receivables are presented at an amount equal to the net investment in the lease for the initial measurement. Thenet investment in the lease is the sum of any unguaranteed residual value and the present value of the rent receipts not received yet asof the commencement date of the lease discounted at the interest rate implicit in the lease.
Interest incomes over the term of the relevant lease are calculated and recognized by the Company based on fixed periodic interestrate. The Company accounts for derecognition and impairment of finance lease receivables in accordance with Note “III. (10) Financialinstruments”.
Variable lease payments that are not included in the measurement of the net investment in the lease are recognized in profit orloss when incurred actually.
The Company accounts for a finance lease modification as a separate lease if both of the following conditions exist:
● The modification has increased the scope of the lease by adding the right to use one or more leased assets; and
● The consideration for the lease increases equals to the standalone price for the increase in scope of lease and any appropriateadjustments to that standalone price to reflect the circumstances of the particular contract.
For a modification to a finance lease that is not accounted for as a separate lease, the Company accounts for the modification asfollows:
● if the lease would have been classified as an operating lease had the modification been in effect at the commencement date ofthe lease, the Company accounts for the lease modification as a new lease from the effective date of the modification, and measuresthe carrying amount of the leased asset as the net investment in the lease immediately before the effective date of the lease modification;or
● if the lease would have been classified as a finance lease had the modification been in effect at the commencement date of thelease, the Company accounts for the lease modification in accordance with the requirements in Note “III. (10) Financial instruments- Policies on the contract modifications or re-negotiation”.
Sale and leaseback transactions
The Company assesses and determines whether the transfer of an asset in the sale and leaseback transactions is accounted for asa sale of that asset pursuant to the principles stated in Note “III. (26) Revenue”.
(1) The Company as a lessee
If the transfer of an asset in the sale and leaseback transactions satisfies the requirements to be accounted for as a sale of the asset,the Company, as a lessee, measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amountof the asset that relates to the right of use retained, and recognizes only the amount of any gain or loss that relates to the rightstransferred to the lessor accordingly.
If the transfer of an asset in the sale and leaseback transactions does not satisfy the requirements to be accounted for as a sale ofthe asset, the Company, as a lessee, continues to recognize the transferred asset and a financial liability equal to the transfer proceeds.Please refer to Note “III. (10) Financial instruments” for accounting treatment of the financial liability.
(2) The Company as a lessor
If the transfer of an asset in the sale and leaseback transactions satisfies the requirements to be accounted for as a sale of the asset,the Company, as a lessor, accounts for the purchase of the asset and for the lease subject to the above policies stated in “2. TheCompany as a lessor”; and if the transfer of an asset in the sale and leaseback transactions does not satisfy the requirements to beaccounted for as a sale of the asset, the Company, as a lessor, does not recognize the transferred asset and instead, recognizes a financialasset equal to the transfer proceeds. Please refer to Note “III. (10) Financial instruments” for accounting treatment of the financialasset.
32. Other significant accounting policies and accounting estimates
None
33. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
? Applicable □ N/A
In RMB
Content and reasons for changes in
accounting policies.
| Content and reasons for changes in accounting policies. | Names of significant affected items in the financial statements. | Amount of impact |
1. Significant Accounting Policy Change
(1) Implementation of Accounting Standards Interpretation No. 16 Accounting Treatment for Deferred Income Tax Exemption onInitial Recognition Arising from Single TransactionsOn November 30, 2022, the Ministry of Finance issued the Notice on Printing and Issuing the Interpretation No. 16 of the AccountingStandards for Business Enterprises (No. 31 [2022] of the Ministry of Finance). The provision regarding the accounting treatment fordeferred income tax exemption on initial recognition arising from single transactions, as outlined in Accounting StandardsInterpretation No. 16, came into effect on January 1, 2023.Interpretation No. 16 provides that the provisions of the Accounting Standards for Business Enterprises No. 18 - Income Tax on theexemption from the initial recognition of deferred income tax liabilities and deferred income tax assets shall not apply to a singletransaction that is not a business combination, that does not affect accounting profits or the amount of taxable income (or deductibleloss) upon the occurrence of a transaction, and in which the initially recognized assets and liabilities result in an equal amount of taxabletemporary differences and deductible temporary differences (including lease transactions in which lease liabilities are initiallyrecognized by the lessee on the lease inception date and included in the right-of-use assets, and transactions in which estimated liabilitiesare recognized and included in the relevant asset costs due to the disposal obligations of fixed assets, among others, hereinafter referredto as “single transactions to which this Interpretation applies”). As for the taxable temporary differences and deductible temporarydifferences arising from the initial recognition of assets and liabilities in a transaction, the enterprise shall, in accordance with theAccounting Standards for Business Enterprises No. 18 - Income Tax and other relevant provisions, respectively recognize thecorresponding deferred income tax liabilities and deferred income tax assets upon the occurrence of the transaction.
For a single transaction to which this Interpretation applies and which occurs from the beginning of the earliest period ofpresentation of financial statements when this Interpretation is implemented for the first time to the effective date of this Interpretation,and if taxable temporary differences and deductible temporary differences arise from the lease liabilities and right-of-use assetsrecognized as a result of a single transaction to which this Interpretation applies as well as the recognized estimated liabilities andcorresponding assets relating to disposal obligations at the beginning of the earliest period of presentation of financial statements whenthis Interpretation is implemented for the first time, the enterprise shall make adjustments in accordance with the provisions of thisInterpretation.As the company had already separately recognized deferred tax assets and deferred tax liabilities for lease liabilities and right-of-use assets in accordance with the new leasing standard, the implementation of Interpretation No. 16 did not have a significant impacton the company's financial position and operating results.
(2) Changes in significant accounting estimates
?Applicable □N/A
| Content and reasons for changes in accounting policies. | Names of significant affected items in the financial statements. | Effective date of application | The effective date of application. |
During this reporting period, there were no significant changes in accounting estimates for the company.
34. Key accounting estimates and judgments
In the application of accounting policies, the company, due to the inherent uncertainties in its operations, needs to make judgments,estimates, and assumptions regarding the measurement of items in the financial statements that cannot be accurately quantified.
These judgments, estimates, and assumptions are based on the company's management's historical experience and other relevantfactors. They affect the reported amounts of income, expenses, assets, and liabilities, as well as disclosures of contingent liabilities atthe balance sheet date. However, the actual results resulting from the uncertainty of these estimates may differ from the companymanagement's current estimates, leading to significant adjustments to the carrying amounts of affected assets or liabilities in thefuture.The company periodically reviews these judgments, estimates, and assumptions on a going concern basis. Changes in accountingestimates affect only the period of change, and their impact is recognized in the period of change. If they affect both the currentperiod and future periods, their impact is recognized in both the period of change and future periods.At the balance sheet date, the company needs to make judgments, estimates, and assumptions in the following significant areas of thefinancial statements:
(1) Revenue Recognition
As described in Note 3, (26) Revenue, the company's revenue recognition involves the following significant accounting judgmentsand estimates: identifying customer contracts; estimating the collectability of consideration from customers for goods transferred;identifying performance obligations in contracts; estimating variable consideration in contracts and the amount of cumulativerevenue recognized to date that is likely to be reversed when related uncertainties are resolved; determining whether significantfinancing components exist in contracts; estimating the standalone selling price of each distinct performance obligation in contracts;determining whether performance obligations are satisfied over time or at a point in time; determining progress towards satisfactionof performance obligations, etc.The company primarily relies on past experience and work to make these judgments, and these significant judgments and estimatechanges may impact revenue, cost of goods sold, and income for the period, as well as the period's financial results, and mayconstitute significant impacts.
(2) Leasing
1. Lease Recognition
When determining whether a contract is a lease or contains a lease, the company evaluates whether there is an identified asset overwhich the customer has control for a certain period. In this assessment, consideration is given to the nature of the asset, substantivesubstitution rights, and whether the customer has the right to obtain almost all of the economic benefits generated by using the assetduring that period and can direct the use of the asset.
2. Lease Classification
As a lessor, the company classifies leases as operating leases or finance leases. When making classifications, management analyzesand determines whether all risks and rewards related to the ownership of the leased asset have substantially transferred to the lessee.
3. Lease Liabilities
As a lessee, lease liabilities are initially measured at the present value of the lease payments unpaid at the commencement date of thelease term. When measuring the present value of lease payments, the company estimates the discount rate used and the lease term forleases with renewal or termination options. In assessing the lease term, the company considers all relevant facts and circumstances thatbring economic benefits to the company from exercising the option, including expected changes in facts and circumstances betweenthe commencement date of the lease term and the exercise date of the option. Different judgments and estimates may affect therecognition of lease liabilities and right-of-use assets and subsequently impact profit or loss in subsequent periods.
(3) Impairment of Financial Assets
The company assesses impairments of financial instruments using the expected credit loss model, which requires significant judgmentsand estimates based on all reasonable and supportable information, including forward-looking information. In making such judgmentsand estimates, the company infers expected changes in the credit risk of debtors based on historical data combined with changes ineconomic policies, macroeconomic indicators, industry risks, external market conditions, technological environments, and customersituations.
(4) Inventory Impairment Provision
In accordance with the inventory accounting policy, the company recognizes inventory impairment provisions for inventory with a costhigher than net realizable value and for obsolete and slow-moving inventory. Inventory impairment to net realizable value is based onan assessment of the salability of inventory and its net realizable value. Identifying inventory impairment requires management to makejudgments and estimates based on obtaining conclusive evidence and considering factors such as the purpose of holding inventory andthe impact of post-balance sheet events. Differences between actual results and original estimates will affect the carrying value ofinventory and the recognition or reversal of inventory impairment provisions during the period when estimates are changed.
(5) Fair Value of Financial Instruments
For financial instruments with no active market, the company determines their fair value using various valuation methods, includingdiscounted cash flow model analysis, etc. When valuing, the company estimates aspects such as future cash flows, credit risks, marketvolatility, and correlations, and selects appropriate discount rates. These related assumptions have uncertainties, and changes in themwill affect the fair value of financial instruments. For equity instrument investments or contracts with quoted prices, the company doesnot consider cost as the best estimate of their fair value.
(6) Impairment of Long-term Assets
The company assesses whether there are indications of impairment for non-financial assets other than financial assets as of the balancesheet date. For intangible assets with uncertain useful lives, impairment tests are performed when there are indicators of impairment inaddition to annual impairment tests. For other non-financial assets other than financial assets, impairment tests are conducted whenthere are indications that their carrying amounts may not be recoverable.When the carrying amount of an asset or asset group exceeds its recoverable amount, which is the higher of its fair value less costs tosell and the present value of expected future cash flows, an impairment is recognized.The net amount after deducting costs to sell from fair value is determined by reference to the sale agreement price of similar assets infair transactions or observable market prices, minus incremental costs directly attributable to the disposal of the asset.In estimating the present value of expected future cash flows, significant judgments are made regarding the production, selling price,relevant operating costs of the asset (or asset group), and the discount rate used in the calculation of present value. The company usesall relevant information available to estimate recoverable amount, including forecasts of production, selling prices, and relevantoperating costs based on reasonable and supportable assumptions.Goodwill is tested for impairment at least annually. This requires estimating the present value of future cash flows of the cash-generatingunits or groups of cash-generating units to which goodwill is allocated. In estimating the present value of future cash flows, the companyneeds to forecast the future cash flows generated by the cash-generating units or groups of cash-generating units and select appropriatediscount rates to determine the present value of future cash flows.
(7) Depreciation and Amortization
The company depreciates and amortizes investment properties, property, plant, and equipment, and intangible assets using the straight-line method over their estimated useful lives after considering their residual values. The company periodically reviews the useful livesto determine the amount of depreciation and amortization expense to be recognized in each reporting period. The useful lives aredetermined by the company based on past experience with similar assets and anticipated technological changes. If there is a significantchange in previous estimates, depreciation and amortization expenses will be adjusted in future periods.
(8) Deferred Tax Assets
The company recognizes deferred tax assets for all unused tax losses to the extent that it is probable that sufficient taxable profits willbe available to offset the losses. This requires significant judgment by management to estimate the timing and amount of future taxableprofits, considering tax planning strategies, to determine the amount of deferred tax assets to be recognized.
(9) Income Taxes
In the normal course of business, there is inherent uncertainty in the final tax treatment and calculation of certain transactions. Approval
from the tax authorities is required for some items to be deducted before tax. If the final determination of these tax matters differs fromthe originally estimated amount, the difference will affect the current income tax and deferred income tax recognized in the period offinal determination.VI. Taxes
1. Major categories of taxes and tax rates
| Tax category | Taxation basis | Tax rate |
| Value added tax | VAT payable is the output tax based on the sales of goods and taxable labor income calculated pursuant to the tax law, net of the input tax that is allowed to be deducted in the current period | 16%, 13%, 10%, 9%, 8%, 6%, 5%, 3%, 0% |
| Urban maintenance and construction tax | Subject to the actual payment of VAT and consumption tax | 7 %, 5% |
| Enterprise income tax | Subject to the taxable income amount | 25%, 20%, 19%, 17%, 16.5%, 15%, 10%, 0% |
Disclosure of taxpayers (if any) with different rates of enterprise income tax:
| Taxpayer | Rate of enterprise income tax |
| Luxshare Precision Industry Co., Ltd. | 15 |
| Xiexun Electronic (Ji’an) Co., Ltd. | 15 |
| ASAP Technology (Jiangxi) Co., Ltd. | 15 |
| Lanto Electronic Limited | 15 |
| Bozhou Lanto Electronic Limited | 15 |
| Huzhou Jiuding Electronic Co., Ltd. | 15 |
| Luxshare Automation (Jiangsu) Ltd. | 15 |
| Merry Electronics (Suzhou) Co., Ltd. | 15 |
| Luxshare Electronic Technology (Kunshan) Co., Ltd. | 15 |
| Yongxin County Boshuo Electronics Co., Ltd. | 15 |
| Chuzhou Luxshare Precision Industry Co., Ltd. | 15 |
| Merry Electronics (Huizhou) Co., Ltd. | 15 |
| Fujian JK Wiring Systems Co., Ltd. | 15 |
| Jiangxi Luxshare Intelligent Manufacture Co., Ltd. | 15 |
| Jiangxi ASAP Electronic Co., Ltd. | 15 |
| Suzhou Luxshare Technology Co., Ltd. | 15 |
| Suining Luxshare Precision Industry Co., Ltd. | 15 |
Luxshare Precision Industry (Baoding) Co., Ltd.
| Luxshare Precision Industry (Baoding) Co., Ltd. | 15 |
| Luxshare Precision Industry (Shanxi) Co., Ltd. | 15 |
| Dongguan Xuntao Electronic Co., Ltd. | 15 |
| Kunshan Luxshare Precision Industry Co., Ltd. | 15 |
| Luxshare iTech (Zhejiang) Co., Ltd. | 15 |
| Shenzhen Luxshare Acoustics Technology Ltd. | 15 |
| Enshi Luxshare Precision Industry Co., Ltd. | 15 |
| Luxshare Precision Industry (Jiangsu) Co., Ltd. | 15 |
| Luxshare Electric (Shanghai) Co., Ltd. | 15 |
| Luxshare Technology (Kunshan) Co., Ltd. | 15 |
| Dongguan Luxshare Technology Co., Ltd. | 15 |
| Luxshare Precision Limited | Note 1 |
| Luxshare Precision Technology Co., Ltd. | 16.5 |
| Taiwan Luxshare Precision Limited | 20 |
| ICT-LANTOLIMITED (HK) | Note 1 |
| Luxshare Standard Limited (HK) | Note 1 |
| Luxshare Technologies Limited | Note 1 |
| LUXSHAREICT (Japan) | Note 2 |
| Yunding Technology Co., Ltd. | Note 1 |
| Luxis Technology Limited | Note 1 |
| Luxshare Precision Investment Co., Ltd. | Note 1 |
| SpeedTech Corp. | 20 |
| Luxshare India Private Limited | 25 |
| Luxshare Lanto India Private Limited | 25 |
| LuxshareICT, Inc. | Note 3 |
| LUXSHARE-ICT EUROPE LIMITED | 19 |
| ICT Legend S. DE R.L. DE C.V. | 30 |
| Luxshare Technologies Mexico S. de. R.L.de c.v. | 30 |
| Linkz Cables Mexico S.deR.L. de C.V. | 30 |
| SukkunststofftechnikGmbH | 15 |
| KoreaLuxshareICTCo.,Ltd | Note 4 |
| Luxshare-ICT (Vietnam) Limited | 10 |
| Luxshare-ICT (Van Trung) Company Limited | 10 |
| Luxshare-ICT (Nghe An) Limited | 0 |
Singapore Luxshare Co., Ltd.
| Singapore Luxshare Co., Ltd. | 17 |
| Xuancheng Luxshare Precision Industry Co., Ltd. | 15 |
| Dongguan Huarong Communications Technology Co., Ltd. | 15 |
| Shenzhen Huarong Technology Co., Ltd. | 15 |
| TIME Interconnect Technology (Huizhou) Limited | 15 |
| Huaxun Industrial (Suzhou) Co., Ltd. | 15 |
| Lixin Precision Intelligent Manufacturing (Kunshan) Co., Ltd. | 15 |
| TIME Interconnect Technology Limited | 16.5 |
| TIME Interconnect Investment Limited | 16.5 |
| Time Interconnect Investment Limited | 0 |
| TIME Interconnect (HK) Limited | 16.5 |
| TIME Interconnect Wiring Technology Co., Ltd. | 16.5 |
| TIME Interconnect Industrial Co., Ltd. | 16.5 |
| Huaxun Hong Kong Limited | 16.5 |
| Huaxun Cable Co., Ltd. | 0 |
| Linkz International Limited | 16.5 |
| HOVER MANUFACTURING COMPANY LIMITED | 16.5 |
| TIME Interconnect Server Technology Co., Ltd. | 16.5 |
| Other subsidiaries | 25 |
2. Tax incentives
Corporate income tax
1. The Company was identified as a high-tech enterprise by the Science, Technology and Innovation Commission of ShenzhenMunicipality, Finance Bureau of Shenzhen Municipality, and Shenzhen Tax Service, State Taxation Administration on December 23,2021, with the High-tech Enterprise Certificate No. GR202144203830 valid for three years. As provided for in the Notice by theMinistry of Finance and the State Administration of Taxation on Preferential Policies for Enterprise Income Taxes Related toEnterprises’ Technological Innovation and the Notice by the State Administration of Taxation on Issues Concerning the Implementationof Preferential Enterprise Income Taxes for High-tech Enterprises, the Company enjoys an enterprise income tax of 15% for 2023.
2. The subsidiary, Xiexun Electronic (Ji’an) Co., Ltd. (“Ji’an Xiexun”), was identified as a high-tech enterprise by the Scienceand Technology Department of Jiangxi Province, Jiangxi Provincial Finance Bureau, and Jiangxi Provincial Tax Service, StateTaxation Administration on November 22, 2023, with the High-tech Enterprise Certificate No. GR202336001430 valid for three years.According to relevant provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys an enterpriseincome tax rate of 15% for 2023.
3. The subsidiary, ASAP Technology (Jiangxi) Co., Ltd. (“ASAP Jiangxi”), was identified as a high-tech enterprise by theScience and Technology Department of Jiangxi Province, Jiangxi Provincial Finance Bureau, and Jiangxi Provincial Tax Service, StateTaxation Administration on December 14, 2022, with the High-tech Enterprise Certificate No. GR202236001286 valid for three years.According to relevant provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys an enterprise
income tax rate of 15% for 2023.
4. The subsidiary, Lanto Electronic Limited (“Lanto Kunshan”), was identified as a high-tech enterprise by the Jiangsu ProvincialDepartment of Science and Technology, Department of Finance of Jiangsu Province, and Jiangsu Provincial Tax Service, StateTaxation Administration on November 6, 2023, with the High-tech Enterprise Certificate No. GR202332005205 valid for three years.According to relevant provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys an enterpriseincome tax rate of 15% for 2023.
5. The sub-subsidiary, Bozhou Lanto Electronic Limited (“Lanto Bozhou”), was identified as a high-tech enterprise by the AnhuiProvincial Department of Science and Technology, Department of Finance of Anhui Province, and Anhui Provincial Tax Service, StateTaxation Administration on September 18, 2021, with the High-tech Enterprise Certificate No. GR202134001185 valid for three years.According to relevant provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys an enterpriseincome tax rate of 15% for 2023.
6. The sub-subsidiary, Huzhou Jiuding Electronic Co., Ltd. (“Huzhou Jiuding”), was identified as a high-tech enterprise by theDepartment of Science and Technology of Zhejiang Province, Zhejiang Provincial Department of Finance, Zhejiang Provincial TaxService, State Taxation Administration and Local Taxation Bureau of Zhejiang Province on December 8, 2023, with the High-techEnterprise Certificate No. GR202333009628 valid for three years. According to relevant provisions of the national high-tech enterpriseincome tax preferential policies in China, it enjoys an enterprise income tax rate of 15% for 2023.
7. The subsidiary, Luxshare Automation (Jiangsu) Ltd. (“Luxshare Automation Jiangsu”), was identified as a high-tech enterpriseby the Jiangsu Provincial Department of Science and Technology, Department of Finance of Jiangsu Province, and Jiangsu ProvincialTax Service, State Taxation Administration on November 30, 2021, with the High-tech Enterprise Certificate No. GR202132006272valid for three years. According to relevant provisions of the national high-tech enterprise income tax preferential policies in China, itenjoys an enterprise income tax rate of 15% for 2023.
8. The sub-subsidiary, Merry Electronics (Suzhou) Co., Ltd. (“Meite Suzhou”), was identified as a high-tech enterprise by theJiangsu Provincial Department of Science and Technology, Department of Finance of Jiangsu Province, and Jiangsu Provincial TaxService, State Taxation Administration on November 6, 2023, with the High-tech Enterprise Certificate No. GR202332001066 validfor three years. According to relevant provisions of the national high-tech enterprise income tax preferential policies in China, it enjoysan enterprise income tax rate of 15% for 2023.
9. The subsidiary, Luxshare Electronic Technology (Kunshan) Co., Ltd. (“Luxshare Electronic Kunshan”), was identified as ahigh-tech enterprise by the Jiangsu Provincial Department of Science and Technology, Department of Finance of Jiangsu Province,and Jiangsu Provincial Tax Service, State Taxation Administration on November 30, 2021, with the High-tech Enterprise CertificateNo. GR202132006555 valid for three years. According to relevant provisions of the national high-tech enterprise income taxpreferential policies in China, it enjoys an enterprise income tax rate of 15% for 2023.
10. The sub-subsidiary, Yongxin County Boshuo Electronics Co., Ltd. (“Yongxin Boshuo”), was identified as a high-techenterprise by the Science and Technology Department of Jiangxi Province, Jiangxi Provincial Finance Bureau, and Jiangxi ProvincialTax Service, State Taxation Administration on December 8, 2023, with the High-tech Enterprise Certificate No. GR202336002349valid for three years. According to relevant provisions of the national high-tech enterprise income tax preferential policies in China, itenjoys an enterprise income tax rate of 15% for 2023.
11. The subsidiary, Chuzhou Luxshare Precision Industry Co., Ltd. (“Luxshare Chuzhou”), was identified as a high-techenterprise by the Anhui Provincial Department of Science and Technology, Department of Finance of Anhui Province, and AnhuiProvincial Tax Service, State Taxation Administration on October 18, 2022, with the High-tech Enterprise Certificate No.GR202234002571 valid for three years. According to relevant provisions of the national high-tech enterprise income tax preferentialpolicies in China, it enjoys an enterprise income tax rate of 15% for 2023.
12. The sub-subsidiary, Merry Electronics (Huizhou) Co., Ltd. (“Merry Huizhou”), was identified as a high-tech enterprise bythe Department of Science and Technology of Guangdong Province, Department of Finance of Guangdong Province, and GuangdongProvincial Tax Service, State Taxation Administration on December 20, 2021, with the High-tech Enterprise Certificate No.
GR202144005561 valid for three years. According to relevant provisions of the national high-tech enterprise income tax preferentialpolicies in China, it enjoys an enterprise income tax rate of 15% for 2023.
13. The subsidiary, Fujian JK Wiring Systems Co., Ltd. (“Fujian JK”), was identified as a high-tech enterprise by the FujianProvincial Department of Science and Technology, Fujian Provincial Department of Finance, and Fujian Provincial Tax Service, StateTaxation Administration on December 28, 2023, with the High-tech Enterprise Certificate No. GR202335000667 valid for three years.According to relevant provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys an enterpriseincome tax rate of 15% for 2023.
14. The subsidiary, Jiangxi Luxshare Intelligent Manufacture Co., Ltd. (“Smart Manufacturing Jiangxi”), was identified as ahigh-tech enterprise by the Science and Technology Department of Jiangxi Province, Jiangxi Provincial Finance Bureau, and JiangxiProvincial Tax Service, State Taxation Administration on November 3, 2021, with the High-tech Enterprise Certificate No.GR202136000345 valid for three years. According to relevant provisions of the national high-tech enterprise income tax preferentialpolicies in China, it enjoys an enterprise income tax rate of 15% for 2023.
15. The sub-subsidiary, Jiangxi ASAP Electronic Co., Ltd. (“Boshuo Electronics”), was identified as a high-tech enterprise bythe Science and Technology Department of Jiangxi Province, Jiangxi Provincial Finance Bureau, and Jiangxi Provincial Tax Service,State Taxation Administration on November 3, 2021, with the High-tech Enterprise Certificate No. GR202136000645 valid for threeyears. According to relevant provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys anenterprise income tax rate of 15% for 2023.
16. The sub-subsidiary, Suzhou Luxshare Technology Co., Ltd. (“Suzou Luxshare Technology”), was identified as a high-techenterprise by the Jiangsu Provincial Department of Science and Technology, Department of Finance of Jiangsu Province, and JiangsuProvincial Tax Service, State Taxation Administration on November 30, 2021, with the High-tech Enterprise Certificate No.GR202132006790 valid for three years. According to relevant provisions of the national high-tech enterprise income tax preferentialpolicies in China, it enjoys an enterprise income tax rate of 15% for 2023.
17. The sub-subsidiary, Suining Luxshare Precision Industry Co., Ltd. (“Luxshare Suining”), is eligible for the tax policy onenterprise income tax for the western region as stipulated in the Announcement of the Ministry of Finance, the State Administration ofTaxation, and the National Development and Reform Commission on Continuing the Policy of Enterprise Income Tax for the WesternRegion Development" From January 1, 2021, to December 31, 2030, encouraged industry enterprises established in the western regionare subject to a reduced enterprise income tax rate of 15%. Suining Luxshare Precision Industry Co., Ltd. is located in Suining City,Sichuan Province. Following the enterprise income tax policy for the western region, the company enjoys and declares taxes accordingto the encouraged industry enterprises in the western region. In the fiscal year 2023, the enterprise income tax is levied at a rate of 15%.Suining Luxshare was identified as a high-tech enterprise by the Science & Technology Department of Sichuan Province, SichuanProvincial Finance Department, and Sichuan Provincial Tax Service, State Taxation Administration on December 15, 2021, with theHigh-tech Enterprise Certificate No. GR202151003570 valid for three years.
18. The sub-subsidiary, Luxshare Precision Industry (Baoding) Co., Ltd. (“Luxshare Baoding”), was identified as a high-techenterprise by the Hebei Provincial Department of Science and Technology, Hebei Provincial Finance Bureau, and Hebei ProvincialTax Service, State Taxation Administration on November 22, 2022, with the High-tech Enterprise Certificate No. GR202213002272valid for three years. According to relevant provisions of the national high-tech enterprise income tax preferential policies in China, itenjoys an enterprise income tax rate of 15% for 2023.
19. The sub-subsidiary, Luxshare Precision Industry (Shanxi) Co., Ltd. (“Luxshare Shanxi”), was identified as a high-techenterprise by the Shanxi Science and Technology Department, Shanxi Provincial Department of Finance, and Shanxi Provincial TaxService, State Taxation Administration on December 12, 2022, with the High-tech Enterprise Certificate No. GR202214000862 validfor three years. According to relevant provisions of the national high-tech enterprise income tax preferential policies in China, it enjoysan enterprise income tax rate of 15% for 2023.
20. The sub-subsidiary, Dongguan Xuntao Electronic Co., Ltd. (“Dongguan Xuntao”), was identified as a high-tech enterpriseby the Department of Science and Technology of Guangdong Province, Department of Finance of Guangdong Province, and
Guangdong Provincial Tax Service, State Taxation Administration on December 22, 2022, with the High-tech Enterprise CertificateNo. GR202244014095 valid for three years. According to relevant provisions of the national high-tech enterprise income taxpreferential policies in China, it enjoys an enterprise income tax rate of 15% for 2023.
21. The subsidiary, Kunshan Luxshare Precision Industry Co., Ltd. (“Luxshare Kunshan”), was identified as a high-techenterprise by the Jiangsu Provincial Department of Science and Technology, Department of Finance of Jiangsu Province, and JiangsuProvincial Tax Service, State Taxation Administration on November 6, 2023, with the High-tech Enterprise Certificate No.GR202332000097 valid for three years. According to relevant provisions of the national high-tech enterprise income tax preferentialpolicies in China, it enjoys an enterprise income tax rate of 15% for 2023.
22. The subsidiary, Luxshare iTech (Zhejiang) Co., Ltd. (“iTech Zhejiang”), was identified as a high-tech enterprise by theDepartment of Science and Technology of Zhejiang Province, Zhejiang Provincial Department of Finance, and Zhejiang ProvincialTax Service, State Taxation Administration on December 8, 2023, with the High-tech Enterprise Certificate No. GR202333005916valid for three years. According to relevant provisions of the national high-tech enterprise income tax preferential policies in China, itenjoys an enterprise income tax rate of 15% for 2023.
23. The subsidiary, Shenzhen Luxshare Acoustics Technology Ltd. (“Luxshare Electroacoustic”), was identified as a high-techenterprise by the Science, Technology and Innovation Commission of Shenzhen Municipality, Finance Bureau of ShenzhenMunicipality, and Shenzhen Tax Service, State Taxation Administration on December 12, 2023, with the High-tech EnterpriseCertificate No. GR202344206957 valid for three years. According to relevant provisions of the national high-tech enterprise incometax preferential policies in China, it enjoys an enterprise income tax rate of 15% for 2023.
24. The subsidiary, Enshi Luxshare Precision Industry Co., Ltd. (“Luxshare Enshi”), was qualified for tax reduction in accordancewith the Announcement on the Continuation of Preferential Enterprise Income Tax Policies in the Western Region of China issued bythe Ministry of Finance, the State Taxation Administration and the National Development and Reform Commission which providedthat enterprise income tax should be levied at a reduced rate of 15% on enterprises engaged in the encouraged industries in the westernregion for the period from January 1, 2021 to December 31, 2030. Since it is located at Enshi Tujia and Miao Autonomous Prefecture,Hubei Province where enterprises can apply the preferential enterprise income tax policies in the Western Region of China, it enjoysan enterprise income tax rate of 15% for 2023. Enshi Luxshare, on November 29, 2022, was recognized as a high-tech enterprise bythe Hubei Provincial Department of Science and Technology, Hubei Provincial Department of Finance, and the State Taxation Bureauof Hubei Province. It obtained the certificate number GR202242006527 for high-tech enterprise certification, valid for three years.
25. The sub-subsidiary, Xuancheng Luxshare Precision Industry Co., Ltd. (“Luxshare Xuancheng”), was identified as a high-tech enterprise by the Anhui Provincial Department of Science and Technology, Department of Finance of Anhui Province, and AnhuiProvincial Tax Service, State Taxation Administration on September 18, 2021, with the High-tech Enterprise Certificate No.GR202134004975 valid for three years. According to relevant provisions of the national high-tech enterprise income tax preferentialpolicies in China, it enjoys an enterprise income tax rate of 15% for 2023.
