iFLYTEK Co., Ltd.
2021 Annual Report
April 2022
Section I Important Notice, Contents and DefinitionsThe Board of Directors, the Board of Supervisors, directors, supervisorsand senior management members of iFLYTEK Co., Ltd. (the "Company")warrant, under joint and several liability, that the information in this AnnualReport is authentic, accurate and complete, and contains no false records,misleading statements or material omissions.
Liu Qingfeng, Chairman of the Company; Wang Ming, head of accountingaffairs; and Cai Shang, head of the accounting department (accountingsupervisor) hereby declare that the financial statements in this Annual Reportare authentic, accurate and complete.
All the directors attended the meeting of the Board of Directors whichreviewed this report.
For the purpose of the report, the statements on future development plansand business objectives are what is planned by the Company. They do notconstitute substantive commitments by the Company to its investors. Hence,investors and interested parties should be fully aware of the risks andunderstand the difference between plans, forecasts and commitments.
The Company analyzes its possible risk exposures and responses in "XI.iii.Risk Exposures of the Company and Responses" in "Section III ManagementDiscussion and Analysis" of the report. Investors are advised to read this part.Profit distribution plan of the Company approved at the meeting of the Board of
Directors: Based on 2,324,325,245 shares of the Company on 31 March 2022,distribute a cash dividend of RMB1.00 (before tax) per ten shares and zerobonus share (before tax), with no capital reserve converted into share capital.
CONTENTS
Section I Important Notice, Contents and Definitions ...... 2
Section II Corporate Information and Main Financial Indicators ...... 8
Section III Management Discussions and Analysis ...... 13
Section IV Corporate Governance ...... 64
Section V Environmental and Social Responsibility ...... 111
Section VI Significant Events ...... 117
Section VII Changes in Shares and Particulars of Shareholders ...... 132
List of Documents for Inspection
I. The financial statements signed and sealed by the legal representative, head of accounting affairs, and head ofthe accounting department;II. The original of the Auditor's Report stamped with the corporate seal of the accounting firm, and signed andsealed by the CPAs;III. Originals of all the documents and announcements published by the Company on the newspapers designatedby the China Securities Regulatory Commission (“CSRC”) during the reporting period; andIV. The original of the 2021 Annual Report signed by the Chairman.
Definitions
| Term | refers to | Definition |
| Artificial intelligence | refers to | Artificial intelligence (AI), is an emerging technical science that studies and develops theories, methods, technologies, and application systems for simulating, extending, and expanding human intelligence. Artificial intelligence generates manual programs or systems that perceive, think, and make decisions like humans and imitate their actions. Perceptual intelligence, or the ability of machines to "listen and speak, see and recognize", mainly involves speech synthesis, speech recognition, image recognition, and multilingual speech processing technologies; cognitive intelligence, or the ability of machines to "understand and think", involves education evaluation, machine-assisted clinical decision support, machine-assisted court trial, intelligent customer service, machine translation and other knowledge services. |
| Intelligent speech | refers to | The technology that enables machines to "listen and speak" like humans. It mainly includes speech recognition (automatically converting speech into text), speech synthesis (automatically converting text into speech), voiceprint recognition (separating speakers), language recognition (recognizing different languages and dialects) and other sub-technologies. It belongs to the perceptual intelligence in artificial intelligence and acts as the core supporting technology for the revolution of human-machine speech interaction. |
| Speech synthesis | refers to | The technology that automatically converts text into speech by machine. |
| Speech recognition | refers to | The technology that automatically converts speech signals into text and other relevant information by machine. |
| Speech evaluation (spoken language evaluation) | refers to | The technology that enables machines to automatically evaluate pronunciation, detect errors, and give correction instructions for speaking. |
| Image recognition | refers to | The technology that uses computers to process, analyze and understand images in order to recognize goals and targets under different models. |
| Machine translation | refers to | The process of using a computer to convert one natural language (source language) into another (target language). It is also known as automatic translation. |
| Natural Language Understanding | refers to | An important branch of research in computer science and artificial intelligence. It works on the theories and practices that enable effective communication between humans and computers using natural languages. The ultimate goal of this technology is to enable computers to understand and use natural languages of human society such as Chinese and English, and realize natural language communication between humans and computers in order to replace part of humans' mental work, including searching information, answering questions, collecting excerpts, compiling documents and all other natural languages processing activities. |
| New Infrastructure | refers to | New types of infrastructure construction ("New Infrastructure Construction" for |
| short), that represented by 5G, artificial intelligence, industrial Internet, and Internet of Things (IoT), which is essentially the infrastructure for informationization and digitalization. | ||
| iFLYTEK Super Brain 2030 Program | refers to | A roadmap launched in 2022 to plan and guide the technological and product development of iFLYTEK in the medium- and long-term. It aims to develop a complex intelligent system of human-machine collaboration and self-evolution based on cognitive intelligence, so that machines can surpass humans in perception, have a deep understanding of industry-specific knowledge, and be able to continuously evolve on an independent basis. In other words, under the program, machines will be able to perceive people and the environment comprehensively, understand the knowledge of various industries, acquire general knowledge and emotion, and be able to move flexibly and express themselves in multiple dimensions. The program will develop complex intelligent systems that can continuously evolve independently and introduce robots into families. The core purpose of the program is to use artificial intelligence to address major social issues that may arise in the future and meet rigid demands. |
Section II Corporate Information and Main Financial IndicatorsI. Corporate Information
| Stock Name | iFLYTEK | Stock Code | 002230 |
| Stock Exchange | Shenzhen Stock Exchange | ||
| Company Name in Chinese | 科大讯飞股份有限公司 | ||
| Name Abbreviation in Chinese | 科大讯飞 | ||
| Company Name in English (if any) | iFLYTEK CO., LTD | ||
| Name Abbreviation in English (if any) | iFLYTEK | ||
| Legal Representative of the Company | Liu Qingfeng | ||
| Registered Address | No. 666 West Wangjiang Road, High-tech Development Zone, Hefei | ||
| Postal Code of the Registered Address | 230088 | ||
| Changes in the Registered Address | Changed to No. 666 West Wangjiang Road, High-tech Development Zone, Hefei from No. 616 Huangshan Road, High-tech Development Zone, Hefei in April 2013 | ||
| Office Address | No. 666 West Wangjiang Road, High-tech Development Zone, Hefei | ||
| Postal Code of the Office Address | 230088 | ||
| Company Website | http://www.iflytek.com | ||
| xunfei@iflytek.com | |||
II. Contact Information
| Secretary of the Board of Directors | Representative | |
| Name | Jiang Tao | Chang Xiaoming |
| Add. | No. 666 West Wangjiang Road, High-tech Development Zone, Hefei | No. 666 West Wangjiang Road, High-tech Development Zone, Hefei |
| Tel. | 0551-67892230 | 0551-67892230 |
| Fax | 0551-65331802 | 0551-65331802 |
| taojiang@iflytek.com | xmchang@iflytek.com |
III. Information Disclosure and Location Where the Disclosure is Kept
| Stock exchange websites for disclosure of the Company's annual report | http://www.szse.cn/ |
| Media outlets and websites for disclosure of the Company's annual report | http://www.cninfo.com.cn The Securities Times, the China Securities Journal, the Shanghai Securities News, and the Securities Daily, as well as http://www.cninfo.com.cn |
| Location where copies of this Annual Report are kept | The Securities Department of the Company |
IV. Changes in Registration
| Organizational code | 91340000711771143J |
| Changes in main business after IPO of the Company (if any) | Based on the breakthroughs in core AI technologies, the Company has further evolved from "empowering machines to listen and speak" to "empowering machines to understand and think", and has grown from a provider of core speech and intelligence technologies and relevant application solutions to a leader in the AI industry. |
| Changes in controlling shareholder (if any) | No controlling shareholder |
V. Other Relevant Information
Accounting firm engaged by the Company
| Name of the accounting firm | RSM Certified Public Accountants (Special General Partnership) |
| Office address of the accounting firm | 29th Floor, Block A, Zhidi Square, Intersection of Longtu Road and West Lvzhou Road, Shushan District, Hefei, Anhui Province, China |
| CPAs (Practicing) | Zhang Liangwen, Yao Bei, and Ren Gangming |
Sponsors engaged by the Company in continuous supervision during the reporting period
√ Applicable □ Not applicable
| Name of the sponsor | Office address of the sponsor | Name of the sponsoring representative | Continuous supervision period |
| GuoYuan Securities Co., Ltd. | No. 18, Meishan Road, Hefei City, Anhui Province, China | Li Hui and Li Jun | 2021.7.19-2021.12.31 |
Financial advisors engaged by the Company in continuous supervision during the reporting period
□ Applicable √ Not applicable
VI. Main Accounting Data and Financial IndicatorsWhether the Company needs to make retroactive adjustments to or restate accounting data for prior years
□ Yes √ No
| Item | 2021 | 2020 | Increase/(decrease) YOY | 2019 |
| Operating Revenue (RMB) | 18,313,605,605.92 | 13,024,657,865.85 | 40.61% | 10,078,688,919.69 |
| Net profit attributable to the Company's shareholders (RMB) | 1,556,463,894.56 | 1,363,789,616.73 | 14.13% | 819,175,858.63 |
| Net profit excluding non-recurring profits and losses attributable to the Company's shareholders (RMB) | 978,739,466.81 | 767,389,240.68 | 27.54% | 488,797,977.01 |
| Net cash flows from operating activities (RMB) | 893,075,431.31 | 2,270,754,855.94 | -60.67% | 1,531,468,509.95 |
| Basic earnings per share (RMB) | 0.70 | 0.64 | 9.37% | 0.40 |
| Diluted earnings per share (RMB) | 0.68 | 0.61 | 11.48% | 0.38 |
| Weighted average return on net assets (%) | 10.93% | 10.97% | -0.04% | 8.22% |
| Item | At the end of 2021 | At the end of 2020 | Increase/(decrease) YOY | At the end of 2019 |
| Total assets (RMB) | 31,394,037,754.41 | 24,836,091,818.68 | 26.40% | 20,100,836,085.61 |
| Net assets attributable to the Company's shareholders (RMB) | 16,780,723,702.63 | 12,668,005,446.56 | 32.47% | 11,417,958,785.25 |
The lower of the Company's net profits before and after excluding non-recurring profits and losses over the lastthree fiscal years were all negative, and the most recent year's audit report shows uncertainty in the Company'scapacity of continued operation.
□ Yes √ No
The lower of the Company's net profit before and after excluding non-recurring profits and losses were negative.
□ Yes √ No
VII. Differences in Accounting Data under Chinese and Foreign Accounting Standards
1. Net profit and net assets differences in the financial reports disclosed under IFRS and under CAS
□ Applicable √ Not applicable
There was no difference in net profit and net assets in the financial reports disclosed under IFRS and thatdisclosed under CAS during the Report Period.
2. Net profit and net assets differences in the financial reports disclosed under foreign accounting standardsand under CAS
□ Applicable √ Not applicable
The Company did not see any net profit and net assets differences in the financial reports disclosed under foreign
accounting standards and under CAS during the reporting period.VIII. Quarterly Key Financial Indicators
Unit: RMB
| Q1 | Q2 | Q3 | Q4 | |
| Operating Revenue | 2,501,303,217.85 | 3,817,347,314.77 | 4,549,313,267.14 | 7,445,641,806.16 |
| Net profit attributable to the Company’s shareholders | 139,470,569.39 | 279,107,268.35 | 310,187,574.93 | 827,698,481.89 |
| Net profit excluding non-recurring profits and losses attributable to the Company’s shareholders | 105,904,298.59 | 103,554,056.29 | 305,097,049.59 | 464,184,062.34 |
| Net cash flows from operating activities | -1,205,546,397.13 | -528,377,190.32 | 246,587,699.75 | 2,380,411,319.01 |
Whether there are significant differences between the above financial indicators or their aggregates and relevantindicators in quarterly and semi-annual reports disclosed by the Company
□ Yes √ No
IX. Non-recurring Profit and Loss Items and Amounts
√ Applicable □ Not applicable
Unit: RMB
| Item | Amount in 2021 | Amount in 2020 | Amount in 2019 |
| Profit or loss on disposal of non-current assets (including the write-off of the provisions for impairment losses) | -7,253,207.50 | 10,172,959.83 | -3,963,385.38 |
| Government grants included in current profit or loss (excluding those closely related to the normal operations of the Company and regularly granted in uniform standard quota or quantity by the government conforming to national policies) | 438,785,803.74 | 425,577,693.85 | 412,178,689.71 |
| The cost of investments in subsidiaries, associates and joint ventures acquired by an entity is less than the entity’s share of the net fair value of the investee’s identifiable assets and liabilities | 57,004.44 | ||
| Profit or loss on entrusting others with investment of assets management | 9,441,683.54 | 23,760,903.38 | 15,951,545.51 |
| Profit or loss from changes in the fair value generated from the Company's held-for-trading and derivative financial assets, and held-for-trading and derivative financial liabilities, and investment income from the disposal of held-for-trading and derivative financial assets, held-for-trading and derivative financial liabilities, and other debt investments, except for effective hedging business related to the Company's normal business | 338,818,986.25 | 371,116,387.49 | 95,019,763.06 |
| Reversal of impairment provision for the accounts receivable for which an independent impairment test is conducted | 190,509.33 | ||
| Other non-operating revenue and expenses besides items above | -80,388,578.22 | -84,847,671.00 | -49,934,658.02 |
| Other profits or losses that belong to non-recurring profits and losses | -47,205,110.57 | -70,832,206.79 | |
| Less: Effect on income tax | 112,234,621.94 | 98,568,980.10 | 64,251,162.98 |
| Effect on non-controlling interests(after tax) | 9,636,147.45 | 3,662,811.27 | 3,790,703.49 |
| Total | 577,724,427.75 | 596,400,376.05 | 330,377,881.62 |
Explanation on defining non-recurring profit and loss items specified in the Explanatory Announcement onInformation Disclosure for Companies Offering Securities to the Public No.1 – Non-recurring Profits and Lossesas recurring profits and losses
□ Applicable √ Not applicable
The Company did not define non-recurring profit and loss items specified in the Explanatory Announcement onInformation Disclosure for Companies Offering Securities to the Public No.1 – Non-recurring Profits and Lossesas recurring profits and losses.
Section III Management Discussions and Analysis
I. Industry Overview during the Reporting PeriodThe Company is required to comply with the disclosure requirements for the software and information technologyservices industry as stated in the Guidelines of Self-discipline Regulation for Shenzhen Stock Exchange ListedCompanies of No. 3: Industry Information Disclosure.
1. Development opportunities for the AI industry
On 12 January 2022, the State Council released the Development Plan for Digital Economy during the 14thFive-Year Plan Period. The plan specifies the guiding ideology, basic principles, development goals, key tasksand supportive measures for promoting the healthy development of the digital economy during the 14
thFive-YearPlan period. According to the development goals proposed in the plan, China’s digital economy will seekacross-the-board expansion by 2025, and the value added of core industries of the digital economy will accountfor 10% of the gross domestic product (GDP). AI is the key driver in the development of the digital economy, andall major global science and technology powers attach great importance to technological advancements andindustrial development of artificial intelligence. China has already listed AI in its new infrastructure constructionand has put forward and launched the “National Program for Medium-to-Long-Term Scientific and TechnologicalDevelopment (2021 – 2035)”, prioritizing the development of the three main driving forces—AI, quantuminformation and integrated circuits. It has become a major historic campaign in China’s economic and socialdevelopment to apply AI to meet people’s shortages, build a “happy China” and integrate the technology with thereal economy to build industrial capabilities. The 14
th
Five-Year Plan has listed AI as a “top priority” in frontiertechnology, a move that will unquestionably drive China’s AI industry forward by leaps and bounds.
The Report on the Work of the Government, delivered at the “Two Sessions” in 2021, stressed the use ofscientific and technological innovations to drive high-quality development and step up support to people’slivelihoods. It also proposed measures to improve public well-being, including the development of fairer andhigher quality education and the building of an educational system for all-round development; the quality andbalanced development of compulsory education and integrated development for urban and rural areas, so everychild would have the opportunity to succeed; the development of technologies for disease prevention, treatmentand other purposes related to public well-being, building of health systems, extensive reform of disease preventionand control systems, innovation in building coordination mechanisms of healthcare and disease prevention,nurturing of general practitioners (GPs) and doctors in rural areas, improvement of medical services in countiesand expedited building of a tiered medical system; and the strengthened development of digital governments andthe sharing of administrative data. The key development proposals stated above provide favourable policies and amacro-environment for the Company to continue to drive key advancements in AI and industrial development, aswell as the large-scale application of products and solutions in smart education, smart healthcare, smart cities andother business areas.
Pursuing “tangible applications that may be promoted in large scale with the results proven by statistics and”,iFLYTEK, “the national AI team”, has been committed to using AI to tackle major issues in social developmentover the years. iFLYTEK Applications in major fields have been generating exemplary results, and strategic basesunderpinning sustainable development have also taken shape. Meanwhile, capitalizing on its credibility as “thenational AI team”, iFLYTEK focuses on addressing users’ rigid demands. In addition to continuing its investment
by a wide margin over others in key technologies, the Company has integrated key innovative technologies to gainadvantages in “systematic innovation”. The strategic bases and “systematic innovation” will become iFLYTEK’score competitive advantages, as it will not only be one step ahead but will become a true leader in AIdevelopment.
2. Uncertainty in the international situation prompting independent innovation of original coretechnologies
According to documents released by the United States Department of Commerce on 7 October 2019 (EST),some Chinese technology companies, including iFLYTEK, were included on the Entity List by the U.S.government. iFLYTEK remains committed to independent innovation in core technologies and possessesworld-leading core technologies such as smart speech and AI. In recent years, technologies developed by theCompany have continued to come out top in international tests, including machine translation, natural languageunderstanding, image recognition, image understanding, knowledge graph, knowledge discovery and machinereasoning. Since all of these core technologies have been independently researched and developed by iFLYTEK,the Company also owns their independent intellectual property rights and is thus not passive in terms of coretechnologies. After being included on the Entity List, iFLYTEK has quickly switched to a non-U.S. supply chainsystem made up of mainly domestic suppliers, enabling itself to continuously provide customers with qualityproducts and services. The Company’s operations have not been significantly impacted.