26. According to the Article 6 of Circular No. 151/2014/TT-BTC issued by the Ministry of Finance on October 10, 2014,Luxshare-ICT (Vietnam) Limited (“Luxshare Vietnam”) will be eligible for exemption from enterprise income tax for the first twoyears and 50% reduction for next four years if realizing the investment plan in the industrial park. Among them, Zone E obtained anOfficial Reply No. 619/CT-TTHT from the Tax Bureau of Bac Giang Province on February 28, 2018, confirming that Zone E hasobtained the qualifications of enjoying exemption from enterprise income tax for the first two years and 50% reduction for next fouryears, and Luxshare Vietnam paid enterprise income tax at a 10% tax rate; and Zones T/U1 obtained an Official Reply No.6555/CTBGI-TTHT from the Tax Bureau of Bac Giang Province on November 23, 2020, confirming that Zones T and U1 have obtainedthe qualifications of enjoying exemption from enterprise income tax for the first two years and 50% reduction for next four years andLuxshare Vietnam paid the enterprise income tax at a 10% tax rate in 2023.
27. According to the provisions of Article 14.1 of the Decree No. 85/2007/Q?-TTg issued on June 11, 2007, any domestic andforeign organization and individual investing in any project based in the Southeast Economic Zone of Nghe An will enjoy the enterpriseincome tax rate of 10% for 15 years from the date when the investment project starts operation, and exemption from enterprise income
tax for 4 years from the date of taxable income and 50% reduction for next 9 years. Luxshare-ICT (Nghe An) Limited (“Luxshare NgheAn”) obtained the Official Reply No. 2417/CT-TTHT from the Tax Bureau of Nghe An Province on July 1, 2020, confirming thatLuxshare Nghe An paid the enterprise income tax at a 0% tax rate in 2023.
28. According to the Article 6 of Circular No. 151/2014/TT-BTC issued by the Ministry of Finance on October 10, 2014,Luxshare-ICT (Van Trung) Company Limited (“Luxshare Van Trung”) is eligible for exemption from enterprise income tax for the firsttwo years and 50% reduction for next four years if realizing the investment plan in the industrial park, and obtained an Official ReplyNo. 5675/CT-TTHT from the Tax Bureau of Bac Giang Province on October 13, 2020, confirming that Luxshare Van Trung paid theenterprise income tax at a 10% tax rate in 2023.
On March 20, 2023, the company received official document 1534/GXN-BCT from the Industrial and Commercial Bureauconfirming the preferential treatment for auxiliary industry products 4 exempt 9 halved:
2020-2021-2023-2024: Corporate Income Tax (CIT) 0%; 2025-2032: CIT 10% reduced by half
The discount not received is regional: 2 exempt 4 halved.
29. Dongguan Huarong Communications Technology Co., Ltd. was identified as a high-tech enterprise by the Department ofScience and Technology of Guangdong Province, Department of Finance of Guangdong Province, and Guangdong Provincial TaxService, State Taxation Administration on December 20, 2021, with the High-tech Enterprise Certificate No. GR202144005374 validfor three years. As provided for in the Notice by the Ministry of Finance and the State Administration of Taxation on PreferentialPolicies for Enterprise Income Taxes Related to Enterprises’ Technological Innovation and the Notice by the State Administration ofTaxation on Issues Concerning the Implementation of Preferential Enterprise Income Taxes for High-tech Enterprises, it paid theenterprise income tax at a 15% tax rate in 2023.
30. Shenzhen Huarong Technology Co., Ltd. was identified as a high-tech enterprise by the Science, Technology and InnovationCommission of Shenzhen Municipality, Finance Bureau of Shenzhen Municipality, and Shenzhen Tax Service, State TaxationAdministration on December 23, 2021, with the High-tech Enterprise Certificate No. GR202144200244 valid for three years. Asprovided for in the Notice by the Ministry of Finance and the State Administration of Taxation on Preferential Policies for EnterpriseIncome Taxes Related to Enterprises’ Technological Innovation and the Notice by the State Administration of Taxation on IssuesConcerning the Implementation of Preferential Enterprise Income Taxes for High-tech Enterprises, it paid the enterprise income tax ata 15% tax rate in 2023.
31. TIME Interconnect Technology (Huizhou) Limited was identified as a high-tech enterprise by the Department of Science andTechnology of Guangdong Province, Department of Finance of Guangdong Province, and Guangdong Provincial Tax Service, StateTaxation Administration on December 19, 2022, with the High-tech Enterprise Certificate No. GR202244004084 valid for three years.As provided for in the Notice by the Ministry of Finance and the State Administration of Taxation on Preferential Policies for EnterpriseIncome Taxes Related to Enterprises’ Technological Innovation and the Notice by the State Administration of Taxation on IssuesConcerning the Implementation of Preferential Enterprise Income Taxes for High-tech Enterprises, it paid the enterprise income tax ata 15% tax rate in 2023.
32. Dongguan Luxshare Technology Co., Ltd. was certified as a high-tech enterprise by the Department of Science and Technology ofGuangdong Province, the Department of Finance of Guangdong Province, and the Guangdong Provincial Taxation Bureau of the StateAdministration of Taxation on December 22, 2022. It obtained the High-tech Enterprise Certificate with No. GR202244011952, validfor three years. According to the Notice of the Ministry of Finance and the State Administration of Taxation on Enterprise Income TaxPreferential Policies for Enterprise Technological Innovation and the Notice of the State Administration of Taxation on IssuesConcerning the Implementation of Preferential Tax Policies for High-tech Enterprises, the company paid enterprise income tax at a rateof 15% for the year 2023.
33. On November 6, 2023, the subsidiary Luxshare Precision Industry (Jiangsu) Co., Ltd. (hereinafter referred to as "Jiangsu Luxshare")was certified as a high-tech enterprise by the Department of Science and Technology of Jiangsu Province, the Department of Financeof Jiangsu Province, and the Jiangsu Provincial Taxation Bureau of the State Administration of Taxation. It obtained Certificate No.GR202332004181, valid for three years. According to the relevant provisions of the national policy on preferential taxation for high-
tech enterprises, Jiangsu Luxshare paid enterprise income tax at a rate of 15% for the year 2023.
34. On December 12, 2023, the subsidiary Luxshare Electronic (Shanghai) Co., Ltd. (hereinafter referred to as "Shanghai Electronic")was certified as a high-tech enterprise by the Shanghai Municipal Science and Technology Commission, the Shanghai MunicipalFinance Bureau, and the Shanghai Municipal Taxation Bureau of the State Administration of Taxation. It obtained Certificate No.GR202331006614, valid for three years. According to the relevant provisions of the national policy on preferential taxation for high-tech enterprises, Shanghai Electric paid enterprise income tax at a rate of 15% for the year 2023.
35. The subsidiary Luxshare Electronic Technology (Kunshan) Co., Ltd. (hereinafter referred to as " Luxshare Technology") wascertified as a high-tech enterprise by the Jiangsu Provincial Science and Technology Department, the Jiangsu Provincial FinanceDepartment, and the Jiangsu Provincial Taxation Bureau of the State Administration of Taxation on November 6, 2023. It obtainedCertificate No. GR202332006405, valid for three years. According to the relevant provisions of the national policy on preferentialtaxation for high-tech enterprises, Lixin Technology paid enterprise income tax at a rate of 15% for the year 2023.
36. The subsidiary Dongguan Huarong Communications Technology Co., Ltd. (hereinafter referred to as "Huarong Communication")was certified as a high-tech enterprise by the Guangdong Provincial Science and Technology Department, the Guangdong ProvincialFinance Department, and the Guangdong Provincial Taxation Bureau of the State Administration of Taxation on December 20, 2021.It obtained Certificate No. GR202144005374, valid for three years. According to the relevant provisions of the national policy onpreferential taxation for high-tech enterprises, Huarong Communication paid enterprise income tax at a rate of 15% for the year 2023.Value-added tax:
1. On September 3, 2023, the Ministry of Finance and the Taxation Bureau issued the Announcement on the Value-added TaxIncremental Deduction Policy for Advanced Manufacturing Enterprises (Announcement No. 43 of 2023 by the Ministry of Financeand the State Administration of Taxation). Advanced manufacturing enterprises refer to general taxpayers in the manufacturing industryamong high-tech enterprises (including their non-legal person branch institutions). From January 1, 2023, to December 31, 2027,advanced manufacturing enterprises are allowed to deduct 5% of the deductible input VAT amount as an additional deduction againstthe payable value-added tax amount.
3. Others
Note 1. As per the tax law in Hong Kong, Hong Kong adopts a territorial source principle of taxation, under which only profitswhich have a source in Hong Kong are taxable there, while profits sourced elsewhere are not subject to Hong Kong gain tax. LuxshareTechnologies Limited, Luxshare Standard Limited (HK), ICT-LANTOLIMITED (HK), Luxshare Precision Limited, YundingTechnology Co., Ltd., Luxis Technology Limited, and Luxshare Precision Investment Co., Ltd. are not required to pay income tax inHong Kong.
Note 2. LUXSHAREICT (Japan) is entitled to the graded tax rate for the capital amounting to not more than JPY100 million.Corporate income tax (national tax): at 15% for the portion of taxable income within JPY8 million (inclusive), and at 23.2% for theportion in excess thereof. Local corporate income tax (national tax): at 10.3% of total corporate taxable income (national tax).
Note 3. The applicable tax rate of LuxshareICT, Inc (USA) is shown as follows:
| Applicable tax rate | |
| Income tax (federal) | 21% |
Local tax (state)
| Local tax (state) | 8.84% |
Note 4. The applicable tax rate of Korea Luxshare ICT Co., Ltd is shown as follows:
| Total profits | Corporate tax | Local tax |
Less than KRW200 million
| Less than KRW200 million | 10% | 10% of corporate taxable income |
| KWR200 million~KWR20 billion | 20% |
KWR20 billion~KWR300 billion
| KWR20 billion~KWR300 billion | 22% |
Above KWR300 billion
| Above KWR300 billion | 25% |
VII. Notes to items in consolidated financial statements
1. Cash and bank balances
In RMB
| Item | Closing balance | Opening balance |
| Cash on hand | 376,233.09 | 1,236,553.93 |
| Bank deposit | 29,683,776,087.56 | 17,311,181,875.58 |
| Other cash and bank balances | 3,935,387,136.86 | 2,054,791,011.90 |
| Total | 33,619,539,457.51 | 19,367,209,441.41 |
| Including: Total amount of funds deposited abroad | 4,220,620,462.47 | 3,147,696,598.47 |
Other descriptions:
2. Held-for-trading financial assets
In RMB
| Item | Closing balance | Opening balance |
| Financial assets at fair value through profit or loss | 1,720,764,175.32 | 1,353,266,499.91 |
| Including: | ||
| Derivative financial assets | 92,485,140.01 | 27,039,649.45 |
| Bank wealth management | 1,628,279,035.31 | 1,326,226,850.46 |
| Including: | ||
| Total | 1,720,764,175.32 | 1,353,266,499.91 |
Other descriptions:
3. Notes receivable
(1) Categorized presentation of notes receivable
In RMB
| Item | Closing balance | Opening balance |
| Bank acceptance bill | 254,212,467.87 | 853,752,545.27 |
Commercial acceptance bill
| Commercial acceptance bill | 6,860,881.19 | 96,014,475.42 |
| Total | 261,073,349.06 | 949,767,020.69 |
(2) Classification and Disclosure of Bad Debt Provision Methods
In RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
| Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
| Including: | ||||||||||
| Notes receivable for which bad-debt provision is made by group | 261,103,603.98 | 100.00% | 30,254.92 | 0.01% | 261,073,349.06 | 950,067,937.26 | 100.00% | 300,916.57 | 0.03% | 949,767,020.69 |
| Including: | ||||||||||
| Bank Acceptance Bill | 254,212,467.87 | 97.36% | 254,212,467.87 | 853,752,545.27 | 89.86% | 853,752,545.27 | ||||
| Commercial Acceptance Bill | 6,891,136.11 | 2.64% | 30,254.92 | 0.44% | 6,860,881.19 | 96,315,391.99 | 10.14% | 300,916.57 | 0.31% | 96,014,475.42 |
| Total | 261,103,603.98 | 100.00% | 30,254.92 | 0.01% | 261,073,349.06 | 950,067,937.26 | 100.00% | 300,916.57 | 0.03% | 949,767,020.69 |
Provision for bad debts made by group: 30,254.92
In RMB
| Description | Closing balance | ||
| Book balance | Bad-debt provision | Provision proportion | |
| Commercial acceptance bill | 6,891,136.11 | 30,254.92 | 0.44% |
| Total | 6,891,136.11 | 30,254.92 | |
Descriptions on basis for determining the group:
If the bad-debt provision of notes receivable is made according to the general model of expected credit loss, please disclose the relevantinformation of bad-debt provision with reference to the disclosure method of other receivables:
□ Applicable ?N/A
(3) Bad-debt provision made, recovered or reversed in the current period
Bad-debt provision in the current period:
In RMB
| Category | Opening balance | Amount of change in the current period | Closing balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Commercial acceptance bill | 300,916.57 | 30,254.92 | 300,916.57 | 30,254.92 | ||
| Total | 300,916.57 | 30,254.92 | 300,916.57 | 30,254.92 | ||
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable ?N/A
(4) Notes receivable that have been endorsed or discounted by the Company at the end of the period and havenot yet matured on the balance sheet date
In RMB
| Item | Derecognized amount at the end of the period | Amount not derecognized at the end of the period |
| Bank acceptance bill | 225,054,602.71 | |
| Total | 225,054,602.71 |
4. Accounts receivable
(1) Disclosure by Aging
In RMB
| Aging | Closing balance | Opening balance |
| Within 1 year (inclusive) | 23,580,290,365.01 | 26,139,064,957.15 |
| Not overdue | 23,209,441,667.74 | 25,384,591,004.45 |
| 1 to 60 days overdue | 341,699,208.94 | 589,079,637.69 |
| 61 to 120 days overdue | 16,518,539.98 | 148,720,229.30 |
| 121 to 180 days overdue | 2,507,628.90 | 5,157,468.31 |
| 181 to 365 days overdue | 10,123,319.45 | 11,516,617.40 |
| 1 to 2 years | 1,807,300.60 | 11,327,849.47 |
2 to 3 years
| 2 to 3 years | 1,834,977.79 | 2,104,454.48 |
| More than 3 years | 32,175,421.76 | 30,988,680.56 |
| 3 to 4 years | 1,186,741.20 | |
| More than 5 years | 30,988,680.56 | 30,988,680.56 |
| Total | 23,616,108,065.16 | 26,183,485,941.66 |
(2) Classification and disclosure by bad debt provision method
In RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
| Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
| Accounts receivable for which bad-debt provision is made individually | 67,527,487.92 | 0.29% | 67,527,487.92 | 100.00% | 35,692,410.70 | 0.14% | 35,692,410.70 | 100.00% | ||
| Including: | ||||||||||
| Amount accrued individually | 67,527,487.92 | 0.29% | 67,527,487.92 | 100.00% | 35,692,410.70 | 0.14% | 35,692,410.70 | 100.00% | ||
| Provision on an individual basis | 23,548,580,577.24 | 99.71% | 44,098,688.17 | 0.19% | 23,504,481,889.07 | 26,147,793,530.96 | 99.86% | 104,438,671.77 | 0.40% | 26,043,354,859.19 |
| Including: | ||||||||||
| Group by aging | 23,548,580,577.24 | 99.71% | 44,098,688.17 | 0.19% | 23,504,481,889.07 | 26,147,793,530.96 | 99.86% | 104,438,671.77 | 0.40% | 26,043,354,859.19 |
| Total | 23,616,108,065.16 | 100.00% | 111,626,176.09 | 0.47% | 23,504,481,889.07 | 26,183,485,941.66 | 100.00% | 140,131,082.47 | 0.54% | 26,043,354,859.19 |
Provision for bad debts made individually: 67,527,487.92
In RMB
| Description | Opening balance | Closing balance |
Book balance
| Book balance | Bad-debt provision | Book balance | Bad-debt provision | Provision proportion | Reason for provision | |
| Entity 1 | 36,297,404.00 | 36,297,404.00 | 100.00% | Unrecoverable | ||
| Entity 2 | 30,988,680.56 | 30,988,680.56 | 30,988,680.56 | 30,988,680.56 | 100.00% | Unrecoverable |
| Entity 3 | 4,367,165.01 | 4,367,165.01 | Unrecoverable | |||
| Entity 4 | 241,403.36 | 241,403.36 | 241,403.36 | 241,403.36 | 100.00% | Unrecoverable |
| Entity 5 | 95,161.77 | 95,161.77 | ||||
| Total | 35,692,410.70 | 35,692,410.70 | 67,527,487.92 | 67,527,487.92 |
Provision for bad debts made by group:
In RMB
| Description | Closing balance | ||
| Book balance | Bad-debt provision | Provision proportion | |
| Undue | 23,173,144,263.74 | 11,586,568.27 | 0.05% |
| 1 to 60 days overdue | 341,699,208.94 | 17,084,960.45 | 5.00% |
| 61 to 120 days overdue | 16,518,539.98 | 4,955,561.99 | 30.00% |
| 121 to 180 days overdue | 2,507,628.90 | 1,003,051.56 | 40.00% |
| 181 to 365 days overdue | 10,123,319.45 | 5,061,659.73 | 50.00% |
| 1 to 2 years (excluding 1 year) overdue | 1,807,300.60 | 1,626,570.54 | 90.00% |
| Over 2 years overdue | 2,780,315.63 | 2,780,315.63 | 100.00% |
| Total | 23,548,580,577.24 | 44,098,688.17 | |
Descriptions on basis for determining the group:
If the bad-debt provision for accounts receivable is made according to the general model of expected credit loss, please refer to thedisclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable ?N/A
(3) Bad-debt provision made, recovered or reversed in the current periodBad-debt provision in the current period:
In RMB
| Category | Opening balance | Amount of change in the current period | Closing balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Accounts receivable | 140,131,082.47 | 25,623,112.25 | 95,161.77 | -2,786,632.36 | 111,626,176.09 | |
| Total | 140,131,082.47 | 25,623,112.25 | 95,161.77 | -2,786,632.36 | 111,626,176.09 | |
Including significant amounts recovered or reversed from the current provision for bad debts:
In RMB
| Entity name | Amount recovered or reversed | Reason for reversal | Recovery method | Basis for determining the provision ratio for the original bad debt reserve and its reasonableness |
(4) Accounts receivable actually written off in the current period
In RMB
| Item | Write-off amount |
Including the write-off of significant accounts receivable:
In RMB
| Entity name | Nature of accounts receivable | Write-off amount | Reasons for write-off | Procedures for write-off | Whether the funds are generated by related-party transactions |
Descriptions on the write-off of accounts receivable:
(5) Accounts receivable with top five closing balance - by debtor
In RMB
| Entity name | Closing balance of accounts receivable | Contractual assets ending balance | Closing balance of accounts receivable and contractual assets | The proportion of the total closing balance of accounts receivable and contractual assets | Closing balance of accounts receivable allowance for doubtful accounts and contractual asset impairment provision |
| Entity 1 | 6,394,834,173.91 | 6,394,834,173.91 | 27.08% | 3,197,417.09 | |
| Entity 2 | 1,627,167,857.07 | 1,627,167,857.07 | 6.89% | 813,583.93 | |
| Entity 3 | 1,496,918,767.33 | 1,496,918,767.33 | 6.34% | 748,459.38 | |
| Entity 4 | 832,460,645.66 | 832,460,645.66 | 3.52% | 416,230.32 | |
| Entity 5 | 653,347,880.69 | 653,347,880.69 | 2.77% | 326,673.94 | |
| Total | 11,004,729,324.66 | 11,004,729,324.66 | 46.60% | 5,502,364.66 |
5. Receivables financing
(1) Accounts Receivable Financing Classification Representation
In RMB
| Item | Closing balance | Opening balance |
| Accounts receivable notes | 587,585,009.82 | |
| Total | 587,585,009.82 |
(2) End-of-period company pledged accounts receivable financing
In RMB
| Item | End-of-period pledged amount |
| Accounts receivable notes | 164,567,477.58 |
| Total | 164,567,477.58 |
(3) End-of-period company endorsed or discounted accounts receivable financing not yet due on the balancesheet date
In RMB
| Item | End-of-period terminated recognition amount | End-of-period un-terminated recognition amount |
| Bank accepted bill | 1,897,417,193.06 | |
| Total | 1,897,417,193.06 |
(4) The actual write-off situation of accounts receivable financing for the current period
In RMB
| Item | Write-off amount |
Significant Accounts Receivable Financing Write-off Situation
In RMB
| Unit Name | Nature of Funds | Write-off Amount | Write-off Reason | Execution of Write-off Procedure | Whether the funds are generated from related transactions |
Write-off description:
(5) Other descriptions
6. Other receivables
In RMB
| Item | Closing balance | Opening balance |
| Other receivables | 322,407,052.71 | 431,123,451.91 |
| Total | 322,407,052.71 | 431,123,451.91 |
(1) Other Receivables
1) Classification of Other Receivables by Nature of Funds
| Nature of Funds | End-of-period Book Balance | Beginning-of-period Book Balance |
| Petty Cash | 823,391.43 | 1,647,513.92 |
| Deposits, Guarantees | 88,785,715.85 | 99,930,933.45 |
| Receivable Export Tax Refund | 104,916,374.47 | 143,831,836.92 |
| Advances | 40,590,467.27 | 32,488,722.87 |
| Proceeds from Fixed Asset Transfers | 66,582.77 | |
| Others | 92,142,220.12 | 158,490,656.80 |
| Total | 327,258,169.14 | 436,456,246.73 |
2) Disclosures by aging
In RMB
| Aging | End-of-period Book Balance | Beginning-of-period Book Balance |
| 1 Year or Less (Including 1 Year) | 324,150,839.67 | 435,419,059.56 |
| Not Overdue | 321,911,620.10 | 413,437,541.79 |
| Overdue 1 to 60 Days | 501,138.07 | 19,869,688.91 |
| Overdue 61 to 120 Days | 71,769.00 | 562,100.70 |
| Overdue 121 to 180 Days | 313,632.50 | 449,021.36 |
| Overdue 181 to 365 Days | 1,352,680.00 | 1,100,706.80 |
| 1 to 2 Years | 2,529,880.47 | 425,049.70 |
| 2 to 3 Years | 100,000.00 | 140,420.00 |
| Over 3 Years | 477,449.00 | 471,717.47 |
| 3 to 4 Years | 477,449.00 | 471,717.47 |
| Total | 327,258,169.14 | 436,456,246.73 |
3) Classification and disclosure by bad debt provision method
?Applicable □N/A
In RMB
Categor
y
| Category | Closing balance | Opening balance | ||||||||
| Book Balance | Bad Debt Provision | Book value | Book Balance | Bad Debt Provision | Book value | |||||
| Amount | Ratio | Amount | Provision Ratio | Amount | Ratio | Amount | Provision Ratio | |||
| Provision for Bad Debts by Individual Item | 2,177,340.03 | 0.67% | 2,177,340.03 | 100.00% | 2,177,340.03 | 0.50% | 2,177,340.03 | 100.00% | ||
| Including: | ||||||||||
| Individual Item Provision | 2,177,340.03 | 0.67% | 2,177,340.03 | 100.00% | 2,177,340.03 | 0.50% | 2,177,340.03 | 100.00% | ||
| Provision for Bad Debts by Group | 325,080,829.11 | 99.33% | 2,673,776.40 | 0.82% | 322,407,052.71 | 434,278,906.70 | 99.50% | 3,155,454.79 | 0.73% | 431,123,451.91 |
| Including: | ||||||||||
| Ageing Analysis Combination | 325,080,829.11 | 99.33% | 2,673,776.40 | 0.82% | 322,407,052.71 | 434,278,906.70 | 99.50% | 3,155,454.79 | 0.73% | 431,123,451.91 |
| Total | 327,258,169.14 | 100.00% | 4,851,116.43 | 1.48% | 322,407,052.71 | 436,456,246.73 | 100.00% | 5,332,794.82 | 1.22% | 431,123,451.91 |
Provision for Bad Debts by Individual Item: 2,177,340.03
In RMB
| Name | Opening balance | Closing balance | ||||
| Book Balance | Bad Debt Provision | Book Balance | Bad Debt Provision | Provision Ratio | Provision Reason | |
| Entity 1 | 2,177,340.03 | 2,177,340.03 | 2,177,340.03 | 2,177,340.03 | 100.00% | Unrecoverable |
| Total | 2,177,340.03 | 2,177,340.03 | 2,177,340.03 | 2,177,340.03 | ||
Provision for Bad Debts by Group: 2,673,776.40
In RMB
| Name | Closing balance | ||
| Book Balance | Bad debt provision | Provision ratio | |
| Not Overdue | 321,911,620.10 | 1,609,558.10 | 0.50% |
| Overdue 1 to 60 Days | 501,138.07 | 5,011.38 | 1.00% |
| Overdue 61 to 120 Days | 71,769.00 | 3,588.45 | 5.00% |
Overdue 121 to 180 Days
| Overdue 121 to 180 Days | 313,632.50 | 31,363.25 | 10.00% |
| Overdue 181 to 365 Days | 1,352,680.00 | 270,536.00 | 20.00% |
| 1 Year Overdue (Excluding) to 2 Years | 352,540.44 | 176,270.22 | 50.00% |
| Over 2 Years Overdue | 577,449.00 | 577,449.00 | 100.00% |
| Total | 325,080,829.11 | 2,673,776.40 |
Determination of the Explanation for this Combination:
Provision for Bad Debts is made according to the Expected Credit Loss General Model.
In RMB
| Bad Debt Provision | Phase I | Phase II | Phase III | Total |
| Expected Credit Loss for the Next 12 Months | Lifetime Expected Credit Loss (No Credit Impairment Incurred) | Lifetime Expected Credit Loss (Credit Impairment Incurred) | ||
| Balance as of January 1, 2023 | 5,332,794.82 | 5,332,794.82 | ||
| Balance as of January 1, 2023 in this period | ||||
| Provision for this period | 2,619,894.43 | 2,619,894.43 | ||
| Other changes | -3,101,572.82 | -3,101,572.82 | ||
| Balance as of December 31, 2023 | 4,851,116.43 | 4,851,116.43 |
Criteria for stage classification and the provision ratios for bad debt reserves
Significant changes in the book balance of loss provisions for the current period
□Applicable ?N/A
4) Provision, Recovery, or Reversal of Bad Debt Provision for the Current PeriodProvision for Bad Debt for the Current Period:
In RMB
| Category | Opening balance | Amount of Changes for the Current Period | Closing balance | |||
| Provision | Recovery or Reversal | Write-off or Write-down | Others | |||
| Aging Combination | 5,332,794.82 | 2,619,894.43 | -3,101,572.82 | 4,851,116.43 | ||
| Total | 5,332,794.82 | 2,619,894.43 | -3,101,572.82 | 4,851,116.43 | ||
Significant Amounts of Bad Debt Provision Reversals or Recoveries for the Current Period:
In RMB
| Name of the Entity | Amount of Recovery | Reason for Reversal | Method of Recovery | Basis and Rationality |
or Reversal
| or Reversal | for Determining the Provision Ratio for Bad Debts |
5) Other receivables categorized by the end-of-period balances of the top five debtors.
In RMB
| Entity Name | Nature of the Funds | End-of-period Balance | Aging | The proportion of the end-of-period balance to the total amount of other receivables. | End-of-period balance of bad debt provision |
| Entity 1 | Export tax rebate | 104,916,374.47 | Not overdue | 32.06% | 524,581.87 |
| Entity 2 | Equity transfer payment | 47,500,000.00 | Not overdue | 14.51% | 237,500.00 |
| Entity 3 | Security deposit | 21,000,000.00 | Not overdue | 6.42% | 105,000.00 |
| Entity 4 | Equity transfer payment | 7,832,244.50 | Not overdue | 2.39% | 39,161.22 |
| Entity 5 | Security deposit | 7,082,700.00 | Not overdue | 2.16% | 35,413.50 |
| Total | 188,331,318.97 | 57.54% | 941,656.59 |
7. Prepayments
(1) Presentation of prepayments by aging
In RMB
| Aging | Closing balance | Opening balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 478,716,760.07 | 98.36% | 578,774,779.64 | 98.67% |
| 1 to 2 years | 3,062,960.52 | 0.63% | 5,930,449.93 | 1.01% |
| 2 to 3 years | 3,509,779.84 | 0.72% | 1,250,070.12 | 0.21% |
| Over 3 years | 1,413,440.93 | 0.29% | 622,565.54 | 0.11% |
| Total | 486,702,941.36 | 586,577,865.23 | ||
Reasons for untimely settlement of prepayments in significant amount with aging over 1 year:
(2) Prepayments with top five closing balance - by prepayment beneficiary
| Prepayment receiver | Closing balance | Proportion in total closing balance of prepayments (%) |
| Entity 1 | 66,334,219.41 | 13.63 |
Prepaymentreceiver
| Prepayment receiver | Closing balance | Proportion in total closing balance of prepayments (%) |
| Entity 2 | 61,176,743.49 | 12.57 |
| Entity 3 | 53,454,012.53 | 10.98 |
| Entity 4 | 19,433,795.26 | 3.99 |
| Entity 5 | 18,967,120.24 | 3.90 |
| Total | 219,365,890.93 | 45.07 |
Other descriptions:
8. Inventories
Whether the Company needs to comply with the disclosure requirements for the real estate industryNo
(1) Classification of inventories
In RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for decline in value of inventories or provision for impairment of contract performance cost | Book value | Book balance | Provision for decline in value of inventories or provision for impairment of contract performance cost | Book value | |
| Raw material | 7,122,401,927.24 | 471,624,816.03 | 6,650,777,111.21 | 8,805,902,241.24 | 254,491,258.28 | 8,551,410,982.96 |
| Products in process | 5,171,213,240.36 | 176,099,689.81 | 4,995,113,550.55 | 4,968,545,535.84 | 41,453,287.63 | 4,927,092,248.21 |
| Goods on hand | 17,873,073,315.30 | 363,208,839.96 | 17,509,864,475.34 | 23,761,428,325.93 | 464,323,619.78 | 23,297,104,706.15 |
| Revolving materials | 137,193,748.06 | 137,193,748.06 | 319,286,571.44 | 319,286,571.44 | ||
| Contract performance cost | 466,878,832.49 | 116,430,069.76 | 350,448,762.73 | 97,678,729.66 | 97,678,729.66 | |
| Goods sold | 80,403,021.27 | 1,180,800.02 | 79,222,221.25 | 112,857,920.38 | 995,408.89 | 111,862,511.49 |
| Materials in transit | 27,648,149.64 | 27,648,149.64 | 38,828,113.69 | 38,828,113.69 | ||
Work in process- outsourced
| Work in process - outsourced | 7,662,300.57 | 7,662,300.57 | 21,425,447.80 | 1,359,834.74 | 20,065,613.06 | |
| Total | 30,886,474,534.93 | 1,128,544,215.58 | 29,757,930,319.35 | 38,125,952,885.98 | 762,623,409.32 | 37,363,329,476.66 |
(2) Provision for decline in value of inventories and provision for impairment of contract performance cost
In RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Provision | Others | Reversal or write off | Others | |||
| Raw material | 254,491,258.28 | 396,338,296.94 | 180,397,886.60 | -1,193,147.41 | 471,624,816.03 | |
| Products in process | 41,453,287.63 | 166,615,905.32 | 33,614,492.15 | -1,644,989.01 | 176,099,689.81 | |
| Inventory items | 464,323,619.78 | 446,816,763.79 | 547,457,325.51 | 474,218.10 | 363,208,839.96 | |
| Contract fulfillment costs | 116,430,069.76 | 116,430,069.76 | ||||
| Shipped goods | 995,408.89 | 185,391.13 | 1,180,800.02 | |||
| Work in process - outsourced | 1,359,834.74 | 1,359,834.74 | ||||
| Total | 762,623,409.32 | 1,126,386,426.94 | 762,829,539.00 | -2,363,918.32 | 1,128,544,215.58 | |
Provision for inventory impairment by group
In RMB
| Combination name | Ending | Beginning | ||||
| Closing balance | Falling price reserves | Provision ration of falling price reserve | Opening balance | Falling price reserves | Provision ration of falling price reserve | |
Criteria for calculating the reserve for inventory decline price by combination
9. Non-current assets maturing within one year
| Item | Closing balance | Opening balance |
| Time deposits maturing within one year | 1,047,566,017.54 | |
| Total | 1,047,566,017.54 |
(1) Debt investments that mature within one year
□Applicable ?N/A
(2) Other debt investments that mature within one year
□Applicable ?N/A
10. Other current assets
In RMB
| Item | Closing balance | Opening balance |
| Input tax to be deducted | 2,106,402,441.64 | 2,019,719,088.95 |
| large-amount deposit note | 709,769,171.50 | 107,450,138.93 |
| Income tax prepaid | 61,578,636.66 | 69,527,937.14 |
| Duty forward | 36,279,446.62 | |
| Others | 6,048,704.65 | 507,429.07 |
| Total | 2,920,078,401.07 | 2,197,204,594.09 |
Other descriptions:
11. Debt investments
(1) Situation of debt investment
In RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Principal | 1,620,000,000.00 | 1,620,000,000.00 | ||||
| Interest | 119,251,540.45 | 119,251,540.45 | ||||
| Total | 1,739,251,540.45 | 1,739,251,540.45 | ||||
Changes in reserves for impairment of debt investments in the current period
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
12. Investments in other equity instruments
In RMB
| Project name | Closing balance | Opening balance | Gains recognized as other comprehensive income in the current period | Loss recognized in other comprehensive income in the current period | Gains accrued to other comprehensive income at the end of the current period | Loss accrued to other comprehensive income at the end of the period | Dividend income recognized for the period | Reasons specified as measured at fair value and for which changes are included in other comprehensive income |
| Beijing XiaoLong Technology Co., Ltd. | 9,049,791.33 | 10,773,818.02 | 1,724,026.69 | 950,208.67 | Not for short-term trading purposes | |||
| Beijing Hui Bo Jin Technology Co., Ltd. | 9,846,904.41 | 10,783,500.71 | 936,596.30 | 153,095.59 | Not for short-term trading purposes | |||
| Jingtuo Liyin Technology (Beijing) Co., Ltd. | 3,356,343.85 | 2,983,866.23 | 372,477.62 | 356,343.85 | Not for short-term trading purposes | |||
| Zhejiang Tony Electronics Co., Ltd. | 172,691,671.36 | 342,379,257.92 | 128,502,839.20 | 156,725,739.38 | Not for short-term trading purposes | |||
| Shenzhen Huaxida Technology Co., Ltd. | 28,138,181.82 | 72,480,000.00 | 44,341,818.18 | 21,861,818.18 | Not for short-term trading purposes | |||
| Asia-Pacific Emerging Industries Venture Capital Co., Ltd. | 1,039,358.55 | 706,549.78 | 332,808.77 | 307,552.75 | Not for short-term trading purposes | |||
| Shenzhen Shifang Sports Technology Co., Ltd. | 25,000,000.00 | Not for short-term trading purposes | ||||||
| Total | 249,122,251.32 | 440,106,992.66 | 705,286.39 | 175,505,280.37 | 157,389,635.98 | 22,965,122.44 |
Termination acknowledgement exists in the current period
In RMB
Project name
| Project name | Cumulative gains transferred to retained earnings | Cumulative losses transferred to retained earnings | Reasons for termination of confirmation |
| Zhejiang Tony Electronics Co., Ltd. | 37,783,386.82 | Disposal of partial stock equity |
Disclosure of non-trading equity instrument investments for the current period.