The Central Economic Work Conference in 2020 laid out eight major tasks for 2021, and the first two werestrengthening China’s scientific and technological capabilities of strategic importance and increasing independentcontrol over industrial and supply chains. Under the strategic planning for “persisting in driving development withinnovations and expediting the development of a modern industrial system; and persisting in giving innovation akey role in China’s modernization and providing strategic support to China’s development with independenttechnology”, China will continue to strengthen its scientific and technological capabilities of strategic importanceand step up its investment in independent innovations. The move will facilitate companies such as iFLYTEK toindependently innovate and extensively apply core AI technologies into different industries.II. Business Highlights during the Reporting Period
(i) Business overview
Since its founding, iFLYTEK has remained devoted to the research on core technologies, including smartspeech, natural language understanding, machine learning and reasoning and independent learning. Being aninternational leader in the technologies, the Company actively promotes the research and development andindustrial application of AI products. iFLYTEK is committed to enabling machines to “listen and talk, think andunderstand” and to “creating a better world with AI”. The Company is firmly focused on its indomitabledevelopment strategy, whereby it will take a lead internationally with its core technologies that will be extensivelyadopted by industries.
iFLYTEK is also strongly committed to its AI strategy of “platform + tracks”. In terms of the platform thatempowers developers, it relies on the iFLYTEK Open Platform, China’s first open AI platform, to providedevelopers with one-stop AI solutions and to further the development of the AI industry.
In terms of the tracks of application, iFLYTEK has achieved positive interplay between innovative originaltechnologies and industrial application in fields such as education, healthcare, office and smart cities.
Figure 1 An overview of key products and customers
1. Smart education
In terms of education, guided by the ideal of “AI-empowered teaching according to students' abilities” and inresponse to the major national educational mission, iFLYTEK has fully applied core AI technologies to educationand learning. The Company provides students, teachers and education supervisors at all levels with more targetedand expedited services. This helps the amassing of data during teaching and learning and alleviates the burden onteachers and students, which improves efficiency and promotes educational advancements. To date, iFLYTEKsmart educational products have been adopted by 32 provincial-level places in China and foreign markets such asJapan and Singapore.iFLYTEK smart education focuses on “alleviating students’ burden while improving teaching quality;reducing tests while scientifically assessing teaching results; promoting all-round education while satisfying thedemands of building scientific and technological capabilities”. As a result, business systems targeting government,business and individual customers have been developed. The business to government chiefly involves thedevelopment in regions such as municipalities, counties and districts, which covers general solutions based onstudents’ aptitude for all the schools and users in the regions. The business to corporate customers chiefly involvesschool development, which includes targeted teaching based on big data and English-listening and -speaking tests.The business to individual customers chiefly involves independent purchases made by parents, which includesAI-powered learning pads and individualized learning handbooks.
Figure 2 Overview of smart education business
2. Smart healthcare business
In terms of healthcare, iFLYTEK’s mission is to create “an AI diagnosis assistant for every doctor and an AIhealth assistant for every person”. With its world-leading AI technologies, the Company providescommunity-level doctors with general practice diagnosis assistance using core technologies, such asmedical-semantic computing, medical NLP, medical-knowledge inference and medical-data mining. Theystandardize the diagnostic and treatment processes, reduce misdiagnosis and diagnostic errors, provide AI generalpractice clinical support to doctors in making clinical decisions and enhance medical service standards andefficiency. Furthermore, they provide health commissions with smart supervision services in diagnostic processesand quality based on real-time data. The medical test robot operating based on iFLYTEK’s core AI technologypassed the written test of the National Vocational Physician Qualification Examination in 2017 with a total scoreof 456, surpassing 96.3% of human candidates across China; it became the world’s first AI system to pass anational vocational physician qualification examination. Products based on the medical test robot, such asiFLYTEK Smart Healthcare General Practice Medical Assistant, have been extensively adopted by medicalinstitutions.
3. Smart city business
In terms of smart cities business, iFLYTEK focuses on government digitalization while improving theefficiency in political and legal administration. The Company provides AI-based products and general solutionsfor urban governance, administrative services and industrial development. This empowers urban development andconnects user data of organizations, allowing data feedback, iteration, learning and improvement while creating amodel of continuous urban service driven by data.
4. Open Platform and consumer business
As one of the first “national next-generation open AI innovation platforms”, iFLYTEK Open Platform is anAI technological and ecological service platform based on the Company’s internationally leading AI technologyand big-data operational capability. The platform provides developers and industry partners with comprehensiveindustry-chain services through technological, market and business-model empowerment. Building upon it, theCompany has developed capability platforms, including an AI marketing platform and a smart-industry platform,which will further diversify the ecology of the AI industry.With respect to consumer business, iFLYTEK focuses on AI + office and offers office products and services,
including smart notebooks, smart recorders and the iFLYREC app. Original unstructured data, such as audios, andimages, generated at work may be swiftly processed and turned into text data easy to save and search, thusenhancing work and learning efficiency.
5. AI solutions for corporate customers, such as operators, smart automobiles and smart financeiFLYTEK provides operators, automobile manufacturers and financial institutions with AI-applicationsolutions:
(1) For operators
The iFLYTKE business focuses on customers such as China’s top three telecommunications operators andradio and television administrations and facilitates their digitalization. The Company provides households,companies and individuals with products and applications such as smart home voice platform, smart customerservice and smart AI services. Building upon iFLYTEK’s multi-modal interactive capability and the contentsamassed from the open platform, the smart home-television voice-interaction platform offers general solutions forscenarios such as film and entertainment, children’s all-round development, elderly care and home security,helping operators improve the business value of household users. Meanwhile, the Company’s smart customerservice introduces AI at multiple service points to help operators improve user satisfaction and reduce usercomplaints.
(2) For automobile manufacturers
The Company’s smart automobile business targets automobile manufacturers at home and abroad and offersproducts and solutions such as the FEIYU smart assistant, FEIYU OS, FEIYU vehicle audio-management systemand AI sales and services. The FEIYU smart assistant fully integrates speech, vision and scene perception to solveissues such as monotonous in-car interaction, fragmented interaction models and high learning costs, so as tocreate natural multi-modal interactions between drivers and their vehicles. The FEIYU OS combines AI algorithmwith big data to provide dedicated in-car services, allowing users to enjoy the highly efficient customizedinformation and entertainment services anytime, anywhere. The smart audio-management system offers theultimate in-car audio experience, while AI sales and service focus on enhancing automobile and dealer sales andservices.The above-mentioned products have already been adopted by mainstream domestic and joint-venture automobilemanufacturers in China, including FAW Group, Dongfeng Motor Corporation, Changan Auto, SAIC Motor, GACGroup, BAIC Group, JAC Motors, Chery Automobile, Great Wall Motor, BYD Company, Geely Auto,Volkswagen, Audi, Toyota, Honda and Ford, as well as emerging manufacturers, such as NIO, Lixiang, HiPhi,Weltmeister and Leapmotor.
(3) For financial institutions
Smart financial services primarily involve offering comprehensive digital-management and -operationalsolutions for financial institutions, such as banks, insurers and securities companies. The AI-powered financialsolutions include AI middle office, data middle office, knowledge middle office, financial-marketing platform,smart customer service, smart outlets, digital staff, smart risk control, assisted review and approval, smartconsumer protection and smart office work.
(ii) Main business development during the reporting period
1. Smart education business
The 19
th
meeting of the CPC Central Committee Comprehensively Deepening Reforms Commission in May2021 reviewed and approved the Opinions on Further Reducing the Burden of Homework and Off-CampusTraining for Compulsory Education Students (known as the “Double Reduction” policy), which were published
by the General Office of the Central Committee of the Chinese Communist Party and the General Office of theState Council in July 2021. The Double Reduction policy emphasizes “further improvement in education qualityand services, logical and reasonable assignments and satisfactory after-school services that will lead students backto more on-campus learning”.The Guiding Opinions on Promoting the Building of New Educational Infrastructure to Devise aHigh-Quality Educational Support System, released by the Ministry of Education and five other departments inJuly 2021, specified that “where the conditions allow, regions should popularize personal-learning terminals thatmeet technical standards and meet learning needs”.The Plan for IT Application during the 14th Five-Year Plan Period, released in December 2021, specified“elevating the level of digital education infrastructure to promote educational reforms that combine informationtechnology, smart technologies and education practices”.The policies mentioned above provide favourable policy support and a conducive macro-environment for theextensive application of AI in realizing teaching according to students' aptitude and the development ofCompany’s smart education business. iFLYTEK’s smart education products and solutions have been widelyadopted for teaching and learning, and they are recognised by governments, favoured by teachers and trusted byparents.
1.1 Extensive replication of the success of teaching according to students' aptitude in different regionsDuring the reporting period, iFLYTEK’s comprehensive smart education solutions for teaching according tostudents' aptitude continued to be adopted. They have been adopted and widely applied in nearly 20 districts,counties and cities including Jinshui District in Zhengzhou City, Wuhan Economic & Technological DevelopmentZone, Qingdao West Coast New Area, Dadong District in Shenyang City, Changchun City in Jilin Province andYijiang District in Wuhu City. A large amount of data has already been generated proving their effectiveness.Taking Bengbu City in Anhui Province for example, after the adoption of iFLYTEK’s general solutions forteaching according to students' aptitude, the city was nominated by the Ministry of Education as a pilot zone for“new teaching and learning models based on teaching reforms and integrated information technology” in August2020. It was also nominated by the Ministry of Education as a “model area for smart education” for 2020 inFebruary 2021. In September the same year, it was nominated by the Ministry of Education as one of the secondbatch of areas that promote teacher education with AI. Bengbu is one of the only two Chinese regions (the otherone, Haidian District of Beijing) selected for all of the three demonstration and pilot projects mentioned above.During the reporting period, the provinces adopting the smart test-grading technology tot he CollegeEntrance Examinations increased from nine to 12 across China. As for English listening and speaking testbusiness, during the reporting period, our system has been deployed in the College Entrance Examinations in 4additional provinces and municipalities and in the high school entrance examinations in 29 cities, which increasesthe total numbers of College Entrance Examinations organizing provinces covered to 14, and the high schoolentrance examinations organizing cities covered to 87.
1.2 Significant increase in the value of products targeting schools
During the reporting period, following the implementation of the “Double Reduction” policy, demands havegrown further for application scenarios such as smart classrooms, big data-based targeted teaching, flexibleassignments, independent learning, all-round education and smart management.For the classroom scenario, core technologies such as big data and AI analyse students’ knowledge based ontheir tests, classroom interactions and assignments and offer customized solutions for their weaknesses. Thetechnologies will also allow teachers to gain an accurate understanding of the students and focus on typical and
individual questions. Furthermore, teachers will be able to give assignments that are flexible and personalizedwhile reducing ineffective and repetitive tasks, so as to help enhance learning efficiency and promote theimplementation of the “Double Reduction” policy. In 2021, the flexible-assignment solution has helped about120,000 teachers give over 60,000 assignments to nearly 4 million students in over 8,000 schools.The “Double Reduction” policy focusing on on-campus teaching and learning has opened up the untapped marketof after-school services. iFLYTEK’s after-school service solutions target educational regulators, third-partyorganisations, schools, teachers, parents and students. The solutions offer services with strong support and tohigher standards and tackle seven key issues, including the supply of course resources, educational administrationand management, course assessments and data monitoring. To date, iFLYTEK’s after-school services cover 4,000schools in over 170 districts and counties.
Figure 3 The launch of iFLYTEK’s after-school service solutions
1.3 Student-oriented AI independent learning products continue to prove their worthAgainst the background of the “Double Reduction” policy, schools have put forward higher requirements forsetting tiered, flexible and personalized assignments, generating even stronger demand for individualized learninghandbooks. iFLYTEK’s individualized learning handbooks have achieved breakthroughs in core technologies andproduction innovation. The human-powered question-suggestion engine has won an accepted recommendationrate of over 95%, cutting students’ ineffective learning time by nearly 60% and helping them solve an average ofover 80% of previously incorrectly answered questions. During the reporting period, the number of schoolsadopting iFLYTEK’s individualized learning handbooks increased by 50%, increasing the user base by 40% overthe same period of last year and the repurchase rate also grew from 75% to 90%.
iFLYTEK’s AI learning pads boast a “4+1 standard”, that is, they are able to “make learning analysis,recommend learning materials, improve language skills and boost confidence with satisfying results withwhole-process protection”. With the help of AI, the learning pads help students learn independently and improveefficiency. Sales of the learning pads to individual consumers surged by 150% in 2021, while the grossmerchandise volume (GMV) and sales on JD and Tmall, China’s online business-to-consumer retail platforms,soared by 200% year-on-year. The learning pads topped the industry with a net promoter score (NPS) of nearly40%. (Note: The score is a market research metric that reflects the likelihood of consumers recommending acertain business or service to other people.)
2. Smart healthcare business
The Opinion of the CPC Central Committee and the State Council on Advancing Rural Vitalization acrossthe Board and Accelerating Agricultural and Rural Modernization, released by the State Council in January 2021,proposes to “advance the building of healthy rural areas across the board and improve the health managementlevel of village-based clinics and health service level of primary medical institutions”. Besides, the Outline of the14th Five-Year Plan (2021-2025) for National Economics and Social Development and Vision 2035 of thePeople's Republic of China points out, “the government will channel resources down to primary healthcare leveland balance the regional distribution of quality medical resources”. The above-mentioned policies have madefurther clear that the application of artificial intelligence (AI) in the healthcare sector calls for furtherstrengthening of public healthcare services at primary level, promotion of tiered diagnosis and treatment system,and equal access to basic healthcare services.During the reporting period, iFLYTEK General Practice Medical Assistant has covered 284 districts/countiesin 28 provinces (autonomous regions and municipalities directly under the central government) and been regularlyapplied. It has cumulatively served more than 50,000 primary doctors and 100 million residents, assisted primarydoctors in finishing over 130 million standard electronic medical records, provided 340 million pieces of AIclinical support suggestions, and given more than 170,000 valuable corrections to diagnoses (a doctor correctshis/her previous diagnosis based on the reminder from the iFLYTEK General Practice Medical Assistant, and thefinal diagnosis is consistent with the medical record information) within a year.
With its core healthcare technology and capability, iFLYTEK has been assisting governments and medicalinstitutions with pandemic prevention & control and general public healthcare follow-up interview services,benefitting a total of over 600 million people. This has also tremendously improved the efficiency of primaryhealthcare staff in pandemic prevention & control as well as that of public healthcare follow-up interviews. It alsoprovides decision-making analysis and support for national health commissions so that they are able to assesspublic healthcare services across provinces more scientifically and allocate public healthcare services funds morefairly.
iFLYTEK Healthcare continues to pursue AI-enabled product innovation in medical insurance cost controland chronic disease management. A medical insurance cost control pilot program has been launched in Changzhiand Lvliang Cities of Shanxi Province. With respect to chronic disease management, the chronic diseasemanagement system in Jieshou City of Anhui Province has recorded over 1.8 million AI-based interventions,which helped doctors improve management efficiency by more than five-fold, increased the control rate of highblood pressure to 72.45% from 39.2%, and reduced the hospitalization rate of cardiovascular and cerebrovascularpatients to 14.48% from 18.2%. In 2021, the “chronic disease management model of Jieshou City” wasrecommended as a typical case of “I Bring Tangible Benefits for the People – 2021 Demonstration Project forImproving People’s Living Standards”, a selection event guided by the People’s Daily.
3. Smart city business
iFLYTEK’s Urban Super Brain solutions has been adopted by cities in Anhui Province, including Tongling,Xuancheng, Wuhu, Hefei and Bozhou. They have also been widely launched across the country with positiveapplication results, such as in Tianjin, Liaocheng City in Shandong Province, Changchun City in Jilin Province,Luohe City in Henan Province, Tongchuan City in Shaanxi Province and Wuhai City in Inner Mongolia.Meanwhile, Tongling City has been named “China’s leading smart city” for three consecutive years. It has alsobeen selected as one of the “Top 10 Examples of Local-Governance Innovation in the Yangtze River Delta in 2020”by the Decision-Making magazine, and listed as one of the world’s six models in the Research Report on theGlobal Standard of City Brains by the WWNS-R.
During the reporting period, iFLYTEK undertook the construction of Jianghuai Big Data Center's main
platform in Anhui Province. To date, it has been connected to 16 prefecture-level cities with over 1 trillionpieces of data having being exchanged, placing itself among the country’s top three in terms of interface-datasharing and access among national ministries and commissions. The Company also lent its support to AnhuiProvince’s online administrative services in 2021, which have been ranked top of the country for fourconsecutive years. Anhui’s smart administration model, Guangdong’s government digitalization and Zhejiang’sone-stop service supported by iFLYTEK have all been listed as national innovative practices.
Figure 4 The launch of Jianghuai Big Data Center's platformDuring the construction of Jianghuai Big Data Center's platform, iFLYTEK was also overseeing theoperations of the All in Wan app. With continual learning through data iteration, the Company created a nationalbenchmark for the business model of “database + app”. The All in Wan app recorded over 10 million active userseach month in 2021 and a total of over 10 billion visits.Building upon its experience in the field of AI + smart city, iFLYTEK began exploring big data-basedinclusive health insurance in 2021. During the reporting period, Huimin insurance, (a government-ledinclusive-insurance programme) initially developed for Anhui Province, was launched in 20 cities across China,serving over six million people. It has played an active role in substantially lowering the medical-treatment costsfor individuals and has prevented poverty caused by illness.During the reporting period, the Company completed the development of a cloud speech-backed platform forcourts, which has been connected to 466 sub-platforms across the country, covering over 1,500 courts in 26provinces. The platform achieves the unified application of speech technologies to courts around the country,unified collection and training of speech materials, unified management and sharing of models and unified qualityand efficiency analysis of application data.
4. iFLYTEK Open Platform and consumer business
4.1 iFLYTEK Open Platform
In 2021, iFLYTEK Open Platform continued to offer diverse AI capabilities in fields such as multilingualspeech synthesis, multilingual speech recognition, natural language processing, image and text recognition andhuman and machine interaction. These capabilities helped developers shorten development cycles and cut thecosts while promoting the launch of products in a highly efficient way. During the reporting period, the iFLYTEKOpen Platform was already offering the public 499 AI capabilities and solutions and had attracted 2.93 milliondevelopers. The platform focused on 18 industries, including finance, agriculture and energy, providing them withdiverse smart-speech and AI capabilities and solutions. The AI marketing based on the iFLYTEK Open Platform
has greatly helped partnerdevelopers cash in on their business and has seen a 55.5% revenue growth over the sameperiod of last year. In 2021, the Company received the “China Advertising Great-wall Awards”, the onlyadvertising award approved by the State Council.The same year, the iFLYTEK 1024 Global Developer Festival was attended by 46,000 participants in personand over 12 million participants online. The “Open Platform 2.0 Strategy” was formally unveiled at the festival.Within the framework of the strategy, iFLYTEK will bring industry leaders together to lay the foundations of theindustry, while opening its technologies to gather more developers and their ideas, so that they can developapplications through low- and zero- code programming. In this way, all parties in the AI industry will jointly buildthe AI ecology in a highly-efficient way and enjoy win-win cooperation.
4.2 Consumer business
During the reporting period, based on its mission of “making work and learning easier and more efficient andmaking life more comfortable and entertainment more accessible”, iFLYTEK rolled out and iterated smart AI +office hardware products. The Company’s brand influence was further enhanced and its brand influence oncustomers also improved significantly. Sales of consumer hardware and the GMV shot up by 140% and 152%over the same period of last year, and the GMV on both JD and Tmall grew over 80%. Sales through newmarketing channels, including TikTok, also expanded rapidly, figuring as a major method of consumer productsmarketing. In August 2021, iFLYTEK stepped up the marketing of its consumer brand as “advanced, ingenious,evolving and caring”. The Company developed an extensive user-oriented physical retail model and opened 20direct-sale stores in five Chinese cities, namely Beijing, Shanghai, Shenzhen, Hangzhou and Nanjing. Meanwhile,the Company developed a flat organisational structure that comprises offline expansion, direct sales, products,growth and training. Such a model has been proven effective and can be quickly applied to more places.
(1) iFLYTEK Input Method
During the reporting period, iFLYTEK released its input method V11.0, which adopts an automaticspeech-recognition framework, called temporal feedback end-end multi-channel ASR (TFMA) that integratesfront- and back-end systems. The framework allows breakthroughs in speech recognition in complex scenariosand helps achieve highly efficient speech input in different scenarios. To date, the method supports speechrecognition in 12 foreign languages and 23 dialects and five ethnic languages from China. Meanwhile, keyboardsfor Japanese and Korean inputting had also been added to satisfy multilingual communication needs.In 2021, the total number of active users per month of the iFLYTEK input method grew by 20% and the monthlyuse of its speech recognition function rose by 30%. The recognition and reputation of the iFLYTEK speechtechnologies remained top in the industry.
(2) iFLYTEK AI Notebook
During the reporting period, the Company launched its second-generation AI Notebook X2, targetingbusiness conferences and simple office scenarios, and a product co-branded with LAMY from Germany. Thetablet enjoyed full upgrades in terms of design, efficiency, encryption and user friendliness. Based on thespeaker-separation technology, iFLYTEK AI Notebook X2 is able to achieve 95% accuracy in automatic speechrecognition in a multi-speaker scenario. Meanwhile, its offline recognition engine allows speech recognition andtranscription even without an Internet connection.
Figure 5 iFLYTEK AI Notebook X2: full upgrades in design, efficiency, encryption and user
friendlinessiFLYTEK’s AI smart notebooks dominated the domestic market in 2021. The sales topped e-book productsover the two renowned online shopping sprees in China on 18 June and 11 November, and surpassed Kindle salesfor the first time on e-commerce platforms. During the reporting period, iFLYTEK AI Notebook X2 won Red DotAward from Germany and the gold prize at China’s MEI Awards in 2021. Meanwhile, the Company’s smart laptopT1 won China’s Design Intelligence Award.
(3) iFLYTEK Smart Recorders
iFLYTEK smart recorders are a one-stop solution to customer needs such as speech recording, transcription,translation, storage and file export. They come in the SR and H1 series for reporters, conference attendees, officeworkers and teachers and students. The former has an independent terminal, while the latter may be used inconjunction with the iFLYREC app. iFLYTEK launched the world’s first wristband recorder R1 in May 2021,creating a new form of smart recorder. The Company launched the world’s first fully offline transcription deviceSR302Pro in September 2021, which supports high-resolution recording, fully offline real-time transcription andlarge storage.
Figure 6 iFLYTEK smart recorders
During the reporting period, iFLYTEK’s smart recorders remained atop the industry and their users grew by
43%. The devices are available in 876 cities in 158 countries across six continents, as well as in 3,545 physicalstores. They have won many awards, including the Red Dot Award from Germany, the iF Design Award, CRCCsafety certificate, International Design Excellence Award (IDEA), China Content Broadcasting Network (CCBN)Annual Innovation Award, A’ Design Award, Big Data Expo Leading Technological Achievement, AWE SmartTechnology Award, “New Domestic Product” of China Brand Day, MEI Award and Goldreed Industrial DesignAward.
(4) iFLYTEK Smart Translator
During the reporting period, iFLYTEK’s Dual-screen Translator was officially launched at the ChinaInternational Consumer Products Expo. It supports simultaneous translation display to both the two sides in aconversation, speech translation in 83 languages and image translation in 32 languages, with the languagescovering almost 200 countries and regions. Its Chinese and English online translation proficiency meets thestandard of the Test for English Majors-Band 8 (TEM-8), whereas its offline translation may reach China’sCollege English Test level 6 (CET-6). This means it may satisfy users’ professional translation needs on differentoccasions, such as business negotiations, talks or international conferences. The smart translator has continued toshine at major international conferences, including Expo 2020, World Artificial Intelligence Conference, ChinaInternational Import Expo and World Manufacturing Convention.
Figure 7 iFLYTEK Dual-screen Translator offers dual-screen display, easy control and smooth
communication
(5) iFLYREC Intelligent Conferencing System
The iFLYREC app and website have to date served over 37 million customers and transcribed over 62million hours of speeches at a 91% customer satisfaction rate. Targeting business customers, the iFLYRECIntelligent Conferencing System has become a comprehensive technological support system with a 98% accuratetranscription rate and is able to convert a one-hour speech in as short as five minutes. It has achieved positiveapplication results in many businesses.
The iFLYREC Intelligent Conferencing System contributed enormously to improving meeting minutesrecording efficiency at China’s “Two Session” and multilingual communication events of the Beijing OrganisingCommittee for the 2022 Olympic and Paralympic Winter Games. At the “Two Sessions”, iFLYRECunprecedentedly served as an AI meeting minutes recorder, promoting efficient reporting at the National People’sCongress and the Chinese People’s Political Consultative Conference. The reports were generated withsignificantly higher efficiency, greatly facilitating the IT application in government administration. With respect toBeijing 2022, iFLYREC targeted the Organising Committee’s administration and information release to ensurefree communication between individuals and organizations. The smart conferencing system’s Chinese and English
core speech-transcription and -translation technologies supported live information display on screens,international conferences and interviews. The system was set up in 50 of the Organising Committees’ conferenceoffices, offering technical support for free communication at over 1,000 international exchange events.
5. AI solutions for business customers, including operators, smart automobiles and smart financecompanies
(1) For operators
During the reporting period, users of the smart home-television speech platform continued to grow in number,with the daily interactions reaching 70 million times on average. The platform’s speech applications and serviceswere introduced in 18 Chinese provinces. Meanwhile, the smart customer services covered 20 provinces,providing services on over 200 million occasions on average per month and saving the human resource costs ofaround 5,000 call operators each year.
During the reporting period, iFLYTEK collaborated extensively with China Mobile. By combining AI and5G networks, a 5G smart-communication platform was developed based on 5G networks’ smart computation. Theplatform facilitates free communication and helps overcome language barriers among regions and countries. Italso effectively helps individuals with hearing problems to make video calls. The results were first seen at Beijing2022, where the 5G calls allowed individuals with hearing problems to “see” the calls and overcome the digitalgap.
(2) For automobile manufacturers
In 2021, the Company’s smart-automobile solutions achieved breakthroughs in core technologies such asmulti-modal speech enhancement and multi-modal integrated interaction, allowing automobiles to capturespeeches more clearly and accurately. The innovative multilingual technological solutions have also helped theautomotive industry expand their business abroad. Meanwhile, the dedicated AI-cloud services based oniFLYTEK’s core cloud technologies satisfied customers’ differentiated demands. Moreover, automotive audioexperience were enhanced following the release of a smart in-car audio-management system. The iFLYTEKsmart-automobile system was installed in 1,200 types of vehicles and were pre-installed on a total of 39 millioncars. During the reporting period, the Company’s smart-automobile solutions were pre-installed over 7 millioncars and adopted by 200 additional types of vehicles and 40 additional automobile manufacturers, with thecooperation with regular customers growing by 90%The system recorded over 10 million active users per monthand nearly 2 billion times of speech interactions in 2021.
(3) For financial institutions
The Company’s smart finance business has covered the banking, insurance and securities industries, withover 2,000 projects for smart customer service, marketing and business operations. iFLYTEK’s AI plusfinancial-product solutions have now been adopted by all the leading financial enterprises. Furthermore, they arebeing swiftly adopted by regional banks (such as Bank of Beijing and Bank of Ningbo) and are systematicallyadjusted specific to the local conditions. During the reporting period, the penetration rate of iFLYTEK’s AI plusfinancial applications jumped by over 200% among regional banks. In terms of the technologies involved, theCompany has achieved the application and expansion of speech, semantic and image technologies and combinednatural language understanding with computer visual technology to realize massive application of smart riskcontrol, assisted review and approval and smart consumer protection solutions.
III. Analysis of Core Competitiveness
1. Original core technologies at world-leading levels
iFLYTEK remains committed to innovation in original core technologies. It was commissioned to build theNational Engineering Laboratory for Speech and Language Information Processing (NELSLIP) of the NationalDevelopment and Reform Commission (NDRC), a national new-generation open AI innovation platform for smartspeech of the Ministry of Science and Technology and China’s first key national laboratory of smart cognition. In2021, NELSLIP passed the NDRC evaluation with the overall passing rate below 50% for all the participants. Thelab was then included into the new queue management system and built into the National Engineering ResearchCenter of Speech and Language Information Processing.With its unique mechanism that integrates industries and academic and research institutes, iFLYTEK enjoysunrivalled advantages in the technological field and has undertaken many major provincial and national scientificand technological projects, including:
? major special projects from the Chinese Academy of Sciences (CAS) in collaboration with theUniversity of Science and Technology of China (USTC), which made significant breakthroughs in differentlanguages. As of the end of 2021, the Company led the world with speech- and image-and-text recognitiontechnology in 14 major languages, and its speech synthesis, machine translation and language understandinghad caught up with the international standard. The speech recognition and synthesis and machine translation in23 major languages had also caught up with the international level. Meanwhile, the Company begancollaborating with leading Chinese automobile exporters, such as SAIC Motor, Chery Automobile andChangan Auto, providing them with multilingual support for their going-global initiative.
? iFLYTEK Dual-screen Translator was nominated as an outstanding scientific and technologicalachievement by CAS in 2021. The Company’s products, such as the iFLYREC Intelligence ConferencingSystem, multilingual recorders and multi-modal virtual volunteers at the Beijing 2022, promoted effectivebarrier-free communication at the Beijing 2022 and were highly recognized by the Organising Committee.
? extensive participation in the Ministry of Science and Technology’s “Cohort Study of the BrainDevelopment of School-Age Children in China” of the major project “Brain Science and NeuromorphicResearch” of 2030. The Company worked with experts from Beijing Normal University, to measure cerebralintelligence with a focus on reading capacity The Company also played a leading role in the key subject“Building and Operating the Children’s Cerebral Intelligence Development Data and Information Platform”and supported the national strategy related to brain science.
? being tasked to create Anhui Province’s first innovative consortium – smart and innovative HMIconsortium – that fully allows businesses to turn to the public for solutions. Furthermore, it combines the entireindustry chain with tertiary institutes to tackle key technological challenges with a focus on industry-chainsecurity, independence and control.During the reporting period, iFLYTEK won 10 authoritative international competitions in the AI field and the titleas a top Chinese science society. The honors have further strengthened the Company’s technological foundationsand advantages in areas such as education, healthcare and consumer products.
? In January 2021, iFLYTEK won the Third DIHARD Speech Diarization Challenge (DIHARD-3). TheCompany had enhanced the diarization capability of its machines in complex environments, and it was for thefirst time that a Chinese team came top at the event.
? In April 2021, iFLYTEK collaborated with the USTC on the project “Key Adaptive-LearningTechnologies and Their Application In Smart Education” and won the first prize of the Wu Wenjun Award forArtificial Intelligence Science & Technology Advancements. The project’s technological breakthroughs in bigdata and AI will overhaul the monotonous educational status quo. It will strongly support an optimized teachingmodel that is based on students’ aptitude and greatly improve learning efficiency. The award is also known as
“China’s highest award for smart science and technology” and represents the topmost honour in the AI field.
? In June 2021, Tsinghua-iFLYTEK Joint Research Center took part in the International Conference onLearning Representations’ Machine Learning for Preventing and Combating Pandemics workshop andparticipated in the challenge of building a task-oriented dialogue system for automatic medical diagnosis. TheTsinghua-iFLYTEK system passed a total of 2,374 dialogue tests involving 12 diseases and 118 symptoms andcame out top among over 70 teams with the most accurate inquiry and diagnoses.
? In July 2021, iFLYTEK came out top at the Lightweight Optical Character Recognition TechnologicalInnovation Competition (LOCR) with 83.29% full-sentence accuracy in complex natural scenarios. Theinnovative technology is able to recognize characters despite significant compression.
? In August 2021, iFLYTEK and USTC-NELSLIP took part in the International Conference on SpokenLanguage Translation (IWSLT) and came out top in three tracks in simultaneous interpreting. The Company hadonce again shown its lead in speech translation and simultaneous interpreting after winning the end-to-end speechtranslation at IWSLT in 2018.
? In August 2021, with its years of technological experience in road-object detection, iFLYTEK broke theworld record with a detection score of 42.9 in Cityscapes 3D’s object-detection tasks following its previousparticipation in the challenge in 2017 and 2018.
? In October 2021, the Joint Laboratory of HIT (Harbin Institute of Technology) and iFLYTEK Research(HFL) set a new world record with an average total score of 84.1 in the Cross-lingual Transfer Evaluation ofMultilingual Encoders. The evaluation covered 40 languages and comprised nine tasks in four categories,including tracks such as sentence-pair classification, sequence tagging, reading comprehension and sentenceretrieval. The new record also shows that iFLYTEK’s multilingual-understanding and cross-lingual transfercapabilities have reached yet another new level.
? In October 2021, iFLYTEK came first in the multi-round text-generation task in a conversationalscenario at the Tenth Dialog State Tracking Challenge (DSTC10). Compared with previous text-dialogue tasks,this one focused on conversations with the use of emojis in open fields and required multi-modal conversationhistory to generate consistent and natural text responses. This has once again significantly prompted iFLYTEK’sbreakthroughs in core multi-modal and machine-human dialogue technologies.
? In November 2021, iFLYTEK collaborated with USTC-NELSLIP to take part in the Open AutomaticSpeech Recognition Challenge (OpenASR) organized by the National Institute of Standards and Technology(NIST) of the U.S. The team came first in all 15 low-resource language tracks and seven non-low-resourcelanguage tracks. This fully demonstrates iFLYTEK’s internationally leading proficiency in multilingualtechnologies.
? In December 2021, the HFL set a new world record with a total score of 72.8 in the multi-modalreading-comprehension test of video cassette recorders, proving iFLYTEK’s profound strength in multi-modaland deep-reading comprehension fields.
2. Systematic innovation – from core technology breakthroughs to extensive applicationsFrom the achievement of breakthroughs in core technologies to their extensive application in industries, theprocess is extremely challenging. On the one hand, the innovation team must be able to realize singularbreakthroughs and innovations throughout the business chain. Moreover, they must be able to find out scenariosfor large-scale application and provide appropriate business models. In this way, business and technology maycomplement each other to generate value. Otherwise iFLYTEK would simply become a supplier of singulartechnologies. iFLYTEK has always been committed to using AI to satisfy rigid social demands and has gainedoverwhelming advantages in the following two fields:
1) While continuing its innovation and lead in single-point core technologies, the Company has expanded
the width and depth of its technology system: from speech synthesis to speech evaluation and speechrecognition; from speech recognition to text embedded in image recognition and image recognition; fromsingle-modal recognition and synthesis to multi-modal overall perception and enriched expression; andfrom smart cognition that enables machines to listen and speak to smart cognition that can understandand think. Furthermore, the Company continues to take on more complex scenarios through means suchas multi-technological integration and innovation. The innovation of general basic algorithm has givenrise to the “amplifier effect” in different technologies, which helps drive the transformation and upgradefrom single-point core technological innovation to systematic innovation.