In RMB
| Project name | Recognized dividend income | Cumulative gain | Cumulative loss | Amount transferred from other comprehensive income to retained earnings | Reasons specified as measured at fair value and for which changes are included in other comprehensive income | Other reasons for transferring comprehensive income to retained earnings |
Other descriptions:
13. Long-term equity investments
In RMB
| Investee | Opening balance (book value) | Opening balance | Increase and decrease in the current period | Closing balance (book value) | Closing balance of provision for impairment | |||||||
| Additional investment | Reduced investment | Investment profit or loss recognized under equity method | Others comprehensive income adjustment | Others changes in equity | Declared cash dividends or profits | Provision for impairment | Others | |||||
| I. Joint ventures | ||||||||||||
| Riyimao Industrial Co., Ltd. | 119,066,960.41 | 15,859,552.50 | -2,049,012.90 | 132,877,500.01 | ||||||||
| Subtotal | 119,066,960.41 | 15,859,552.50 | -2,049,012.90 | 132,877,500.01 | ||||||||
| II. Associates | ||||||||||||
| Subtotal of associates | 1,915,313,290.71 | 34,372,608.46 | 235,000,000.00 | 2,028,502,057.39 | -7,598,398.15 | -35,597,677.30 | -1,182,423.15 | 4,134,436,849.50 | 34,372,608.46 | |||
| Subtotal | 1,915,313,290.71 | 34,372,608.46 | 235,000,000.00 | 2,028,502,057.39 | -7,598,398.15 | -35,597,677.30 | -1,182,423.15 | 4,134,436,849.50 | 34,372,608.46 | |||
Total
| Total | 2,034,380,251.12 | 34,372,608.46 | 235,000,000.00 | 2,044,361,609.89 | -7,598,398.15 | -35,597,677.30 | -3,231,436.05 | 4,267,314,349.51 | 34,372,608.46 |
Determining the recoverable amount by subtracting the disposal costs from the fair value
□Applicable ?N/A
Determining the recoverable amount by the present value of expected future cash flows
□Applicable ?N/A
Reasons for the significant differences between the above information and the information used or external information used inimpairment tests in previous years
Reasons for significant differences between the information used in impairment tests in previous years and the actual situation in thecurrent year
Other descriptions:
14. Other non-current financial assets
In RMB
| Item | Closing balance | Opening balance |
| Stock investment | 35,700,000.00 | 35,700,000.00 |
| Total | 35,700,000.00 | 35,700,000.00 |
Other descriptions:
15. Investment properties
(1) Investment properties measured at cost
?Applicable □ N/A
In RMB
| Item | Buildings | Land use right | Construction in progress | Total |
| I. Original carrying amount | ||||
| 1. Opening balance | 88,325,184.67 | 18,216,793.02 | 106,541,977.69 | |
| 2. Increase in the current period | 357,334.67 | 328,822.92 | 686,157.59 | |
| (1) Purchase | ||||
| (2) Transferred from |
inventories\fixedassets\construction inprogress
| inventories\fixed assets\construction in progress | ||||
| (3) Increase in business combination | ||||
| (4) Others | 357,334.67 | 328,822.92 | 686,157.59 | |
| 3. Decrease in the current period | 71,655,597.57 | 6,472,952.20 | 78,128,549.77 | |
| (1) Disposal | 71,655,597.57 | 6,472,952.20 | 78,128,549.77 | |
| (2) Other transfer out | ||||
| 4. Closing balance | 17,026,921.77 | 12,072,663.74 | 29,099,585.51 | |
| II. Accumulated depreciation and amortization | ||||
| 1. Opening balance | 13,759,567.63 | 13,759,567.63 | ||
| 2. Increase in the current period | 423,659.58 | 423,659.58 | ||
| (1) Provision or amortization | 327,662.40 | 327,662.40 | ||
| (2) Increase in business combination | 95,997.18 | 95,997.18 | ||
| 3. Decrease in the current period | 8,437,577.94 | 8,437,577.94 | ||
| (1) Disposal | 8,437,577.94 | 8,437,577.94 | ||
| (2) Other transfer out | ||||
| 4. Closing balance | 5,745,649.27 | 5,745,649.27 | ||
| III. Provision for impairment | ||||
| 1. Opening balance | ||||
| 2. Increase in the current period | ||||
| (1) Provision | ||||
| 3. Decrease in the current period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4. Closing balance | ||||
| IV. Book value |
1. Closing book
value
| 1. Closing book value | 11,281,272.50 | 12,072,663.74 | 23,353,936.24 | |
| 2. Opening book value | 74,565,617.04 | 18,216,793.02 | 92,782,410.06 |
Determining the recoverable amount by subtracting the disposal costs from the fair value
□Applicable ?N/A
Determining the recoverable amount by the present value of expected future cash flows
□Applicable ?N/A
Reasons for the significant differences between the above information and the information used or external information used inimpairment tests in previous years
Reasons for significant differences between the information used in impairment tests in previous years and the actual situation in thecurrent year
Other descriptions:
16. Fixed assets
In RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 44,560,506,279.62 | 44,026,022,703.69 |
| Fixed asset clearance | ||
| Total | 44,560,506,279.62 | 44,026,022,703.69 |
(1) Fixed assets
In RMB
| Item | Buildings | Office equipment | Machinery equipment | Computer equipment | Auxiliary production equipment | Transportation equipment | Other equipment | Mould equipment | Total |
| I. Original carrying amount | |||||||||
| 1. Opening balance | 13,363,674,979.58 | 348,923,944.21 | 32,046,639,146.51 | 378,144,995.23 | 2,960,204,186.00 | 94,727,461.82 | 9,188,808,043.60 | 5,897,963,482.80 | 64,279,086,239.75 |
| 2. Increase in the | 1,436,850,613.87 | 102,497,803.68 | 5,172,845,249.69 | 31,094,374.78 | 624,906,054.64 | 14,749,924.56 | 3,535,385,856.71 | 874,213,023.20 | 11,792,542,901.13 |
currentperiod
| current period | |||||||||
| (1) Purchase | 237,692,262.35 | 95,971,543.92 | 4,178,527,094.77 | 30,610,450.72 | 513,710,051.82 | 12,759,444.67 | 2,483,112,485.85 | 380,262,836.92 | 7,932,646,171.02 |
| (2) Transferred from construction in progress | 1,121,416,016.74 | 4,159.29 | 974,351,416.54 | 217,707.66 | 74,895,324.73 | 1,699,203.54 | 1,032,336,602.87 | 490,089,454.73 | 3,695,009,886.10 |
| (3) Increase in business combination | |||||||||
| (4) Others | 77,742,334.78 | 6,522,100.47 | 19,966,738.38 | 266,216.40 | 36,300,678.09 | 291,276.35 | 19,936,767.99 | 3,860,731.55 | 164,886,844.01 |
| 3. Decrease in the current period | 50,134,681.31 | 10,229,692.28 | 1,652,955,339.91 | 42,107,567.15 | 204,344,211.09 | 9,872,532.26 | 312,816,584.10 | 327,295,480.89 | 2,609,756,088.99 |
| (1) Disposal or scrap | 16,759,483.13 | 9,976,074.27 | 843,596,384.74 | 20,807,712.78 | 162,247,527.53 | 9,768,706.00 | 182,299,464.66 | 194,408,280.01 | 1,439,863,633.12 |
| (2) Others | 33,375,198.18 | 253,618.01 | 809,358,955.17 | 21,299,854.37 | 42,096,683.56 | 103,826.26 | 130,517,119.44 | 132,887,200.88 | 1,169,892,455.87 |
| 4. Closing balance | 14,750,390,912.14 | 441,192,055.61 | 35,566,529,056.29 | 367,131,802.86 | 3,380,766,029.55 | 99,604,854.12 | 12,411,377,316.21 | 6,444,881,025.11 | 73,461,873,051.89 |
| II. Accumulated depreciation | |||||||||
| 1. Opening balance | 2,364,415,146.93 | 162,894,220.17 | 10,132,127,638.78 | 174,691,015.13 | 1,046,642,736.76 | 51,242,564.18 | 3,569,014,319.36 | 2,259,730,286.23 | 19,760,757,927.54 |
| 2. Increase in the current period | 732,446,472.56 | 70,692,422.21 | 4,632,494,310.12 | 53,006,714.00 | 648,319,706.10 | 12,098,377.43 | 2,078,853,735.38 | 1,482,814,147.87 | 9,710,725,885.67 |
| (1) Provision | 709,628,538.89 | 64,176,498.05 | 4,610,848,476.83 | 52,831,481.56 | 623,131,581.58 | 12,064,262.96 | 2,067,302,007.50 | 1,479,296,748.19 | 9,619,279,595.56 |
| (2) Transferre | 22,817,933.67 | 6,515,924.16 | 21,645,833.29 | 175,232.44 | 25,188,124.52 | 34,114.47 | 11,551,727.88 | 3,517,399.68 | 91,446,290.11 |
d frominvestmentproperties(3)Increaseinbusinesscombination(1)Provision
| d from investment properties(3) Increase in business combination(1) Provision | |||||||||
| (2) Transferred from investment properties | 11,399,108.48 | 3,995,272.70 | 514,617,890.14 | 24,167,091.50 | 154,903,320.68 | 4,865,690.74 | 114,310,893.38 | 231,592,130.31 | 1,059,851,397.93 |
| (1) Disposal or scrap | 8,000,538.73 | 3,858,790.93 | 325,059,511.62 | 4,913,091.38 | 137,740,766.94 | 3,329,797.51 | 65,835,470.30 | 132,266,683.76 | 681,004,651.17 |
| (2) Others | 3,398,569.75 | 136,481.77 | 189,558,378.52 | 19,254,000.12 | 17,162,553.74 | 1,535,893.23 | 48,475,423.08 | 99,325,446.55 | 378,846,746.76 |
| 4. Closing balance | 3,085,462,511.01 | 229,591,369.68 | 14,250,004,058.76 | 203,530,637.63 | 1,540,059,122.18 | 58,475,250.87 | 5,533,557,161.36 | 3,510,952,303.79 | 28,411,632,415.28 |
| III. Provision for impairment | |||||||||
| 1. Opening balance | 63,256,923.55 | 1,861,367.25 | 347,496,049.28 | 259,852.81 | 10,156,494.51 | 42,534.87 | 26,091,492.31 | 43,140,893.94 | 492,305,608.52 |
| 2. Increase in the current period | 4,126.30 | 149,592,837.36 | 1,152,035.53 | 17,422,103.12 | 27,602,804.54 | 2,360,812.13 | 198,134,718.98 | ||
| (1) Provision | 4,126.30 | 144,040,465.07 | 1,149,231.13 | 17,422,103.12 | 26,702,570.04 | 2,357,938.29 | 191,676,433.95 | ||
| (2) Others | 5,552,372.29 | 2,804.40 | 900,234.50 | 2,873.84 | 6,458,285.03 | ||||
| 3. Decrease in the current period | 1,854,243.98 | 146,742,174.94 | 94,153.81 | 19,086,408.06 | 9,253,966.26 | 23,675,023.46 | 200,705,970.51 | ||
| (1) Disposal or scrap | 58,288.51 | 146,740,870.50 | 94,153.81 | 16,979,837.45 | 9,253,324.43 | 21,122,430.08 | 194,248,904.78 |
(2)Others
| (2) Others | 1,795,955.47 | 1,304.44 | 2,106,570.61 | 641.83 | 2,552,593.38 | 6,457,065.73 | |||
| 4. Closing balance | 63,256,923.55 | 11,249.57 | 350,346,711.70 | 1,317,734.53 | 8,492,189.57 | 42,534.87 | 44,440,330.59 | 21,826,682.61 | 489,734,356.99 |
| IV. Book value | |||||||||
| 1. Closing book value | 11,601,671,477.58 | 211,589,436.36 | 20,966,178,285.83 | 162,283,430.70 | 1,832,214,717.80 | 41,087,068.38 | 6,833,379,824.26 | 2,912,102,038.71 | 44,560,506,279.62 |
| 2. Opening book value | 10,936,002,909.10 | 184,168,356.79 | 21,567,015,458.45 | 203,194,127.29 | 1,903,404,954.73 | 43,442,362.77 | 5,593,702,231.93 | 3,595,092,302.63 | 44,026,022,703.69 |
(2) Fixed assets without title certificate
In RMB
| Item | Book value | Reasons for not obtaining the title certificate |
| Plant, office and dormitory buildings of Fujian JK | 7,220,008.93 | Note 1 |
| Changshu Luxshare Factory and Auxiliary Building Project | 785,432,113.14 | The certificate is undergoing the formalities |
| Suzhou Meite Cadre Training Center | 955,897.08 | The certificate is undergoing the formalities |
| The certificate is undergoing the formalities Plants A and B of Luxshare Dongguan | 50,693,626.67 | The certificate is undergoing the formalities |
| Plant and Dormitory of Electronic Technology | 125,169,613.27 | The certificate is undergoing the formalities |
| Phase VI Plant of ASAP Technology | 88,125,876.44 | The certificate is undergoing the formalities |
| New plant of LuxcaseICT Yancheng | 74,915,032.07 | The certificate is undergoing the formalities |
Other descriptions:
Note 1: The land occupied by the staff dormitory is in nature an allotted land, the use right of which was acquired by the Company bymeans of transfer through agreement in line with relevant regulations at that time. The property title formed based on the allotted landuse right is not allowed to be transferred unless the allocated land use right is converted to paid land use right. However, the existingland use right cannot be transferred by agreement, as a result of which the property title to the staff dormitory building has not beentransferred to Fujian JK.
In RMB
17. Construction in progress
In RMB
| Item | Closing balance | Opening balance |
| Construction in progress | 2,226,217,016.31 | 2,695,377,794.32 |
| Total | 2,226,217,016.31 | 2,695,377,794.32 |
(1) Construction in progress
In RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Plant construction | 1,147,091,150.13 | 1,147,091,150.13 | 1,757,877,949.76 | 1,757,877,949.76 | ||
| Equipment installation project | 702,303,869.84 | 702,303,869.84 | 630,505,432.98 | 630,505,432.98 | ||
| Mould improvement | 178,571,369.63 | 178,571,369.63 | 77,734,469.29 | 77,734,469.29 | ||
| Others | 198,250,626.71 | 198,250,626.71 | 229,259,942.29 | 229,259,942.29 | ||
| Total | 2,226,217,016.31 | 2,226,217,016.31 | 2,695,377,794.32 | 2,695,377,794.32 | ||
(2) Changes in significant constructions in progress for the current period
In RMB
| Item | Budget | Opening balance | Increase in the current period | Amount transferred to fixed assets in the current period | Other decrease in the current period | Closing balance | Proportion of accumulated project investment in budget | Project progress | Amount of accumulated capitalized interest | Including: Amount of current capitalized interest | Current interest capitalization rate | Source of funds |
| Plant construction of Luxshare Changshu | 3,760,327,831.39 | 1,189,282,930.08 | 760,411,746.25 | 1,390,352,012.03 | 559,342,664.30 | 62.23% | 62.00% | Others |
EquipmentinstallationprojectofLuxshareChangshu
| Equipment installation project of Luxshare Changshu | 1,142,834,251.00 | 245,346,465.69 | 37,156,420.98 | 266,109,110.17 | 5,637,188.13 | 10,756,588.37 | 48.00% | 50.00% | Others | |||
| Vietnam plant project | 805,618,010.28 | 11,273,342.58 | 11,273,342.58 | 100.00% | 100.00% | Others | ||||||
| Yi’an project construction | 1,491,869,006.92 | 161,988,668.98 | 1,307,857,453.99 | 936,715,559.68 | 533,130,563.29 | 64.26% | 64.26% | Others | ||||
| Total | 7,200,649,099.59 | 1,607,891,407.33 | 2,105,425,621.22 | 2,604,450,024.46 | 5,637,188.13 | 1,103,229,815.96 |
(3) Impairment test of construction in progress
□Applicable ?N/A
18. Right-of-use assets
(1) Situations of right-of-use asset
In RMB
| Item | Buildings | Machinery equipment | Transportation equipment | Total |
| I. Original carrying amount | ||||
| 1. Opening balance | 1,161,016,114.04 | 8,954,945.31 | 140,235.69 | 1,170,111,295.04 |
| 2. Increase in the current period | 170,397,024.42 | 47,612,973.87 | 1,078,518.46 | 219,088,516.75 |
| (1) New leases | 160,984,962.16 | 47,612,973.87 | 1,075,676.55 | 209,673,612.58 |
| (2) Others | 9,412,062.26 | 2,841.91 | 9,414,904.17 | |
| 3. Decrease in the current period | 450,498,747.31 | 53,590,996.25 | 504,089,743.56 | |
| (1) Transfer out to fixed assets | 35,318,482.08 | 1,747,953.03 | 37,066,435.11 | |
| (2) Disposal | 415,180,265.23 | 51,843,043.22 | 467,023,308.45 |
4. Closing balance
| 4. Closing balance | 880,914,391.15 | 2,976,922.93 | 1,218,754.15 | 885,110,068.23 |
| II. Accumulated depreciation | ||||
| 1. Opening balance | 220,152,500.80 | 8,168,065.58 | 40,914.00 | 228,361,480.38 |
| 2. Increase in the current period | 149,802,109.13 | 32,194,017.60 | 164,066.57 | 182,160,193.30 |
| (1) Provision | 144,033,638.76 | 32,194,017.60 | 163,328.57 | 176,390,984.93 |
| (2) Others | 5,768,470.37 | 738.00 | 5,769,208.37 | |
| 3. Decrease in the current period | 136,396,448.18 | 37,979,125.36 | 174,375,573.54 | |
| (1) Disposal | 129,805,899.01 | 37,979,125.36 | 167,785,024.37 | |
| (2) Others | 6,590,549.17 | 6,590,549.17 | ||
| 4. Closing balance | 233,558,161.75 | 2,382,957.82 | 204,980.57 | 236,146,100.14 |
| III. Provision for impairment | ||||
| 1. Opening balance | ||||
| 2. Increase in the current period | ||||
| (1) Provision | ||||
| 3. Decrease in the current period | ||||
| (1) Disposal | ||||
| 4. Closing balance | ||||
| IV. Book value | ||||
| 1. Closing book value | 647,356,229.40 | 593,965.11 | 1,013,773.58 | 648,963,968.09 |
| 2. Opening book value | 940,863,613.24 | 786,879.73 | 99,321.69 | 941,749,814.66 |
(2) Situations of impairment test of the right to use assets
□Applicable ?N/A
Other descriptions:
19. Intangible assets
(1) Intangible assets
In RMB
Item
| Item | Land use right | Patent right | Non-patent technology | Software | Other | Total |
| I. Original carrying amount | ||||||
| 1. Opening balance | 2,433,471,958.29 | 194,363,877.67 | 94,473,253.38 | 376,376,284.59 | 108,431,904.34 | 3,207,117,278.27 |
| 2. Increase in the current period | 81,858,575.62 | 2,151,532.00 | 38,136,201.23 | 101,286,460.32 | 2,217,360.82 | 225,650,129.99 |
| (1) Purchase | 66,189,101.89 | 2,145,190.80 | 36,831,406.85 | 84,449,943.74 | 267,160.45 | 189,882,803.73 |
| (2) Internal R&D | ||||||
| (3) Increase in business combination | ||||||
| (4) Other increases | 15,669,473.73 | 6,341.20 | 1,304,794.38 | 16,836,516.58 | 1,950,200.37 | 35,767,326.26 |
| 3. Decrease in the current period | 17,315,931.44 | 118,150.00 | 16,327,282.36 | 41,140,345.27 | 313,677.50 | 75,215,386.57 |
| (1) Disposal | 118,150.00 | 508,609.61 | 39,168,200.38 | 167,798.61 | 39,962,758.60 | |
| (2) Others | 17,315,931.44 | 15,818,672.75 | 1,972,144.89 | 145,878.89 | 35,252,627.97 | |
| 4. Closing balance | 2,498,014,602.47 | 196,397,259.67 | 116,282,172.25 | 436,522,399.64 | 110,335,587.66 | 3,357,552,021.69 |
| II. Accumulated amortization | ||||||
| 1. Opening balance2. Increase in the current period4. Closing balance II. Accumulated amortization1. Opening balance2. Increase in the current period4. Closing balance II. Accumulated amortization1. Opening balance2. Increase in the current period4. Closing balance | 235,085,224.75 | 32,275,155.70 | 42,988,312.96 | 183,727,565.49 | 17,356,965.70 | 511,433,224.60 |
| II. Accumulated amortization | 63,004,328.62 | 42,837,581.49 | 32,172,371.20 | 98,256,378.31 | 10,180,423.12 | 246,451,082.74 |
(1)Provision
| (1) Provision | 62,800,649.59 | 42,833,973.43 | 28,908,970.37 | 88,715,602.53 | 9,869,974.39 | 233,129,170.31 |
| (2) Other increase | 203,679.03 | 3,608.06 | 3,263,400.83 | 9,540,775.78 | 310,448.73 | 13,321,912.43 |
| 3. Decrease in the current period | 12,834,394.20 | 118,150.00 | 12,411,161.46 | 37,873,660.89 | 164,022.96 | 63,401,389.51 |
| (1) Disposal | 118,150.00 | 479,189.99 | 36,830,306.69 | 25,169.80 | 37,452,816.48 | |
| (3) Other decrease | 12,834,394.20 | 11,931,971.47 | 1,043,354.20 | 138,853.16 | 25,948,573.03 | |
| 4. Closing balance | 285,255,159.17 | 74,994,587.19 | 62,749,522.70 | 244,110,282.91 | 27,373,365.86 | 694,482,917.83 |
| III. Provision for impairment | ||||||
| 1. Opening balance | ||||||
| 2. Increase in the current period | ||||||
| (1) Provision | ||||||
| 3. Decrease in the current period | ||||||
| (1) Disposal | ||||||
| 4. Closing balance | ||||||
| IV. Book value | ||||||
| 1. Closing book value | 2,212,759,443.30 | 121,402,672.48 | 53,532,649.55 | 192,412,116.73 | 82,962,221.80 | 2,663,069,103.86 |
| 2. Opening book value | 2,198,386,733.54 | 162,088,721.97 | 51,484,940.42 | 192,648,719.10 | 91,074,938.64 | 2,695,684,053.67 |
The proportion of intangible assets formed through internal R&D in the balance of intangible assets at the end of this period is
0.00%.
(2)Impairment test of intangible assets
□Applicable ?N/A
20. Goodwill
(1) Original carrying amount of goodwill
In RMB
| Investee name or event forming goodwill | Opening balance | Increase | Decrease | Closing balance | ||
| Formed by business combination | Others | Disposal | Others | |||
| ASAP Technology (Jiangxi) Co., Ltd. | 42,325,745.85 | 42,325,745.85 | ||||
| Kunshan Lanto Electronic Limited | 376,682,429.24 | 376,682,429.24 | ||||
| Bozhou Lanto Electronic Limited | 9,564,372.61 | 9,564,372.61 | ||||
| M&A of KERTONG goodwill | 53,174,339.31 | 53,174,339.31 | ||||
| Fujian JK Wiring Systems Co., Ltd. | 17,717,209.29 | 17,717,209.29 | ||||
| Huzhou Jiuding Electronic Co., Ltd. | 1,730,318.45 | 1,730,318.45 | ||||
| SpeedTech Corp. | 26,656,146.69 | 26,656,146.69 | ||||
| Luxshare Electronic Technology (Kunshan) Co., Ltd. | 4,582,880.91 | 4,582,880.91 | ||||
| Suk kunststofftechnik GmbH | 9,552,894.63 | 9,552,894.63 | ||||
| Merry Electronics (Suzhou) Co., Ltd. | 8,570,588.06 | 8,570,588.06 | ||||
| Merry Electronics (Huizhou) Co., | 6,575,713.14 | 6,575,713.14 | ||||
Ltd.
| Ltd. | ||||||
| Merry Electronics (Shanghai) Co., Ltd. | 454,304.97 | 454,304.97 | ||||
| Castle Rock, Inc. | 8,303,254.98 | 8,303,254.98 | ||||
| Taiqiao Investment Co., Ltd. | 441,595.93 | 441,595.93 | ||||
| Luxcase Precision Technology (Yancheng) Co., Ltd. | 814,784,800.96 | 814,784,800.96 | ||||
| Zhejiang Puxing Electronic Technology Co., Ltd. | 804,455.51 | 804,455.51 | ||||
| Caldigit Holding(Cayman) | 41,765,582.41 | 41,765,582.41 | ||||
| Taihan Precision Co., Ltd. | 9,972,872.88 | 9,972,872.88 | ||||
| TIME Interconnect Technology Limited | 175,669,057.02 | 175,669,057.02 | ||||
| Shenzhen Huarong Technology Co., Ltd. | 157,013,624.50 | 157,013,624.50 | ||||
| Total | 1,766,342,187.34 | 1,766,342,187.34 |
(2) Provision for impairment of goodwill
In RMB
| Investee name or event forming goodwill | Opening balance | Increase | Decrease | Closing balance | ||
| Provision | Other | Disposal | Other | |||
| Merry Electronics (Suzhou) Co., Ltd. | 8,570,588.06 | 8,570,588.06 | ||||
SukkunststofftechnikGmbH
| Suk kunststofftechnik GmbH | 9,552,894.63 | 9,552,894.63 | ||||
| Merry Electronics (Shanghai) Co., Ltd. | 454,304.97 | 454,304.97 | ||||
| Fujian JK Wiring Systems Co., Ltd.. | 17,717,209.29 | 17,717,209.29 | ||||
| Zhejiang Puxing Electronic Technology Co., Ltd. | 804,455.51 | 804,455.51 | ||||
| Total | 36,294,996.95 | 804,455.51 | 37,099,452.46 |
(3) Specific method of determining the recoverable amount
Determining the recoverable amount by subtracting the disposal costs from the fair value
□Applicable ?N/A
Determining the recoverable amount by the present value of expected future cash flows
□Applicable ?N/A
Reasons for the significant differences between the above information and the information used or external information used inimpairment tests in previous years
Note 1: The goodwill of the Company is formed by business combinations not involving enterprises under common control in previousyears and this year. On the balance sheet date, the Company conducted impairment tests on goodwill. The recoverable amount of theasset group involved in goodwill is determined according to the present value of the future cash flow of the asset group and the netrealizable value. The management determines the growth rate and gross margin based on the macro market environment, historicalexperience and the development stage forecast of product segments involved in different asset groups. Depending on the different assetgroups involved, the growth rate used in the forecast for the current year is -10.50%-16.24%, the gross margin is 3.00%-45.00%, andthe discount rate is 3.21%-11.01%. The parameters used in goodwill impairment test of major asset groups are as follows:
| Asset group name | Gross margin | Growth rate | Discount rate |
| Kunshan Lanto Electronic Limited | 11.00%-11.62% | 1.00%-2.10% | 10.58% |
| Shenzhen Kertong Industrial Co., Ltd. | 24.00%-25.98% | 14.56%-15.76% | 10.38% |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | 4.55%-4.73% | 14.00%-15.20% | 10.49% |
| Shenzhen Huarong Technology Co., Ltd. | 3.00%-3.00% | 1.00%-1.30% | 11.01% |
Explanation 2: Converge Technology Limited is a Hong Kong-listed company. The recoverable amount isdetermined by subtracting the disposal costs from the fair value.
Reasons for significant differences between the information used in impairment tests in previous years and theactual situation in the current year.
None.