2) iFLYTEK is devoted to the principle of AI-value realisation, that is, tangible application examples,expandable standard products and statistically provable application results. That is why it continues toextensively promote and apply AI products and solutions for meeting major social needs, such aseducation, healthcare and urban living, and in major economic fields, including automobile, finance andconsumer products. The Company’s growing profitability and market success have in turn helpedstrengthening its advantages, such as an in-depth knowledge and understanding of the industrialscenarios and algorithm iteration, which have strengthened the Company’s competitive edge in differentindustries and fields.In terms of smart education, iFLYTEK has made breakthroughs in multiple core AI technologies, includingspoken language evaluation, complex handwritten formula recognition, understanding of natural language intexts and images, open-question intelligence assessments, multidimensional in-depth student profiles, optimizedlearning-path planning and personalized recommendations. The Company has achieved systematic innovations inmajor social subjects related to education, such as teaching according to students' aptitude, educationalassessments and efficient and independent learning. The systematic innovation of smart education has effectivelypromoted personalized learning to alleviate students’ burden and improve their efficiency with knowledge graphsand personal data. In addition, the integration of technology and classroom teaching has optimized the supply anddemand of educational resources and has provided teachers with more targeted teaching materials. iFLYTEK’ssolutions for teaching according to students' aptitude have been widely promoted – from Bengbu City in AnhuiProvince and Qingdao City in Shandong Province to other places across China. As its business revenues fromeducation continue to grow, the Company is creating immense social value in addressing major social issues, suchas alleviating the burden of teachers and students. The use time of its Smart Classroom solution jumped by 315%over the same period of last year and over 1 billion smart assignments were set. This has substantially alleviatedstudents of the burden of ineffective assignments while improving learning results, greatly supporting theimplementation of the “Double Reduction” policy.
3. A credible industrial brand and an extensive marketing and service systemIn sectors relating to people’s livelihoods such as education and healthcare, iFLYTEK is widely recognizedthanks to the brand credibility it has gained as a “national AI team”. For example:
? iFLYTEK is the only business to collaborate extensively with Beijing Normal University in the buildingof the Ministry of Education’s “Collaborative Innovation Center of Assessment for Basic EducationQuality” and the NDRC’s “Model Project for the Research and Development and Application ofBasic-Education Big Data”.
? iFLYTEK signed strategic collaboration agreement with the National Center for Educational
Technology (NCET) and jointly released industry reports, such as the Framework for the Developmentof Artificial-Intelligence Technology and Engineering at Primary and Middle Schools and the 2021 Blue
Book for the Development of Smart Education: Smart Technology-Empowered Educational Evaluation.
? Under the supervision of the State Language Commission, the Company has built and run a global
Chinese-learning platform, which uses AI technology to provide Chinese learners worldwide withpersonalized Chinese-learning resources and tools.
? iFLYTEK signed a strategic collaboration agreement with the China Education Association forInternational Exchange (CEAIE) and jointly launched the AI Plus Education Expert Committee as itssecretariat.
? iFLYTEK signed a strategic collaboration agreement with China Education Television (CETV) andfounded a joint-venture company, the only such company that CETV has set up with a business in recentyears.
? iFLYTEK co-organized the Global AI Education Summit with Beijing Normal University, the NCET
and CEAIE. The Company also delivered a keynote report as the Chinese business representative at theInternational Conference on Artificial Intelligence and Big Data in Education (AIDE), which wasorganized by the United Nations Educational, Scientific and Cultural Organization (UNESCO) andChina’s Ministry of Education, National Commission for UNESCO and the People’s Government ofBeijing.In terms of healthcare:
? The iFLYTEK General Practice Medical Assistant was nominated as an outstanding achievement in
2021 by CAS’s Artificial Intelligence Industry-University-Research Innovation Alliance.
? iFLYTEK Healthcare’s AI primary CDSS technology was listed among the pioneering
electronic-information technologies of the China Association for Science and Technology.
? The iFLYTEK program “Application of Smart-Voice Technology in Electronic Medical Records” won
the “National AI Healthcare Innovation Award 2020” and “Clinical Application Innovation Award”.
? iFLYTEK was selected as the best example of applying big data and AI to COVID-19 prevention andcontrol by the Chinese Medical Association.
? iFLYTEK won the “Effective AI Empowerment during the Pandemic” award from the Science and
Technology Department of the Ministry of Industry and Information.
? iFLYTEK was named as an outstanding example of pandemic-fighting AI-empowered medicalequipment by the China Medical Equipment Artificial Intelligence Alliance.With its years of business experience, iFLYTEK has developed an extensive marketing network that coversthe entire country and has set up 23 regional marketing offices, covering every Chinese province. Furthermore,iFLYTEK has effectively reached key customer groups in 73% of China’s over 2,800 districts and counties andsigned strategic cooperation agreements with 82 prefecture-level cities in 13 provinces.
To provide customers with better services, iFLYTEK has been actively strengthening the management andbuilding of its regional teams. The Company has developed an integrated sales and service system that fullyintegrates both the front- and back-end processes, so as to support the extensive and rapid launch and promotionof its products. Taking education for example, the Company has built an all-round system for both online andoffline services; the localized-service team with more than 2,000 members provides extensive services andsupport. To date, iFLYTEK’s service system has provided services to over 100 million teachers and students from50,000 schools across China, covering 92% of prefecture-level cities and all second-tier and above cities.
IV. Analysis of Main Business
1. Overview
During the reporting period, iFLYTEK’s core AI technology continued to make breakthroughs. Itsfundamental business had taken root in key locations and its strategy to drive development with originaltechnologies continued to generate desirable results. Meanwhile, the Company’s business scale and efficiencywere increasing as it strove not only to be one step ahead but to become a true leader in key fields. Generally, theCompany made a good start during the first year of the 14
thFive-Year Plan period.
The commitment to “being indomitable” and developing an industry driven by independentinnovations: during the reporting period, iFLYTEK continued to lead the technological advancement in AI: Atthe global multilingual speech-recognition competition staged by NIST, the Company came top in 22 eventsinvolving 15 languages; the Company set the world record at its third Cityscapes competition; won the first prizeof the Wu Wenjun Award for Artificial Intelligence Science & Technology Advancements; became the championof three tracks at the IWSLT 2021 challenge; came top in the educational-cognition challenge staged by NeuralInformation Processing Systems; winning the highest award in China’s intellectual property rights field: China’sGolden Patent Award. In 2021, iFLYTEK won 10 authoritative international tests in the AI field and the title of atop Chinese science society. The honors have further strengthened the Company’s technological foundations andadvantages in areas such as education, healthcare and consumer products. Moreover, the honors helped theCompany continue to develop the capability fundamental to its systematic innovation and ongoing development,as well as assisting the Company in boosting its credibility as an industrial and technological brand with adistinctive competitive edge.
The commitment to satisfying rigid social demands with fundamental business and creating value:
during the reporting period, the Company’s fundamental business continued to take root and grow in size. Itaccounted for over 50% of the Company’s total revenues and set the local business standards with positive userdependency, long-term operational capacity, ongoing growth potential and leading industrial value. The Companyhas enjoyed an advantage in sustainable development by “tackling rigid demands and gaining generation-wideedges over others”.
Steady business development to achieve sustainable and rapid business growth: The Company generatedan annual operating revenue of RMB18.3 billion in 2021, a year-on-year growth of 40.6%. Among all the listedA-share companies, iFLYTEK was the only one with a consecutive annual operating revenue growth rate thatexceeded 25% over the last decade. The Company’s base area business was also ushering in a period of extensiveAI application. To facilitate swift business application and steadier development, the Company planned itsoperations and personnel assignment beforehand based on specific human-resources models, which saw itsnumber of employees grew by 3,301 in 2021. Against such background, the Company generated a gross profit ofRMB7.533 billion in 2021, a like-for-like growth of 28.2%. The net profit reached RMB1.556 billion for itsshareholders, a year-on-year growth of 14.13%, and a net profit excluding non-recurring profits and lossesRMB979 million, , a year-on-year growth of 27.54%. While increased employees caused increased costs andadversely impacted profit growth during the period, they consolidated the foundation for enhanced futureprofitability of the Company, strengthened its role as an industry leader and guaranteed its sustainabledevelopment.
For specific development in the Company’s main business in 2021, please see “Major Business of theCompany during the Reporting Period”.
2. Revenues and Costs
(1) Revenue breakdown
Unit: RMB
| Item | 2021 | 2020 | Increase/(decrease) YOY | ||
| Amount | Contribution to operating revenue | Amount | Contribution to operating revenue | ||
| Total operating revenue | 18,313,605,605.92 | 100% | 13,024,657,865.85 | 100% | 40.61% |
| By industry | |||||
| I. Main business | |||||
| Software and information technology services | 18,052,041,197.82 | 98.58% | 12,820,661,073.57 | 98.44% | 40.80% |
| Education and teaching services | 224,217,683.51 | 1.22% | 167,310,688.77 | 1.28% | 34.01% |
| II. Other business | 37,346,724.59 | 0.20% | 36,686,103.51 | 0.28% | 1.80% |
| By product | |||||
| I. Main business | |||||
| 1. Education sector | |||||
| Education products and services | 6,007,348,293.08 | 32.82% | 4,019,222,681.95 | 30.86% | 49.47% |
| Teaching services | 224,217,683.51 | 1.22% | 167,310,688.77 | 1.28% | 34.01% |
| 2. Smart city business | |||||
| Information engineering | 2,850,900,426.27 | 15.57% | 1,773,613,518.25 | 13.62% | 60.74% |
| Digital government applications | 1,204,462,203.07 | 6.58% | 1,025,307,509.84 | 7.87% | 17.47% |
| Smart administration and legal service applications | 918,237,445.42 | 5.01% | 1,038,090,006.86 | 7.97% | -11.55% |
| 3. iFLYTEK Open Platform and consumer business | |||||
| iFLYTEK Open Platform | 2,987,814,681.57 | 16.31% | 1,920,794,562.91 | 14.75% | 55.55% |
| Intelligent hardware | 1,236,725,229.04 | 6.75% | 873,228,157.56 | 6.70% | 41.63% |
| Mobile Internet products and services | 462,863,443.18 | 2.53% | 285,960,859.66 | 2.20% | 61.86% |
| 4. Operators | |||||
| Operators related business | 1,393,232,435.68 | 7.61% | 1,098,888,765.96 | 8.44% | 26.79% |
| 5. Smart vehicles | |||||
| Intelligent networked vehicle services | 449,414,135.30 | 2.45% | 323,508,700.10 | 2.48% | 38.92% |
| 6. Smart healthcare | |||||
| Healthcare services | 337,867,525.71 | 1.84% | 312,680,410.23 | 2.40% | 8.06% |
| 7. Smart finance | |||||
| Smart financial products and solutions | 196,729,251.86 | 1.07% | 147,008,316.17 | 1.13% | 33.82% |
| 8. Others | 6,446,127.64 | 0.04% | 2,357,584.08 | 0.02% | 173.42% |
| II. Other business | 37,346,724.59 | 0.20% | 36,686,103.51 | 0.28% | 1.80% |
| By region | |||||
| I. Main business | |||||
| Eastern China | 10,019,356,758.47 | 54.72% | 7,091,116,668.21 | 54.44% | 41.29% |
| Southern China | 2,268,908,133.81 | 12.39% | 2,139,581,799.40 | 16.43% | 6.04% |
| Northern China | 2,235,094,034.24 | 12.20% | 1,190,129,582.47 | 9.14% | 87.80% |
| Southwestern China | 1,519,332,972.24 | 8.30% | 1,120,951,071.15 | 8.61% | 35.54% |
| Central China | 1,268,649,617.07 | 6.93% | 542,372,928.72 | 4.16% | 133.91% |
| Northeastern China | 473,166,919.48 | 2.58% | 239,080,443.83 | 1.84% | 97.91% |
| Northwestern China | 434,512,177.19 | 2.37% | 481,906,435.79 | 3.70% | -9.83% |
| Outside China | 57,238,268.83 | 0.31% | 182,832,832.77 | 1.40% | -68.69% |
| II. Other business | |||||
| Eastern China | 37,346,724.59 | 0.20% | 36,686,103.51 | 0.28% | 1.80% |
| By sales model | |||||
| Operating Revenue | 18,313,605,605.92 | 100.00% | 13,024,657,865.85 | 100.00% | 40.61% |
The Company is required to comply with the disclosure requirements for the software and informationtechnology services industry as stated in the Guidelines of Shenzhen Stock Exchange for Self-discipline Regulationof Listed Companies No. 3: Industry Information Disclosure.
Unit: RMB
| 2021 | 2020 | |||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |
| Operating Revenue | 2,501,303,217.85 | 3,817,347,314.77 | 4,549,313,267.14 | 7,445,641,806.16 | 1,408,820,489.46 | 2,940,380,800.55 | 2,934,873,823.63 | 5,740,582,752.21 |
| Net profit attributable to the listed company’s shareholders | 139,470,569.39 | 279,107,268.35 | 310,187,574.93 | 827,698,481.89 | -131,445,229.01 | 389,634,438.91 | 296,070,808.70 | 809,529,598.13 |
Description of why the operations were seasonal (or cyclical) and the fluctuation risksThe education business and smart city business of the Company target mainly at public institutions such asschools and governments, as well as big enterprises. The project development has certain seasonal characteristics,e.g. planning and justification in the first half year, and implementation in the middle or latter half of a year.Judging from quarterly operations in the past two years, there is also the characteristic that the revenue is low inthe first quarter is low but high in the fourth quarter.
(2) Industry, product, geographical location and sales model that contribute over 10% to the Company'soperating revenue or profit
√ Applicable □ Not applicable
The Company is required to comply with the disclosure requirements for the software and informationtechnology services industry as stated in the Guidelines of Shenzhen Stock Exchange for Self-discipline Regulationof Listed Companies No. 3: Industry Information Disclosure.
Unit: RMB
| Item | Operating revenue | Operating costs | Gross profit margin | Increase/(decrease) of operating revenue YOY | Increase/(decrease) of operating costs YOY | Increase/(decrease) of gross margin YOY |
| By customers' industry | ||||||
| Software and information technology services | 18,052,041,197.82 | 10,572,274,760.86 | 41.43% | 40.80% | 51.12% | -4.00% |
| By product | ||||||
| Education products and services | 6,007,348,293.08 | 2,903,903,180.50 | 51.66% | 49.47% | 57.94% | -2.59% |
| Open Platform | 2,987,814,681.57 | 2,354,106,352.73 | 21.21% | 55.55% | 61.43% | -2.87% |
| Information engineering | 2,850,900,426.27 | 2,266,140,964.59 | 20.51% | 60.74% | 74.64% | -6.33% |
| By geographical location | ||||||
| Eastern China | 10,019,356,758.47 | 6,536,875,685.77 | 34.76% | 41.29% | 39.92% | 0.64% |
| Southern China | 2,268,908,133.81 | 1,134,009,333.72 | 50.02% | 6.04% | 35.68% | -10.92% |
| Northern China | 2,235,094,034.24 | 896,885,460.54 | 59.87% | 87.80% | 60.44% | 6.84% |
In the event that the statistical caliber of the Company's main business data is adjusted during the reporting period,the Company's main business data for the most recent year was calculated with the adjusted caliber at the end ofthe reporting period
□ Applicable √ Not applicable
(3) Whether the Company’s revenue from goods sold is higher than from service rendered?
□ Yes √ No
(4) Execution of the significant sales/procurement contracts signed by the Company up to the reportingperiod
□ Applicable √ Not applicable
(5) Breakdown of operating costs
Industry
Unit: RMB
| Industry | Item | 2021 | 2020 | Increase/(decrease) YOY | ||
| Amount | Percentage of operating costs | Amount | Percentage of operating costs | |||
| Software and information technology services | Material cost | 5,995,818,402.95 | 55.62% | 3,775,549,842.58 | 52.82% | 2.80% |
| Software and information technology services | Operating costs | 3,424,059,399.99 | 31.76% | 2,315,955,586.40 | 32.40% | -0.64% |
| Software and information technology services | Personnel outlays and outsourced labor | 1,057,067,657.01 | 9.81% | 850,758,062.35 | 11.90% | -2.09% |
| Teaching | Operating costs | 299,758,728.31 | 2.78% | 203,977,610.69 | 2.85% | -0.07% |
| Other business | Operating costs | 3,644,276.79 | 0.03% | 2,190,796.39 | 0.03% | 0.00% |
| Total | 10,780,348,465.05 | 100.00% | 7,148,431,898.41 | 100.00% | 0.00% | |
The Company is required to comply with the disclosure requirements for the software and information technologyservices industry as stated in the Guidelines of Shenzhen Stock Exchange for Self-discipline Regulation of ListedCompanies No. 3: Industry Information Disclosure.Costs of main business
Unit: RMB
| Cost breakdown | For the reporting period | For the same period of last year | Increase/(decrease) YOY | ||
| Amount | Percentage of operating costs | Amount | Percentage of operating costs | ||
| Software and information technology services | 5,983,839,149.32 | 55.57% | 3,768,052,401.63 | 52.77% | 2.80% |
| Software and information technology services | 3,424,059,399.99 | 31.80% | 2,315,955,586.40 | 32.43% | -0.63% |
| Software and information technology services | 1,057,067,657.01 | 9.82% | 850,758,062.35 | 11.91% | -2.09% |
| Teaching | 299,758,728.31 | 2.78% | 203,977,610.69 | 2.86% | -0.08% |
| Other business | 3,644,276.79 | 0.03% | 2,190,796.39 | 0.03% | 0.00% |
| Total | 10,768,369,211.42 | 100.00% | 7,140,934,457.46 | 100.00% | 0.00% |
(6) Any changes in the scope of consolidated statement during the reporting period
√ Yes □ No
See "VII. Description of Any Changes in the Scope of Consolidated Statement over the 2020 Financial Report" in"Section VI Significant Events" herein for details.
(7) Any significant changes in or adjustments to the Company's business, products or services during thereporting period
□ Applicable √ Not applicable
(8) Major customers and suppliers
Major customers of the Company
| Combined sales of the top five customers (RMB) | 2,150,231,256.20 |
| Percentage of combined sales of the top five customers in total annual sales | 11.74% |
| Percentage of sales by related parties among the sales by the top five customers in total annual sales | 3.69% |
Information on the Company's top five customers
| No. | Customer name | Sales (RMB) | Percentage of total annual sales |
| 1 | Customer 1 | 675,077,341.14 | 3.69% |
| 2 | Customer 2 | 423,919,910.10 | 2.31% |
| 3 | Customer 3 | 416,303,290.20 | 2.27% |
| 4 | Customer 4 | 347,230,526.10 | 1.90% |
| 5 | Customer 5 | 287,700,188.66 | 1.57% |
| Total | -- | 2,150,231,256.20 | 11.74% |
Notes to other information on major customers
√ Applicable □ Not applicable
Among the Company's top five customers, Customer 1 was comprised of China Mobile Limited and itssubsidiaries. This customer is an entity affiliated with the Company in accordance with Article 6.3.3 of the RulesGoverning the Listing of Shares on Shenzhen Stock Exchange (2022 Revision).Major suppliers of the Company
| Combined purchases by the top five suppliers (RMB) | 1,833,653,209.64 |
| Percentage of combined purchases by the top five suppliers in total annual purchases | 24.73% |
| Percentage of purchases by related parties among the purchases by the top five suppliers in total annual purchases | 0.00% |
Information on the Company's top five suppliers
| No. | Supplier name | Purchases (RMB) | Percentage of total annual purchases |
| 1 | Supplier 1 | 806,976,056.02 | 10.88% |
| 2 | Supplier 2 | 351,538,906.12 | 4.74% |
| 3 | Supplier 3 | 280,186,570.46 | 3.78% |
| 4 | Supplier 4 | 205,164,235.04 | 2.77% |
| 5 | Supplier 5 | 189,787,442.00 | 2.56% |
| Total | -- | 1,833,653,209.64 | 24.73% |
Notes to other information on major suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: RMB
| Item | 2021 | 2020 | Increase/(decrease) YOY | Notes to major changes |
| Sales expenses | 2,692,844,410.57 | 2,084,441,964.88 | 29.19% | |
| Administrative expenses | 1,101,759,620.99 | 856,632,560.34 | 28.62% | |
| Financial expenses | -10,431,988.07 | 16,200,970.39 | -164.39% | Mainly as a result of interest income increase. |
| Research and development (R&D) expenses | 2,829,840,977.50 | 2,211,061,146.73 | 27.99% | |
| Income tax expenses | -114,030,689.84 | 14,852,434.38 | -867.76% | Mainly as a result of deferred income tax decrease. |
4. R&D inputs
√ Applicable □ Not applicable
The Company always places strategic importance on R&D. In a market-oriented way, it continues to refinethe core technology, develops new products, upgrades the product structure, and enhances its core competitivenessacross the board.
Inputs in R&D
| Major R&D projects | Project purpose | Project progress | Objectives to be achieved | Expected influence on the Company's development in the future |
| Platform for Supporting Individualized Learning Handbook Resources | To provide AI technology, system support, teaching and research support, and resources for individualized learning in respect of teaching and learning | Development completed | To increase user satisfaction with delivered handbooks | To expand the market share of individualized learning handbook product and save delivery cost |
| iFLYTEK Learning Pad | An intelligent laptop to facilitate the learning of kindergarten to grade 12 (K12) students, which is based on the AI-powered, customized and targeted learning system | Development completed | To enhance the product's core competitiveness and increase user satisfaction, via such functions as AI-powered diagnosis of homework and test papers, and AI-powered Answering Pen | To increase the conversion rate of sales and expand the Company's share in the learning laptop market |
| Teaching and Test Platform | Based on the AI technology of iFLYTEK, to enable the closed-loop application in a full range of scenarios across teaching, learning, examination, assessment and management of English listening and speaking, provide a full package of solutions of English listening and speaking for education authorities, and help students improve their comprehensive ability of English listening, speaking, reading and writing | Development completed | To develop new products of AI-based Listening and Speaking in Classrooms to meet the needs of classroom teaching; integrate product users, resources, and business data to enhance product competitiveness; optimize product functions to respond quickly to external customers' needs and promote cost reduction and efficiency gain; optimize and upgrade the technical architecture to solidify the foundation and serve long-term business development | To expand the new applications of AI-based Listening and Speaking in Classrooms among K12 students and enrich the application scenarios across English teaching, learning, examination, assessment and management; integrate and connect the application scenarios of English teaching, learning, examination, assessment and management for unified management and operation; consolidate the foundation of English Teaching and Testing Platform to support the longer-term positive development of business |
| R&D of systematic teaching resources | To provide teachers with the digital teaching resources needed for lesson preparation and teaching | Under development | To provide a great variety of high-quality resources for lesson preparation and teaching with a wide coverage for higher lesson preparation and teaching efficiency of users and greater usage rate and satisfaction | To improve the influence of iFLYTEK's content, build iFLYTEK's resource brand, and help with the implementation of the strategy of teaching according to students' abilities |
| Consumer software and content development of iFLYTEK Learning Pad | To equip the intelligent education pads on offer with intelligent learning functions and resources across different periods of schooling and over all subjects | Under development | To continuously replenish and optimize software and content resources to improve user experience and satisfaction and sharpen product competitiveness | To improve the user satisfaction and reputation of the system products, increase sales conversion, and further expand the market share of the products on offer in the industry |
| Secondary School Homework | To explore the application value of teaching according to students' abilities by addressing multi-project needs | Development completed | To refine and optimize the usability of the frequently-used core functions of homework products, complete the upgrade of the old homework platform, and improve the competitiveness of the products | To develop a solution for individualized learning that integrates all the main processes and scenarios of daily teaching, explore, develop and successfully implement the "one, two, one" homework model, which has become a featured homework model of iFLYTEK after the policy of easing the burden of excessive homework and off-campus tutoring for students undergoing compulsory education (the "double reduction" policy) was introduced |
| Aixue Services Platform | To provide individualized training methods and tools for K12 users in the hope of improving their learning awareness and effectiveness while reducing the burden of studies on them | Development completed | To boost users' learning efficiency through continuous innovation and iteration of the product's education concept | To drive up the awareness and technology of the education industry, and work for higher intelligence in the smart education industry |
| AI-powered innovative education products | To provide K12 students with AI-featured technological innovation education, and improve teachers' and students' information technology (IT) literacy and innovation and creativity | Under development | To work for regular use at schools through optimization and iteration of products and development of new products | To develop products specific to different teaching application scenarios for market breakthrough and formation of a sales model |
| iFLYTEK Open Platform | To continuously release and launch the latest capabilities and solutions of AI products, and improve the platform ecosystem and the functions of commercialized system | Development completed | To develop an industry-leading platform for AI ecosystem, and maintain the largest market share among developers | To enhance influence in the AI industry and core technological prowess of AI, and help iFLYTEK establish No. 1 AI brand |
| iFLYTEK AI-powered Input | To complete the AI Helper function of the input method, | To further expand the user base, and achieve a | To deepen the value created by the input method to users, and |
Methodsupport the keyboard'smultilingual function such asJapanese and Korean, andcomplete the development andadaptation of Harmony inputmethod; and lead peers interms of Pinyin and speecheffect
| Under development | break-even of the project under various profit-making models by making the most of the users of the input method | continue to consolidate the brand influence of iFLYTEK among the general public | ||
| Open, Cloud-based Natural Human-Machine Interaction (HMI) System Oriented to IoT—Platform | To develop a variety of core HMI technologies. To complete the adaptation of the Chinese HMI system to localized operating systems and chip platforms, and build a localized multi-modal HMI algorithm platform that supports Chinese and English interaction | Under development | To break barriers and develop a homegrown English HMI system, and achieve localized production. | To meet the daily needs of natural HMI in English and Chinese, and empower the Company's support for China's home appliance and mobile phone producers to export overseas and the intelligent manufacturing industry to expand in the global market |
| Open, Cloud-based Natural HMI System Oriented to IoT—One-stop Marketing Cloud Platform | To work on the R&D of the real-time interaction system on the cloud characterized by high concurrency, great stability, and big flexibility, develop homegrown intelligent devices based on localized operating systems, and provide flexible and easily accessible integration solutions | Under development | To address the risk of a disruption to supply because the deployment of China's HMI systems relies on foreign equipment, realize the adaptation of domestic operating systems and chip platforms, and put in place a Chinese and English HMI system | To address the adaptation of speech-related core technology involved in the cloud-based HMI system on the localized chip platforms, including Cambricon and Zhaoxin, realize the localization of the cloud-based system, and help the Company secure a place in the capability adaptation of the localized platforms |
| Open, Cloud-based Natural HMI System Oriented to IoT—Advertising Transactions Platform | To provide visualized operations of function development, device access and service access for smart device manufacturers in IoT industry, and meet the needs of IoT manufacturers to develop natural language understanding models in vertical fields and develop personalized HMI | Under development | To shore up the weakness of localized terminal device systems and platforms that they are not empowered by core technology, allow the HMI system to support localized terminal platforms, and improve the application foundation of localized platforms | To adapt terminal acoustic algorithms and access protocols on the localized operating systems and Hisilicon chip platform, and support calls of localized terminals on platforms |
| Intelligent Habitat All-scenario AI-powered Middle office System for | To develop the intelligent habitat AI middle office and data analysis platform and the all-scenario intelligent habitat | Under development | To provide customers with platform-level AI capability clusters, provide customers with integrated solutions for | To provide whole-chain services ranging from support with core technology and establishment of ecosystem partnerships to |
| Digitalization of Real Estate Developers | operating system | entry-level smart hardware development, and help real estate developers with technological transformation and business upgrade | marketing empowerment under the business scenario of product digitization in the real estate industry | |
| iFLYTEK Voice Cloud Data Platform | To build data analysis and marketing platforms, and put in place a closed-loop marketing platform from data collection, data analysis, and marketing to retrospective effect optimization by leveraging the strength of iFLYTEK in big data and tapping the value of data To provide users with a one-stop analysis of marketing data platform, while providing strong support for deep exploitation of the value of big data in marketing | Under development | To develop a perfect big data-based marketing platform for large financial institutions and large retailers nationwide to enable such product functions as sound operations management and data analysis, data automation and custom analysis | To develop the big data-based marketing platform and services of iFLYTEK and help customers succeed by leveraging the technical and product advantages of iFLYTEK in AI, intelligent speech interaction, natural language processing, big data and data analysis and mining |
| AI Virtual Human Services Platform | To complete the development of the Virtual Human Services Platform, work on higher digitalization and intelligence of corporate business under the virtual human service scenario, provide customers in selected industries with software interface services, standardized products, standardized and customized services of software and hardware all-in-one machine | Under development | To utilize AI virtual human for better digitalization and intelligent application of industry customers' business, improve service efficiency and experience, and reduce service cost | To enhance the market competitiveness of AI virtual human, establish AI virtual human brand, and work for launch of a series of application products and ecosystem cooperation |
| Cool Ringtones | To conduct R&D of the ringtone products and services platform boasting core competitiveness to improve user experience, while exploring new business directions | Under development | To continuously ensure the stability and growth of revenue from the ringtone business, improve the user experience of Cool Ringtones related products, and complete the exploration of new profit-making model and business transformation | To continue to meet user needs, create the best experience for users, and further expand market share |
| AI TV Helper | To provide speech and related AI capability support for operators | Under development | To improve the user experience of the products and user activation | To expand market share among operators and reduce business operation costs |
| Hotel AI Phone Keeper SaaS Platform | To complete the development and launch of Hotel AI Phone Keeper, so as to help hotel staff handle a large number of process-related, simple and repetitive tasks, easing their workload and helping hotels save manpower | Development completed | To provide hotel operators with AI phone keeper SaaS platform rental service, which can be customized to answer general phone calls | To develop a set of intelligent customer service system for hotels, support the access of a variety of terminal devices and applications, support the development of multiple business processes, and enhance competitiveness in the hotel market |
R&D staff
| 2021 | 2020 | Change (%) | |
| Number of R&D staff | 8,367 | 6,461 | 29.50% |
| Percentage | 58.48% | 58.70% | -0.22% |
| Education background | —— | —— | —— |
| Age composition | —— | —— | —— |
Inputs in R&D
| Item | 2021 | 2020 | Change (%) |
| Amount of R&D inputs (RMB) | 2,935,836,674.77 | 2,416,243,833.83 | 21.50% |
| Percentage of R&D inputs to operating revenue | 16.03% | 18.55% | -2.52% |
| Capitalized R&D inputs (RMB) | 1,129,996,985.31 | 1,032,742,430.63 | 9.42% |
| Percentage of capitalized R&D inputs to R&D inputs | 38.49% | 42.74% | -4.25% |
Reason for a significant change in the percentage of total inputs in R&D in operating revenue over last year
□ Applicable √ Not applicable
The Company is required to comply with the disclosure requirements for the software and information technologyservices industry as stated in the Guidelines of Shenzhen Stock Exchange for Self-discipline Regulation of ListedCompanies No. 3: Industry Information Disclosure.
Unit: RMB
| Major R&D projects | Capitalized amount of R&D | Project purpose | Project progress |
| iFLYTEK Open Platform | 68,469,151.98 | To continuously release and launch the latest capabilities and solutions of AI products, and improve the platform ecosystem and the functions of commercialized system | Development completed |
| iFLYTEK AI-powered Input Method | 52,821,567.91 | To complete the AI Helper function of the input method, support the keyboard's multilingual function such as Japanese and | Under development |
| Korean, and complete the development and adaptation of Harmony input method; and lead peers in terms of Pinyin and speech effect | |||
| iFLYTEK Learning Pad | 45,500,278.21 | An intelligent laptop to facilitate the learning of kindergarten to grade 12 (K12) students, which is based on the AI-powered, customized and targeted learning system | Development completed |
| Open, Cloud-based Natural Human-Machine Interaction (HMI) System Oriented to IoT—Platform | 26,318,335.47 | Through endeavors in the English HMI field, to work on the R&D of many core technologies on HMI, e.g. wake-on-English voice, English speech recognition, English semantic understanding, and English speech synthesis To complete the adaptation of the Chinese HMI system to localized operating systems and chip platforms, and build a localized multi-modal HMI algorithm platform that supports Chinese and English interaction | Under development |
| Open, Cloud-based Natural HMI System Oriented to IoT—One-stop Marketing Cloud Platform | 20,676,222.95 | To work on the R&D of the real-time interaction system on the cloud characterized by high concurrency, great stability, and big flexibility, and deploy it in many computer rooms at home and abroad for synchronization. To develop homegrown intelligent devices based on localized operating systems, and provide flexible and easily accessible integration solutions | Under development |
| Open, Cloud-based Natural HMI System Oriented to IoT—Advertising Transactions Platform | 20,067,376.03 | To develop open HMI platform, and provide the visualized operations of skill development, device access and service access for smart device manufacturers in IoT industry | Under development |
| AI TV Helper | 17,279,019.40 | To provide speech and related AI capability support for operators, with a focus on optimizing the product experience, for better hardware sales, internal support and industry-leading on the basis of ensuring the innovation of functions and basic operations | Under development |
| Consumer software and content development of iFLYTEK Learning Pad | 16,556,380.44 | To equip the intelligent education pads on offer with intelligent learning functions and resources across different periods of schooling and over all subjects | Under development |
| Intelligent Habitat All-scenario AI-powered Middle office System for Digitalization of Real Estate Developers | 16,467,843.54 | To develop the intelligent habitat AI middle office and data analysis platform and the all-scenario intelligent habitat operating system | Under development |
| R&D of systematic teaching resources | 15,986,616.93 | To provide teachers with the digital teaching resources needed for lesson preparation and teaching | Under development |
| iFLYTEK Voice Cloud Data Platform | 14,906,019.19 | To build data analysis and marketing platforms, and put in place a closed-loop marketing platform from data collection, data analysis, and marketing to retrospective effect optimization by | Under development |
| leveraging the strength of iFLYTEK in big data and tapping the value of data. To provide users with a one-stop analysis of marketing data platform, while providing strong support for deep exploitation of the value of big data in marketing | |||
| Hotel AI Phone Keeper SaaS Platform | 14,712,988.66 | To complete the development and launch of Hotel AI Phone Keeper, so as to help hotel staff handle a large number of process-related, simple and repetitive tasks, easing their workload and helping hotels save manpower | Development completed |
| Platform for Supporting Individualized Learning Handbook Resources | 13,824,878.90 | To provide AI technology, system support, teaching research support, and resources for individualized learning in respect of teaching and learning | Development completed |
| AI Virtual Human Services Platform | 13,760,108.33 | To complete the development of the Virtual Human Services Platform, work on higher digitalization and intelligence of corporate business under the virtual human service scenario, provide financial, media, governmental and corporate customers with software interface services, standardized products, standardized and customized services of software and hardware all-in-one machine | Under development |
| Secondary School Homework | 12,771,081.32 | To refine and optimize usability of the frequently-used core functions of homework products, complete the upgrade of the old homework platform, synchronously address the market needs of multiple projects, and explore the application value of teaching according to students' abilities | Development completed |
| Aixue Services Platform | 12,744,136.14 | Targeting at K12 users, the project, with localized high-quality subject resources and other infrastructures, customizes diagnosis and learning solutions, to help students devise a reasonable learning path and learn more efficiently under a lesser burden of studies | Under development |
| AI-powered innovative education products | 10,943,531.90 | To provide K12 students with AI-featured technological innovation education, and improve teachers' and students' information technology (IT) literacy and innovation and creativity | Under development |
| Cool Ringtones | 10,817,999.30 | Leveraging the Company's core technology, to conduct R&D of the ringtone products and services platform boasting core competitiveness to improve user experience, while exploring new business directions | Under development |
| Teaching and Test Platform | 10,597,877.40 | Based on the AI technology of iFLYTEK, to enable the closed-loop application in a full range of scenarios across teaching, learning, examination, assessment and management of English listening and speaking, provide a full package of solutions of English listening and speaking for education authorities, and help students improve their comprehensive ability of English listening, speaking, reading and writing | Development completed |
1. The capitalization of the Company's R&D inputs is subject to the following recognition conditions:
(1) It is technically feasible to develop the intangible asset so that it may be used or sold;
(2) The Company intends to complete the development of the intangible asset, to use or to sell it;
(3) The way in which the intangible asset generates economic benefits, including the ability to prove that theproducts produced using the intangible asset have market or the intangible assets themselves have market, and theintangible asset will be used internally, can prove the usefulness;
(4) The Company has adequate technological, financial and other resources to support the completion of theintangible asset development and is able to use or sell the intangible asset; and
(5) Expenditure attributable to development phase of the intangible asset can be reliably measured.