21. Long-term deferred expenses
In RMB
| Item | Opening balance | Increase in the current period | Amortization amount in the current period | Other reduced amount | Closing balance |
| House decoration fees | 683,275,646.67 | 136,043,949.17 | 348,995,154.67 | 470,324,441.17 | |
| Others | 127,637,883.05 | 110,764,591.94 | 118,460,913.01 | 119,941,561.98 | |
| Total | 810,913,529.72 | 246,808,541.11 | 467,456,067.68 | 590,266,003.15 |
Other descriptions:
22. Deferred tax assets / deferred tax liabilities
(1) Deferred tax assets that are not offset
In RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Provision for impairment of assets | 1,143,132,621.04 | 224,368,274.81 | 657,614,145.51 | 120,807,667.80 |
| Unrealized profit of internal transaction | 541,695,019.14 | 96,205,468.40 | 547,139,157.01 | 83,055,862.59 |
| Deductible losses | 3,129,088,911.68 | 474,034,583.26 | 4,720,193,354.02 | 720,299,236.63 |
| Share-based payment | 1,029,585,993.98 | 163,582,703.34 | 622,032,254.71 | 108,660,230.06 |
| Tax and accounting difference for depreciation of fixed assets | 642,643,662.15 | 160,660,915.54 | 162,109,310.74 | 40,527,327.69 |
| Government grants | 590,824,033.43 | 94,809,630.59 | 632,820,537.44 | 100,039,648.41 |
| Exchange differences of foreign operations | 68,848,999.67 | 13,769,799.93 | 33,377,229.80 | 6,675,445.96 |
| Lease liability | 410,088,669.15 | 71,535,638.48 | 112,433,079.83 | 18,929,003.15 |
Changes in the fairvalue of other equityinstruments
| Changes in the fair value of other equity instruments | 22,965,122.40 | 3,444,768.36 | ||
| Valuation of derivative financial instruments | 12,795,763.95 | 3,198,940.99 | 26,587,015.00 | 3,988,052.25 |
| Dismissal welfare | 2,231,853.00 | 446,370.60 | 1,801,352.50 | 360,270.50 |
| Unused vacation bonus | 2,649,530.00 | 529,906.00 | 4,402,578.27 | 660,386.74 |
| Others | 122,671,291.67 | 23,352,718.56 | 144,569,697.93 | 21,685,454.69 |
| Total | 7,719,221,471.26 | 1,329,939,718.86 | 7,665,079,712.76 | 1,225,688,586.47 |
(2) Deferred tax liabilities that are not offset
In RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
| Assets valuation appreciation of business combination not involving enterprises under common control | 613,468,097.18 | 138,602,301.85 | 1,063,081,733.74 | 155,352,276.68 |
| Changes in fair value of other investments in equity instruments | 156,725,739.33 | 23,508,860.90 | 347,049,284.20 | 52,057,392.63 |
| Accelerated depreciation of fixed assets | 5,334,807,068.28 | 821,130,904.46 | 7,762,570,628.34 | 1,174,529,672.69 |
| Accumulative recognition of overseas investment interests by equity method | 1,032,240,690.00 | 206,448,138.00 | 852,318,046.60 | 170,463,609.32 |
| Valuation of derivative financial instruments | 452,705,163.11 | 71,282,964.19 | 274,939,615.85 | 48,638,903.32 |
| Right-of-use assets | 380,058,524.89 | 65,285,746.10 | 98,762,595.73 | 17,106,305.46 |
| Unrealized exchange gains | 64,324,553.60 | 9,648,683.04 | ||
| Support funds allocated by the government | 13,883,542.73 | 2,082,531.41 | 14,271,238.70 | 2,140,685.81 |
| Prepaid pension | 6,748,781.00 | 1,349,756.20 | 6,459,206.85 | 1,291,841.37 |
| Others | 5,895,798.70 | 1,580,971.04 | 14,249,026.72 | 2,170,795.18 |
| Total | 8,060,857,958.82 | 1,340,920,857.19 | 10,433,701,376.73 | 1,623,751,482.46 |
(3) Deferred tax assets or liabilities presented in net amount after offsetting
In RMB
| Item | Offset amount between deferred tax assets and liabilities at the end of the period | Closing balance of deferred tax assets or liabilities after offset | Offset amount between deferred tax assets and liabilities at the beginning of the period | Opening balance of deferred tax assets or liabilities after offset |
| Deferred tax assets | 456,995,883.46 | 872,943,835.40 | 17,106,305.46 | 1,208,582,281.01 |
| Deferred tax liabilities | 456,995,883.46 | 883,924,973.73 | 17,106,305.46 | 1,606,645,177.00 |
23. Other non-current assets
In RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Certificates of deposit and time deposits | 8,363,006,126.99 | 8,363,006,126.99 | ||||
| Prepayments for equipment, project and land | 1,416,220,632.39 | 1,416,220,632.39 | 1,663,116,059.58 | 1,663,116,059.58 | ||
| Advance equity purchase margin | 141,654,000.00 | 141,654,000.00 | ||||
| Prepaid pension | 6,748,719.45 | 6,748,719.45 | 6,459,206.83 | 6,459,206.83 | ||
| Others | 4,014,634.09 | 4,014,634.09 | 6,684,645.92 | 6,684,645.92 | ||
| Total | 9,931,644,112.92 | 9,931,644,112.92 | 1,676,259,912.33 | 1,676,259,912.33 | ||
Other descriptions:
24、Assets whose ownership or use is restricted
In RMB
| Item | End of the period | Beginning of the period | ||||||
| Book balance | Book value | Restricte | Restricted case | Book balance | Book value | Restricted type | Restricted case | |
dtype
| d type | ||||||||
| Monetary funds | 3,935,387,136.86 | 3,935,387,136.86 | Deposit | Limited by the issuance of bills, letters of credit | 2,054,791,011.90 | 2,054,791,011.90 | Deposit | Limited by the issuance of bills, letters of credit |
| Notes receivable | 164,567,477.58 | 164,567,477.58 | Pledge | Notes receivable pledge financing | 469,338,331.89 | 469,338,331.89 | Pledge | Notes receivable pledge financing |
| Fixed assets | 635,803,443.15 | 635,803,443.15 | Mortgage | Fixed assets mortgage financing | 1,596,425,969.25 | 1,596,425,969.25 | Mortgage | Fixed assets mortgage financing |
| Intangible assets | 401,674,060.39 | 401,674,060.39 | Pledge | Land use right pledge financing | 547,767,902.77 | 547,767,902.77 | Pledge | Land use right pledge financing |
| Accounts receivable | 1,049,804,176.80 | 1,049,804,176.80 | Pledge | Accounts receivable pledge financing | ||||
| Equity investment | 5,781,943,543.70 | 5,781,943,543.70 | Pledge | Equity pledge financing | ||||
| Trading financial assets | 60,000,000.00 | 60,000,000.00 | Pledge | Transactional financial asset pledge financing | ||||
| Other non-current assets | 2,874,097,749.98 | 2,874,097,749.98 | Pledge | Limited by the issuance of bills, letters of credit | ||||
| Total | 8,011,529,867.96 | 8,011,529,867.96 | 11,560,070,936.31 | 11,560,070,936.31 |
Other descriptions:
25. Short-term borrowings
(1) Classification of Short-term borrowings
In RMB
| Item | Closing balance | Opening balance |
| Pledge loans | 4,260,029,345.26 | 1,284,267,389.38 |
| Mortgage loans | 171,321,000.00 | 294,954,654.15 |
| Guaranteed loans | 550,036,618.19 | 897,638,187.36 |
| Credit loans | 15,532,795,277.02 | 12,435,039,438.04 |
| Total | 20,514,182,240.47 | 14,911,899,668.93 |
Descriptions on classification of short-term borrowings:
26. Held-for-trading financial liabilities
In RMB
| Item | Closing balance | Opening balance |
| Held-for-trading financial liabilities | 117,942,421.18 | 44,318,321.50 |
| Including: | ||
| Held-for-trading bonds issued | 41,436.00 | |
| Derivative financial liabilities | 117,942,421.18 | 44,276,885.50 |
| Including: | ||
| Total | 117,942,421.18 | 44,318,321.50 |
Other descriptions:
27. Notes payable
In RMB
| Category | Closing balance | Opening balance |
| Commercial acceptance draft | 168,339.81 | |
| Bank acceptance bill | 492,417,560.22 | 515,054,217.52 |
| Total | 492,585,900.03 | 515,054,217.52 |
The total amount of notes payable due but unpaid at the end of this period is RMB0.00. The reason for the unpaid maturity is.
28. Accounts payable
(1) Presentation of accounts payable
In RMB
| Item | Closing balance | Opening balance |
| Within 1 year | 45,810,846,164.38 | 49,695,071,669.97 |
| 1-2 years | 78,664,332.26 | 74,344,408.63 |
| 2-3 years | 12,249,724.48 | 9,178,439.03 |
| More than 3 years | 6,755,074.31 | 7,889,034.91 |
| Total | 45,908,515,295.43 | 49,786,483,552.54 |
(2) Significant accounts payable with aging over 1 year or overdue
In RMB
| Item | Closing balance | Reasons for non-payment or carrying forward |
Other descriptions:
29. Other payables
In RMB
| Item | Closing balance | Opening balance |
| Dividends payable | 11,894,022.29 | 15,089,486.78 |
| Other payables | 394,783,918.24 | 457,790,709.70 |
| Total | 406,677,940.53 | 472,880,196.48 |
(1) Interest payable
| Item | Closing balance | Opening balance |
| Common stock dividend | 11,894,022.29 | 15,089,486.78 |
| Total | 11,894,022.29 | 15,089,486.78 |
Other descriptions, including significant dividends payable that have not been paid for more than 1 year, should disclose the reasonsfor non-payment:
(2) Other payables
1) Presentation of other payables by nature
In RMB
| Item | Closing balance | Opening balance |
| Within 1 year | 373,822,808.71 | 437,302,630.87 |
| 1 -2 years | 7,536,142.05 | 3,828,361.57 |
| 2 -3 years | 2,845,498.74 | 11,160,503.01 |
| Over 3 years | 10,579,468.74 | 5,499,214.25 |
| Total | 394,783,918.24 | 457,790,709.70 |
2) Other payables in the top five closing balances aggregated by counterparty
Other descriptions:
30. Contract liabilities
In RMB
| Item | Closing balance | Opening balance |
| Goods payments received in advance | 243,566,923.42 | 501,765,453.24 |
| Total | 243,566,923.42 | 501,765,453.24 |
Significant contractual liabilities older than 1 year
In RMB
| Item | Closing balance | Reasons for non-repayment or carry-forward |
Amount of and reason for significant changes in book value during the reporting period
In RMB
| Item | Change amount | Reason for change |
31. Employee benefits payable
(1) Presentation of employee benefits payable
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| I. Short-term benefits | 2,342,044,143.27 | 17,938,012,648.19 | 17,971,644,511.47 | 2,308,412,279.99 |
| II. Post-employment benefits - defined | 26,031,119.21 | 1,039,587,523.62 | 1,043,928,351.07 | 21,690,291.76 |
contribution plan
| contribution plan | ||||
| III. Termination benefits | 60,500.00 | 15,963,144.94 | 15,807,224.94 | 216,420.00 |
| Total | 2,368,135,762.48 | 18,993,563,316.75 | 19,031,380,087.48 | 2,330,318,991.75 |
(2) Presentation of short-term benefits
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Salary, bonus, allowance and subsidy | 2,303,342,360.89 | 16,547,791,329.28 | 16,574,894,848.65 | 2,276,238,841.52 |
| 2. Employee welfare | 6,515,232.20 | 85,664,849.56 | 85,767,093.55 | 6,412,988.21 |
| 3. Social insurance premium | 21,145,736.14 | 448,482,748.52 | 455,407,250.78 | 14,221,233.88 |
| Including: Medical insurance premium | 18,863,295.63 | 383,592,643.71 | 389,831,076.50 | 12,624,862.84 |
| Employment injury insurance premium | 1,332,166.31 | 34,298,511.91 | 34,387,939.77 | 1,242,738.45 |
| Maternity insurance premium | 950,274.20 | 30,591,592.90 | 31,188,234.51 | 353,632.59 |
| 4. Housing provident fund | 5,026,232.09 | 309,818,975.91 | 310,055,560.19 | 4,789,647.81 |
| 5. Trade union funds and staff education funds | 3,005,344.46 | 24,697,378.06 | 25,255,200.10 | 2,447,522.42 |
| 8. Other short-term benefits | 3,009,237.49 | 521,557,366.86 | 520,264,558.20 | 4,302,046.15 |
| Total | 2,342,044,143.27 | 17,938,012,648.19 | 17,971,644,511.47 | 2,308,412,279.99 |
(3) Presentation of defined contribution plan
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Basic endowment insurance premium | 25,313,173.90 | 1,003,732,063.84 | 1,007,967,001.31 | 21,078,236.43 |
| 2. Unemployment insurance premium | 717,945.31 | 35,855,459.78 | 35,961,349.76 | 612,055.33 |
| Total | 26,031,119.21 | 1,039,587,523.62 | 1,043,928,351.07 | 21,690,291.76 |
Other descriptions:
32. Taxes payable
In RMB
| Item | Closing balance | Opening balance |
| Value added tax | 132,476,622.34 | 178,562,778.85 |
| Enterprise income tax | 561,049,186.85 | 357,553,487.54 |
| Individual income tax | 77,002,005.54 | 60,744,264.97 |
| Urban maintenance and construction tax | 46,681,016.77 | 54,221,444.33 |
| Property tax | 41,139,838.65 | 26,963,503.04 |
| Education surcharges | 28,316,821.64 | 32,686,140.44 |
| Local education surcharges | 18,936,169.14 | 21,777,325.55 |
| Land use tax | 5,206,233.88 | 2,338,741.28 |
| Stamp duty | 50,252,147.37 | 48,783,498.15 |
| Disability insurance | 49,635,583.88 | 49,582,574.67 |
| Others | 10,628,649.12 | 8,171,415.10 |
| Total | 1,021,324,275.18 | 841,385,173.92 |
Other descriptions:
33. Non-current liabilities due within one year
In RMB
| Item | Closing balance | Opening balance |
| Long-term borrowings due within one year | 2,688,496,752.82 | 828,839,225.82 |
| Bonds payable due within one year | 49,591,565.40 | 224,130,860.43 |
| Lease liabilities due within one year | 129,207,552.67 | 179,282,344.89 |
| Total | 2,867,295,870.89 | 1,232,252,431.14 |
Other descriptions:
34. Other current liabilities
In RMB
| Item | Closing balance | Opening balance |
| Short-term bonds payable | 802,722,191.78 | 3,840,115,068.49 |
| Payable for purchase returns | 46,968,630.49 | 38,288,770.18 |
| Entrusted loans | 10,417,821.56 | 68,866,600.31 |
| Unconfirmed instrument | 24,834,420.45 |
Short-term tickets payable
| Short-term tickets payable | 40,012,542.80 | |
| Others | 7,746,196.22 | 9,766,686.26 |
| Total | 932,701,803.30 | 3,957,037,125.24 |
Increase and decrease in short-term bonds payable:
In RMB
| Bond name | Face value | Nominal interest rate | Issue date | Bond maturity | Amount of issue | Opening balance | Issue date | Bond maturity | Amount of issue | Opening balance | Closing balance | Default or not | |
| Short-term bonds payable | 100.00 | 2.40% | 2022/6/15 | 270 days | 1,000,000,000.00 | 1,012,953,424.66 | 4,800,000.00 | 1,017,753,424.66 | No | ||||
| Short-term bonds payable | 100.00 | 2.20% | 2022/7/14 | 270 days | 1,200,000,000.00 | 1,212,223,561.64 | 7,305,205.48 | 1,219,528,767.12 | No | ||||
| Short-term bonds payable | 100.00 | 2.15% | 2022/7/21 | 270 days | 800,000,000.00 | 807,633,972.60 | 5,089,315.07 | 812,723,287.67 | No | ||||
| Short-term bonds payable | 100.00 | 2.15% | 2022/7/28 | 270 days | 800,000,000.00 | 807,304,109.59 | 5,419,178.08 | 812,723,287.67 | No | ||||
| Short-term bonds payable | 100.00 | 2.77% | 2023/4/21 | 90 days | 1,200,000,000.00 | 1,200,000,000.00 | 8,173,770.49 | 1,208,173,770.49 | No | ||||
| Short-term bonds payable | 100.00 | 2.42% | 2023/5/23 | 178 days | 800,000,000.00 | 800,000,000.00 | 9,415,519.13 | 809,415,519.13 | No | ||||
| Short-term bonds payable | 100.00 | 2.70% | 2023/11/15 | 177 days | 800,000,000.00 | 800,000,000.00 | 2,722,191.78 | 802,722,191.78 | No | ||||
| Total | 6,600,000,000.00 | 3,840,115,068.49 | 2,800,000,000.00 | 42,925,180.03 | 5,880,318,056.74 | 802,722,191.78 |
Other descriptions:
35. Long-term borrowings
(1) Classification of long-term borrowings
In RMB
| Item | Closing balance | Opening balance |
| Pledge loans | 181,159,890.80 | 3,163,203,834.77 |
| Mortgage loans | 1,605,792,188.08 | 1,992,850,059.15 |
| Guaranteed loans | 72,496,000.00 | 791,766,506.32 |
| Credit loans | 10,179,323,211.04 | 3,257,492,660.70 |
| Total | 12,038,771,289.92 | 9,205,313,060.94 |
Descriptions on classification of long-term borrowings:
Other descriptions, including interest rate range:
36. Bonds payable
(1) Bonds payable
In RMB
| Item | Closing balance | Opening balance |
| Convertible bonds | 2,799,499,850.29 | 2,689,623,546.98 |
| Total | 2,799,499,850.29 | 2,689,623,546.98 |
(2) Increase and decrease in bonds payable (excluding preferred shares, perpetual bonds and other financialinstruments classified as financial liabilities)
In RMB
| Bond name | Face value | Nominal interest rate | Issue date | Bond maturity | Amount of issue | Opening balance | Issue date | Bond maturity | Amount of issue | Opening balance | Closing balance | Default or not | |
| Convertible bonds of Luxshare | 100.00 | 2020/11/3 | 6 years | 3,000,000,000.00 | 2,689,623,546.98 | 15,000,000.00 | 104,018,900.07 | 9,000,000.00 | 142,596.76 | 2,799,499,850.29 | No | ||
| Total | —— | 3,000,000,0 | 2,689,623,5 | 15,000,000. | 104,018,90 | 9,000,000.0 | 142,596.76 | 2,799,499,8 | —— | ||||
00.00
| 00.00 | 46.98 | 00 | 0.07 | 0 | 50.29 |
(3) Description of convertible corporate bonds
37. Lease liabilities
In RMB
| Item | Closing balance | Opening balance |
| Lease payment | 600,566,123.03 | 863,481,119.65 |
| Minus: Unrecognized financing costs | -48,077,234.37 | -62,742,078.14 |
| Total | 552,488,888.66 | 800,739,041.51 |
Other descriptions:
38. Provisions
In RMB
| Item | Closing balance | Opening balance | Reason |
| Product quality warranty | 642,733.24 | 682,513.39 | |
| Total | 642,733.24 | 682,513.39 |
Other descriptions, including major assumptions and estimation descriptions related to significant provisions:
39. Deferred income
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance | Reason |
| Government grants | 665,910,095.66 | 118,233,376.14 | 188,819,870.75 | 595,323,601.05 | |
| Total | 665,910,095.66 | 118,233,376.14 | 188,819,870.75 | 595,323,601.05 | -- |
Other descriptions:
40. Other non-current liabilities
In RMB
| Item | Closing balance | Opening balance |
| Others | 1,471,770.36 | 324,039.05 |
| Total | 1,471,770.36 | 324,039.05 |
Other descriptions:
41. Share capital
In RMB
| Opening balance | Increase and decrease (+, -) | Closing balance | |||||
| New shares issued | Stock dividend | Shares converted from capital reserve | Others | Subtotal | |||
| Total shares | 7,099,908,647.00 | 48,256,556.00 | 3,010.00 | 48,259,566.00 | 7,148,168,213.00 | ||
Other descriptions:
Other descriptions: The Company’s share capital increased by RMB 48,259,566.00 in the current period,including 48,256,556 shares exercised by the stock option incentive recipients at their sole discretion, and 3,010shares converted from convertible bonds. After the said exercise and conversion, the Company’s share capitalincreased to 7,148,168,213.00 shares.
42. Other equity instruments
(1) Basic information on preferred shares, perpetual bonds and other financial instruments outstanding atthe end of the periodThe 10th meeting of the fourth session of the Board of Directors of the Company reviewed and passed theProposal on Clarifying the Specific Plan for the Public Issuance of Convertible Corporate Bonds. The Companyreceived the Approval for the Public Issuance of Convertible Corporate Bonds to Luxshare Precision Industry Co.,Ltd. issued by the China Securities Regulatory Commission on February 19, 2020 (CSRC Permit [2020] No. 247),approving the Company to publicly issue convertible corporate bonds with a total face value of RMB 3,000million, with a term of 6 years. The RMB 3,000 million convertible corporate bonds of the Company were listedand traded on the Shenzhen Stock Exchange on November 3, 2020, with the bond abbreviation LuxshareConvertible Bonds" and the bond code "128136".
(2) Changes in preferred shares, perpetual bonds and other financial instruments outstanding at the end ofthe period
In RMB
| Outstanding | Opening | Increase | Decrease | Closing |
financialinstruments
| financial instruments | Quantity | Book value | Quantity | Book value | Quantity | Book value | Quantity | Book value |
| Convertible bonds | 527,319,637.88 | 30,617.60 | 527,289,020.28 | |||||
| Total | 527,319,637.88 | 30,617.60 | 527,289,020.28 |
Descriptions on the increase and decrease in other equity instruments in the current period, the reasons for the changes, and the basisfor relevant accounting treatment:
Other descriptions:
43. Capital reserve
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Capital premium (share capital premium) | 3,422,693,029.12 | 1,008,533,620.81 | 4,431,226,649.93 | |
| Other capital reserve | 229,933,832.62 | 731,177,177.72 | 380,393,026.35 | 580,717,983.99 |
| Total | 3,652,626,861.74 | 1,739,710,798.53 | 380,393,026.35 | 5,011,944,633.92 |
Other descriptions, including those on the increase and decrease for the current period and the reasons for the change:
Capital reserve - share capital premium increased by RMB 1,008,533,620.81 in the current period, including an increase of RMB498,442,142.52 from stock option exercise, a transfer of RMB 380,393,026.35 from other capital reserve through stock option exercise,a conversion of RMB 170,204.36 from convertible bonds, and an increase of RMB 129,528,247.58 by other ways;Capital reserve - the increase in other capital reserve in the current period is due to the cost of share-based payment increased by RMB731,177,177.72, and the decrease therein is due to the transfer of other capital reserve to share capital premium.
44. Other comprehensive income
In RMB
| Item | Opening balance | Amount recognized in the current period | Closing balance | |||||
| Amount of income before tax in the current period | Less: amount previously included in other comprehensive income and transferred to profit or loss for the current period | Less: amount previously included in other comprehensive income and transferred to retained earnings for the current | Less: income tax expenses | Attributable to the parent company after tax | Attributable to minority shareholders after tax | |||
period
| period | ||||||||
| I. Other comprehensive income that cannot be reclassified into profit or loss | 294,744,933.12 | -174,594,425.38 | 37,783,386.82 | -31,937,428.44 | -180,440,383.76 | 114,304,549.36 | ||
| Changes in fair value of other investments in equity instruments | 294,744,933.12 | -174,594,425.38 | 37,783,386.82 | -31,937,428.44 | -180,440,383.76 | 114,304,549.36 | ||
| II. Other comprehensive income to be reclassified into profit or loss | 356,713,383.13 | -348,883,547.50 | -322,255,755.61 | -26,627,791.90 | 34,457,627.52 | |||
| Translation difference of foreign currency financial statements | 356,713,383.13 | -348,883,547.50 | -322,255,755.61 | -26,627,791.90 | 34,457,627.52 | |||
| Total other comprehensive income | 651,458,316.25 | -523,477,972.88 | 37,783,386.82 | -31,937,428.44 | -502,696,139.37 | -26,627,791.90 | 148,762,176.88 |
Other descriptions, including those on the adjustment for conversion of the effective part of profit or loss of cash flow hedging intothe initial recognition amount of the hedged item:
45. Special reserve
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Safety production expenses | 2,094,879.61 | 32,093,607.36 | 30,660,117.17 | 3,528,369.80 |
| Total | 2,094,879.61 | 32,093,607.36 | 30,660,117.17 | 3,528,369.80 |
Other descriptions, including those on the increase and decrease for the current period and the reasons for the change:
46. Surplus reserve
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserve | 1,121,072,698.83 | 322,447,486.64 | 1,443,520,185.47 | |
| Total | 1,121,072,698.83 | 322,447,486.64 | 1,443,520,185.47 |
Description of surplus reserve, including those on increase and decrease for the current period and the reasons for the change:
47. Undistributed profits
In RMB
| Item | Current Period | Prior Period |
| Undistributed profits at the end of prior period before adjustment | 32,288,416,277.22 | 24,040,637,144.00 |
| Undistributed profits at the beginning of the period after adjustment | 32,288,416,277.22 | 24,040,637,144.00 |
| Add: Net profits attributable to the owners of the parent company in the current period | 10,952,656,702.16 | 9,163,104,849.54 |
| Less: Apportion to statutory surplus reserve | 322,447,486.64 | 135,911,192.22 |
| Common stock dividends payable | 926,948,678.85 | 779,270,547.26 |
| Others | -35,295,097.36 | 143,976.84 |
| Undistributed profits at the end of the period | 42,026,971,911.25 | 32,288,416,277.22 |
Details of adjustment of undistributed profits at the beginning of the period:
1) The undistributed profits at the beginning of the period affected by the retroactive adjustment as stipulated in the AccountingStandards for Business Enterprises and new regulations newly promulgated relating thereto amounted to RMB0.00.
2) The undistributed profits at the beginning of the period affected by the changes in accounting policies amounted to RMB0.00.
3) The undistributed profits at the beginning of the period affected by the correction of major accounting errors amounted to RMB0.00.
4) The undistributed profits at the beginning of the period affected by changes in the scope of consolidation due to business combinationinvolving enterprises under common control amounted to RMB0.00.
5) The undistributed profits at the beginning of the period affected by other adjustments amounted to RMB0.00.
48. Operating income and operating costs
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Income | Cost | Income | Cost | |
| Principal business | 229,308,417,348.68 | 203,310,851,043.48 | 211,943,848,653.92 | 186,111,713,122.60 |
| Other business | 2,597,042,481.15 | 1,730,449,415.11 | 2,084,545,637.52 | 1,817,167,162.78 |
| Total | 231,905,459,829.83 | 205,041,300,458.59 | 214,028,394,291.44 | 187,928,880,285.38 |
If the lower of audited nets profits including and excluding non-recurring profit or loss is negative
□ Yes ?No
Breakdown of operating revenue and operating costs
In RMB
| Classification of contract | Segment 1 | Segment 2 | Total | |||||
| Operating income | Operating cost | Operating income | Operating cost | Operating income | Operating cost | Operating income | Operating cost | |
| Business type | ||||||||
| Including: | ||||||||
| Merchandise sales revenue | 231,905,459,829.83 | 205,041,300,458.59 | 231,905,459,829.83 | 205,041,300,458.59 | ||||
| Classified on by operating area | ||||||||
| Including: | ||||||||
| Type of market or customer | ||||||||
| Including: | ||||||||
| Contract type | ||||||||
| Including: | ||||||||
| Classified by time of transfer of goods | ||||||||
| Including: | ||||||||
| Confirm at a certain point | 231,905,459,829.83 | 205,041,300,458.59 | 231,905,459,829.83 | 205,041,300,458.59 | ||||
| Classified | ||||||||
by contractterm
| by contract term | ||||||||
| Including: | ||||||||
| Classified by contract term | ||||||||
| Including: | ||||||||
| Total | 231,905,459,829.83 | 205,041,300,458.59 | 231,905,459,829.83 | 205,041,300,458.59 |
Information related to performance obligations:
| Item | Time of performance or fulfillment of obligations | Key payment terms | Nature of the company's commitment to transfer goods | Whether they are the primary obligor | Amounts expected to be refunded to customers by the company | The type of quality assurance provided by the company and related obligations |
Other descriptions:
Information relating to the transaction price allocated to the remaining performance obligations:
At the end of the reporting period, the incomes corresponding to the contracts signed whose performance has not been commenced orcompleted amount to RMB0.00, of which RMB is expected to be recognized in, RMB is expected to be recognized in, and RMB isexpected to be recognized in.Information related to variable consideration in contracts:
Significant contract amendments or significant adjustments in transaction prices.
In RMB
| Item | Accounting treatment methods | Amount of impact on revenue. |
Other descriptions:
49. Taxes and surcharges
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Urban maintenance and construction tax | 135,828,066.62 | 134,237,633.10 |
| Education surcharges | 74,879,240.47 | 82,084,208.17 |
| Property tax | 94,893,905.31 | 75,088,009.87 |
| Land use tax | 12,471,189.05 | 9,681,156.59 |
| Vehicle and vessel use tax | 63,832.43 | 66,685.43 |
Stamp duty
| Stamp duty | 156,855,629.56 | 119,933,691.80 |
| Local education surcharges | 50,692,853.69 | 43,726,505.69 |
| Others | 9,130,512.93 | 11,507,549.02 |
| Total | 534,815,230.06 | 476,325,439.67 |
Other descriptions:
50. Management expenses
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Personnel expenses | 2,955,300,979.92 | 2,752,635,462.67 |
| Depreciation and amortization expenses | 1,141,476,216.54 | 780,606,889.02 |
| Materials and consumables | 436,597,420.45 | 613,926,759.41 |
| Office expenses | 241,922,242.64 | 194,254,096.88 |
| Repair and miscellaneous purchases | 157,359,307.86 | 182,254,970.23 |
| Utilities | 65,353,249.13 | 70,926,413.34 |
| Leasing expenses | 116,187,241.86 | 65,448,985.07 |
| Travel and transportation expenses | 42,414,743.05 | 39,010,434.62 |
| Other expenses | 386,245,592.81 | 376,604,074.11 |
| Total | 5,542,856,994.26 | 5,075,668,085.35 |
Other descriptions:
51. Selling expenses
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Employee benefits | 598,361,422.40 | 547,517,120.77 |
| Storage and lease expenses | 30,444,556.09 | 36,541,171.64 |
| Consumables and miscellaneous purchases | 18,734,939.68 | 31,804,228.22 |
| Business entertainment expenses | 34,681,627.31 | 25,994,673.80 |
| Depreciation and amortization | 19,007,296.20 | 14,527,746.62 |
| Travel expenses | 23,367,644.53 | 13,269,371.79 |
| Material expenditure | 16,493,491.17 | 10,789,563.43 |
| Transportation expenses | 6,688,139.24 | 5,306,607.96 |
| Employee benefits | 18,527,534.76 | 7,002,044.68 |
| Storage and lease expenses | 1,162,239.79 | 1,558,957.69 |
| Consumables and miscellaneous purchases | 121,555,530.46 | 137,086,653.00 |
| Business entertainment expenses | 889,024,421.63 | 831,398,139.60 |
Other descriptions:
52. R&D expenses
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Personnel benefits | 4,474,219,036.60 | 4,296,689,104.43 |
| Mould and material cost | 1,223,716,713.86 | 1,659,569,732.34 |
| Depreciation and amortization | 1,071,507,770.65 | 894,098,153.77 |
| Consumables and miscellaneous | 298,285,961.53 | 564,831,528.23 |
| Repair and inspection | 373,156,578.61 | 341,779,541.87 |
| Service fees | 206,099,670.82 | 225,595,394.86 |
| Water and electricity | 126,487,095.42 | 132,921,844.25 |
| Transportation and travel expenses | 55,143,408.18 | 35,267,611.83 |
| Commercial insurance | 4,193,418.58 | 3,153,481.73 |
| Lease fee | 72,638,748.64 | 64,081,121.07 |
| Other expenses | 283,319,129.96 | 229,051,431.83 |
| Total | 8,188,767,532.85 | 8,447,038,946.21 |
Other descriptions:
53. Financial expenses
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Interest expenses | 1,376,870,146.38 | 1,038,070,641.24 |
| Including: interest cost of lease liabilities Less: Interest income | -1,005,580,557.62 | -504,344,274.59 |
| Foreign exchange gains or losses | 72,796,425.87 | 337,513,015.17 |
| Others | 38,783,312.39 | 11,481,756.95 |
| Total | 482,869,327.02 | 882,721,138.77 |
Other descriptions:
54. Other incomes
In RMB
| Sources of other incomes | Amount recognized in the current period | Amount recognized in the prior period |
| Government subsidies | 791,098,788.52 | 596,775,248.61 |
Input tax credit offset
| Input tax credit offset | 20,559,877.99 | |
| Withholding personal income tax processing fees | 13,530,448.56 | 5,519,015.29 |
| Total | 825,189,115.07 | 602,294,263.90 |
55. Income from changes in fair value
In RMB
| Sources of income from changes in fair value | Amount recognized in the current period | Amount recognized in the prior period |
| Held-for-trading financial assets | 210,346,832.18 | 13,625,720.11 |
| Including: Income from changes in fair value of derivative financial instruments | 210,346,832.18 | 13,625,720.11 |
| Total | 210,346,832.18 | 13,625,720.11 |
Other descriptions:
56. Investment income
In RMB
| Long-term equity investment income accounted for using the equity method | 2,044,361,609.89 | 794,759,492.42 |
| Investment income from disposal of long-term equity investment | 22,800,675.95 | |
| Investment income from disposal of held-for-trading financial assets | 279,341,611.63 | 525,062,938.11 |
| Dividends from other equity instrument investments during holding period | 264,713.32 | 212,413.30 |
| Gains from derecognition of financial assets measured at amortized cost. | -741,342,548.75 | -400,156,146.02 |
| Interest income from fixed deposits/large certificates of deposit/financial investments | 188,657,405.35 | 55,598,985.01 |
| Total | 1,771,282,791.44 | 998,278,358.77 |
Other descriptions:
None.