2. Related internal controls and their implementation
(1) Project initiation
After the project manager submits the project initiation application, the project management office willorganize all parties to review. Then, the middle-level managers and senior managers, as well as EMT managers,president and chairman of the Group will make final approval according to the nature of the project and thebudget amount. The internal control design in this step ensures that the R&D project has been fully andscientifically demonstrated and effectively approved by the management.
(2) Project change
The project manager submits the change application, and the project management office organizes all partiesto review it. After the review is passed, the middle-level managers, senior managers in charge and EMT managersof the group will make final approval according to the nature of the project and the budget amount. The internalcontrol design in this step ensures that the change in the R&D project is reasonable and has been effectivelyapproved by the management.
(3) Project closing
The project manager submits the project closing application, and the budget manager submits it to the projectmanagement office for closing review after budget review, to evaluate whether the related indicators have beencompleted, the expected results been achieved, and secondary R&D is needed, etc. If the project passes theabove-mentioned review, it will be submitted to the head of the business unit for approval, and to the middle-levelmanagers and senior managers in charge for approval according to the nature of the project and the budget amount.The internal control design in this step ensures that the closing of the R&D project has been effectively evaluatedon an independent basis and approved by the management.Reasons for the significant change in capitalization rate of R&D inputs and its reasonableness
□ Applicable √ Not applicable
5. Cash flow
Unit: RMB
| Item | 2021 | 2020 | Increase/(decrease) over the same period of last year |
| Subtotal of cash inflows from operating activities | 18,622,185,224.19 | 13,779,556,349.60 | 35.14% |
| Subtotal of cash outflows from operating activities | 17,729,109,792.88 | 11,508,801,493.66 | 54.05% |
| Net cash flows from operating activities | 893,075,431.31 | 2,270,754,855.94 | -60.67% |
| Subtotal of cash inflows from investing activities | 248,647,456.34 | 1,086,124,653.16 | -77.11% |
| Subtotal of cash outflows from investing activities | 2,827,942,108.44 | 1,821,413,476.56 | 55.26% |
| Net cash flows from investing activities | -2,579,294,652.10 | -735,288,823.40 | 250.79% |
| Subtotal of cash inflows from financing activities | 4,094,224,490.83 | 1,890,469,448.88 | 116.57% |
| Subtotal of cash outflows from financing activities | 1,715,438,704.56 | 1,985,647,298.18 | -13.61% |
| Net cash flows from financing activities | 2,378,785,786.27 | -95,177,849.30 | 2599.31% |
| Net increase in cash and cash equivalents | 686,911,857.43 | 1,437,257,416.50 | -52.21% |
Explanation on major factors causing significant year-on-year changes in relevant data
√ Applicable □ Not applicable
(1) The net cash flows from the Company's operating activities decreased by 60.67% in 2021 over 2020,mainly due to the increase in cash for purchasing goods and receiving labor services.
(2) The net cash flows from the Company's investment activities increased by 250.79% in 2021 over 2020,which was mainly due to the larger amount of cash received by the Company in the previous year from thepurchase of structured deposits at maturity and the disposal of fixed assets, and the increase in cash paid for thepurchase and construction of fixed assets, intangible assets and other long-term assets during this period.
(3) The net cash flows from the Company's financing activities increased by 2599.31% in 2021 over 2020,mainly due to the increase in the amount of funds received by the Company from non-public offerings this year.Reason for the significant difference between the net cash flows from the Company's operating activities duringthe reporting period and the net profit for the year
□ Applicable √ Not applicable
V. Analysis of Non-main Business
□ Applicable √ Not applicable
VI. Analysis of Balance Sheet
1. Major Changes in Assets Composition
Unit: RMB
| Item | At the end of 2021 | At the beginning of 2021 | Increase/(decrease) |
| Amount | Percentage of total assets | Amount | Percentage of total assets | in percentage | |
| Cash and cash equivalents | 5,869,934,498.97 | 18.70% | 5,350,027,393.05 | 21.24% | -2.54% |
| Accounts receivable | 7,485,907,223.92 | 23.84% | 5,467,912,568.95 | 21.71% | 2.13% |
| Inventories | 2,433,958,499.25 | 7.75% | 2,378,935,699.96 | 9.45% | -1.70% |
| Contract assets | 872,957,868.27 | 2.78% | 480,185,851.21 | 1.91% | 0.87% |
| Other current assets | 785,233,724.05 | 2.50% | 103,969,197.98 | 0.41% | 2.09% |
| Long-term receivables | 1,349,656,441.96 | 4.30% | 1,007,891,262.92 | 4.00% | 0.30% |
| Long-term equity investments | 717,774,229.09 | 2.29% | 567,091,669.89 | 2.25% | 0.04% |
| Other non-current financial assets | 1,303,033,663.76 | 4.15% | 1,082,191,506.46 | 4.30% | -0.15% |
| Investment properties | 186,138,183.59 | 0.59% | 233,699,917.01 | 0.93% | -0.34% |
| Fixed assets | 2,522,658,852.39 | 8.04% | 1,839,011,067.38 | 7.30% | 0.74% |
| Constructions in progress | 286,774,067.37 | 0.91% | 267,414,007.21 | 1.06% | -0.15% |
| Right-of-use assets | 442,630,344.44 | 1.41% | 349,065,196.20 | 1.39% | 0.02% |
| Intangible assets | 2,391,889,408.30 | 7.62% | 1,908,355,236.54 | 7.58% | 0.04% |
| Development expenditure | 795,676,085.67 | 2.53% | 1,087,369,464.44 | 4.32% | -1.79% |
| Goodwill | 1,126,453,239.15 | 3.59% | 1,110,918,321.27 | 4.41% | -0.82% |
| Deferred income tax assets | 1,106,670,124.28 | 3.53% | 610,707,150.69 | 2.42% | 1.11% |
| Short-term borrowings | 525,433,319.10 | 1.67% | 642,621,532.44 | 2.55% | -0.88% |
| Bill payable | 2,525,673,609.38 | 8.05% | 2,405,992,623.78 | 9.55% | -1.50% |
| Accounts payable | 3,852,801,201.35 | 12.27% | 2,828,498,890.65 | 11.23% | 1.04% |
| Contract liabilities | 1,385,477,240.76 | 4.41% | 1,668,203,863.02 | 6.62% | -2.21% |
| Other payables | 1,594,961,432.44 | 5.08% | 1,200,826,071.66 | 4.77% | 0.31% |
| Long-term borrowings | 392,039,217.02 | 1.25% | 82,474,789.20 | 0.33% | 0.92% |
| Lease liabilities | 350,883,846.25 | 1.12% | 286,049,331.00 | 1.14% | -0.02% |
| Provision | 789,771,420.91 | 2.52% | 702,985,683.55 | 2.79% | -0.27% |
High percentage of overseas assets
□ Applicable √ Not applicable
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB
| Item | Beginning balance | Profit or loss on changes in fair value during the period | Accumulative fair value changes recorded into equity | Impairment provision set aside during the period | Purchased during the period | Sold during the period | Other decreases | Closing balance |
| Financial assets | ||||||||
| 1. Financial assets held for trading (excluding derivate financial assets) | 1,082,191,506.46 | 331,410,437.96 | 7,545,000.00 | 115,176,448.36 | 2,936,832.30 | 1,303,033,663.76 | ||
| Sub-total of financial assets | 1,082,191,506.46 | 331,410,437.96 | 7,545,000.00 | 115,176,448.36 | 2,936,832.30 | 1,303,033,663.76 | ||
| Total | 1,082,191,506.46 | 331,410,437.96 | 7,545,000.00 | 115,176,448.36 | 2,936,832.30 | 1,303,033,663.76 | ||
Other changesThe investment of RMB10.5 million in Anhui Imaging Union Co., Ltd. was included in long-term equityinvestments for accounting.Any significant change in the measurement attributes of the Company's major assets during the reporting period
□ Yes √ No
3. Restrictions upon assets rights as of the end of the reporting period
| Item | Carrying amount on 31 December 2021 | Reason for restriction |
| Cash and cash equivalents | 325,818,033.49 | Margins for banker's acceptance bills and letters of guarantee |
Bill receivable
| Bill receivable | 116,083,627.22 | Pledged for the Group's bills pool business |
| Intangible assets | 292,829,358.04 | Mortgage loan |
| Total | 734,731,018.75 | —— |
VII. Investment Analysis
1. Overview
√ Applicable □ Not applicable
| Amount of investments during the reporting period (RMB) | Amount of investments during the same period of last year (RMB) | Change (%) |
| 190,575,000.00 | 261,043,090.43 | -26.99% |
2. Significant equity investments received during the reporting period
□ Applicable √ Not applicable
3. Significant non-equity investments under way during the reporting period
□ Applicable √ Not applicable
4. Investments in financial assets
(1) Investments in securities
√ Applicable □ Not applicable
Unit: RMB
| types | code | name | Initial investment cost | Accounting measurement model | Book value at period beginning | Profit or loss on changes in fair value during the period | Accumulative fair value changes recorded into equity | Purchased during the period | Sold during the period | Profit or loss during the reporting period | Book value at period end | Accounting item | Source of fund |
| Chinese and foreign stocks | 605168 | 3ren | 9,180,000.00 | Fair value measurement | 199,938,375.00 | 172,684,575.00 | 172,684,575.00 | 372,622,950.00 | Other non-current financial assets | Own capital | |||
| Chinese and foreign stocks | 688256 | Cambricon | 10,000,000.00 | Fair value measurement | 313,283,635.89 | 92,674,584.21 | 92,674,584.21 | 405,958,220.10 | Other non-current financial assets | Own capital | |||
| Chinese and foreign stocks | H00020 | Sensetime-W | 2,867,255.08 | Fair value measurement | 33,788,707.81 | 38,160,092.19 | 38,160,092.19 | 71,948,800.00 | Other non-current financial assets | Own capital | |||
| Other investment securities held at period end | -- | -- | -- | ||||||||||
| 22,047,255 | -- | 547,010,71 | 303,519, | 0.00 | 0.00 | 0.00 | 303,519, | 850,52 | -- | -- | |||
| Total | .08 | 8.70 | 251.40 | 251.40 | 9,970.10 |
(2) Investments in derivatives
□ Applicable √ Not applicable
The Company did not invest in derivatives during the reporting period.
5. Use of proceeds from fundraising activities
√ Applicable □ Not applicable
(1) Overview of the use
√ Applicable □ Not applicable
Unit: RMB10,000
| Fund-raising year | Fund-raising method | Total raised funds | Use of raised funds during the period | Accumulated use of raised funds | Raised funds with a change in investment purpose during the reporting period | Add-up of raised funds with a change in investment purpose | Percentage of add-up of raised funds with a change in investment purpose (%) | Raised funds not used yet | Purpose and direction of the raised funds not used yet | Raised funds in idle for over two years |
| 2019 | Private offering | 286,185.18 | 0 | 286,185.18 | 0 | 0 | 0.00% | 0 | -- | 0 |
| 2021 | Private offering | 253,676.99 | 253,676.99 | 253,676.99 | 0 | 0 | 0.00% | 0 | -- | 0 |
| Total | -- | 539,862.17 | 253,676.99 | 539,862.17 | 0 | 0 | 0.00% | 0 | 0 | |
| Notes to the use of raised funds | ||||||||||
| 1. Stocks privately issued in 2019: Upon approval by China Securities Regulatory Commission in its Z.J.F.X.Z. [2019] No. 517 Document, the Company made a private issuance of 108,000,000 RMB-denominated ordinary shares (A shares) at a price of RMB27.10 per share in July 2019. According to the Capital Verification Report (R.C.Y.Z. [2019] No. 6464) issued by RSM Certified Public Accountants (Special General Partnership), the total amount of fund to be raised was RMB2,926.8 million, and the net amount of fund actually raised after deduction of issuing expenses was RMB2,861.8518 million. The said raised fund has become fully available on 5 July 2019, and put by the Company into a special account for management. As per the implementation program of the projects for raising funds from non-public offering of stocks in 2019, as of 31 December 2020, all these projects have been closed, cumulatively utilizing the raised money of RMB2,490.6871 million. The raised funds not utilized yet amounted to RMB371.1647 million. With respect to the portion not utilized, upon review by the 12th Meeting of the Fifth Board of Directors and the Eighth Meeting of the Fifth Board of Supervisors both held on 18 April 2021, as well as the | ||||||||||
(2) Projects committed for the raised funds
√ Applicable □ Not applicable
Unit: RMB10,000
Annual General Meeting for 2020 held on 10 May 2021, the surplus raised funds of RMB427.6347 million (the actual amount wassubject to the balance of the said account of raised funds on the day of transfer into the own capital account. It was RMB428.854million) were used to permanently replenish the working capital and finance the Company's day-to-day production and businessactivities (the difference between the amount of the surplus raised funds and that of raised funds not utilized was mainly caused bythe proceeds from cash management and interest income from banks). In the meanwhile, the Company has canceled all the specialaccounts of raised funds, while the escrow agreements in respect of the special accounts of raised funds signed by and between theCompany and its subsidiaries and the sponsors and commercial banks depositing the raised funds been terminated as well.
2. Stocks privately issued in 2021:
Upon approval by China Securities Regulatory Commission in its Z.J.X.K.[2021] No. 1769 Document, the Company made aprivate issuance of 76,393,048 RMB-denominated ordinary shares (A shares) at a price of RMB33.38 per share in July 2021.According to the Capital Verification Report (R.C.Y.Z. [2021] No. 230Z0152) issued by RSM Certified Public Accountants(Special General Partnership), the total amount of fund raised was RMB2,549.9999 million, and the net amount of fund actuallyraised after deduction of issuing expenses was RMB2,536.7699 million. The said raised fund has become fully available on 7 July2021, and put by the Company into a special account for management.In line with the raised fund utilization plan, the Company has used the total net amount of raised fund after deduction of fees to theintermediaries and other related expenses to supplement the working capital. The raised fund has been used as planned. In themeanwhile, the Company has canceled all the special accounts of raised funds, while the escrow agreements in respect of thespecial accounts of raised funds signed by and between the Company and its subsidiaries and the sponsors and commercial banksdepositing the raised funds been terminated as well.
Investmentprojectscommittedanddestinationof thefundsraisedabove thequota
| Investment projects committed and destination of the funds raised above the quota | Projects changed (partially changed) (yes/no) | Total commitment amount of investments with the raised funds | Total investment amount after adjustments (1) | Amount invested during the reporting period | Accumulated amount invested at the period end (2) | Progress of investment at the period end (3)＝(2)/(1) | Date of the project reaching the intended use | Benefits realized during the reporting period | Expected benefits met (yes/no) | Material change in project feasibility (yes/no) | |
| Investment projects committed | |||||||||||
| Next-generation Core Sensing & Cognitive Technology R&D Project | No | 55,000 | 55,000 | 0 | 55,514.6 | 100.94% | Not applicable | No | |||
| Intelligent Speech AI-powered Open Platform Project | No | 90,198 | 90,198 | 0 | 59,725.38 | 66.22% | 01 January 2021 | 314,648.56 | Yes | No |
| Intelligent Service Robotics Platform and Application Product Project | No | 44,637.18 | 44,637.18 | 0 | 42,946.37 | 96.21% | 01 January 2021 | 81,230.92 | Yes | No |
| Sale and Service System Upgrade Project | No | 44,000 | 44,000 | 0 | 38,413.3 | 87.30% | Not applicable | No | ||
| Replenishing working capital | No | 52,350 | 52,350 | 0 | 52,469.06 | 100.23% | Not applicable | No | ||
| Subtotal of investment projects committed | -- | 286,185.18 | 286,185.18 | 0 | 249,068.71 | -- | -- | 395,879.48 | -- | -- |
| Total | -- | 286,185.18 | 286,185.18 | 0 | 249,068.71 | -- | -- | 395,879.48 | -- | -- |
| Fact and reason of failure to meet the expected progress or expected benefits (by project) | Not applicable | |||||||||
| Explanation of material changes in | Not applicable | |||||||||
| project feasibility | |
| Amount, purpose and progress in use of the funds raised above quota | Not applicable |
| Change in the location of implementing the project invested with the raised funds | Not applicable |
| Change in the method of implementing the project invested with the raised funds | Not applicable |
| Advance investment in the investment projects and replacement | Applicable |
| The Company invested with self-raised money in the investment projects of raised funds in view of the actual project progress before the funds raised from private offerings of stocks were made available, for the purpose of ensuring the smooth implementation of the projects of raising funds from private stock offerings in 2019. It then replaced the self-raised money with the raised funds according to the applicable rules. RSM Certified Public Accountants (Special General Partnership) conducted a special review of the Company's advance investment in the investment projects with self-raised money as of 31 July 2019, and issued the Assurance Report on Use of Self-raised Money by iFLYTEK Co., Ltd. in Advance Investment in the Investment Projects with Raised Funds (K.Z.Zi. [2019] No. 7135]. When the raised funds were readily available, the Company replaced the self-raised funds previously invested in the projects in RMB516.1003 million with the raised funds in equal amount. | |
| Extraordin |
| ary replenishment of working capital with idle raised funds | Not applicable |
| Amount of the balance of raised funds after project implementation and why there is a balance | Applicable |
| An investment of RMB901.98 million was committed to the Intelligent Speech AI-powered Open Platform Project, but the actual investment was RMB597.2538 million, leading to a difference of RMB304.7262 million. An investment of RMB446.3718 million was committed to the Intelligent Service Robotics Platform and Application Product Project, but the actual investment was RMB429.4637 million, leading to a difference of RMB16.9081 million. An investment of RMB440 million was committed to the Sale and Service System Upgrade Project, but the actual investment was RMB384.133 million, leading to a difference of RMB55.867 million. The difference was mainly owing to the following facts: First, the market environment changed during implementation of the fund-raising projects. Some expenditure items were thus adjusted on the premise of guaranteeing the project quality; second, the Company acted strictly upon the rules on use of raised funds, and used the money prudently on the principles of reasonableness, effectiveness and frugality. This helped to better control the spending and saved the money. | |
| Purpose and direction of the raised funds not used yet | Applicable |
| The Company held the 12th Meeting of the Fifth Board of Directors and the Eighth Meeting of the Fifth Board of Supervisors on 18 April 2021, as well as the Annual General Meeting for 2020 on 10 May 2021, which reviewed and approved the Proposal on the Closing of Fund-raising Projects and Permanent Replenishment of the Working Capital with the Surplus. Given the fact that all the projects for raising funds from non-public offering of stocks in 2019 have been closed as planned, it was approved that the Company could spend the surplus raised funds of RMB427.6347 million (including interest income and proceeds from cash management) in permanently replenishing the working capital (the actual amount was subject to the balance of the said account of raised funds on the day of transfer into the own capital account. It was RMB428.854 million) for the purpose of bringing the fund use efficiency to the fullest. Please see the Announcement on the Closing of Fund-raising Projects and Permanent Replenishment of the Working Capital with the Surplus dated 20 April 2021 for details. The Company has transferred all the surplus money (including interest income) in the said accounts of raised funds into its general settlement accounts for permanent replenishment of the working capital. As of 8 July 2021, the Company has gone through all the procedures of canceling the special accounts of raised funds, and terminated the relevant Tripartite Escrow Agreement of Raised Funds and the Quadripartite Escrow Agreement of Raised Funds. Please see the Announcement on the Cancellation of Special Accounts of Funds Raised from Non-public Offering of Stocks in 2019 dated 8 July 2021 for details. | |
| Problems in use and disclosure of the raised funds or | Not applicable |
(3) Change in projects using the raised funds
□ Applicable √ Not applicable
No raised fund changed its relevant project during the reporting period.