57. Impairment losses of credit
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Bad debt loss of notes receivable | 270,661.65 | -297,668.79 |
| Bad debt loss of accounts receivable | 25,623,112.25 | -45,942,584.71 |
| Bad debt loss of other receivables | -2,619,894.43 | -941,685.43 |
| Total | 23,273,879.47 | -47,181,938.93 |
Other descriptions:
58. Impairment losses of assets
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| I. Loss of inventory depreciation and impairment loss of contract performance cost | -1,126,386,426.94 | -613,236,634.12 |
| IV. Impairment loss of fixed assets | -191,676,433.95 | -233,585,496.93 |
| X. Impairment loss of goodwill | -804,455.51 | |
| Total | -1,318,867,316.40 | -846,822,131.05 |
Other descriptions:
59. Income from disposal of assets
In RMB
| Sources of income from asset disposal | Amount recognized in the current period | Amount recognized in the prior period |
| Income from disposal of fixed assets | 121,555,370.09 | 44,833,504.83 |
| Income from disposal of intangible assets | 53,313.42 | -10,551.92 |
| Income from disposal of right-of-use assets | 1,258,494.01 | 3,108,576.72 |
| Total | 122,867,177.52 | 47,931,529.63 |
60. Non-operating income
In RMB
Item
| Item | Amount recognized in the current period | Amount recognized in the prior period | Amount included in non-recurring profit or loss for the current period |
| Income from compensation for breach of contract | 70,247,182.56 | 16,376,930.09 | 70,247,182.56 |
| Income from asset retirement | 5,791,215.56 | 5,538,035.76 | 5,791,215.56 |
| Others | 17,420,629.28 | 12,397,333.89 | 17,420,629.28 |
| Total | 93,459,027.40 | 34,312,299.74 | 93,459,027.40 |
61. Non-operating expenses
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period | Amount included in non-recurring profit or loss for the current period |
| External donation | 11,692,180.78 | 1,279,333.00 | 11,692,180.78 |
| Asset retirement loss | 22,307,439.97 | 13,071,784.99 | 22,307,439.97 |
| Compensation, liquidated damages and fines | 14,784,120.05 | 6,424,974.87 | 14,784,120.05 |
| Others | 19,551,144.99 | 10,029,281.47 | 19,551,144.99 |
| Total | 68,334,885.79 | 30,805,374.33 | 68,334,885.79 |
Other descriptions:
62. Income tax expenses
(1) Income tax expenses
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Current income tax expense | 1,024,939,081.02 | 657,866,108.46 |
| Deferred income tax expense | -383,109,737.84 | 9,452,096.88 |
| Total | 641,829,343.18 | 667,318,205.34 |
(2) Reconciliation of income tax expenses to the accounting profit
In RMB
| Item | Amount recognized in the current period |
| Total profits | 12,885,042,486.31 |
Income tax expense calculated based on statutory/applicable taxrate
| Income tax expense calculated based on statutory/applicable tax rate | 1,933,491,772.90 |
| Effect of different tax rates of subsidiaries operating in other jurisdictions | -189,779,320.46 |
| Effect of adjustment on income tax for prior period | -13,915,839.15 |
| Effect of non-taxable income | -301,762,515.51 |
| Effect of non-deductible cost, expense and loss | 57,627,081.37 |
| Effect of utilizing deductible loss not recognized for deferred tax assets for prior period | -434,036,917.84 |
| Effect of deductible temporary difference or deductible loss not recognized for deferred tax assets for the current period | 310,496,195.13 |
| Change in the balance of opening deferred tax assets/liabilities caused by tax rate adjustment | 244,000.92 |
| Additional deduction of R&D expenses (presented in negative) | -633,930,614.80 |
| Difference from exercise of stock option | -71,252,929.20 |
| Additional deduction of expenses used for disable persons | -6,146,223.87 |
| Others | -9,205,346.31 |
| Income tax expenses | 641,829,343.18 |
Other descriptions:
63. Other comprehensive income
Please refer to Note 44.
64. Items in the cash flow statement
(1) Cash related to operating activities
Other cash received related to operating activities
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Special subsidies and grants | 730,512,293.94 | 729,647,415.38 |
| Lease income | 86,864,463.17 | 30,878,939.74 |
| Interest income | 1,005,580,557.62 | 504,344,274.59 |
| Non-operating income | 83,854,908.45 | 28,383,594.53 |
| Recovery of current accounts and disbursements | 2,344,231,763.48 | 1,388,046,955.47 |
| Total | 4,251,043,986.66 | 2,681,301,179.71 |
Descriptions on other cash received related to operating activities:
(2) Other cash paid related to operating activities
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Selling expenses | 239,741,364.82 | 263,930,838.26 |
| General and administrative expenses | 1,354,873,317.36 | 1,414,021,613.64 |
| R&D expenses | 1,079,345,043.17 | 984,376,384.20 |
| Inter-company transactions | 1,342,835,159.67 | 1,234,314,047.35 |
| Transferred to restricted funds | 2,554,396,002.20 | 1,000,000,000.00 |
| Non-operating expenses | 46,027,445.82 | 17,733,589.34 |
| Handling charges | 38,783,312.39 | 11,481,756.95 |
| Total | 6,656,001,645.43 | 4,925,858,229.74 |
Descriptions on other cash paid related to operating activities:
(3) Cash related to investing activities
Other cash received related to investing activities
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Reversal of restricted funds | 427,650,270.00 | 715,017,358.71 |
| Recovery of suppliers’ borrowings | 30,000,000.00 | |
| Total | 427,650,270.00 | 745,017,358.71 |
Significant cash receipts related to investing activities
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
Descriptions on other cash received related to investing activities:
Other cash paid related to investing activities
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Transferred to restricted funds | 427,650,270.00 | |
| Payment for acquisition of equity deposits | 140,474,000.00 | |
| Net cash paid for disposal of subsidiaries | 385,253.59 | |
| Others | ||
| Total | 140,474,000.00 | 428,035,523.59 |
Significant cash payments related to investing activities
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
Descriptions on other cash paid relating to investing activities:
(3) Cash related to financing activities
Other cash received related to financing activities
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Short-term financing bonds | 2,800,000,000.00 | 6,600,000,000.00 |
| Reversal of restricted funds | 701,054,171.58 | |
| Taxes withheld from shareholder for reduction of shares | 921,511,778.98 | |
| Other | 30,370,799.83 | 5,960,996.25 |
| Total | 3,531,424,971.41 | 7,527,472,775.23 |
Descriptions on other cash received related to financing activities:
Other cash paid related to financing activities
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Short-term financing bonds | 5,800,000,000.00 | 4,400,000,000.00 |
| Borrowings returned to minority shareholders | 1,953,239,500.00 | |
| Taxes prepaid for shareholder for reduction of shares | 921,511,778.98 | |
| Transferred to restricted funds | 700,123,698.63 | |
| Lease fee | 203,632,926.89 | 159,062,113.35 |
| Financing charges | 6,203,470.61 | 4,184,658.23 |
| Total | 6,009,836,397.50 | 8,138,121,749.19 |
Descriptions on other cash paid related to financing activities:
Changes in liabilities generated from financing activities?Applicable □N/A
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
65. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
In RMB
| Supplementary information | Current period | Prior period |
| 1. Reconciliation of net profit to cash flow from operating activities: | ||
| Net profits | 12,243,213,143.13 | 10,490,676,778.96 |
| Add: Provision for impairment of assets | 1,295,593,436.93 | 894,004,069.98 |
| Depreciation of fixed assets, depletion of oil and gas assets, depreciation of bearer biological assets | 9,619,607,257.96 | 7,233,705,585.39 |
| Depreciation of right of use assets | 176,390,984.93 | 168,866,435.84 |
| Amortization of intangible assets | 233,129,170.31 | 170,869,522.76 |
| Amortization of Long-term deferred expenses | 467,456,067.68 | 395,513,128.13 |
| Loss from disposal of fixed assets, intangible assets and other long-term assets (“-” means income) | -122,867,177.52 | -47,931,529.63 |
| Loss from fixed assets retirement (“-” means income) | 16,516,224.41 | 7,533,749.23 |
| Loss from changes in fair value (“-” means income) | -210,346,832.18 | -13,625,720.11 |
| Financial expenses (“-” means income) | 1,376,870,146.38 | 1,038,070,641.24 |
| Investment loss (“-” means income) | -1,771,282,791.44 | -998,278,358.77 |
| Decrease in deferred income tax assets (“-” means increase) | 339,083,213.97 | -316,866,043.97 |
| Increase in deferred tax liabilities (“-” means decrease) | -694,171,671.54 | 326,646,031.03 |
| Decrease in inventories (“-” means increase) | 7,239,478,351.05 | -15,791,020,357.63 |
| Decrease in operating receivables (“-” means increase) | 2,054,810,808.92 | 6,415,757,847.29 |
| Increase in operating accounts payable (“-” means decrease) | -4,658,419,921.83 | 2,753,688,539.60 |
| Other | ||
| Net cash flow from operating activities | 27,605,060,411.16 | 12,727,610,319.34 |
| 2 . Significant investing and financing activities that do not involve cash receipts and payments: | ||
| Conversion of debt into capital | ||
| Convertible bonds due within one year | ||
| Fixed assets acquired under finance |
leases
| leases | ||
| 3 . Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 29,684,152,320.65 | 17,312,418,429.51 |
| Less: Opening balance of cash | 17,312,418,429.51 | 8,921,536,728.08 |
| Add: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 12,371,733,891.14 | 8,390,881,701.43 |
(2) Composition of cash and cash equivalents
In RMB
| Item | Closing balance | Opening balance |
| I. Cash | 29,684,152,320.65 | 17,312,418,429.51 |
| Including: Cash on hand | 376,233.09 | 1,236,553.93 |
| Bank deposits available for payment at any time | 29,683,776,087.56 | 17,311,181,875.58 |
| III. Closing balance of cash and cash equivalents | 29,684,152,320.65 | 17,312,418,429.51 |
(3) Restricted cash and cash equivalents included in cash and cash equivalents
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period | Reasons for still being classified as cash and cash equivalents |
(4) Cash and cash equivalents not classified as monetary funds
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period | Reasons for not being classified as cash and cash equivalents |
| Other monetary funds | 3,935,387,136.86 | 2,054,791,011.90 | Restricted cash due to opening bills, letters of credit, etc. |
| Total | 3,935,387,136.86 | 2,054,791,011.90 |
Other descriptions:
(5) Other significant activity explanations
66. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
| Item | Closing balance in foreign currency | Exchange rate | Closing balance in RMB |
| Cash and bank balances | 18,713,530,707.15 | ||
| Including: USD | 2,596,502,767.98 | 7.0827 | 18,390,250,154.74 |
| EUR | 3,870,452.81 | 7.8592 | 30,418,662.73 |
| HKD | 72,294,436.24 | 0.9062 | 65,514,664.01 |
| JPY | 31,612,655.09 | 0.0502 | 1,587,366.25 |
| TWD | 798,000,181.98 | 0.2314 | 184,657,242.11 |
| VND | 126,579,190.95 | 0.0003 | 36,923.15 |
| KRW | 2,082,492,112.80 | 0.0055 | 11,482,861.51 |
| GBP | 64,783.34 | 9.0411 | 585,712.66 |
| INR | 306,403,430.86 | 0.0855 | 26,191,365.27 |
| SGD | 488,609.06 | 5.3772 | 2,627,348.62 |
| MXN | 426,659.90 | 0.4181 | 178,406.10 |
| Accounts receivable | 14,254,413,067.37 | ||
| Including: USD | 2,008,564,201.57 | 7.0827 | 14,226,057,670.45 |
| EUR | 823,666.02 | 7.8592 | 6,473,356.01 |
| HKD | 19,751,279.30 | 0.9062 | 17,899,004.32 |
| TWD | 17,212,776.97 | 0.2314 | 3,983,036.59 |
| Accounts receivable | 392,981,525.32 | ||
| Including: USD | |||
| EUR | |||
| HKD | 79,999,998.63 | 0.9062 | 72,497,598.76 |
| TWD | 1,384,978,075.02 | 0.2314 | 320,483,926.56 |
| Other receivables | 152,513,272.42 | ||
| Including: USD | 18,846,909.45 | 7.0827 | 133,487,005.53 |
| EUR | 1,129,258.50 | 7.8592 | 8,875,068.40 |
| HKD | 3,278,527.45 | 0.9062 | 2,971,067.15 |
| JPY | 35,227,117.28 | 0.0502 | 1,768,859.24 |
| TWD | 15,032,972.00 | 0.2314 | 3,478,629.72 |
| VND | 228,072,060.34 | 0.0003 | 66,528.62 |
KRW
| KRW | 149,985,819.73 | 0.0055 | 827,021.81 |
| INR | 11,996,496.49 | 0.0855 | 1,025,460.52 |
| MXN | 32,599.54 | 0.4181 | 13,631.43 |
| Short-term borrowings | 510,175,658.40 | ||
| Including: USD | 60,022,209.58 | 7.0827 | 425,119,303.80 |
| HKD | 52,443,728.10 | 0.9062 | 47,525,555.28 |
| TWD | 162,190,143.99 | 0.2314 | 37,530,799.32 |
| Accounts payable | 27,193,453,315.89 | ||
| Including: USD | 3,833,979,042.12 | 7.0827 | 27,154,923,361.62 |
| EUR | 1,341,989.97 | 7.8592 | 10,546,967.57 |
| HKD | 1,766,637.16 | 0.9062 | 1,600,961.93 |
| JPY | 193,719,449.15 | 0.0502 | 9,727,234.70 |
| TWD | 53,608,131.98 | 0.2314 | 12,404,921.74 |
| GBP | 2,731.46 | 9.0411 | 24,695.40 |
| INR | 49,428,789.54 | 0.0855 | 4,225,172.93 |
| Other payables | 74,389,437.43 | ||
| Including: USD | 8,044,044.73 | 7.0827 | 56,973,555.61 |
| EUR | 25,599.96 | 7.8592 | 201,195.21 |
| HKD | 5,258,795.18 | 0.9062 | 4,765,625.37 |
| JPY | 7,707,951.13 | 0.0502 | 387,039.35 |
| TWD | 29,340,615.00 | 0.2314 | 6,789,418.31 |
| KRW | 147,420,790.71 | 0.0055 | 812,878.24 |
| GBP | 37,625.57 | 9.0411 | 340,176.54 |
| INR | 235,179.34 | 0.0855 | 20,103.13 |
| MXN | 9,803,768.35 | 0.4181 | 4,099,445.67 |
Other descriptions:
(2) Descriptions on overseas business entities, including, with respect to significant overseas business entities,disclosure of their overseas main business place, functional currency and selection basis, and the reasons forchanges in functional currency (if any).
?Applicable □N/A
67. Lease
(1) Company as lessee
?Applicable □N/A
Variable lease payments not included in lease liability measurement
□Applicable ?N/A
Lease expense for short-term leases or low-value assets with simplified treatment?Applicable □N/A
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Interest expense on lease liabilities | 27,150,426.74 | 44,537,265.44 |
| Simplified short-term lease expenses recognized in the cost of related assets or in current period profit or loss | 201,471,466.53 | 141,495,257.7 |
| Simplified lease expenses for low-value assets recognized in the cost of related assets or in current period profit or loss (excluding short-term lease expenses for low-value assets) | ||
| Variable lease payments not included in lease liability measurement recognized in the cost of related assets or in current period profit or loss | ||
| Including: Portion generated from sale and leaseback transactions | ||
| Income from subleasing right-of-use assets acquired | ||
| Income from subleasing right-of-use assets acquired | 405,104,393.42 | 300,557,370.62 |
| Related profit or loss generated from sale and leaseback transactions | ||
| Cash inflows from sale and leaseback transactions | ||
| Cash inflows from sale and leaseback transactions |
Sale and leaseback transactions involvedNone.
68. Others
None.
VIII. R&F Expenditures
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Personnel benefits | 4,474,219,036.60 | 4,296,689,104.43 |
| Mould and material cost | 1,223,716,713.86 | 1,659,569,732.34 |
| Depreciation and amortization | 1,071,507,770.65 | 894,098,153.77 |
| Consumables and miscellaneous | 298,285,961.53 | 564,831,528.23 |
| Repair and inspection | 373,156,578.61 | 341,779,541.87 |
| Service fees | 206,099,670.82 | 225,595,394.86 |
| Water and electricity | 126,487,095.42 | 132,921,844.25 |
| Transportation and travel expenses | 55,143,408.18 | 35,267,611.83 |
| Commercial insurance | 4,193,418.58 | 3,153,481.73 |
| Lease fee | 72,638,748.64 | 64,081,121.07 |
| Other expenses | 283,319,129.96 | 229,051,431.83 |
| Total | 8,188,767,532.85 | 8,447,038,946.21 |
| Including: Expense research and development costs | 8,188,767,532.85 | 8,447,038,946.21 |
IX．Changes in scope of consolidation
1. Business combination not involving enterprises under common control
(1) Business combination not involving enterprises under common control in the current period
In RMB
| Name of combined party | Proportion of equity acquired in the business combination | Basis for constituting the business combination under the same control | Combination date | Basis for determining the combination date | Income of the combined party from the beginning of the current period to the combination date | Net profits of the combined party from the beginning of the current period to the combination | Income of the combined party during the comparison period | Net profits of the combined party during the comparison period |
date
date
Other descriptions:
2. Business combination involving enterprises under common control
(1) Business combination involving enterprises under common control in the current period
In RMB
| Name of combined party | Equity ratio obtained in business combination | Basis for business combination involving enterprises under common control | Combination date | Basis for determining the combination date | Income of the combined party from the beginning of the current period to the combination date | Net profit of the combined party from the beginning of the current period to the combination date | Income of the combined party during the comparison period | Net profit of the combined party during the comparison period |
Other descriptions:
None.
3. Changes in consolidation scope for other reasons
Descriptions on changes in the scope of consolidation for other reasons (such as the establishment of new subsidiaries, liquidation ofsubsidiaries, etc.) and related situations:
The Company’s changes in scope of consolidation caused by newly established subsidiaries in 2023 are stated as follows:
| Company | Date of establishment |
| Luxshare Precision Industry (Huzhou), Ltd. | 2023/1/1 |
| TIME Interconnect Technology Limited | 2023/1/10 |
| Kunshan TIME Interconnect Technology Limited | 2023/1/19 |
| Luxshare Technologies International, Inc. | 2023/3/24 |
| Linkz Cables Mexico S.DE R.L. DE C.W. | 2023/4/14 |
| ICT Legend S. DE R.L. DE C.V. | 2023/5/8 |
| Lixin Precision Intelligent Manufacturing (Shantou) Co., Ltd. | 2023/6/19 |
| Luxshare Precision Industry (Anhui) Co., Ltd. | 2023/7/21 |
| Luxshare Technologies Mexico S. de. R.L.de c.v. | 2023/8/14 |
| Luxshare Technologies (Vietnam)Co., ltd | 2023/8/29 |
| Dongguan Luxshare Holdings Co., Ltd. | 2023/9/5 |
| Luxcase Precision Technology (Vietnam)Co., Ltd. | 2023/11/10 |
Changes in the scope of consolidation resulting from the subsidiary's dissolution in 2023 are as follows:
Company name
| Company name | Date of cancelation |
| Kunshan Luxshare Precision Mould Co., Ltd. | 2023/2/6 |
| Henan Leader Precision Industry Co., Ltd. | 2023/6/21 |
4. Others
Other changes in the scope of consolidation include the absorption merger of Xuande Technology Co., Ltd. with Taiqiao InvestmentCo., Ltd. during the year. Xuande Technology Co., Ltd. assumed its assets and liabilities, and Taiqiao Investment Co., Ltd. wasdissolved.
X. Equity in other entities
1. Equity in subsidiaries
(1) Composition of the enterprise group
In RMB
| Luxshare Precision Technology Co., Ltd. | Registered capital | Main place of business | Place of registration | Nature of business | Shareholding ratio | Method of acquisition | |
| Direct | Indirect | ||||||
| Luxshare Precision Technology Co., Ltd. | USD 9 million and RMB 100 million | Hong Kong | Hong Kong | Investment consulting | 100.00% | Establishment | |
| Taiwan Luxshare Precision Limited | NT$618.758 million | Taiwan | Taiwan | Marketing business | 100.00% | Establishment | |
| Luxshare ICT, Inc. | USD 2 million | United States | United States | Marketing business | 100.00% | Establishment | |
| Luxshare-ICT Europe Limited | GBP 100 | UK | UK | Marketing business | 100.00% | Establishment | |
| Luxshare Precision Limited | USD 5 million | Hong Kong | Hong Kong | Trade | 100.00% | Establishment | |
| Yunding Technology Co., Ltd. | USD 7.58853 million | Hong Kong | Hong Kong | Investment consulting | 100.00% | Establishment | |
| Huzhou Jiuding Electronic Co., Ltd. | RMB 30,800,000 | Huzhou | Huzhou | Processing and manufacturing | 100.00% | Business combination involving enterprises not under common control | |
LUXSHARE-ICT JapanLtd.
| LUXSHARE-ICT Japan Ltd. | JPY 80 million | Japan | Japan | Marketing business | 80.00% | Establishment | |
| Korea LuxshareICT Co., Ltd | KRW 545,750,000 | Korea | Korea | Marketing business | 100.00% | Establishment | |
| Luxshare India Private Limited | NPR557,500,000 | India | Chennai | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare Precision Investment Co., Ltd. | USD 100 | Hong Kong | Hong Kong | Investment consulting | 100.00% | Establishment | |
| Luxis Technology Limited | USD 1.5 million | Hong Kong | Hong Kong | Trade | 100.00% | Establishment | |
| Luxshare Liantao (India) Co., Ltd. | INR 1.4 million | India | India | Processing and manufacturing | 100.00% | Establishment | |
| TIME Interconnect Technology Limited | HKD 19.45952 million | Hong Kong | Hong Kong | Investment consulting | 70.95% | Business combination involving enterprises not under common control | |
| Huaxun Cable Co., Ltd. | HKD 8.39 million | Hong Kong | Hong Kong | Investment consulting | 70.95% | Business combination involving enterprises not under common control | |
| Linkz International Limited | HKD 10,000 | Hong Kong | Hong Kong | Trade | 70.95% | Business combination involving enterprises not under common control | |
| Huaxun Industrial (Suzhou) Co., Ltd. | USD 30 million | Kunshan | Kunshan | Processing and manufacturing | 70.95% | Business combination involving enterprises not under |
commoncontrol
| common control | |||||||
| Huaxun Hong Kong Limited | HKD 10 million | Hong Kong | Hong Kong | Investment consulting | 70.95% | Business combination involving enterprises not under common control | |
| Lingxun Wire Industry (Shanghai) Co., Ltd. | USD 15 million | Shanghai | Shanghai | Processing and manufacturing | 67.40% | Business combination involving enterprises not under common control | |
| Haohe Manufacturing Co., Ltd. | HKD 8 million | Hong Kong | Hong Kong | Investment consulting | 70.95% | Business combination involving enterprises not under common control | |
| Haohe (Kunshan) Electronic Material Co., Ltd. | HKD 30 million | Kunshan | Kunshan | Processing and manufacturing | 70.95% | Business combination involving enterprises not under common control | |
| Kunshan Deqin Machinery Co., Ltd. | RMB 10 million | Kunshan | Kunshan | Processing and manufacturing | 70.95% | Business combination involving enterprises not under common control | |
| Time Interconnect Investment Limited | HKD 77,934 | Hong Kong | Hong Kong | Investment consulting | 70.95% | Business combination involving enterprises not under |
commoncontrol
| common control | |||||||
| TIME Interconnect (HK) Limited | HKD 10,000 | Hong Kong | Hong Kong | Investment consulting | 70.95% | Business combination involving enterprises not under common control | |
| TIME Interconnect Technology (Huizhou) Limited | USD 28.60286 million | Huizhou | Huizhou | Processing and manufacturing | 70.95% | Business combination involving enterprises not under common control | |
| TIME Interconnect Industrial Co., Ltd. | HKD 2 million | Hong Kong | Hong Kong | Trade | 70.95% | Business combination involving enterprises not under common control | |
| TIME Interconnect Wiring Technology Co., Ltd. | HKD 68.935877 million | Hong Kong | Hong Kong | Trade | 70.95% | Business combination involving enterprises not under common control | |
| Huizhou Chuangxiang Technology Co., Ltd. | RMB 140,525,010 | Huizhou | Huizhou | Processing and manufacturing | 70.95% | Business combination involving enterprises not under common control | |
| Huiju Robot Technology (Shanghai) Co., Ltd. | RMB 12.939 million | Shanghai | Shanghai | Processing and manufacturing | 70.95% | Business combination involving enterprises |
not undercommoncontrol
| not under common control | |||||||
| Huizhi Software Technology (Huizhou) Co., Ltd. | RMB 680,389 | Huizhou | Huizhou | Software sales and services | 70.95% | Business combination involving enterprises not under common control | |
| TIME Interconnect Wiring Technology (Huizhou) Co., Ltd. | RMB29.9753 million | Huizhou | Huizhou | Processing and manufacturing | 70.95% | Business combination involving enterprises not under common control | |
| TIME Interconnect Server Technology Co., Ltd. | HKD 10,000 | Hong Kong | Hong Kong | Trade | 70.95% | Business combination involving enterprises not under common control | |
| Dachuang Precision Intelligent Manufacture (Dongguan) Co., Ltd. | RMB 200,000,000 | Dongguan | Dongguan | Processing and manufacturing | 70.95% | Establishment | |
| Dachuang Precision Intelligent Manufacture (Kunshan) Co., Ltd. | RMB 200,000,000 | Kunshan | Kunshan | Processing and manufacturing | 70.95% | Business combination involving enterprises not under common control | |
| Huiju Dachuang Information (Shanghai) Co., Ltd. | RMB 50 million | Shanghai | Shanghai | Processing and manufacturing | 70.95% | Establishment | |
| TIME Interconnect Technology Limited | RMB 50 million | Wan'an | Wan'an | Processing and manufacturing | 70.95% | Establishment |
Kunshan TIMEInterconnect TechnologyLimited
| Kunshan TIME Interconnect Technology Limited | RMB 250,000,000 | Kunshan | Kunshan | Processing and manufacturing | 70.95% | Establishment | |
| Linkz Cables Mexico S.deR.L. de C.V. | MXN 50,000 | Mexico | Mexico | Processing and manufacturing | 70.95% | Establishment | |
| Singapore Luxshare Co., Ltd. | USD 700,000 | Singapore | Singapore | Marketing business | 100.00% | Establishment | |
| ICT Legend S. DE R.L. DE C.V. | MXN 246,109,367 | Mexico | Mexico | Processing and manufacturing | 100.00% | Establishment | |
| ICT-LANTO LIMITED(HK) | USD 153,290,322 | Hong Kong | Hong Kong | Trade | 100.00% | Business combination involving enterprises not under common control | |
| Xuande Technology Co., Ltd. | NTD 1.719573 billion | Taiwan | Taiwan | Processing and manufacturing | 31.15% | Business combination involving enterprises not under common control | |
| Castle Rock, Inc. | NTD 104,000,000 | Taiwan | Taiwan | Processing and manufacturing | 12.46% | Business combination involving enterprises not under common control | |
| Cyber Acoustics, LLC(USA) | USD 310,400 | United States | United States | Trade | 21.81% | Business combination involving enterprises not under common control |
Caldigit Holding Limited
| Caldigit Holding Limited | USD 3 million | United States | Cayman Islands | Investment consulting | 12.46% | Business combination involving enterprises not under common control | |
| Taihan Precision Co., Ltd. | NTD 1,500,000,000 | Taiwan | Taiwan | Processing and manufacturing | 9.14% | Business combination involving enterprises not under common control | |
| Luxshare-ICT (Vietnam) Limited | VND 2.8056336 trillion | Vietnam | Vietnam | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare-ICT (Van Trung) Company Limited | #N/A | Vietnam | Vietnam | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare-ICT (Nghe An) Limited | VND 2.663 trillion | Vietnam | Vietnam | Processing and manufacturing | 100.00% | Establishment | |
| Kunshan Luxshare Precision Industry Co., Ltd. | RMB 508,000,000 | Kunshan | Kunshan | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare Precision Industry (Baoding) Co., Ltd. | RMB 70 million | Baoding | Baoding | Processing and manufacturing | 100.00% | Establishment | |
| Xuancheng Luxshare Precision Industry Co., Ltd. | RMB 100,000,000 | Xuancheng | Xuancheng | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare Electronic (Shanghai) Co., Ltd. | RMB 100,000,000 | Shanghai | Shanghai | Processing and manufacturing | 88.00% | Establishment | |
| Luxshare Precision Industry (Jiangsu) Co., Ltd. | RMB 50 million | Liyang | Liyang | Processing and manufacturing | 100.00% | Establishment | |
| Yancheng Luxshare Precision Industry Co., Ltd. | RMB 50 million | Yancheng | Yancheng | Processing and manufacturing | 100.00% | Establishment |
Luxshare PrecisionIndustry (Hefei) Co., Ltd.
| Luxshare Precision Industry (Hefei) Co., Ltd. | RMB 20 million | Hefei | Hefei | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare Precision Industry (Hubei) Co., Ltd. | RMB 50 million | Macheng | Macheng | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare Automotive Technology (Shanghai) Co., Ltd. | RMB 20 million | Shanghai | Shanghai | Processing and manufacturing | 90.00% | Establishment | |
| Luxshare Precision Industry (Wuhu) Co., Ltd. | RMB 20 million | Wuhu | Wuhu | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare Precision Industry (Anhui) Co., Ltd. | RMB 50 million | Fuyang | Fuyang | Processing and manufacturing | 100.00% | Establishment | |
| Kunshan Lanto Electronic Limited | RMB 2.32 billion | Kunshan | Kunshan | Processing and manufacturing | 100.00% | Business combination involving enterprises not under common control | |
| Bozhou Lanto Electronic Limited | RMB 130,000,000 | Bozhou | Bozhou | Processing and manufacturing | 100.00% | Business combination involving enterprises not under common control | |
| Bozhou Xuntao Electronic Limited | RMB 2 million | Bozhou | Bozhou | Processing and manufacturing | 100.00% | Establishment | |
| Suining Luxshare Precision Industry Co., Ltd. | RMB 20 million | Suining | Suining | Processing and manufacturing | 100.00% | Establishment | |
| Merry Electronics (Suzhou) Co., Ltd. | USD 91.836735 million | Suzhou | Suzhou | Processing and manufacturing | 51.00% | Business combination involving enterprises not under |
commoncontrol
| common control | |||||||
| Beijing Luxshare Acoustic Technology Co., Ltd. | RMB 10 million | Beijing | Beijing | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare Precision Industry (Shanxi) Co., Ltd. | RMB 90 million | Changzhi | Changzhi | Processing and manufacturing | 100.00% | Establishment | |
| Changzhi Luxshare Precision Industry Co., Ltd. | RMB 20 million | Changzhi | Changzhi | Processing and manufacturing | 100.00% | Establishment | |
| Suzhou Lanto Electronic Co., Ltd. | RMB 180,000,000 | Suzhou | Suzhou | Processing and manufacturing | 100.00% | Establishment | |
| Wan’an Xiexun Electronic Co., Ltd. | RMB 40 million | Wan'an | Wan'an | Processing and manufacturing | 100.00% | Establishment | |
| Xiexun Electronic (Ji’an) Co., Ltd. | RMB 114,718,979.44 | Ji'an | Ji'an | Processing and manufacturing | 100.00% | Business combination involving enterprises not under common control | |
| ASAP Technology (Jiangxi) Co., Ltd. | RMB 100,924,134 | Ji'an | Ji'an | Processing and manufacturing | 93.90% | Business combination involving enterprises not under common control | |
| Yongxin County Boshuo Electronic Co., Ltd. | RMB 20 million | Yongxin County | Yongxin County | Processing and manufacturing | 100.00% | Business combination involving enterprises not under common control | |
| Xinyu Xiexun Electronic Co., Ltd. | RMB 11 million | Xinyu | Xinyu | Processing and manufacturing | 100.00% | Establishment |
Jiangxi ASAP ElectronicCo., Ltd.
| Jiangxi ASAP Electronic Co., Ltd. | RMB 10 million | Ji'an | Ji'an | Processing and manufacturing | 100.00% | Establishment | |
| Fujian JK Wiring Systems Co., Ltd.. | USD 5.6 million | Fuzhou | Fuzhou | Processing and manufacturing | 55.00% | Business combination involving enterprises not under common control | |
| Jianou JK Wiring Systems Co., Ltd. | RMB 4 million | Jian'ou | Jian'ou | Processing and manufacturing | 55.00% | Establishment | |
| Luxshare Electronic Technology (Kunshan) Co., Ltd. | RMB 2.2 billion | Kunshan | Kunshan | Processing and manufacturing | 100.00% | Business combination involving enterprises not under common control | |
| Shenzhen Luxshare Acoustics Technology Ltd. | RMB 28 million | Shenzhen | Shenzhen | Processing and manufacturing | 100.00% | Establishment | |
| Fengshun Luxshare Precision Industry Co., Ltd. | RMB 10 million | Fengshun | Fengshun | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare Precision Industry (Chuzhou), Ltd. | RMB 758,000,000 | Chuzhou | Chuzhou | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare New Energy (Anhui) Co., Ltd. | RMB 180,000,000 | Chuzhou | Chuzhou | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare Precision Industry (Mingguang) Co., Ltd. | RMB 50 million | Chuzhou | Chuzhou | Processing and manufacturing | 100.00% | Establishment | |
| SuK Kunststofftechnik GmbH | ERU 25,564 | Germany | Germany | Processing and manufacturing | 100.00% | Business combination involving enterprises not under |
commoncontrol
| common control | |||||||
| Luxshare Automation (Jiangsu) Ltd. | RMB 30 million | Kunshan | Kunshan | Processing and manufacturing | 70.00% | Business combination involving enterprises not under common control | |
| Dongguan Luxshare Precision Industry Co., Ltd. | RMB 1 billion | Dongguan | Dongguan | Processing and manufacturing | 100.00% | Establishment | |
| Guangdong Luxshare & Merry Electronics Co., Ltd. | RMB 200,000,000 | Dongguan | Dongguan | Processing and manufacturing | 51.00% | Establishment | |
| Merry Electronics (Huizhou) Co., Ltd. | RMB 100,000,000 | Huizhou | Huizhou | Processing and manufacturing | 51.00% | Business combination involving enterprises not under common control | |
| Merry Electronics (Shanghai) Co., Ltd. | RMB 1.65963 million | Shanghai | Shanghai | Trade | 51.00% | Business combination involving enterprises not under common control | |
| Xingning Luxshare Electronic Co., Ltd. | RMB 8.5 million | Xingning | Xingning | Processing and manufacturing | 100.00% | Establishment | |
| Jiangxi Luxshare Intelligent Manufacture Co., Ltd. | RMB 1 billion | Ji'an | Ji'an | Processing and manufacturing | 100.00% | Establishment | |
| Shenzhen Luxshare Standard Co., Ltd. | RMB 30 million | Shenzhen | Shenzhen | Processing and manufacturing | 70.00% | Establishment | |
| Luxshare Standard Limited (HK) | USD 1.45764 million | Hong Kong | Hong Kong | Processing and manufacturing | 70.00% | Establishment |
Luxshare PrecisionIndustry (Enshi) Co., Ltd.
| Luxshare Precision Industry (Enshi) Co., Ltd. | RMB 100,000,000 | Enshi | Enshi | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare Precision Industry (Suzhou) Co., Ltd. | RMB 130,000,000 | Suzhou | Suzhou | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare iTech (Zhejiang) Co., Ltd. | RMB 730,000,000 | Jiashan | Jiashan | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare Electronic Service (Zhejiang) Co., Ltd. | RMB 50 million | Jiashan | Jiashan | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare Intelligent Manufacture Technology (Changshu) Co., Ltd. | RMB 1.3 billion | Changshu | Changshu | Processing and manufacturing | 100.00% | Establishment | |
| Dongguan Luxshare Technology Co., Ltd. | RMB 571,106,365.50 | Dongguan | Dongguan | Processing and manufacturing | 93.90% | Establishment | |
| Luxshare Technologies Limited | RMB 5 million | Hong Kong | Hong Kong | Processing and manufacturing | 93.90% | Establishment | |
| Donguan Xuntao Electronic Co., Ltd. | RMB 539,817,955.50 | Dongguan | Dongguan | Processing and manufacturing | 93.90% | Business combination involving enterprises not under common control | |
| Xingning Luxshare Technology Co., Ltd. | RMB 5 million | Xingning | Xingning | Processing and manufacturing | 93.90% | Establishment | |
| Suzhou Luxshare Technology Co., Ltd. | RMB 200,000,000 | Kunshan | Kunshan | Processing and manufacturing | 93.90% | Establishment | |
| Hangzhou Xuntao Technology Co., Ltd. | RMB 25 million | Hangzhou | Hangzhou | Processing and manufacturing | 93.90% | Establishment | |
| Zhejiang Puxing Electronic Technology Co., Ltd. | RMB 14.6 million | Zhejiang | Zhejiang | Processing and manufacturing | 65.73% | Business combination involving enterprises |
not undercommoncontrol
| not under common control | |||||||
| Dongguan Luxshare Smart-Link Electronic Technology Co., Ltd. | RMB 80 million | Dongguan | Dongguan | Processing and manufacturing | 93.90% | Establishment | |
| Shenzhen Huarong Technology Co., Ltd. | RMB 12.5 million | Shenzhen | Shenzhen | Processing and manufacturing | 71.39% | Business combination involving enterprises not under common control | |
| Dongguan Huarong Communications Technology Co., Ltd. | RMB 20 million | Dongguan | Dongguan | Processing and manufacturing | 71.39% | Business combination involving enterprises not under common control | |
| Dongguan Huarong Supply Chain Management Co., Ltd. | RMB 10 million | Dongguan | Dongguan | Processing and manufacturing | 71.39% | Business combination involving enterprises not under common control | |
| Dongguan Changlong Communications Technology Co., Ltd. | RMB 2 million | Dongguan | Dongguan | Processing and manufacturing | 71.39% | Business combination involving enterprises not under common control | |
| Luxshare Rechuan Technology (Huizhou) Co., Ltd. | RMB 100,000,000 | Huizhou | Huizhou | Processing and manufacturing | 65.73% | Establishment | |
| Shenzhen Sanhe Rongyu Technology Co., Ltd. | RMB 1 million | Shenzhen | Shenzhen | Processing and manufacturing | 93.90% | Business combination involving enterprises not under |
commoncontrol
| common control | |||||||
| Shantou Luxshare Technologies Co., Ltd. | RMB 100,000,000 | Shantou | Shantou | Processing and manufacturing | 93.90% | Establishment | |
| Luxshare Technologies International, Inc. | USD 1 million | United States | United States | Marketing business | 93.90% | Establishment | |
| Luxshare Technologies (Vietnam)Co., ltd | VND 105.3 billion | Vietnam | Vietnam | Processing and manufacturing | 93.90% | Establishment | |
| Luxshare Technologies Mexico S. de. R.L.de c.v. | MXN 40,000 | Mexico | Mexico | Processing and manufacturing | 93.90% | Establishment | |
| Changshu Luxshare Industrial Investment Management Co., Ltd. | RMB 660,000,000 | Changshu | Changshu | Investment consulting | 100.00% | Establishment | |
| Rugao Luxshare Corporate Management Services Partnership (Limited Partnership) | RMB 2.2 billion | Rugao | Rugao | Investment consulting | 100.00% | Establishment | |
| Lianxun Intelligent Equipment (Rugao) Co., Ltd. | RMB 2.201 billion | Rugao | Rugao | Equipment rent and sales | 100.00% | Establishment | |
| Yancheng Luxshare Corporate Management Services Partnership (Limited Partnership) | RMB 2.2 billion | Yancheng | Yancheng | Investment consulting | 9.09% | Establishment | |
| Luxshare Intelligent Equipment (Yancheng) Co., Ltd. | RMB 2.201 billion | Yancheng | Yancheng | Equipment rent and sales | 9.14% | Establishment | |
| Jiashan Luxshare Business Management Service Partnership (LP) | RMB 2.2 billion | Jiashan | Jiashan | Investment consulting | 9.09% | Establishment | |
| Jiashan Luxshare Intelligent Equipment Co., Ltd. | RMB 2.201 billion | Jiashan | Jiashan | Equipment rent and sales | 9.14% | Establishment |
Kunshan LuxshareEnterprise ManagementDevelopment Co., Ltd.
| Kunshan Luxshare Enterprise Management Development Co., Ltd. | RMB 200,000,000 | Kunshan | Kunshan | Investment consulting | 100.00% | Establishment | |
| Kunshan Luxshare Corporate Management Services Partnership (Limited Partnership) | RMB 2.2 billion | Kunshan | Kunshan | Investment consulting | 9.09% | Establishment | |
| Luxshare Intelligent Equipment (Kunshan) Co., Ltd. | RMB 2.201 billion | Kunshan | Kunshan | Equipment rent and sales | 9.14% | Establishment | |
| Luxshare Precision Technology (Xi’an) Co., Ltd. | RMB 50 million | Xi'an | Xi'an | Processing and manufacturing | 93.90% | Establishment | |
| Luxshare Electronic Technology (Enshi) Co., Ltd. | RMB 245,000,000 | Enshi | Enshi | Processing and manufacturing | 100.00% | Establishment | |
| Luxis Technology (Kunshan) Co., Ltd. | RMB 245,000,000 | Kunshan | Kunshan | Processing and manufacturing | 100.00% | Establishment | |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | RMB 6.264312296 billion | Yancheng | Yancheng | Processing and manufacturing | 49.75% | Business combination involving enterprises not under common control | |
| Ri Pei Computer Accessory (Shanghai) Co., Ltd. | RMB 30.848 million | Shanghai | Shanghai | Processing and manufacturing | 49.75% | Business combination involving enterprises not under common control | |
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | RMB 1.437684 billion | Jiashan | Jiashan | Processing and manufacturing | 49.75% | Business combination involving enterprises not under common control |
Ri Ming ComputerAccessory (Shanghai)Co., Ltd.
| Ri Ming Computer Accessory (Shanghai) Co., Ltd. | RMB 638,928,568 | Shanghai | Shanghai | Processing and manufacturing | 49.75% | Business combination involving enterprises not under common control | |
| Sheng-Rui Electronic Technology (Shanghai) Limited | RMB 63.603 million | Shanghai | Shanghai | Processing and manufacturing | 49.75% | Business combination involving enterprises not under common control | |
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | RMB 2.5 billion | Rugao | Rugao | Processing and manufacturing | 49.75% | Business combination involving enterprises not under common control | |
| Caseteck Singapore PTE. LTD. | USD 730,000 | Singapore | Singapore | Trade | 49.75% | Business combination involving enterprises not under common control | |
| Luxshare Smart Manufacturing (Rugao) Co., Ltd. | RMB 100,000,000 | Rugao | Rugao | Processing and manufacturing | 49.75% | Establishment | |
| Luxcase Precision Technology (Kunshan) Co., Ltd. | RMB 500,000,000 | Kunshan | Kunshan | Processing and manufacturing | 49.75% | Establishment | |
| Luxcase Precision Technology (Vietnam)Co., Ltd. | VND 172.8 billion | Vietnam | Vietnam | Processing and manufacturing | 49.75% | Establishment | |
| Luxcase Precision Technology (Kunshan) Co., Ltd. | RMB 300,000,000 | Kunshan | Kunshan | Processing and manufacturing | 100.00% | Establishment |
Luxis PrecisionIntelligent Manufacture(Shantou) Co., Ltd.
| Luxis Precision Intelligent Manufacture (Shantou) Co., Ltd. | RMB 100,000,000 | Shantou | Shantou | Trade | 100.00% | Establishment | |
| Luxshare Intelligent Manufacture Electronic Service (Kunshan) Co., Ltd. | RMB 200,000,000 | Kunshan | Kunshan | Processing and manufacturing | 100.00% | Establishment | |
| Liding Electronic Technology (Dongguan) Co., Ltd. | RMB 250,000,000 | Dongguan | Dongguan | Processing and manufacturing | 100.00% | Establishment | |
| Luxshare Precision Technology (Nanjing) Co., Ltd. | RMB 50 million | Nanjing | Nanjing | Processing and manufacturing | 100.00% | Establishment | |
| Fengshun Luxshare Intelligent Manufacture Co., Ltd. | RMB 250,000,000 | Fengshun | Fengshun | Processing and manufacturing | 100.00% | Establishment | |
| Lisen Precision Technology (Kunshan) Co., Ltd. | RMB 170,000,000 | Kunshan | Kunshan | Processing and manufacturing | 76.47% | Establishment | |
| Luxshare Precision Industry (Huzhou), Ltd. | RMB 250,000,000 | Huzhou | Huzhou | Processing and manufacturing | 100.00% | Establishment | |
| Dongguan Luxshare Holdings Co., Ltd. | RMB 200,000,000 | Dongguan | Dongguan | Investment consulting | 100.00% | Establishment |
Descriptions on the difference between the shareholding ratio and the voting right ratio in the subsidiary:
Basis for holding half or less voting rights but still controlling the investee, and holding more than half of the voting rights but notcontrolling the investee:
Basis for the control of significant structured entities included in the consolidation scope:
Basis for determining whether a company is an agent or a principal:
Other descriptions:
(2) Significant non-wholly-owned subsidiaries
In RMB
| Name of subsidiary | Shareholding ratio of minority shareholders | Profit or loss attributable to minority shareholders in the current period | Dividends declared and distributed to minority shareholders in the current period | Balance of minority interest at the end of the period |
Luxcase PrecisionTechnology (Yancheng)Co., Ltd.
| Luxcase Precision Technology (Yancheng) Co., Ltd. | 50.25% | 987,343,269.80 | 7,584,967,985.49 |
Descriptions on the difference between the shareholding ratio of minority shareholders and their voting right ratio in the subsidiary:
Other descriptions:
(3) Main financial information of significant non-wholly-owned subsidiaries
In RMB
| Name of subsidiary | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Luxcase Precision Technology (Yancheng) Co., Ltd. | 25,423,036,044.85 | 10,372,710,992.02 | 35,795,747,036.87 | 20,145,946,853.72 | 541,754,886.17 | 20,687,701,739.89 | 21,717,382,026.08 | 10,085,761,927.48 | 31,803,143,953.56 | 18,462,805,711.46 | 299,403,365.43 | 18,762,209,076.89 |
In RMB
| Name of subsidiary | Amount recognized in the current period | Amount recognized in the prior period | ||||||
| Operating income | Net profits | Total comprehensive incomes | Cash flow from operating activities | Operating income | Net profits | Total comprehensive incomes | Cash flow from operating activities | |
| Luxcase Precision Technology (Yancheng) | 79,079,113,772.15 | 1,965,034,291.16 | 2,067,110,420.31 | 6,533,472,194.48 | 74,186,807,358.22 | 1,943,749,080.02 | 2,044,371,435.54 | 5,913,355,569.06 |
Other descriptions:
Other descriptions:
2. Transactions in which the share of owners’ equity in the subsidiary changes and still controls the subsidiary
(1) Descriptions on changes in the shares of owners’ equity in subsidiaries
(2) Impact of transactions on minority interest and owners’ equity attributable to the parent company
In RMB
Acquisition cost/ disposal consideration
| Acquisition cost/ disposal consideration | |
| --Cash | |
| -- Fair value of non-cash assets | |
| Total acquisition cost/ disposal consideration | |
| Less: share of subsidiaries’ net assets calculated by the proportion of acquired/disposed equity shares | |
| Difference | |
| Including: Adjustment to capital reserve | |
| Adjustment to surplus reserve | |
| Adjustment to undistributed profits |
Other descriptions:
3. Equity in joint ventures or associates
(1) Summary financial information of insignificant joint ventures and associates
In RMB
| Closing balance/Amount recognized in the current period | Opening balance/Amount recognized in the prior period | |
| Joint ventures: | ||
| Total book value of investment | 132,877,500.01 | 119,066,960.41 |
| Total amount of the following items calculated according to shareholding ratio | ||
| --Net profit | 15,859,552.50 | 23,777,786.12 |
| --Other comprehensive income | 2,113,184.27 | |
| --Total comprehensive income | 15,859,552.50 | 25,890,970.39 |
| Associates: | ||
| Total book value of investment | 4,100,064,241.04 | 1,880,940,682.25 |
| Total amount of the following items calculated according to shareholding ratio | ||
| --Net profit | 2,028,502,057.39 | 770,981,706.30 |
| --Other comprehensive income | -7,598,398.15 | -65,915.00 |
| --Total comprehensive income | 2,020,903,659.24 | 770,915,791.30 |
Other descriptions:
XI. Government Grants
1. Government grants recognized as receivables at the end of the reporting period
□Applicable ?N/A
Reasons for not receiving government grants as expected at the anticipated timing
□Applicable ?N/A
2. Liabilities related to government grant
?Applicable □N/A
In RMB
| Accounting subjects | Opening balance | Amount of new subsidies for the current period | Amount of non-operating income recognized for the current period | Amount transferred to other income for the current period | Other changes for the current period | Closing balance | Related to assets/income |
| Deferred revenue | 665,910,095.66 | 118,233,376.14 | 188,819,870.75 | 595,323,601.05 | Related to assets |
3. Government grants recognized in the current period's profit or loss
?Applicable □N/A
In RMB
| Accounting subject | Amount recognized in the current period | Amount recognized in the prior period |
| Other income - Directly recorded | 602,278,917.77 | 426,692,467.71 |
| Offset financial expenses - Directly recorded | 10,000,000.00 | |
| Other income - Transfer from deferred income | 188,819,870.75 | 175,601,796.19 |
| Total | 801,098,788.52 | 602,294,263.90 |
Other descriptions:
XII. Risks associated with financial instruments
1. Types of risks generated by financial instruments
1． Credit risk
Credit risks refer to the risks that one party to a financial instrument suffers financial losses due to the failure of the other partyto perform its obligations. The customer credit risks mainly faced by the Company come from credit sale. Before signing a new contract,
the Company will assess the credit risks generated by new customers from perspectives such as external credit rating and, in somecases, bank credit certification (when the same is available). The Company has a credit limit, which is the maximum amount withoutadditional approval, for each customer.The Company ensures that its overall credit risk is within the controllable range through quarterly monitoring of credit rating ofexisting customers and monthly review of aging analysis of accounts receivable. Customers are grouped according to their creditcharacteristics when the credit risks from them are monitored. Customers rated as “high risk” will be placed on the restricted customerlist, and only with additional approval can the Company sell them on credit in the future period, otherwise they must be required to paythe corresponding amount in advance.
2. Liquidity Risk
Liquidity risk refers to the risk of funds shortage when an enterprise is obligated to settle its obligations by delivering cash orother financial assets.Our company's policy is to ensure sufficient cash to repay maturing debts. Liquidity risk is centrally controlled by our company'sfinance department. The finance department monitors cash balances, marketable securities that can be liquidated at any time, androlling forecasts of cash flows for the next 12 months to ensure that the company has sufficient funds to repay debts under all reasonableforecasts. Simultaneously, it continuously monitors compliance with loan agreements, obtains commitments from major financialinstitutions to provide sufficient standby funds to meet short-term and long-term funding needs.The financial liabilities of our company are listed below based on undiscounted contractual cash flows by maturity date:
| Item | Closing balance | ||||||
| Immediate repayment | Within 1 year | 1-2 years | 2-5 years | More than 5 years | Total undiscounted contract amount | Book value | |
| Notes payable | 492,585,900.03 | 492,585,900.03 | 492,585,900.03 | ||||
| Accounts payable | 45,908,515,295.43 | 45,908,515,295.43 | 45,908,515,295.43 | ||||
| Other payables | 406,677,940.53 | 406,677,940.53 | 406,677,940.53 | ||||
| Short-term loan | 20,514,182,240.47 | 20,514,182,240.47 | 20,514,182,240.47 | ||||
| Short-term loan | 2,867,295,870.89 | 2,867,295,870.89 | 2,867,295,870.89 | ||||
| Long-term loan | 1,905,178,810.77 | 9,770,446,879.15 | 363,145,600.00 | 12,038,771,289.92 | 12,038,771,289.92 | ||
| Other current liabilities (short-term | 802,722,191.78 | 802,722,191.78 | 802,722,191.78 | ||||
financingnotes)
| financing notes) | |||||||
| Total | 70,991,979,439.13 | 1,905,178,810.77 | 9,770,446,879.15 | 363,145,600.00 | 83,030,750,729.05 | 83,030,750,729.05 |
As of the end of this reporting period, the balance of lease liabilities of the company amounted to RMB681,696,441.33, with an amount due within 1 year of RMB 129,207,552.67.
3. Market risks
Market risks of financial instruments refer to the risks that the fair value or future cash flow of financial instruments will fluctuatedue to market price changes, including exchange rate risk, interest rate risk and other price risks.
(1) Interest rate risk
Interest rate risk refers to the risk of fluctuations in the fair value or future cash flows of financial instruments due to changes inmarket interest rates.
Fixed-rate and floating-rate interest-bearing financial instruments expose our company to fair value interest rate risk and cashflow interest rate risk, respectively. Our company determines the proportion of fixed-rate and floating-rate instruments based on marketconditions and maintains an appropriate mix of fixed and floating-rate instruments through regular reviews and monitoring. Whennecessary, our company utilizes interest rate swap instruments to hedge interest rate risk.
(2) Exchange rate risk
Exchange rate risk refers to the risk that the fair value of financial instruments or future cash flow will fluctuate due to the changein foreign exchange rate.
The company continues to monitor the scale of foreign currency transactions and foreign currency assets and liabilities tominimize exposure to foreign exchange risk. Additionally, the company may enter into forward foreign exchange contracts or currencyswap agreements to mitigate exchange rate risk. For the current and prior periods, the company has not entered into any forward foreignexchange contracts or currency swap agreements.
The foreign exchange risk faced by the company primarily stems from financial assets and financial liabilities denominated inUS dollars. The amounts of foreign currency financial assets and foreign currency financial liabilities converted into Renminbi aredetailed in foreign currency monetary items.
(3) Other price risks
Other price risk refers to the risk of fluctuations in the fair value or future cash flows of financial instruments due to market pricechanges other than exchange rate risk and interest rate risk.
The other price risk faced by the company primarily arises from investments in various equity instruments, exposing the companyto the risk of fluctuations in equity instrument prices.
| Item | Closing balance | Balance at the end of last year |
| Other investments in equity instruments | 200,829,853.18 | 414,859,257.92 |
| Total | 200,829,853.18 | 414,859,257.92 |
2. Financial assets
(1) Classification by transfer method
?Applicable □N/A
In RMB
| Transfer methods | Nature of transferred financial assets | Amount of transferred financial assets | Termination confirmation status | Basis for termination confirmation judgment |
| Sale | Accounts receivable | 17,945,216,138.03 | Termination confirmed | Transfer of risks and reward |
| Discounting, endorsement | Receivables financing | 4,579,914,056.32 | Termination confirmed | Transfer of risks and reward |
| Discounting, endorsement | Notes receivable | 337,335,907.43 | Not terminated | |
| Total | 22,862,466,101.78 |
(2) Financial assets terminated due to transfer
?Applicable □N/A
In RMB
| Item | Methods of financial asset transfer | Amount of financial assets terminated for recognition | Gains or losses related to termination recognition |
| Accounts receivable | Sale | 17,945,216,138.03 | -601,291,208.81 |
| Receivables financing | Discounting, endorsement | 4,579,914,056.32 | -140,051,339.94 |
| Total | 22,525,130,194.35 | -741,342,548.75 |
(3) Continued involvement in transferred financial assets
?Applicable □N/A
In RMB
| Item | Asset transfer method | Amount of assets formed due to continued involvement | Amount of liabilities formed due to continued involvement |
| Notes receivable | Discounting, endorsement | 225,054,602.71 | 225,054,602.71 |
| Total | 225,054,602.71 | 225,054,602.71 |
Other descriptions
XIII. Disclosure of fair value
1. Closing fair value of assets and liabilities measured at fair value
In RMB
| Item | Closing fair value | |||
| Level I | Level II | Level I | Total | |
| I. Continuous fair value measurement | -- | -- | -- | -- |
| (I) Held-for-trading financial assets | 92,485,140.01 | 1,628,279,035.31 | 1,720,764,175.32 | |
| 1. Financial assets at fair value through profit or loss | 92,485,140.01 | 1,628,279,035.31 | 1,720,764,175.32 | |
| (3) Derivative financial assets | 92,485,140.01 | 92,485,140.01 | ||
| (4) Others | 1,628,279,035.31 | 1,628,279,035.31 | ||
| (III) Investment in other equity instruments | 172,691,671.36 | 76,430,579.96 | 249,122,251.32 | |
| (VI) Receivables financing | 587,585,009.82 | 587,585,009.82 | ||
| (VII) Other non-current financial assets | 35,700,000.00 | 35,700,000.00 | ||
| 1. Total assets continuously measured at fair value | 35,700,000.00 | 35,700,000.00 | ||
| (1) Investment in equity instruments | 35,700,000.00 | 35,700,000.00 | ||
| Total assets continuously measured at fair value | 172,691,671.36 | 92,485,140.01 | 2,327,994,625.09 | 2,593,171,436.46 |
| (VI) Held-for-trading financial liabilities | 117,942,421.18 | 117,942,421.18 | ||
| Derivative financial liabilities | 117,942,421.18 | 117,942,421.18 | ||
| Total liabilities continuously measured at fair value | 117,942,421.18 | 117,942,421.18 | ||
| II. Non-continuous fair value measurement | -- | -- | -- | -- |
2. Basis for determining the market price of the items continuously and not continuously measured at fairvalue at level ILevel I inputs are quoted market price (unadjusted) in an active market for an identical asset or liability available at
the date of measurement.
3. Valuation technology and qualitative and quantitative information of important parameters used in theitems continuously and not continuously measured at fair value at level II.Level II inputs are inputs other than quoted market price (Level I) that are directly or indirectly observable for theasset or liability.
4. Valuation technology and qualitative and quantitative information of important parameters used in theitems continuously and not continuously measured at fair value at level IIILevel III inputs are unobservable inputs for the asset or liability.
5. Adjustment information between the opening book value and the closing book value, and the sensitivityanalysis of unobservable parameters for items continuously measured at fair value at level III
6. For items continuously measured at fair value, if there is conversion between different levels in the currentperiod, the reasons for the conversion and the policy for determining the conversion time point
7. Changes in valuation technology in the current period and reasons for changes
8. Fair value of financial assets and financial liabilities not measured at fair value
9. Others
XIV. Related parties and related-party transactions
1. The parent company of the Company
| Name of parent company | Place of registration | Nature of business | Registered capital | Shareholding ratio of the parent company in the Company | Voting rights ratio of the parent company in the Company |
| Luxshare Limited | Hong Kong | Industry | HKD10,000 | 38.15% | 38.15% |
Descriptions on the parent company of the Company
As of December 31, 2023, Luxshare Limited has pledged 39.38% of shares it held.