VIII. Significant Asset and Share Sales
1. Significant asset sales
□ Applicable √ Not applicable
The Company did not sell significant assets during the reporting period.
2. Significant share sales
□ Applicable √ Not applicable
IX. Analysis of Major Controlled or Equity-participating Companies
√ Applicable □ Not applicable
Major subsidiaries and equity-participating companies influencing the Company's net profit by more than 10%
Unit: RMB
other notesCompany name
| Company name | Type | Principal business | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| iFLYTEK Intelligent System Co., Ltd. | Subsidiary | Education, software development, and information engineering | 406,000,000.00 | 8,619,742,404.83 | 2,181,191,335.98 | 5,254,255,798.35 | 220,194,964.97 | 279,072,478.16 |
| iFLYTEK South China Co., Ltd. | Subsidiary | Software development | 150,000,000.00 | 2,376,188,612.31 | 1,508,484,422.80 | 687,020,365.15 | 289,815,731.64 | 267,802,186.91 |
| Anhui Zhixue Technology Co., Ltd. | Subsidiary | Software development | 100,000,000.00 | 864,104,279.73 | 598,516,641.03 | 736,536,323.86 | 215,135,053.65 | 193,443,695.86 |
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not applicable
| Company name | Method of acquisition and disposal of subsidiaries during the reporting period | Influence on overall production and operation and performance |
| Anhui iFLYTEK Zhiyue Technology Co., Ltd. | Loss of control | 5,317,431.48 |
X. Structured Entities Controlled by the Company
□ Applicable √ Not applicable
XI. Outlook for the Company's Future Developmenti. Future development planMission and vision statementiFLYTEK has the mission of "empowering machine to listen and speak and to understand and think, creatinga better world with artificial intelligence". All the employees are working hard toward the well-defined vision andclear indicators which are founded on the mission. When breaking the RMB2.5 billion mark in 2015 operatingrevenue, the Company made public its "near-, mid-, and long-term vision" on 8 August 2016. Near term: becomea leader in the speech industry and a pioneer in the AI industry, and increase operating revenue to RMB10 billionand market capitalization to RMB100 billion; mid-term: to become a leader in China's AI industry and a builder ofthe industry's ecosystem, connecting one billion users and realizing RMB100 billion in operating revenue;long-term: become a leader in the global AI industry and a great enterprise that creates a better world with AI.The near-term vision of "becoming a leader in the speech industry and a pioneer in the AI industry, andincreasing operating revenue to RMB10 billion and market capitalization to RMB100 billion" has successfullycome true in 2019; on this basis, in 2021, the first year of the 14th Five-Year Plan period, the Company made clearthe goal of "AI 2.0", striving to "become a leader in China's AI industry, connecting one billion users and realizingRMB100 billion in operating revenue and RMB1 trillion in ecosystem" during the 14th Five-Year Plan period.The Company is currently progressing toward this goal smoothly. At the beginning of 2022, the Companyofficially released the "iFLYTEK Super Brain 2030 Program", as a move to the long-term vision of "becoming aleader in the global AI industry".The iFLYTEK Super Brain 2030 Program will guide the path for the Company's medium- and long-termtechnological advancement and product development, and shape a cognitive intelligence based complexintelligent system with human-machine collaboration and self-evolution. That is, empower machine to surpasshumans in perception, have a deep understanding of knowledge in a specific field, and continuously evolve on anindependent basis; empower machine to perceive people and the environment in all aspects, learn all kinds ofknowledge, have general knowledge and emotion, move flexibly, and express in multiple dimensions, thuscreating a complex intelligent system with sustainable and independent evolution, and introducing companionrobots into households to benefit people's lives.
Timetable for and milestones of the Company's long-term visionThe Company makes an objective and clear vision, with a specified timetable and regularly updatedmilestones. Three milestones have been set for the iFLYTEK Super Brain 2030 Program: in the first stage(2022-2023), the Company will launch robots that integrate software and hardware, such as interactive companionpets and bionic robot dogs with motion, as well as the family of professional virtual humans to serve as teachersand doctors, etc.; in the second stage (2023-2025), the Company will launch walking exoskeleton robots and thefamily of companion virtual humans. The elderly can walk and exercise normally with the exoskeleton robot. Inthe meanwhile, the Company will launch a depression screening platform for teenagers; in the third stage
(2025-2030), the Company will roll out companion robots that have knowledge and know how to study and thefamily of independent-learning virtual humans for families.
Path for realizing the Company's visionThanks to development in the past 20-plus years, iFLYTEK has extended its technological footprint fromspeech to a majority of AI research fields. As an industry leader in voice, image, natural language understanding,machines' cognitive and reasoning ability, and multi-lingual, multi-modal HMI, the Company is working on deepintegration of key technologies across the innovation chains and introduction of a full set of chains for unhinderedproduct launch and application to figure out major social issues and rigid social demands in a more systematicway."Base area business" and "systematic innovation" are the core logic behind the Company's endeavors towardits mid-term vision of "realizing RMB100 billion in operating revenue". In terms of "base area business", theCompany will address rigid demands in social areas and areas relating to people's livelihoods with AI throughlinkage of three tiers (G, B and C ends), and generate sustainable revenue in disregard of the economic cycle.Along the path for realizing the vision, the Company will solve major social issues through "systematicinnovation": to put key and core technological achievements into application by filling up the technological gap;deeply integrate key technologies on the innovation chains to stimulate innovation ability; systematically analyzeand turn major social issues into scientific issues."Base area business" and "systematic innovation", the two core engines to support the rapid growth ofiFLYTEK's business results, will inform its operations management and strategic moves in the next five years.Systematic innovation has forged an increasingly solid core competitiveness and brand-new competition barriersat iFLYTEK, guiding the Company onto a fresh stage that leads to the future and ushering it into a new chapter ofdevelopment.ii. Operations management plan for 2022In 2022, the Company will still follow the indomitable development strategy:
For one, the Company will retain its leadership in core technology, ensure the actual business applicationwith core technology that is top tier around the world, and continue to forge technological barriers and leadingadvantages; for two, the Company will actively promote large-scale application of AI related technologies, andwork for deep integration of AI technology with many industries and multiple areas, so that the industrialecosystem can sustain and prosper.
Stick to the industrial development strategy of “platforms + tracks”:
Based on the AI Open Platform of iFLYTEK, an ecosystem of the AI industry has taken initial shape at theCompany, and the open platform ecosystem service system has become an important element of the Company'sstrategy. The open platform will continue to empower developers, build a closed-loop ecosystem with continuous
iterations, realize inner and extended growth in a sustainable manner through technological empowerment, andjoin partners in achieving win-win business outcomes and creating a healthy, prosperous open ecosystem.In terms of track, the Company's base area business has formed the standard of "benign dependence on users,long-term business capability, sustainable growth potential and value of setting an example in the industry", and itwill enter the harvest period, and forge sustainable development and long-term profit-making capabilities. In faceof the opportunity endowed by the AI era, the Company will maintain the development momentum, continuouslyintegrate resources to improve the strategic execution efficiency of key business directions, and orderly promotethe large-scale application of AI in various industries. In key fields such as consumers, education, and health, theCompany will, underpinned by the three-in-one combination of core AI technology, application data and field,continue to sharpen its edges in tackling rigid demands and forging intergenerational differences, build a base areafor business with high growth potential, work to address rigid social demands with innovative advantages, andmake AI a source of bringing benefits to the society and fueling the continuous growth of its business results.To meet the urgent demand of high-growth business clusters in the AI industry for space, iFLYTEK haskicked off the construction of an AI R&D and production base for higher-quality, larger-scale development.Technology research and business development plansConsistent with the development plan, the Company has devised the business plans in technical research andbusiness development in 2022 as follows:
Core technology research plan: pursue innovation in core technology at the source, continuously increaseinputs in core technology in the fields of intelligent speech, machine translation, natural language understanding,image recognition, image understanding, knowledge map, knowledge discovery, and machine reasoning, etc., andcontinuously lead the core AI technology by deepening research and expanding technical boundaries; continue tomake breakthrough in key technologies, including unsupervised learning and interpretable learning, and activelyprepare for working in such forward-looking research directions as virtual humans, robots integrating softwareand hardware, and brain science; scientifically analyze major social issues such as education and health,continuously strengthen the technological moat, and build differentiated advantages; strive to be a leader not onlyin technology but also in product, allow "core technology to support core product and core product to supportsolutions", and sustain the rapid development of products in education, health, consumers, cities, and automobiles,guaranteeing the realization of the goal of "creating a better world with artificial intelligence" with powerful coretechnology.
Business development plan
Education business: further cement the platform capabilities and work for the integration of products andresults; make wider presence in high-quality areas and schools, and continuously improve the efficiency of and ITapplication in education and teaching through the solution of "teaching according to students' abilities"; based onthe product value of individualized learning, further promote the business model of in-depth operation aroundteachers and student users, and increase the business revenue.
Consumer business: actively accommodate to the interactive demand in the field of intelligent hardware, relyon the international leading core AI technology of iFLYTEK to continuously refresh the interactive experience inhardware scenarios, accelerate the industrial layout among individual consumers, entrepreneurs and all types ofusers, keep on conducting optimizations and iterations, improve user experience, further strengthen channels,increase traffic of private domains in marketing, reach more and increase end users in scale.
Healthcare business: maintain the leading edge in assisting diagnosis and treatment at the community level,continuously promote the in-depth application of AI technology in health, duplicate and promote AI-aideddiagnosis and treatment in the rest of the country for higher work efficiency and service ability of medical staff,
and accelerate the layout and large-scale application of iFLYTEK Smart Medical Assistant in community-basedmedical institutions; explore new business models, including AI-powered chronic disease management, andmedical insurance cost control.Smart city business: utilize core AI technology at the source to continuously improve the "urban super brain"centered novel and integrated solution for smart cities, and actively participate in the program design andconstruction of smart cities based on technological accumulation and large-scale applications in the past, to meetthe demand of "digital economy". Closely follow the application requirements of political and legal authorities,and actively expand the in-depth application of intelligent speech and AI technology in the fields of justice andpublic security.
iFLYTEK will further enhance its international leading edge in core technology, strengthen and consolidateproduct and market advantages, and guide the AI industry onto a faster growth track. Through "base areabusiness" and "systematic innovation", the Company will empower the development of education, health andother fields which is required by major national strategies with AI, and work to serve people's lives with theapplication of innovative technological products and create a better world with AI.iii. Risk Exposures of the Company and ResponsesThe Company insists on returning to value creation and standardized operation, carefully identifies variousrisks, and actively takes actions to shun and mitigate risks.
1. Macro-economic risks
At present, the international landscape is quite complicated, geopolitical conflicts such as the Russia-UkraineWar continue to interweave with other risks, and the uncertainty of the macro-economic environment furtherincreases. The Company will strengthen technological innovation at the source in a down-to-earth manner,constantly promote the business and product applications that address rigid demands and feature intergenerationaldifferences, and actively sharpen the ability to develop not affected by the economic cycle. In amacro-environment of aging population and declining birth rate, the transition from demographic dividend totalent dividend and then to AI application dividend will define the trend of industrial development. The Companywill continue to address the rigid social needs with innovative strength, and make AI a source of bringing benefitsto the society and fueling the continuous growth of its business results.
2. COVID-19 risks
The COVID-19 pandemic is still lingering globally, with flare-ups at home and abroad. If lost control, thevirus may have a great impact on the Company's marketing and on-site delivery. The Company will contain thevirus with unremitting efforts, make endeavors to protect the health of employees, keep a close watch on thepandemic development, carefully assess its impact on operations, and fight actively against the disease tominimize its negative impact. iFLYTEK will contribute its share to the pandemic response, utilizing itsinternational leading core AI technology. The pandemic also highlights the rigid demand of deep integration of AIplus Internet with education and health, and provides the Company with the opportunity of strengthening itsunderstanding of customers in education, health and smart city, among others, which will build a soundapplication foundation, justification and demonstration for the long-term development of the Company's relatedbusiness.
3. Business innovation risks
To seize the opportunity in the AI industry and cater to the need for rapid advances of technology in theindustry, companies are increasing R&D inputs for the development of new technologies and new products.However, there are many uncertainties over the industrial and market-oriented application of technology. If theR&D inputs cannot get the expected results, that may threaten the profitability and growth of the Company. Faced
with the above risks, the Company will pursue the two growth engines of "systematic innovation + base areabusiness". Specifically, it will leverage the solid R&D power in core AI technology, carry forward with businessinnovation and mitigate exploration risks based on the base area business of "benign dependence on users,long-term business capability, sustainable growth potential and value of setting an example in the industry".