The ultimate controller of the Company is WANG Laichun and WANG Laisheng.Other descriptions:
2. Subsidiaries of the Company
Please refer to Note “X. Equity in other entities” for details of the Company’s subsidiaries
3. Joint ventures and associates of the Company
Please refer to Note “X Equity in joint ventures or associates” for details of the Company’s significant joint ventures or associates.Other joint ventures or associates that have related-party transactions with the Company in the current period or formed a balance dueto related-party transactions with the Company in the prior period are as follows:
| Name of joint venture or associate | Relationship with the Company |
| Riyimao Industrial Co., Ltd. | Joint-stock company of a majority-owned sub-subsidiary of the Company |
| Assem Technology Co., Ltd. | Joint-stock company of a majority-owned sub-subsidiary of the Company |
| Xuande Energy Co., Ltd. | Joint-stock company of a majority-owned sub-subsidiary of the Company |
| Lihao Optoelectronics Technology (Nantong) Co., Ltd. | Joint-stock company of a majority-owned subsidiary of the Company |
| Xinhao Photoelectric Technology (HK) Limited | Joint-stock company of a majority-owned subsidiary of the Company |
| MERRY & LUXSHARE (VIETNAM) CO., Ltd. | Joint-stock company of the Company’s subsidiary |
| Zhuhai Kinwong Flexible Circuit Co., Ltd. | Associates of the Company |
| Lisheng Automotive Technology (Guangzhou) Co., Ltd. | Associates of the Company |
Other descriptions:
4. Other related parties
| Name of other related parties | Relationship between other related parties and the Company |
| BCS Automotive Technology (Shenzhen) Co., Ltd. | An enterprise controlled by the Company’s parent company |
| BCS Automotive Technology (Suzhou) Co., Ltd. | An enterprise controlled by the Company’s parent company |
| Luxsan Technology (Kunshan) Co., Ltd. | An enterprise controlled by the Company’s parent company |
| Luxsan Precision Intelligent Manufacture (Kunshan) Co., Ltd. | An enterprise controlled by the Company’s parent company |
| Luxsan Investment (Jiangsu) Co., Ltd. | An enterprise controlled by the Company’s parent company |
| Luxsan Intelligent Equipment (Kunshan) Co., Ltd. | An enterprise controlled by the Company’s parent company |
| LUXSAN TECHNOLOGY LIMITED | An enterprise controlled by the Company’s parent company |
BCS Automotive Interface Solutions GmbH (Germany)
| BCS Automotive Interface Solutions GmbH (Germany) | An enterprise controlled by the Company’s parent company |
| BCS Automotive Interface Solutions US, LLC (USA) | An enterprise controlled by the Company’s parent company |
| BCS Automotive Interface Solutions Romania s.r.l. (Romania) | An enterprise controlled by the Company’s parent company |
| BCS Automotive Interface Solutions s.r.o. (Czech) | An enterprise controlled by the Company’s parent company |
| BCS-AIS Ensambles Mexico S. de R.L.de C.V. (Mexico) | An enterprise controlled by the Company’s parent company |
| Guangzhou Luxvisions Innovation Technology Limited | Other related party of the Company |
| Luxvisions Innovation (Ji’an) Co., Ltd. | Other related party of the Company |
| Luxvisions Innovation Technology Co., Ltd. | Other related party of the Company |
| LUXVISIONS INNOVATION TECHNOLOGY LIMITED | Other related party of the Company |
| Xinguang Energy Technology (Anhui) Co., Ltd. | Other related party of the Company |
| Dongguan Terry Leather Co., Ltd. | Other related party of the Company |
| Terry Smart Manufacturing (Dongguan) Technology Co., Ltd. | Other related party of the Company |
| Teleray (Hong Kong) International Company Limited | Other related party of the Company |
| Dongguan Gaowei Optical Electronics Co., Ltd. | Other related party of the Company |
| Shangrao City Luxvisions Innovation Technology Co., Ltd. | Other related party of the Company |
| Xinhao Photoelectric Technology (HK) Limited | Other related party of the Company |
| COWELL OPTIC ELECTRONICS LTD | Other related party of the Company |
| Chery Automobile Co., Ltd. | Other related party of the Company |
| Chery Automobile Henan Co., Ltd. | Other related party of the Company |
| Chery Commercial Vehicle (Anhui) Co., Ltd. | Other related party of the Company |
| Terry Precision Corporation | Other related party of the Company |
| Terry Smart Manufacturing (Dongguan) Technology Co., Ltd. | Other related party of the Company |
| Xinhao Photoelectric Technology Limited | Other related party of the Company |
| Xunmu Information Technology (Shanghai) Co., Ltd. | An enterprise controlled by the Company’s parent company |
| Lishan Smart Manufacturing Technology (Guangdong) Co., Ltd. | An enterprise controlled by the Company’s parent company |
Other descriptions:
5. Related-party transactions
(1) Related-party transactions of purchasing and selling goods, rendering and accepting servicesPurchasing goods/accepting services
In RMB
| Related party | Related-party transactions | Amount recognized in the current period | Approved transaction limit | Whether the transaction limit is exceeded | Amount recognized in the prior period |
| Riyimao Industrial Co., Ltd. | Processing services | 8,666,666.79 | No | 19,083,384.89 | |
| Assem Technology Co., Ltd. | Equipment and appliances | 517,891.33 | No | 1,642,783.57 |
Assem TechnologyCo., Ltd.
| Assem Technology Co., Ltd. | Other services | 25,501,235.88 | No | 1,015,414.60 | |
| Assem Technology Co., Ltd. | Purchasing goods | 443,692.28 | No | 20,623,798.84 | |
| BCS Automotive Technology (Shenzhen) Co., Ltd. | Purchasing fixed assets | 221,636.87 | No | ||
| BCS Automotive Technology (Suzhou) Co., Ltd. | Purchasing goods | 18,700,732.83 | 45,000,000.00 | No | 23,441,183.61 |
| Guangzhou Luxvisions Innovation Technology Limited | Purchasing goods | No | 573,252.39 | ||
| Guangzhou Luxvisions Innovation Technology Limited | Service fees | 3,663,133.48 | No | 2,365,923.22 | |
| Guangzhou Luxvisions Innovation Technology Limited | Equipment | 76,318.48 | No | 9,050.00 | |
| Luxvisions Innovation Technology (Ji'an) Limited | Service fees | 33,849.06 | No | ||
| Luxvisions Innovation Technology Limited | Equipment and appliances | 429,489.75 | No | ||
| Luxvisions Innovation Technology Limited | Rent and utilities | No | 844,931.03 | ||
| LUXVISIONS INNOVATION TECHNOLOGY LIMITED | Purchasing goods | 457,613.05 | No | ||
| LUXVISIONS INNOVATION TECHNOLOGY LIMITED | Equipment and appliances | 914,452.98 | No | ||
| Luxsan Technology (Kunshan) Co., Ltd. | Purchasing goods | No | 311,176,270.99 | ||
| Luxsan Precision Intelligent Manufacture | Utilities | 9,658,090.82 | No | 36,498,229.20 |
(Kunshan) Co.,Ltd.
| (Kunshan) Co., Ltd. | |||||
| Luxsan Investment (Jiangsu) Co., Ltd. | Purchasing goods | 39,528,673.28 | 130,000,000.00 | No | |
| LUXSAN TECHNOLOGY LIMITED | Purchasing goods | 1,189,126,782.26 | 1,200,000,000.00 | No | 1,037,899,802.32 |
| MERRY & LUXSHARE (VIET NAM) CO.,LTD | Purchasing goods | 71,739,173.68 | No | 63,555,616.23 | |
| BCS Automotive Interface Solutions GmbH (Germany) | Purchasing goods | 36,595,812.14 | 70,000,000.00 | No | 33,585,700.71 |
| BCS Automotive Interface Solutions US, LLC (USA) | Purchasing goods | 92,923.55 | 100,000,000.00 | No | |
| BCS Automotive Interface Solutions Romania s.r.l. (Romania) | Purchasing goods | 5,410,212.91 | No | ||
| Xinguang Energy Technology (Anhui) Co., Ltd. | Outsourcing fees | 900,429.00 | No | ||
| Lihao Optoelectronics Technology (Nantong) Co., Ltd. | Purchasing goods | 4,320,397.20 | No | 336,203.20 | |
| Dongguan Terry Leather Co., Ltd. | Purchasing goods | No | 802,216.95 | ||
| Terry Smart Manufacturing (Dongguan) Technology Co., Ltd. | Purchasing goods | 39,367,448.03 | No | 1,139,462.18 | |
| Terry Smart Manufacturing (Dongguan) Technology Co., Ltd. | Service fees | 890,219.06 | No | ||
| Terry Smart Manufacturing (Dongguan) Technology Co., Ltd. | Purchasing fixed assets | 1,726,385.36 | No | ||
| Teleray (Hong Kong) International Company Limited | Purchasing goods | 2,709,161.11 | No | 943,970.54 | |
| Xunmu Information | Purchasing goods | No | 9,763,593.17 |
Technology(Shanghai) Co.,Ltd.
| Technology (Shanghai) Co., Ltd. | |||||
| Dongguan Gaowei Optical Electronics Co., Ltd. | Service fees | 11,517,032.81 | No | 2,474,770.49 | |
| Lishan Smart Manufacturing Technology (Guangdong) Co., Ltd. | Rent and utilities | 2,389,436.16 | No | 1,022,581.35 |
Selling goods/rendering services
In RMB
| Related party | Related-party transactions | Amount recognized in the current period | Amount recognized in the prior period |
| Assem Technology Co., Ltd. | Other services | 2,546,700.11 | 1,026,668.20 |
| Shangrao City Luxvisions Innovation Technology Co., Ltd. | Selling goods | 122,520.00 | |
| Guangzhou Luxvisions Innovation Technology Limited | Equipment and apparatus | 534,229.50 | |
| Guangzhou Luxvisions Innovation Technology Limited | Selling goods | 132,801,682.91 | 4,182,806.58 |
| BCS Automotive Technology (Suzhou) Co., Ltd. | Selling goods | 396,983,841.26 | 394,380,063.81 |
| Luxvisions Innovation Tech Limited | Service fees | 495,622.71 | |
| BCS Automotive Interface Solutions GmbH (Germany) | Selling goods | 6,727,835.59 | 533,646.76 |
| BCS Automotive Interface Solutions Romania s.r.l. (Romania) | Selling goods | 27,529,559.67 | |
| BCS Automotive Interface Solutions US, LLC (USA) | Selling goods | 24,226,761.76 | 1,383,127.79 |
| BCS Automotive Interface Solutions s.r.o. (Czech) | Selling goods | 94,165.76 | |
| Luxsan Technology (Kunshan) Co., Ltd. | Selling goods | 78,602,371.08 | 643,619,515.80 |
| Luxsan Precision Intelligent Manufacture (Kunshan) Co., Ltd. | Selling goods | 36,934,393.03 | 55,980,332.83 |
| Luxsan Precision Intelligent Manufacture (Kunshan) Co., Ltd. | Selling goods | 230,417,667.66 | |
| LUXSAN TECHNOLOGY | Selling fixed assets | 8,550,535.36 |
LIMITED
| LIMITED | |||
| Luxsan Investment (Jiangsu) Co., Ltd. | Selling goods | 5,047,357.29 | |
| LUXSAN TECHNOLOGY LIMITED | Selling goods and service fees | 832,394,772.18 | 19,117,778.28 |
| Xunmu Information Technology (Shanghai) Co., Ltd. | Selling goods | 3,200.00 | 14,868,596.51 |
| MERRY & LUXSHARE(VIET NAM) CO.,LTD | Selling goods | 36,766,791.14 | 15,844,650.03 |
| MERRY & LUXSHARE(VIET NAM) CO.,LTD | Service fees | 16,173,198.52 | 15,994,272.36 |
| Lihao Optoelectronics Technology (Nantong) Co., Ltd. | Selling goods | 19,675,233.05 | 3,922,201.00 |
| Xinhao Photoelectric Technology (HK) Limited | R&D and marketing consulting fees | 258,979.73 | 4,287,145.58 |
| BCS Automotive Technology (Shenzhen) Co., Ltd. | Selling goods | 550.00 | |
| Xinguang Energy Technology (Anhui) Co., Ltd. | Selling goods | 12,998,999.82 | |
| Xinhao Photoelectric Technology Limited | Service fees | 195,600.00 | |
| Dongguan Gaowei Optical Electronics Co., Ltd. | Selling goods | 8,059,987.00 | 991,782.45 |
| Dongguan Gaowei Optical Electronics Co., Ltd. | Service fees | 148,944.09 | |
| Lisheng Automotive Technology (Guangzhou) Co., Ltd. | Selling goods | 1,337,518.57 | |
| COWELL OPTIC ELECTRONICS LTD | Selling goods | 47,483,807.36 | 117,926,402.49 |
| Chery Automobile Co., Ltd. | Selling goods | 102,949,356.35 | 28,562,202.47 |
| Chery Automobile Co., Ltd. | Service fees | 404,966.04 | |
| Chery Automobile Henan Co., Ltd. | Selling goods | -479,403.24 | 559,356.88 |
| Chery Commercial Vehicle (Anhui) Co., Ltd. | Selling goods | 18,196,506.19 | 220,361.59 |
| Dongguan Terry Leather Co., Ltd. | Selling goods | 690,004.06 | |
| Terry Smart Manufacturing (Dongguan) Technology Co., Ltd. | Selling goods | 11,724.37 | 10,550.18 |
| Terry Smart Manufacturing (Dongguan) Technology Co., Ltd. | Selling goods | 1,764,651.29 | 112,247.00 |
| Terry Smart Manufacturing | Selling fixed assets | 2,000.00 |
(Dongguan) Technology Co.,Ltd.
| (Dongguan) Technology Co., Ltd. | |||
| Terry Smart Manufacturing (Dongguan) Technology Co., Ltd. | Service fees | 353,771.00 |
Descriptions on related-party transactions of purchasing and selling goods, and rendering and accepting services
On February 21, 2023, the Company held the 15
thmeeting of the fifth session of Board of Directors, deliberatingand approving the Proposal on the Prediction of Increase in Daily Related-party Transactions of the Company in2023:
to purchase goods from BCS Automotive Technology (Suzhou) Co., Ltd. in the amount of up to RMB45,000,000.00;
to purchase goods from BCS Automotive Interface Solutions GmbH (Germany) in the amount of up to RMB70,000,000.00;
to purchase goods from LUXSAN TECHNOLOGY LIMITED in the amount of up to RMB 1,200,000,000.00;
to purchase goods from Luxsan Investment (Jiangsu) Co., Ltd. in the amount of up to RMB 130,000,000.00;
to purchase goods from BCS Automotive Interface Solutions US, LLC (USA) in the amount of up to RMB100,000,000.00;
to sell goods to BCS Automotive Technology (Suzhou) Co., Ltd. in the amount of up to RMB 850,000,000.00
to sell goods/provide labor to LUXSAN TECHNOLOGY LIMITED in the amount of up to RMB1,800,000,000.00;
to sell goods to Cowell Optic Electronics Limited in the amount of up to RMB 360,000,000.00;
to sell goods to Luxsan Intelligent Equipment (Kunshan) Co., Ltd. in the amount of up to RMB 350,000,000.00;
to sell goods to Luxsan Investment (Jiangsu) Co., Ltd. in the amount of up to RMB 55,000,000.00;
to sell goods to BCS Automotive Interface Solutions US, LLC (USA) in the amount of up to RMB40,000,000.00;
(2) Related-party lease
The Company acts as the lessor:
In RMB
| Name of lessee | Types of leased assets | Lease income recognized in the current period | Lease income recognized in the prior period |
The Company acts as the lessee:
In RMB
| Lessor | Category of leased | Expenses related to short-term leases and low- | Variable lease payments through profit or loss not | Paid rent | Assumed interest expenses of lease liabilities | Added right-of-use assets |
assets
| assets | value assets leases subject to simplified treatment, if any | included in the measurement of lease liabilities, if any | |||||||||
| Amount recognized in the current period | Amount recognized in the prior period | Amount recognized in the current period | Amount recognized in the prior period | Amount recognized in the current period | Amount recognized in the prior period | Amount recognized in the current period | Amount recognized in the prior period | Amount recognized in the current period | Amount recognized in the prior period | ||
| Luxsan Precision Intelligent Manufacture (Kunshan) Co., Ltd. | Fixed assets and buildings | 30,600,000.00 | 2,615,051.89 | ||||||||
| Luxsan Investment (Jiangsu) Co., Ltd. | Fixed assets and buildings | 1,984,124.96 | |||||||||
| Luxvisions Innovation (Ji’an) Co., Ltd. | Fixed assets and buildings | 2,415,740.00 | 51,827.16 | 170,770.30 | 17,685,567.07 | ||||||
Descriptions on related-party leases
(3) Remuneration of key managers
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Compensation of key managers | 12,830,400.00 | 13,665,822.35 |
| Share-based payment of key managers | 12,019,751.67 | 3,842,203.80 |
(4) Other related-party transactions
6. Accounts receivable and payable of related parties
(1) Receivables
In RMB
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Bad-debt provision | Book balance | Bad-debt provision | ||
| Accounts receivables | |||||
| BCS Automotive Interface Solutions GmbH(Germany) | 1,324,482.00 | 662.24 | |||
| BCS Automotive Interface Solutions Romania s.r.l. (Romania) | 14,600,815.64 | 7,300.41 | |||
| BCS Automotive Interface Solutions US,LLC(USA) | 20,232,577.86 | 10,116.29 | 24,913.91 | 12.46 | |
| BCS Automotive Interface Solutions s.r.o.(Czech) | 83,825.90 | 41.91 | |||
| COWELL OPTIC ELECTRONICS LTD | 92,216.75 | 46.11 | 89,178,452.13 | 44,589.23 | |
| LUXSAN TECHNOLOGY LIMITED | 250,986,471.18 | 125,493.24 | 3,036,189.27 | 1,518.09 | |
| MERRY & LUXSHARE(VIET NAM) CO.,LTD | 20,589,657.46 | 10,294.83 | 8,503,901.75 | 4,251.95 | |
| XINHAO PHOTOELECTRIC TECHNOLOGY (HK) | 43,319.52 | 21.66 | |||
| Assem Technology Co., Ltd. | 1,412,127.29 | 706.06 | 335,321.60 | 167.66 | |
| Dongguan Gaowei Optical Electronics Co., Ltd. | 8,992,751.31 | 4,496.38 | |||
| Guangzhou Luxvisions Innovation Technology Limited | 137,683,353.53 | 68,841.68 | 3,407,360.47 | 1,703.68 | |
| Lisheng Automotive | 1,511,395.99 | 755.70 | |||
Technology(Guangzhou) Co.,Ltd.
| Technology (Guangzhou) Co., Ltd. | |||||
| Lihao Optoelectronics Technology (Nantong) Co., Ltd. | 1,272,105.69 | 636.05 | |||
| BCS Automotive Technology (Shenzhen) Co., Ltd. | 621.50 | 0.31 | |||
| BCS Automotive Technology (Suzhou) Co., Ltd. | 302,574,007.23 | 151,287.00 | 321,616,341.01 | 160,808.17 | |
| Luxsan Precision Intelligent Manufacture (Kunshan) Co., Ltd. | 32,616,026.16 | 16,308.01 | |||
| Luxsan Technology (Kunshan) Co., Ltd. | 173,086,093.05 | 86,543.05 | |||
| Luxsan Investment (Jiangsu) Co., Ltd. | 2,962,511.55 | 1,481.26 | |||
| Luxsan Intelligent Equipment (Kunshan) Co., Ltd. | 184,417,695.50 | 92,208.85 | |||
| Chery Automobile Co., Ltd. | 50,708,439.08 | 25,354.22 | 6,792,611.72 | 3,396.31 | |
| Chery Automobile Henan Co., Ltd. | 408.97 | 0.20 | 632,073.27 | 316.04 | |
| Chery Commercial Vehicle (Anhui) Co., Ltd. | 19,452,711.52 | 9,726.36 | 249,008.60 | 124.50 | |
| Shangrao City Luxvisions Innovation Technology Co., Ltd. | 118,085.00 | 59.04 | |||
| Xinhao Photoelectric Technology (HK) Limited | 207,336.00 | 103.67 | |||
| Terry Smart Manufacturing (Dongguan) Technology Co., Ltd. | 2,371,233.21 | 1,185.62 | 126,839.11 | 63.42 | |
| Xinguang Energy Technology | 15,854,406.07 | 7,927.20 |
(Anhui) Co., Ltd.
| (Anhui) Co., Ltd. | |||||
| Xunmu Information Technology (Shanghai) Co., Ltd. | 2,848,819.77 | 1,424.41 | |||
| Other receivables | |||||
| BCS Automotive Interface Solutions GmbH(Germany) | 4,150,973.34 | ||||
| BCS Automotive Interface Solutions US,LLC(USA) | 1,835,605.65 | ||||
| COWELL OPTIC ELECTRONICS LTD | 566,896.90 | 2,834.48 | |||
| MERRY & LUXSHARE (VIET NAM) CO.,LTD | 54,214.88 | 271.07 | 83,591.01 | 417.96 | |
| Xinhao Photoelectric Technology (HK) Limited | 126,709.50 | 633.55 | 19,207.53 | 96.04 | |
| Dongguan Gaowei Optical Electronics Co., Ltd. | 10,121.46 | 50.61 | |||
| Guangzhou Luxvisions Innovation Technology Limited | 6,620,554.60 | 33,102.77 | |||
| Lihao Optoelectronics Technology (Nantong) Co., Ltd. | 3,922,636.50 | 19,613.18 | |||
| BCS Automotive Technology (Suzhou) Co., Ltd. | 183,851.00 | 919.26 | 5,699,756.88 | 28,498.78 | |
| Luxsan Technology (Kunshan) Co., Ltd. | 9,349.09 | 46.75 | |||
| Teleray (Hong Kong) International Company Limited | 373,541.60 | 1,867.71 | |||
| Xuande Energy Co., Ltd. | 164,996.62 | 824.98 |
Prepayments
| Prepayments | |||||
| BCS Automotive Interface Solutions GmbH(Germany) | 16,758.58 | 10,761,181.73 | |||
| BCS Automotive Interface Solutions Romania s.r.l. (Romania) | 8,626,289.64 | ||||
| BCS Automotive Interface Solutions US,LLC(USA) | 1,468,031.23 | ||||
| Notes receivable | |||||
| Bisaisi Automotive Technology (Suzhou) Co., Ltd. | 12,071,807.98 |
(2) Payables
In RMB
| Item | Related party | Closing book balance | Opening book balance |
| Accounts payable | |||
| BCS Automotive Interface Solutions Romania s.r.l. (Romania) | 2,729.66 | ||
| BCS Automotive Interface Solutions US,LLC(USA) | 10,064,934.58 | ||
| BCS Automotive Interface Solutions GmbH(Germany) | 382,381.23 | ||
| LUXSAN TECHNOLOGY LIMITED | 338,536,004.32 | 907,791,605.59 | |
| LUXVISIONS INNOVATION TECHNOLOGY LIMITED | 585,128.90 | ||
| MERRY & LUXSHARE (VIET NAM) CO.,LTD | 43,589,524.60 | 13,129,894.24 | |
| Assem Technology Co., Ltd. | 11,442,488.98 | 6,958,457.33 | |
| Dongguan Gaowei Optical Electronics Co., Ltd. | 2,404,063.04 | ||
| Guangzhou Luxvisions Innovation Technology Limited | 1,217,397.22 | 149,969.97 | |
| Xinguang Energy Technology (Anhui) Co., Ltd. | 713,564.13 | ||
| Lihao Optoelectronics | 3,012,052.57 | 267,949.42 |
Technology (Nantong) Co.,Ltd.
| Technology (Nantong) Co., Ltd. | |||
| Luxvisions Innovation (Ji’an) Co., Ltd. | 4,380.00 | 1,811,805.00 | |
| Luxvisions Innovation Technology Limited | 75,514.52 | ||
| Lishan Smart Manufacturing Technology (Guangdong) Co., Ltd. | 892,581.04 | 1,112,875.90 | |
| BCS Automotive Technology (Suzhou) Co., Ltd. | 9,829,821.10 | 7,368,354.63 | |
| Luxsan Precision Intelligent Manufacture (Kunshan) Co., Ltd. | 80,467,446.67 | ||
| Luxsan Technology (Kunshan) Co., Ltd. | 1,054,198.48 | ||
| Luxsan Investment (Jiangsu) Co., Ltd. | 38,169,781.48 | ||
| Riyimao Industrial Co., Ltd. | 5,532,481.51 | 9,959,460.45 | |
| Teleray (Hong Kong) International Company Limited | 2,520,685.43 | 899,233.35 | |
| Terry Smart Manufacturing (Dongguan) Technology Co., Ltd. | 14,283,178.83 | 1,653,291.06 | |
| Xunmu Information Technology (Shanghai) Co., Ltd. | 1,154,129.50 | ||
| Other payables | |||
| Luxsan Investment (Jiangsu) Co., Ltd. | 1,982,319.68 | ||
| Riyimao Industrial Co., Ltd. | 9,196.33 | ||
| Teleray (Hong Kong) International Company Limited | 166,040.61 | 44,737.19 | |
| BCS-AIS Ensambles Mexico S. de R.L.de C.V. (Mexico) | 563,387.00 | ||
| Contract liabilities | |||
| BCS Automotive Interface Solutions US,LLC(USA) | 15,150.91 | 9,387.26 | |
| Lease liabilities | |||
| Luxvisions Innovation (Ji’an) Co., Ltd. | 17,024,178.30 | ||
| Luxsan Precision Intelligent Manufacture (Kunshan) Co., | 65,504,587.32 |
Ltd.
Ltd.
XV. Share-based payment
1. General situation of share-based payment
?Applicable □ N/A
In RMB
| Categories of recipients: | Grants awarded this period | Exercised this period | Unlocked this period | Expired this period | ||||
| Quantity | Amount | Quantity | Amount | Quantity | Amount | Quantity | Amount | |
| Sales personnel | 3,788,322.00 | 34,205,994.87 | 1,044,487.00 | 9,341,404.83 | ||||
| Administrative personnel | 29,127,569.00 | 237,593,903.49 | 10,144,021.00 | 94,435,598.93 | ||||
| Research and development personnel | 12,279,289.00 | 108,593,127.99 | 10,001,181.00 | 99,629,513.39 | ||||
| Total | 45,195,180.00 | 380,393,026.35 | 21,189,689.00 | 203,406,517.15 | ||||
Outstanding stock options or other equity instruments issued at the end of the period.?Applicable □N/A
| Categories of recipients: | Outstanding stock options issued at the end of the period. | Outstanding equity instruments issued at the end of the period. | ||
| Range of exercise prices | Remaining contract term | Range of exercise prices | Remaining contract term | |
| Sales personnel | 9.93-35.63 | 1-3 years | ||
| Management personnel | 9.93-35.63 | 1-3 years | ||
| Research and development personnel | 9.93-35.63 | 1-3 years | ||
2. Payment situation settled by equity
?Applicable □N/A
In RMB
Method for determining the fair value of equity instruments
granted on the grant date
| Method for determining the fair value of equity instruments granted on the grant date | Black-Scholes module |
| Key parameters for determining the fair value of equity instruments granted on the grant date | Historical volatility, risk-free rate |
| Basis for determining the number of equity instruments eligible for exercise | The company determines based on factors such as the equity instruments corresponding to the incentive objects in employment, and forecasts of the company's future annual performance |
| Reasons for significant differences between current period estimates and prior period estimates | None |
| Accumulated amount of share-based payments settled in equity recognized in capital reserve | 2,173,438,344.17 |
| Total expenses recognized for share-based payments settled in equity for the current period | 780,664,929.64 |
Other descriptions:
(1) On September 25, 2018, the Proposal on Granting Stock Options to Grantees under the 2018 Stock Option Incentive Plan ofLuxshare Precision Industry Co., Ltd. was approved upon deliberation at the 5th meeting of the fourth session of Board of Directors ofthe Company. Accordingly, the Company granted 97.50 million of stock options to 1,899 eligible grantees at the exercise price ofRMB17.58 per share. After 12 months from the date on which the registration of grants was completed, grantees meeting the exerciseconditions would exercise the options in five periods, with a proportion of 20% for each period, in the following 60 months; Accordingto the Proposal on Achievement of the Exercise Conditions for the Second Exercise Period under the 2018 Stock Option Incentive Planapproved upon deliberation at the 27th meeting of the fourth session of Board of Directors of the Company held on December 2, 2020,given that the exercise condition for the second exercise period under the 2018 Stock Option Incentive Plan had been matured, it wasagreed that 1,718 grantees of the 2018 Stock Option Incentive Plan would independently exercise their options at the exercise price ofRMB10.28 per share, with the estimated stock options to be exercised numbering 31,212,577 (the actual number of stock options to beexercised shall be subject to registered number by Shenzhen Branch of China Securities Depository and Clearing Co., Ltd.)
(2) On April 22, 2019, the Company held the 9th meeting of the fourth session of Board of Directors, deliberating and approvingthe Proposal on Granting Stock Options to Initial Grantees under the 2019 Stock Option Incentive Plan of Luxshare Precision IndustryCo., Ltd., whereby it was determined that 50,076,000 stock options would be granted to 348 eligible grantees and 12, 519,000 stockoptions would be reserved for future granting. The stock options initially granted under this incentive plan was RMB 23.36 per share.
(3) On November 27, 2019, the Company held the 13th meeting of the fourth session of Board of Directors, deliberating andapproving the Proposal on Grant of Stock Options to Grantees in Reserved Grant under the 2019 Stock Option Incentive Plan, pursuantto which the Company granted 16,274,700 stock options to 263 eligible grantees at an exercise price of RMB17.93 per share, and after12 months from the date on which the registration of grants was completed, grantees meeting the exercise conditions would exercisethe stock options in five periods, with a proportion of 20% for each period, in the following 60 months.
(4) On December 3,2021, the Company held the 6th meeting of the fifth session of Board of Directors, deliberating and approvingthe Proposal on Granting Stock Options to Grantees under the 2021 Stock Option Incentive Plan of Luxshare Precision Industry Co.,Ltd., whereby it was determined that 52,419,000 stock options would be granted to 1,097 eligible grantees on December 3, 2021 as thegrant date of the incentive plan. The exercise price of stock options initially granted under this incentive plan was RMB 35.87 per share.Since 22 original grantees resigned from the Company and 3 original grantees gave up all stock options to be granted to them forpersonal reasons, the number of grantees subject to this stock option incentive was changed from 1,097 to 1,072 and the quantity ofstock options granted was changed from 52,419,000 to 52,092,000.
On September 15, 2022, the Company held the 11th meeting of the fifth session of Board of Directors and the 11th meeting ofthe fifth session of Board of Supervisors, deliberating and approving the Proposal on Grant of Stock Options to Grantees in Reserved
Grant under the 2021 Stock Option Incentive Plan, whereby it was determined that 13,101,000 stock options would be granted to 365eligible grantees on September 15, 2022 as the grant date of the reserved stock options. The exercise price of reserved stock optionsunder this incentive plan was RMB 35.76 per share. Since 9 original grantees resigned from the Company or gave up all stock optionsto be granted to them for personal reasons, the number of grantees subject to this stock option incentive was changed from 365 to 356and the quantity of stock options granted was changed from 13,101,000 to 12,785,800.
(5) On December 15, 2022, the Company held the 14th meeting of the fifth session of Board of Directors, deliberating andapproving the Proposal on Grant of Stock Options to Grantees under the 2022 Stock Option Incentive Plan of Luxshare PrecisionIndustry Co., Ltd., whereby it was determined that 172,021,000 stock options would be granted to 3,759 eligible grantees on December5, 2022 as the grant date of the reserved stock options. The exercise price of stock options initially granted under this incentive planwas RMB 30.35 per share. Since 254 original grantees resigned from the Company or gave up all stock options to be granted to themfor personal reasons, the number of grantees subject to this stock option incentive was changed from 3,759 to 3,505 and the quantityof stock options granted was changed from 172,021,000 to 168,513,000.
3. Share-based payment settled in cash
□ Applicable ?N/A
4. Stock-based compensation expense for the current period
| Categories of recipients: | Share-based payment expenses settled by equity | Share-based payment expenses settled in cash |
| Sales personnel | 57,851,529.29 | |
| Management personnel | 394,024,707.00 | |
| Research and development personnel | 328,788,693.35 | |
| Total | 780,664,929.64 |
Other descriptions:
5. Others
None
XVI. Commitments and contingencies
1. Significant commitments
Significant commitments on the balance sheet dateOn December 16, 2023, the company entered into an agreement with Qorvo Semiconductor Limited ("Qorvo Semiconductor") toacquire 100% equity of Qorvo Semiconductor (Singapore) Limited ("Qorvo Singapore") and Qorvo Semiconductor (Hong Kong)Limited ("Qorvo Hong Kong"). As of December 31, 2023, the company paid a $20,000,000 equity acquisition deposit to QorvoSemiconductor.
2. Contingencies
(1) Significant contingencies on the balance sheet date
The Company has no significant contingencies to be disclosed.
(2) Notes shall be made if the Company has no significant contingencies that need to be disclosed
The Company has no significant contingencies to be disclosed.
3. Others
None.XVII. Events after the balance sheet date
1. Profit distribution
| Dividend to be distributed per 10 shares (RMB) | 3.00 |
| Number of dividends per 10 shares declared after deliberation and approval (RMB) | 3.00 |
| Profit sharing scheme | According to the resolution of the 24th meeting of the fifth session of the Board of Directors of the Company, the Company distributed profits in the current year, based on the total share capital of 7,178,011,313 shares, and paid cash dividends of RMB 3 (including tax) for every 10 shares to all shareholders, and paid a total cash dividend of RMB 2,153,403,393.90 (including tax). The remaining undistributed profits are carried forward to be distributed in subsequent years. |
2. Description of other events after the balance sheet date
1. According to the resolution of the 23rd meeting of the fifth session of the Board of Directors of the company, the company plans toapply for a total comprehensive credit line of RMB 42 billion from 8 banks. The final approved credit line by the banks shall prevail,including RMB loans, bank acceptance bills, letters of credit, guarantees, forward foreign exchange, and other credit varieties in bothdomestic and foreign currencies. The credit lines mentioned above all have a term of one year.
In RMB
XVIII. Other significant events
1. Segment information
1) Basis of Segments Determination and Accounting Policies
None.
(2) Financial Information of Segments
In RMB
| Item | Offset among segments | Total | |
| None |
(3) If the company has no reporting segments, or is unable to disclose the total assets and liabilities of eachreporting segment, it shall explain the reasonsThe Group determines operating segments based on internal organizational structure, management requirements,and internal reporting systems, and discloses segment information based on operating segments.
Operating segments refer to components of the Group that simultaneously meet the following conditions: (1)the component generates revenue and incurs expenses in its daily activities; (2) the Group's management canregularly evaluate the operating results of the component to determine resource allocation and performanceevaluation; (3) the Group can obtain relevant accounting information such as financial condition, operating results,and cash flows of the component. If two or more operating segments have similar economic characteristics and meetcertain conditions, they are combined into one operating segment.
As over 90% of the Group's revenue and performance originate from the electronics product business, segmentinformation is not presented.
(4) Other descriptions
None.
XVIX. Notes to key items in financial statements of the parent company
1. Accounts receivable
(1) Disclosure by Aging
In RMB
| Aging | Closing balance | Opening balance |
| Within 1 year (inclusive) | 5,233,442,091.29 | 6,134,043,494.78 |
| Not overdue | 5,227,457,238.25 | 6,113,655,873.43 |
| 1 to 60 days overdue | 5,937,121.62 | 13,695,933.00 |
| 61 to 120 days overdue | 47,731.42 | 812,899.90 |
| 121 to 180 days overdue | 1,603,021.06 | |
| 181 to 365 days overdue | 4,275,767.39 | |
| 1 to 2 years | 670,086.81 | 11,076,680.31 |
| 2 to 3 years | 1,832,777.87 | 925,835.14 |
| More than 3 years | 242,560.49 | 242,560.49 |
| More than 5 years | 242,560.49 | 242,560.49 |
| Total | 5,236,187,516.46 | 6,146,288,570.72 |
(2) Classification and disclosure by bad debt provision method
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
| Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
| Accounts receivable for which bad-debt provision is made individually | 241,403.36 | 0.01% | 241,403.36 | 100.00% | 241,403.36 | 0.01% | 241,403.36 | 100.00% | ||
| Including: | ||||||||||
| Entity 1 | 241,403.36 | 0.01% | 241,403.36 | 100.00% | 241,403.36 | 0.01% | 241,403.36 | 100.00% | ||
| Accounts receivable for which bad-debt | 5,235,946,113.10 | 99.99% | 3,509,490.81 | 0.07% | 5,232,436,622.29 | 6,146,047,167.36 | 100.00% | 15,127,587.81 | 0.25% | 6,130,919,579.55 |
provision ismade bygroup
| provision is made by group | ||||||||||
| Including: | ||||||||||
| Group by aging | 1,531,093,301.52 | 29.24% | 3,509,490.81 | 0.23% | 1,527,583,810.71 | 1,092,897,234.00 | 17.78% | 15,127,587.81 | 1.38% | 1,077,769,646.19 |
| Related party group in the scope of consolidation | 3,704,852,811.58 | 70.75% | 3,704,852,811.58 | 5,053,149,933.36 | 82.21% | 5,053,149,933.36 | ||||
| Total | 5,236,187,516.46 | 100.00% | 3,750,894.17 | 0.07% | 5,232,436,622.29 | 6,146,288,570.72 | 100.00% | 15,368,991.17 | 0.25% | 6,130,919,579.55 |
Provision for bad debts made individually: 241,403.36
In RMB
| Description | Opening balance | Closing balance | ||||
| Book balance | Bad-debt provision | Book balance | Bad-debt provision | Provision proportion | Reason for provision | |
| Entity 1 | 241,403.36 | 241,403.36 | 241,403.36 | 241,403.36 | 100.00% | Unrecoverable |
| Total | 241,403.36 | 241,403.36 | 241,403.36 | 241,403.36 | ||
Provision for bad debts on a portfolio basis: 3,509,490.81
In RMB
| Description | Closing balance | ||
| Book balance | Bad-debt provision | Provision proportion | |
| Undue | 1,522,604,426.67 | 761,302.17 | 0.05% |
| 1 to 60 days overdue | 5,937,121.62 | 296,856.08 | 5.00% |
| 61 to 120 days overdue | 47,731.42 | 14,319.43 | 30.00% |
| 121 to 180 days overdue | |||
| 181 to 365 days overdue | |||
| 1 to 2 years (excluding 1 year) overdue | 670,086.81 | 603,078.13 | 90.00% |
| Over 2 years overdue | 1,833,935.00 | 1,833,935.00 | 100.00% |
| Total | 1,531,093,301.52 | 3,509,490.81 | |
Descriptions on basis for determining the group:
If the bad-debt provision for accounts receivable is made according to the general model of expected credit loss, please refer to the
disclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable ?N/A
(3) Bad-debt provision made, recovered or reversed in the current period
Bad-debt provision in the current period:
In RMB
| Category | Opening balance | Amount of change in the current period | Closing balance | |||
| Provision | Recover or reversal | Write off | Other | |||
| Provision on an individual basis | 241,403.36 | 241,403.36 | ||||
| Provision on a group basis | 15,127,587.81 | 11,618,097.00 | 3,509,490.81 | |||
| Total | 15,368,991.17 | 11,618,097.00 | 3,750,894.17 | |||
Including significant amounts reversed or recovered from the current provision for bad debts:
In RMB
| Entity name | Amount recovered or reversed | Reason for reversal | Recovery method | Basis for determining the provision ratio for the original bad debt reserve and its reasonableness |
(4) Account receivables and contractual assets in the top five closing balances collected by defaulter
In RMB
| Entity name | Closing balance of accounts receivable | Contractual assets ending balance | Closing balance of accounts receivable and contractual assets | The proportion of the total closing balance of accounts receivable and contractual assets | Closing balance of accounts receivable allowance for doubtful accounts and contractual asset impairment provision |
| Entity 1 | 1,410,537,935.66 | 1,410,537,935.66 | 26.94% | ||
| Entity 2 | 1,128,080,418.34 | 1,128,080,418.34 | 21.54% | ||
| Entity 3 | 566,349,132.29 | 566,349,132.29 | 10.82% | ||
| Entity 4 | 420,454,730.26 | 420,454,730.26 | 8.03% | 210,227.37 | |
| Entity 5 | 306,627,206.33 | 306,627,206.33 | 5.86% | ||
| Total | 3,832,049,422.88 | 3,832,049,422.88 | 73.19% | 210,227.37 |
2. Other receivables
In RMB
| Item | Closing balance | Opening balance |
| Dividends receivable | 522,000,000.00 | 150,000,000.00 |
| Other receivables | 53,065,087.05 | 100,596,765.44 |
| Total | 575,065,087.05 | 250,596,765.44 |
(1) Dividends receivable
1) Classification of dividends receivable
In RMB
| Item (or Investee) | Closing balance | Opening balance |
| Luxshare Precision Industry (Chuzhou), Ltd. | 150,000,000.00 | |
| Jiangxi Luxshare Intelligent Manufacture Co., Ltd. | 500,000,000.00 | |
| Dongguan Leader Precision Industry Co., Ltd. | 22,000,000.00 | |
| Total | 522,000,000.00 | 150,000,000.00 |
2) Significant dividends receivable with aging over 1 year
In RMB
| Item (or Investee) | Closing balance | Aging | Reasons for non-recovery | Whether there is impairment and its judgment basis |
(2) Other receivables
1) Classification of other receivables by nature
In RMB
| Nature of receivables | Closing book balance | Opening book balance |
| Reserve fund | 12,800.00 | 8,000.00 |
| Security deposit | 5,818,945.78 | 5,692,864.47 |
| Others | 47,500,000.00 | 95,013,902.20 |
| Current account | 385,572.60 |
Total
| Total | 53,331,745.78 | 101,100,339.27 |
2)
2) Disclosures by aging
| Aging | Closing balance | Opening balance |
| 1 Year or Less (Including 1 Year) | 53,331,745.78 | 101,100,339.27 |
| Not Overdue | 53,331,745.78 | 101,100,339.27 |
| Total | 53,331,745.78 | 101,100,339.27 |
3) Bad-debt provision
In RMB
| Category | Closing balance | Opening balance | ||||||||
| Book Balance | Bad Debt Provision | Book value | Book Balance | Bad Debt Provision | Book value | |||||
| Amount | Ratio | Amount | Provision Ratio | Amount | Ratio | Amount | Provision Ratio | |||
| Including: | ||||||||||
| Provision for Bad Debts by Individual Item | 53,331,745.78 | 100.00% | 266,658.73 | 0.50% | 53,065,087.05 | 101,100,339.27 | 100.00% | 503,573.83 | 0.50% | 100,596,765.44 |
| Including: | ||||||||||
| Ageing Analysis Combination | 53,331,745.78 | 100.00% | 266,658.73 | 0.50% | 53,065,087.05 | 100,714,766.67 | 99.62% | 503,573.83 | 0.50% | 100,211,192.84 |
| Combined internal related party combinations | 385,572.60 | 0.38% | 385,572.60 | |||||||
| Total | 53,331,745.78 | 100.00% | 266,658.73 | 0.50% | 53,065,087.05 | 101,100,339.27 | 100.00% | 503,573.83 | 0.50% | 100,596,765.44 |
Provision for bad debts on a portfolio basis: 266,658.73
In RMB
| Name | Closing balance | ||
| Book balance | Bad debt provision | Provision ratio | |
| Aging combination (not overdue) | 53,331,745.78 | 266,658.73 | 0.50% |
| Total | 53,331,745.78 | 266,658.73 | |
Descriptions for determining the basis of the combination:
Provision for doubtful accounts according to the general model of expected credit losses:
In RMB
| Bad-debt provision | Stage I | Stage II | Stage III | Total |
| 12 -month ECL | Lifetime ECL (without credit impaired) | Lifetime ECL (with credit unimpaired) | ||
| Balance as at January 1, 2023 | 503,573.83 | 503,573.83 | ||
| Balance as at January 1, 2023 in the current period | ||||
| Reversal | 236,915.10 | 236,915.10 | ||
| Balance as at December 31, 2023 | 266,658.73 | 266,658.73 |
Criteria for stage classification and the provision ratios for bad debt reserves
Changes in book balance of provision for loss with significant changes in the current period
□ Applicable ?N/A
4) Bad-debt provision made, recovered or reversed in the current period
Bad-debt provision in the current period:
In RMB
| Category | Opening balance | Amount of change in the current period | Closing balance | |||
| Provision | Recover or reversal | Write off | Other | |||
| Group by aging | 503,573.83 | 236,915.10 | 266,658.73 | |||
| Total | 503,573.83 | 236,915.10 | 266,658.73 | |||
Including significant amounts reversed or recovered from the current provision for bad debts:
In RMB
Entity name
| Entity name | Amount reserved or recovered | Reason for reversal | Recovery method | Basis and rationality of determining the ratio of the original bad debt reserve |
5) Other receivables with top five closing balance - by debtor
In RMB
| Entity name | Nature of receivables | Closing balance | Aging | Proportion in total closing balance of other receivables | Closing balance of bad-debt provision |
| Entity 1 | Equity transfer funds | 47,500,000.00 | Undue | 89.07% | 237,500.00 |
| Entity 2 | Security deposit | 4,216,931.94 | Undue | 7.91% | 21,084.66 |
| Entity 3 | Security deposit | 412,839.90 | Undue | 0.77% | 2,064.20 |
| Entity 4 | Security deposit | 298,575.04 | Undue | 0.56% | 1,492.88 |
| Entity 5 | Security deposit | 228,968.00 | Undue | 0.43% | 1,144.84 |
| Total | 52,657,314.88 | 98.74% | 263,286.58 |
3. Long-term equity investments
In RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Investment in subsidiaries | 23,305,219,310.74 | 28,560,179.80 | 23,276,659,130.94 | 22,124,109,565.86 | 28,560,179.80 | 22,095,549,386.06 |
| Investment in joint ventures and associates | 359,712,752.90 | 34,372,608.46 | 325,340,144.44 | 271,906,254.31 | 34,372,608.46 | 237,533,645.85 |
| Total | 23,664,932,063.64 | 62,932,788.26 | 23,601,999,275.38 | 22,396,015,820.17 | 62,932,788.26 | 22,333,083,031.91 |
(1) Investment in subsidiaries
In RMB
| Investee | Opening balance (book value) | Opening balance of provision for | Increase and decrease in the current period | Closing balance (book value) | Closing balance of provision for | |||
| Additional investment | Reduced investment | Provision for | Others | |||||
impairment
| impairment | impairment | impairment | ||||||
| BSC Technology (Jiangxi) Co., Ltd. | 279,587,122.38 | 6,423,949.12 | 287,443,078.94 | -1,432,007.44 | ||||
| Xiexun Electronic (Ji’an) Co., Ltd. | 248,697,661.66 | 10,598,861.14 | 259,296,522.80 | |||||
| Suining Luxshare Precision Industry Co., Ltd. | 2,513,272.40 | 909,096.64 | 3,422,369.04 | |||||
| Luxshare Precision Technology Co., Ltd. | 158,059,935.32 | 158,059,935.32 | ||||||
| ICT-LANTO LIMITED | 987,362,500.26 | 987,362,500.26 | ||||||
| Luxshare Precision Limited | 32,423,829.90 | 2,487,457.98 | 34,911,287.88 | |||||
| Kunshan Liantao Electronics Co., Ltd. | 3,396,010,970.46 | 285,641,450.74 | 3,681,652,421.20 | |||||
| Dongguan Leader Precision Industry Co., Ltd. | 65,586,759.64 | 3,489,441.47 | 69,076,201.11 | |||||
| Kunshan Luxshare Precision Industry Co., Ltd. | 519,241,909.62 | 4,353,678.56 | 523,595,588.18 | |||||
| Wan’an Xiexun Electronic Co., Ltd. | 40,503,741.58 | 606,767.70 | 41,110,509.28 | |||||
| Fujian JK Wiring Systems Co., Ltd.. | 97,148,970.19 | 435,273.64 | 97,584,243.83 | |||||
| Xingning Luxshare Technology Co., Ltd. | 672,878.18 | 421,922.46 | 1,094,800.64 | |||||
| Luxshare Precision | 785,589,532.99 | 4,327,691.29 | 789,917,224.28 |
Industry(Chuzhou),Ltd.
| Industry (Chuzhou), Ltd. | ||||||||
| SuK Kunststofftechnik GmbH | 33,746,516.14 | 33,746,516.14 | ||||||
| Fengshun Luxshare Precision Industry Co., Ltd. | 10,162,220.53 | 79,519.73 | 10,241,740.26 | |||||
| Shenzhen Luxshare Acoustics Technology Ltd. | 7,210,499.84 | 28,560,179.80 | 2,982,440.79 | 10,192,940.63 | 28,560,179.80 | |||
| Dongguan Luxshare Precision Industry Co., Ltd. | 1,034,817,364.24 | 10,205,393.26 | 1,045,022,757.50 | |||||
| Luxshare Automation (Jiangsu) Ltd. | 65,015,912.05 | 25,437,925.54 | 90,453,837.59 | |||||
| Shenzhen Luxshare Smart Life Co., Ltd. | 21,000,000.00 | 21,000,000.00 | ||||||
| Jiangxi Luxshare Intelligent Manufacture Co., Ltd. | 1,117,959,148.52 | 13,745,772.05 | 25,392,558.04 | 1,106,312,362.53 | ||||
| Dongguan Xuntao Electronic Co., Ltd. | -10,363,501.49 | 4,449,330.66 | -5,914,170.83 | |||||
| Luxshare Electronic Technology (Kunshan) Co., Ltd. | 2,270,465,789.36 | 74,967,684.18 | 2,345,433,473.54 | |||||
| Luxshare Precision Components (Kunshan) Co., Ltd. | 106,126,860.87 | 298,782.09 | 106,425,642.96 |
LuxsharePrecisionIndustry(Enshi)Co., Ltd.
| Luxshare Precision Industry (Enshi) Co., Ltd. | 102,776,306.15 | 1,929,129.83 | 104,705,435.98 | |||||
| Yongxin County Boshuo Electronics Co., Ltd. | 1,107,331.70 | 687,788.37 | 1,795,120.07 | |||||
| LUXSHARE-ICT Japan Ltd. | 3,140,913.42 | 247,583.13 | 2,893,330.29 | |||||
| Taiwan Luxshare Precision Limited | 173,086,776.55 | 44,276,251.37 | 217,363,027.92 | |||||
| Luxshare-ICT,inc. | 46,596,940.81 | 19,607,273.66 | 66,204,214.47 | |||||
| Korea Luxshare-ICT Co.,Ltd. | 5,836,242.62 | 437,978.32 | 6,274,220.94 | |||||
| LUXSHARE-ICT EUROPE LIMITED | 182,206.32 | 182,206.32 | ||||||
| Mette Electronics (Suzhou) Co., Ltd. | 11,737,053.90 | 11,240,385.59 | 22,977,439.49 | |||||
| Kunshan-Luxshare RF Technology Co., Ltd. | 30,888,796.67 | 9,190,613.04 | 40,079,409.71 | |||||
| Merry Electronics (Huizhou) Co., Ltd. | 3,255,101.86 | 1,700,194.54 | 4,955,296.40 | |||||
| Jiangxi Boshuo Electronic Co., Ltd. | 1,972,318.72 | 36,355.14 | 1,935,963.58 | |||||
| Luxshare Precision Industry (Baoding) | 1,409,585.32 | 1,598,662.56 | 3,008,247.88 |
Co., Ltd.
| Co., Ltd. | ||||||||
| Luxshare Precision Industry (Shanxi) Co., Ltd. | 2,532,431.61 | 2,723,066.43 | 5,255,498.04 | |||||
| Dongguan Luxshare Smart-Link Electronic Technology Co., Ltd. | 611,892.33 | 472,501.45 | 1,084,393.78 | |||||
| Guangdong Luxshare & Merry Electronics Co., Ltd. | 1,058,103.73 | 1,058,103.73 | ||||||
| Bozhou Lanto Electronic Limited | 6,317,324.92 | 4,337,125.93 | 10,654,450.85 | |||||
| Yancheng Luxshare Precision Industry Co., Ltd. | 331,513.63 | 331,513.63 | ||||||
| Huzhou Jiuding Electronic Co., Ltd. | 2,111,090.47 | 1,655,777.91 | 3,766,868.38 | |||||
| Xinyu Xiexun Electronic Co., Ltd. | 4,339,715.13 | 714,872.61 | 5,054,587.74 | |||||
| Luxshare Precision Industry (Suzhou) Co., Ltd. | 130,000,000.00 | 130,000,000.00 | ||||||
| Luxshare iTech (Zhejiang) Co., LTD. | 802,931,682.14 | 53,822,543.71 | 856,754,225.85 | |||||
| Bozhou Xuntao Electronic Limited | 260,249.46 | 18,013.92 | 278,263.38 | |||||
| Dongguan | 906,784,68 | 317,637,34 | 1,224,422,0 |
LuxshareTechnologyCo., Ltd.
| Luxshare Technology Co., Ltd. | 9.18 | 4.82 | 34.00 | |||||
| Xuancheng Luxshare Precision Industry Co., Ltd. | 20,548,360.76 | 11,779,871.40 | 32,328,232.16 | |||||
| Beijing Luxshare Acoustic Technology Co., Ltd. | 7,510,289.72 | 10,221,477.29 | 17,731,767.01 | |||||
| Luxshare Intelligent Manufacture Technology (Changshu) Co., Ltd. | 1,441,333,131.87 | 28,828,248.87 | 1,412,504,883.00 | |||||
| Xingning Luxshare Electronic Co., Ltd. | 221,447.92 | 192,933.60 | 414,381.52 | |||||
| Xuande Technology Co., Ltd. | 2,291,092.92 | 2,372,391.90 | 4,663,484.82 | |||||
| Luxshare Technology Co., Ltd. | 4,288,174.77 | 1,966,491.97 | 2,321,682.80 | |||||
| Changshu Luxshare Industrial Investment Management Co., Ltd. | 161,667,000.00 | 1,700,000.00 | 163,367,000.00 | |||||
| Kunshan Luxshare Enterprise Management Development Co., Ltd. | 200,000,000.00 | 200,000,000.00 | ||||||
| Luxshare Precision | 184,220.25 | 475,778.69 | 659,998.94 |
Industry(Jiangsu)Co., Ltd.
| Industry (Jiangsu) Co., Ltd. | ||||||||
| Rida Intelligent Manufacture Technology (Rugao) Co., Ltd. | 12,642,132.79 | 17,514,816.85 | 30,156,949.64 | |||||
| Luxcase Precision Technology (Yancheng) Co., Ltd. | 5,770,757,306.69 | 6,031,638.14 | 5,776,788,944.83 | |||||
| Luxis Technology (Kunshan) Co., Ltd. | 246,946,030.99 | 1,123,661.60 | 248,069,692.59 | |||||
| Luxshare Electronic Technology (Enshi) Co., Ltd. | 35,000,000.00 | 10,000,000.00 | 45,000,000.00 | |||||
| Liding Electronic Technology (Dongguan) Co., Ltd. | 251,575,973.77 | 1,369,961.40 | 252,945,935.17 | |||||
| Luxshare Technology (Xi'an) Co., Ltd. | 28,601,994.98 | 24,305,561.29 | 52,296,326.86 | 611,229.41 | ||||
| Lixin Precision Intelligent Manufacturing (Kunshan) Co., Ltd. | 305,165,600.10 | 17,736,147.75 | 322,901,747.85 | |||||
| Luxshare Precision Technology (Nanjing) Co., Ltd. | 24,775,706.44 | 27,703,274.00 | 52,478,980.44 | |||||
| Luxshare Electronic (Shanghai) Co., Ltd. | 4,480,333.87 | 3,727,250.63 | 8,207,584.50 | |||||
| Ri Ming Computer | 21,156,714. | 18,154,296. | 39,311,010. |
Accessory(Shanghai)Co., Ltd.
| Accessory (Shanghai) Co., Ltd. | 43 | 25 | 68 | |||||
| Ri Pei Computer Accessory (Shanghai) Co., Ltd. | 575,113.62 | 575,113.61 | 0.01 | |||||
| Shengrui Electronic Technology (Shanghai) Co., Ltd. | 47,348.33 | 552,405.00 | 599,753.33 | |||||
| Ri Shan Computer Accessory (Jiashan) Co., Ltd. | 12,158,105.97 | 7,922,152.19 | 20,080,258.16 | |||||
| LUXSHARE-ICT (VIETNAM) LIMITED | 572,247.51 | 1,438,993.32 | 2,011,240.83 | |||||
| Hangzhou Xuntao Technology Co., Ltd. | 6,075,602.47 | 8,557,832.00 | 14,633,434.47 | |||||
| Dachuang Precision Intelligent Manufacture (Kunshan) Co., Ltd. | 15,703,722.77 | 6,938,871.64 | 22,642,594.41 | |||||
| Fengshun Luxshare Intelligent Manufacture Co., Ltd. | 2,104,000.00 | 247,896,000.00 | 250,000,000.00 | |||||
| Luxshare Electronic Technology (Kunshan) Co., Ltd. | 5,000,000.00 | 30,500,000.00 | 35,500,000.00 | |||||
| Suzhou Luxshare Technology Co., Ltd. | 2,454,628.88 | 2,499,509.75 | 4,954,138.63 | |||||
| Yancheng Luxshare Corporate Management Services Partnership | 47,147.95 | 47,147.95 |
(LimitedPartnership)
| (Limited Partnership) | ||||||||
| Luxshare Precision Industry (Wuhu) Co., Ltd. | 144,254.59 | 1,714,980.74 | 1,859,235.33 | |||||
| Dongguan Huarong Communications Technology Co., Ltd. | 31,881.21 | 589,722.54 | 621,603.75 | |||||
| Luxshare Precision Components (Kunshan) Co., Ltd. | 321,813.49 | 7,994,737.69 | 8,316,551.18 | |||||
| Zhejiang Puxing Electronic Technology Co., Ltd. | 66,287.67 | 773,367.00 | 839,654.67 | |||||
| Luxshare Thermal Technology (Huizhou) Co., Ltd. | 1,699,063.35 | 3,029,427.71 | 4,728,491.06 | |||||
| Luxshare Automotive Technology (Shanghai) Co., Ltd. | 4,103.52 | 560,482.19 | 564,585.71 | |||||
| Luxshare Precision Industry (Huzhou), Ltd. | 299,659.78 | 519,665.42 | 819,325.20 | |||||
| Luxshare Precision (Yunzhong) Co., Ltd. | 531,336.23 | 1,368,220.53 | 1,899,556.76 | |||||
| Shenzhen Huarong Technology Co., Ltd. | 90,908.80 | 1,060,617.60 | 1,151,526.40 | |||||
| Dongguan Luxshare Holdings Co., Ltd. | 131,800,000.00 | 131,800,000.00 | ||||||
| Shantou | 7,332.16 | 7,332.16 |
LuxshareTechnologies Co., Ltd.
| Luxshare Technologies Co., Ltd. | ||||||||
| TIME Interconnect Technology Limited | 956,470.98 | 956,470.98 | ||||||
| Kunshan TIME Interconnect Technology Limited | 680,207.74 | 680,207.74 | ||||||
| Luxshare Precision Industry (Anhui) Co., Ltd. | 69,312.21 | 69,312.21 | ||||||
| Luxshare Precision Industry (Huzhou), Ltd. | 39,550,000.00 | 39,550,000.00 | ||||||
| CASETEK SINGAPORE PTE.LTD. | 1,289,759.72 | 1,289,759.72 | ||||||
| Luxcase Precision Technology (Kunshan) Co., Ltd. | 559,415.27 | 559,415.27 | ||||||
| Luxshare Precision Industry (Mingguang) Co., Ltd. | 460,628.47 | 460,628.47 | ||||||
| Total | 22,095,549,386.06 | 28,560,179.80 | 1,577,942,649.39 | 396,832,904.51 | 23,276,659,130.94 | 28,560,179.80 |
(2) Investment in joint ventures and associates
In RMB
| Investee | Opening balance (book value) | Opening balance of provision for | Increase and decrease in the current period | Closing balance (book value) | Closing balance of provision for | |||||||
| Additional investment | Reduced investment | Investment profit or loss recogn | Other comprehensive incom | Other changes in equity | Declared cash dividends or | Provision for impairment | Others | |||||
impairment
| impairment | ized under equity method | e adjustment | profits | impairment | ||||||||
| I. Joint ventures | ||||||||||||
| II. Associates | ||||||||||||
| Siliconch | 21,778,148.76 | 2,180,802.19 | 23,958,950.95 | |||||||||
| Zhuhai Kinwong Flexible Circuit Co., Ltd. | 215,755,497.09 | 34,372,608.46 | -26,477,181.93 | 189,278,315.16 | 34,372,608.46 | |||||||
| Lisheng Automotive Technology (Guangzhou) Co., Ltd. | 112,500,000.00 | -397,121.67 | 112,102,878.33 | |||||||||
| Subtotal | 237,533,645.85 | 34,372,608.46 | 112,500,000.00 | -24,693,501.41 | 325,340,144.44 | 34,372,608.46 | ||||||
| Total | 237,533,645.85 | 34,372,608.46 | 112,500,000.00 | -24,693,501.41 | 325,340,144.44 | 34,372,608.46 | ||||||
The recoverable amount is determined based on the present value of estimated future cash flows.?Applicable □N/A
In RMB
| Item | Book value | Recoverable amount | Impairment amount | Method of determining fair value and disposal costs | Key parameters | Criteria for determining key parameters |
The recoverable amount is determined based on the present value of estimated future cash flows.?Applicable □N/A
In RMB
| Item | Book value | Recoverable amount | Impairment amount | Forecast period duration | Key parameters for the forecast | Key parameters for the stable period | Criteria for determining key parameters |
period
| period | for the stable period |
Reasons for differences between the aforementioned information and the information used in previous years' impairment tests orexternal information:
None.Reasons for significant discrepancies between the information used in previous years' impairment tests and the actual situation in thecurrent year:
(3) Other descriptions
4. Operating income and operating costs
In RMB
| Item | Amount recognized in the current period | Amount recognized in the prior period | ||
| Income | Cost | Income | Cost | |
| Principal business | 10,632,214,770.04 | 10,025,885,162.48 | 12,732,437,422.46 | 11,987,063,338.40 |
| Other business | 145,744,213.41 | 64,294,879.18 | 220,376,313.08 | 64,760,595.99 |
| Total | 10,777,958,983.45 | 10,090,180,041.66 | 12,952,813,735.54 | 12,051,823,934.39 |
Income related information:
In RMB
| Contract classification By product types | Segment 1 | Segment 2 | Total | |||||
| Operating revenue | Operating costs | Operating revenue | Operating costs | Operating revenue | Operating costs | Operating revenue | Operating costs | |
| Including: | ||||||||
| Contract classification | ||||||||
| By geographical areas of operations | ||||||||
| Including: | ||||||||
| By markets or customers | ||||||||
| Including: | ||||||||
| By contract | ||||||||
types
| types | ||||||||
| Including: | ||||||||
| By the period of transferring products | ||||||||
| Including: | ||||||||
| By contract term | ||||||||
| Including: | ||||||||
| By sales channel | ||||||||
| Including: | ||||||||
| Total |
In RMBIn RMBInformation related to performance obligations:
| Item | Time of performance or fulfillment of obligations | Key payment terms | Nature of the company's commitment to transfer goods | Whether they are the primary obligor | Amounts expected to be refunded to customers by the company | The type of quality assurance provided by the company and related obligations |
Other descriptionsInformation relating to the transaction price allocated to the remaining performance obligations:
At the end of the reporting period, the incomes corresponding to the contracts signed whose performance has not been commenced orcompleted amount to RMB0.00, of which RMB is expected to be recognized in , RMB is expected to be recognized in , and RMB isexpected to be recognized in .Significant contract amendments or significant adjustments in transaction prices.
In RMB
| Item | Accounting treatment methods | Amount of impact on revenue. |
Other descriptions:
5. Investment income
In RMB
Item
| Item | Amount recognized in the current period | Amount recognized in the prior period |
| Long-term equity investment income accounted for using the cost method | 3,436,245,988.83 | 1,300,000,000.00 |
| Long-term equity investment income accounted for using the equity method | -24,693,501.41 | 16,056,804.17 |
| Investment income from disposal of held-for-trading financing assets | -48,976,370.39 | |
| Long-term equity investment income accounted for using the cost method | 93,809,534.50 | 77,056,640.91 |
| Dividend income earned during the holding period of other equity instruments. | 264,713.32 | 212,413.30 |
| Income from wealth management products | 879,726.47 | 11,308,785.90 |
| Gains from derecognition of financial assets measured at amortized cost. | -39,618,411.95 | -43,522,172.22 |
| Total | 3,417,911,679.37 | 1,361,112,472.06 |
6. Others
XX. Supplementary information
1. Breakdown of non-recurring profit and loss for the current period
?Applicable □ N/A
In RMB
| Item | Amount | Remarks |
| Profit or loss from disposal of non-current assets | 106,350,953.11 | |
| Government grants recognized in the current profit or loss (except for the government grants which are closely related to the company’s normal business operations and gained at a fixed amount or quantity according to national uniform standards) | 791,098,788.52 | |
| Except for effective hedging business related to the company’s normal business operations, profit or loss from changes in fair value arising from the holding of held-for-trading financial assets and liabilities, and investment income from disposal of held-for-trading financial assets and liabilities, and available-for-sale financial assets | 488,375,997.34 | |
| Profit or loss on assets under entrusted investment or management | 189,969,851.82 |
Other non-operating income and expensesexcept the above items
| Other non-operating income and expenses except the above items | 41,640,366.02 | |
| Other profit and loss items satisfying the definition of non-recurring profit and loss | -601,026,495.49 | |
| Less: Affected quantum of income tax | 158,749,222.86 | |
| Affected quantum of minority interest | 90,557,090.29 | |
| Total | 767,103,148.17 | -- |
Details of other profit and loss satisfying the definition of non-recurring profit and loss? Applicable □N/AThe early termination recognition of investment income primarily pertains to financial assets.
Description of classifying non-recurring profit and loss items enumerated in the Explanatory Announcement No.1 for Public CompanyInformation Disclosures – Non-recurring Profits and Losses as recurring profit and loss items
□ Applicable ?N/A
2. Return on equity and earnings per share
| Profit in the reporting period | Weighted average return on equity | Earnings per share | |
| Basic earnings per share (RMB/share) | Diluted earnings per share (RMB/share) | ||
| Net profit attributable to ordinary shareholders of the Company | 21.61% | 1.54 | 1.53 |
| Net profit after deduction of non-recurring profit and loss attributable to ordinary shareholders of the Company | 20.25% | 1.43 | 1.42 |
3. Accounting data differences under domestic and foreign accounting standards
(1) Differences of net profit and net assets in financial reports disclosed according to InternationalAccounting Standards and Chinese Accounting Standards at the same time
□ Applicable ?N/A
(2) Difference of net profit and net asset in financial reports disclosed according to overseas accountingstandards and Chinese Accounting Standards at the same time
□ Applicable ?N/A
(3) Descriptions on the reasons for the differences of accounting data under the accounting standards at homeand abroad, and the name of the overseas institution if difference adjustment is made to the data audited byan overseas audit institutionNone
4. Others
None