XII. Researches, Communications and Interviews Received during the Reporting Period
√ Applicable □ Not applicable
| Date | Location | Reception | Type of visitors | Visitors | Main content of talks and materials provided | Index to basic information on the researches |
| 26 February 2021 | Beijing Headquarters of iFLYTEK | Field research | Institution | Bian Guangjie of Gfund, Zhu Xiang of Orient Fund, Ping Shuyu of Zheshang Fund, Yang Haida of Great Wall Wealth IAMC, Deng Zuming of Purekind Fund, Wang Hao of Yinhua Fund, Li Yaxin of Sinosafe Assets, Zheng Xiangchun of ZYYL AMC, Jin Feng of Bohai Fund, Guo Ruijian of Dunhe Foundation, Geng Jinwen of Xinhua Assets, Du Hao of Jinying Fund, Chen Chaoyang of Xinhua Assets, Yang Benhong of Industrial Securities, Wu Mingyuan of Industrial Securities, Bai Jiayi of Southwest R&D, Jiang Yaokun of Dongwu Fund, Wang Xiaoqiang of Founder Fund, Sun Guanqiu of Fengpei fUND, Qian Dongbiao of Fuanda Fund, Tian Yu of Guanshi AMC, Lu Yuheng of Hanye Investment, Lu Xujuan of Hengsheng Fund, Fan Weijun of HuaAn Fund, Chu Tian of China Future Capital, Xu Ben of HSBC Group Management, Du Hao of Jinying Fund, Wise Lui of Kingtower AMC, Lv Weizhi of Kingtower AMC, Wu Xin, Li Jian and Huang Qun of Jun Tang AMC, Yang Yushan of Smile Stone, Liang Guozhu of ABC-CA Fund Management, Hao Xudong of Lord Abbett China AMC, Hu Zhiwei of Lord Abbett China AMC, Xiong Yu of Qianhai Alliance Asset Management, He Tianxiang of Rong Tong Fund, Tang Qian of Ruiyuan Fund, Tao Junfeng of Southwest R&D, Zhao Feng of Taiping AMC, Tan Linglan of Southwest R&D, Tian Wen of Southwest R&D, Xu Yidan of Southwest R&D, Xu Zhe of Southwest R&D, Yang Zhenyu of Southwest R&D, Zhu Bin of Southwest R&D, Lei Yacong of Southwest Securities, Wang Xiangjie of Southwest Securities, Zeng Guofu of First State Cinda Fund, Lu Shijie of Industrial Global Fund, Du Caiming of E Fund, Jiang Yifei of Yiqinginghui AMC, Shen Yufei of Galaxy Asset, Zhang Bing of Yingfeng Capital, Pu Renjie of Orvibo, Wang Jiaqi of BOC Investment | Intelligent hardware sales, planning on health products, competitive barriers of the Company, and regional promotion of the initiative of teaching according to students' abilities | (http://rs.p5w.net/c/002230) 20210228 Please see the IR Management Files of iFLYTEK dated 28 February 2021 on the IR Interactions Platform (http://rs.p5w.net/c/002230) for details. |
| Management, Ouyang Lijun of BOC Investment Management, Xu Yidan of Southwest Securities, Ma Zhihao of Stoneylake Asset, Zhao Wanjia of Shennong Capital, Chen Yu of Shennong Capital, Zhang Lei of Tianhong Asset Management, Chen Jianbo of CQ Capital, Sun Yujiao of Life Insurance, Zhong Xin of Ren Bridge Fund, Chen Meng of Western Leadbank FMC, Zhu Dengke of Shanghai Dingtian Investment, Gary Ng of Samsung Asset Management, Wu Zhiwen of KGI SITE, Xie Tianling of Capital Fund, Wu Binghuan of Fubon Securities, Chen Minghui of Shenzhen ORVIBO Investment Management Co., Ltd., Zhai Shiming of Shenzhen ORVIBO Investment Management Co., Ltd., Huang Xin of PICC AMC, Qi Chenfu of PICC AMC, Sun Qiubo of PICC AMC, Huang Haipei of PICC AMC, and Wang Gaowei of PICC AMC | ||||||
| 04 March 2021 | Beijing Headquarters of iFLYTEK, and Hefei Headquarters of iFLYTEK | Field research | Institution | Gao Xiaoxiao of Broad Fund, Jing Shuguang of China Securities, Xu Bo of China Securities, Feng Da of CICC, Tian Peng of CICC, Luo Yichao of CITIC AMC, Gao Zhenxiao of Industrial Securities, Jiang Yanglei of Topsperity Securities, Wang Zuozhou of Topsperity Securities, Yang Yanyu of Guokai Securities, Wang Yifei of Guokai Securities, Zheng Rentao of Founder Fubon Fund, Li Jia of Hao Ze Zhi Yuan (Beijing) Investment Management Co., Ltd., Yu Chenglong of Haitong Securities, Zhao Zian of Shanghai Yueqiu Investment Co., Ltd., Zhang Jiawei of Shanghai Yace Investment Management Co., Ltd., Fang Yunlong of Beijing Hongdao Investment Management Co., Ltd., Yuan Chao of China United Insurance Group, Zhang Zhang of Hua Chuang Securities, Zhao Xuyang of Yongrui Wealth, Wang Jiawei of Yihui Investment, Yu Jingwen of Botong Investment, Wang Qiyu of GF AMC, Cui Wei of China Life AMC, Li Lei of ICBC Credit Suisse AMC, Wu Tong of Shanxi Securities, Zhao Gaoshang of Fundamental & Beyond AMC, Xie Weiyu of BOCOM International Trust, Feng Pin of GF Fund, Zhang Mingyu of Dongfanghong AMC, Guo Leying of Guangdong Cherami Sunon Securities Investment Management Co., Ltd., Li Aoyuan of GF Securities, Wang Xiaole of GF Securities, Wang Shuwei of Huamei International Investment Group, Zhou Jiansheng of Nuode Fund, Yan Li of Yixinan AMC, and Ding Zhiguo of Xiangbai Fund | Rotating president, barriers to smart education, planning on health products, and intelligent hardware | (http://rs.p5w.net/c/002230) 20210304 Please see the IR Management Files of iFLYTEK dated 04 March 2021 on the IR Interactions Platform (http://rs.p5w.net/c/002230) for details. |
| 20 April 2021 | Shenzhen Stock Exchange | Field research | Institution & Individu | 579 investors attended on the spot (170 investors) or via IFLYREC (409 investors). | Exhibition hall on the cloud to virtually | (http://rs.p5w.net/c/002230) |
| al | visit the AI Exploration Hall of iFLYTEK and hear the presentation on the Company's business results in 2020; influence of education policies; the vision for increasing operating revenue to RMB100 billion; vehicle-mounted business; planning on business in the Greater Bay area; business results; Learning Pad and smart notebook; internal organizational framework; and consumer side of education | 20210422 Please see the Performance Briefings and Road Show Information of iFLYTEK dated 22 April 2021 on the IR Interactions Platform (http://rs.p5w.net/c/002230) for details. | ||||
| 25 August 2021 | Beijing Headquarters of | Field research | Institution & Individu | The results briefing was open to all the investors and friends who cared about the development of iFLYTEK and the AI industry. It was held virtually via iFLYREC and broadcast via | The Report on Business Performanc | (http://rs.p5w.net/c/002230) |
| iFLYTEK, and Hefei Headquarters of iFLYTEK | al | live video streaming on p5w.net and egsea.com. By incomplete statistics, the results briefing attracted more than 413,500 participants. Where, 318 investors attended via iFLYREC (the number of those investors who attended using their nicknames was not counted); the number of investors who attended the live streaming session was 82,182 on p5w.net and over 331,000 on egsea.com. | e in 1H2021; the faster growth of operating revenue from education business; the influence of the education policy "double reduction" on the Company's business; the changes in gross profit margin in 1H; the planning on development of health business; the development of platform-based business model | 20210826 Please see the Performance Briefings and Road Show Information of iFLYTEK dated 26 August 2021 on the IR Interactions Platform (http://rs.p5w.net/c/002230) for details. | ||
| 28 October 2021 | Beijing Headquarters of iFLYTEK, and Hefei Headquarters of iFLYTEK | Field research | Institution & Individual | The results briefing was open to all the investors and friends who cared about the development of iFLYTEK and the AI industry. It was held virtually via iFLYREC and broadcast via live video streaming on p5w.net. By incomplete statistics, the results briefing attracted more than 110,000 participants. Where, the number of investors who attended the live streaming session was 110,593 on p5w.net; 112 investors attended via iFLYREC. | The Report on Business Performance in 3Q2021; the influence of the education policy "double reduction" on the Company's | (http://rs.p5w.net/c/002230) 20211028 Please see the Performance Briefings and Road Show Information of iFLYTEK dated 28 October 2021 on the IR |
| business; interpretations of gross profit margin figure; intelligent hardware of consumer business; the strategic planning on Harmony ecosystem and Open Platform 2.0; and the planning on development of health business | Interactions Platform (http://rs.p5w.net/c/002230) for details. |
Section IV Corporate GovernanceI. Basic Overview
Complying fully to regulated development, iFLYTEK has always strictly abided by the laws, administrativerules and regulations and regulatory documents in its operations, including the Company Law of the People’sRepublic of China, Securities Law of the People’s Republic of China, China Securities Regulatory Commission’s(CSRC) related regulations, Rules Governing the Listing of Shares on Shenzhen Stock Exchange and Guidelines ofShenzhen Stock Exchange for Self-discipline Regulation of Listed Companies No. 1: Regulated Operations ofCompanies Listed on the Main Board. Furthermore, the Company has been continuously optimizing itsgovernance while striving to build a modern business system and actively empowering its governance with AI.The Company continues to perfect its governance and all the rules and regulations for internal control. It isstrengthening its information disclosure and actively managing its investor relations while maintaining itsregulated operations.(i) Due diligence and compliance to enhance the listed company’s qualityThe Company’s governing body remained diligent in enforcing compliance, while its shareholders’ generalmeeting, Board of Directors, Board of Supervisors and senior management were running normally in 2021.According to statistical data from Easy Board, a Chinese AI-powered compliance-service platform, the number oftimes that iFLYTEK held shareholders’, Board of Directors’ and Board of Supervisors’ meetings in 2021 washigher than the industrial and market means. The corporate governance information during the reporting periodwas updated below:
1. The shareholders and shareholders’ general meetings: The Company has formulated and fully implementsthe Rules of Procedure for the Shareholders’ General Meetings. During the reporting period, the Company heldfour shareholders’ general meetings, whose calling, convening, voting, drafting of resolutions and disclosure allcomplied with the laws and regulations and the rules stipulated in regulatory documents. The shareholders’general meetings adopted both on-site and online voting to fully safeguard shareholders’ legal rights, particularlythose of non-significant shareholders. Solicitors also witnessed the meetings and compiled Legal Opinions. Theyalso confirmed that the meetings’ calling, convening, attendants, conveners and voting procedure and results allsatisfied the Company Law, Rules of Shareholders’ General Meetings and Articles of Association, making theresolutions legal and effective.
2. The Board of Directors and its members: The Company has formulated and fully implements the Rules ofProcedure for the Board of Directors, Implementation Rules of the Special Committees of the Board of Directorsand Detailed Work Rules of Independent Directors. during the reporting period, the Company held 13 Board ofDirectors’ meetings, which decided on major issues, while the independent directors all expressed independentopinions on major decisions and issues of the Company. In line with the laws and regulations, regulatorydocuments and company rules concerned, the Board of Directors has been working diligently and playing anactive role. It has guided the ongoing and healthy development of the Company with rational decisions and iscommitted to repaying the investors with growth and results. The Company especially respects and gives play tothe roles of the independent directors and the special committee of the Board of Directors, which diversify theknowledge structure of the board and in turn ensure rational decision-making. During the reporting period, theSpecial Committees of the Board of Directors held 13 meetings and gave fully play to the professionalism and
effectiveness of the board’s operations. In 2021, iFLYTEK’s Board of Directors was named “Best Board ofDirectors” by the Securities Times, a national financial newspaper in China, and won the “Golden Round-TableAward” from Directors & Boards, a Chinese magazine. Moreover, iFLYTEK’s Board of Directors Office wasnominated as the “Best Example of Board of Directors Office of Listed Companies” by the China Association forPublic Companies (CAPCO), making it the only non-“zhongzitou” company among the top ten nominees. Theoffice has also been selected as an outstanding model example – one of the only two in China.
3. The Board of Supervisors and its members: The Company has formulated and fully implements the Rulesof Procedure for the Board of Supervisors. During the reporting period, the Company held nine Board ofSupervisors’ meetings, which fully monitored, reviewed and supervised the Company’s operations and activelyparticipated in the making of business decisions. Special financial management and internal checks were launched.Meanwhile, with its multi-approach and dimensional monitoring and a sound discussion mechanism, the boardwas able to fully monitor, review and check the Company’s business management, finances, internal control andrelated-party transactions. It assumed fully the responsibility to safeguard the rights of the shareholders whilepromoting the Company’s ongoing and healthy development. The monitoring approaches and aspects primarilyincluded: 1) off-site checks of the Company’s operations in conformity with legal provisions; 2) on-site checks ofthe Company’s finances and regular report reviews; 3) internal-control checks; 4) special checks on related-partytransactions; 5) special checks on the use of the raised funds; 6) special investigation of major issues andstrategies of the Company; 7) the setting up of special appointments with the Company’s Chairman of the Board,president and other senior managers at the regular reporting meetings to communicate face-to-face and understandthe key concerns of the Company; and 8) checking the recipients of the Company’s stock ownership incentiveplan. The Board of Supervisors actively exercised its supervisory functions and powers within the scope of powerentrusted by the Corporate Law, Articles of Association and the shareholders’ general meetings. All thesupervisors were present at every shareholders’ meeting as non-voting attendees and monitored the voting. Theyalso observed the meetings held by the Board of Directors to safeguard the legal rights of the Company and itsshareholders and creditors.
4. The president and management: The Company has formulated and fully implements the Detailed WorkRules of the President. During the reporting period, the Company held 25 president’s working meetings, while themanagement diligently fulfilled all its duties entrusted by the Board of Directors. A corporate-governancestructure, comprising shareholders’ general meetings, the Board of Directors, Board of Supervisors andmanagement, which is discrete and mutually constraining was thus formed. This ensures the Company’s regulatedoperations as each component attends to its own duties and assumes its own responsibility within the scope of itsrespective authority. Before the convening of each biannual or annual Board of Directors meeting, iFLYTEK hasalways insisted that the management formally responds and discusses the handling of issues that the Board ofDirectors had raised in the previous biannual or annual meeting, so as to ensure the effective execution of theboard’s decisions.
5. Significant shareholder and actual controllers: The Company’s business, personnel, assets, organization andfinances are independent of the actual controllers that have always given top priority to fostering the awareness ofregulated operations and development. They strictly observe the laws, administrative rules and regulations andregulatory documents concerning actual controllers, including the CSRC’s related regulations, Rules Governingthe Listing of Shares on Shenzhen Stock Exchange and Guidelines of Shenzhen Stock Exchange for Self-disciplineRegulation of Listed Companies No. 1: Regulated Operations of Companies Listed on the Main Board.Furthermore, they fully guarantee that there is no horizontal competition, misappropriation of the Company’sfunds or jeopardizing the Company’s interests, especially those of small and minority shareholders.
6. Information disclosure and transparency: The Company has always attached great importance to
information disclosure and continues to improve its information transparency. It protects the interests of itsinvestors by ensuring that the disclosed information is authentic, timely, accurate, complete, fair, legal andregulated. The Company demonstrates its driving force through full, timely and effective information disclosure,which also strongly supports the management of its investor relations and the safeguarding of investors’ rights.The Company discloses information in strict compliance with the laws, administrative rules and regulations andregulatory documents, including the Rules Governing the Listing of Shares on Shenzhen Stock Exchange andGuidelines of Shenzhen Stock Exchange for Self-discipline Regulation of Listed Companies No. 1: RegulatedOperations of Companies Listed on the Main Board, as well as the Company’s Management System forInformation Disclosure. The Company disclosed and published a total of 197 documents in 2021, amounting to
1.8466 million words. The Company has always maintained accurate and prompt information communicationwith the capital market. By providing an open channel for the management of investor relations and thesafeguarding of investors’ rights, the Company hopes to truly help investors with value-investing ideals. 2021marked the 13
th year since iFLYTEK became listed and the 13
thconsecutive year as the Company’s informationdisclosure continued to be evaluated as outstanding by the Shenzhen Stock Exchange. The Shenzhen StockExchange pointed out especially in its 2020 Evaluation List of Information Disclosure by Companies Listed on theShenzhen Stock Exchange that “companies including iFLYTEK have been receiving an A in their evaluation forover ten consecutive years and serve as exemplary models”. According to statistics, among all the companieslisted on the main board of the Shenzhen Stock Exchange, including those previously listed on the small andmedium enterprise board, only nine companies have received an outstanding evaluation for 13 consecutive years,that is, only 0.60%.
7. The management of investor relations and the protection of investors’ rights: The Company has alwaysstrictly followed the rules stipulated in the Management Rules of Investor Relations. It continues to strengthen itsinformation communication with investors and hold investor events, so as to help investors learn more about andunderstand the Company and invest rationally. The Company also helps investors learn fully about its operationsand development through receiving visits from individual and institutional investors, press interviews with itsmanagement and participation in strategy meetings. Since becoming listed 13 years ago, the Company has alwaysdistributed dividends every year, allowing investors to share the Company’s growth and development and offeringits shareholders long-term returns with solid business achievements. The Company’s operating revenue grew by70-fold between its listing in 2008 and 2021, while the net profit attributable to equity shareholders rose by21-fold. The Company is also the only A-share listed company to achieve a consecutive annual revenue growththat exceeded 25% for the last decade. In 2021, iFLYTEK worked diligently to set the example of annualperformance briefings and was named the “Best Example of Performance Briefings by Listed Companies in 2020”by CAPCO. The Company’s investor-relations efforts were also honored with awards such as “Best InvestorRelations” by the Securities Times, “Outstanding IR Business” of the gold prize for investor relations bywww.p5w.net, “Outstanding IR Team” and “Outstanding IR Company” by www.chnfund.com.
8. Performance evaluation and incentive and restraint mechanism: Upholding the core value of “helpingemployees to achieve ideals and creating value for society”, the Company remains focused on its long-termdevelopment and individual internal needs, even as it designed its performance evaluation and incentive andrestraint mechanism. The appointment of the Company’s senior management members has always been open andtransparent and the emoluments are verified by the emolument board and approved by the Board of Directors andshareholders’ general meetings. Moreover, based on its business operations, the Company has built a soundperformance-evaluation system and an incentive and restraint mechanism that ensure its healthy development.Focusing on business development and personal growth, the Company continues to improve structural division,talent training and the training system. The Company has launched diverse talent-fostering programmes that
combine employee growth with business development, so both the Company and its employees may succeedtogether.
(ii) AI-empowered corporate governance innovationBuilding upon its internationally leading core AI technology, iFLYTEK actively applies AI to corporategovernance.In conjunction with the requirements of corporate governance and standardized internal control,iFLYTEK has systematized and normalized its governance and risk control and management with the help ofAI and big data. In terms of actual execution, when making major internal business decisions, the Companyuses iFLYREC to help the shareholders’ general meeting, the Board of Directors, the Board of Supervisorsand the senior management make big decisions, including the decision making on major issues, theappointment and dismissal of key executives, the decision making on important investments and the use oflarge funds. The meetings are fully recorded, allowing tracking and management and avoiding regulatoryrisks. iFLYREC remotely connects the Board of Directors, Board of Supervisors and investors “face to face”,
allowing them to share and view PowerPoint presentations and conference materials and voice their opinions. Thisovercomes the spatial limitations of conference participation and communication and enhances the efficiency ofcorporate governance. The Company pools together information and data from different internal systems and isable to automate most of the internal-control processes with the help of risk models and algorithm, making themmore targeted, efficient and smarter. For example, iFLYTEK’s reimbursement robot can conduct independentinternal checks with the help of AI and eliminate fake and illegal invoices. The advantage of fully quantitativereviews both respect employees’ self-discipline and systematically avoids potential risks. The digital auditing fullycovers the self-service reimbursement and automatically identifies problems, making it a relativelywell-developed personal reimbursement system.
(iii) The deeply engrained standardized corporate governance is widely recognizediFLYTEK is committed to being a listed company that operates in strict accordance with the regulations, andits corporate governance and regulated operations have received the unanimous approval of regulatory authorities,CAPCO and all sectors of society.
Since its listing in 2008, iFLYTEK has always received an evaluation score of A for information disclosureeach year.iFLYTEK’s Board of Directors and Board of Supervisors have been nominated as the “Best Example ofBoard of Directors Office of Listed Companies” and the “Best Example of Board of Supervisors of ListedCompanies” by CAPCO. They are also both the only ones among those from the top ten listed private companiesto be selected as outstanding model examples.iFLYTEK has been named the “Most Respected Listed Company by Investors” in a “Most Respected ListedCompany by Investors” nomination event organized by CAPCO, the Shenzhen Stock Exchange and the ShanghaiStock Exchange.
In 2021, the Company was presented with honors such as “the best listed company” by New Fortune, aChinese magazine; the “Golden Bull’s Award for Most Worthy of Investment” by the China Securities Journal;the “Star Company with Ongoing Investment Value” by Chinese Securities Journal; “TOP Growth Potential ofthe Golden Company List” by China’s Snowball Finance; and “China’s Reputable Listed Company” by China’sNational Business Daily.
Does the Company’s actual corporate governance deviate significantly from the laws, administrative rulesand regulations and the CSRC’s rules concerning the governance of listed companies?
□ Yes √ No
The Company’s actual corporate governance does not deviate significantly from the laws, administrative rules andregulations and the CSRC’s rules concerning the governance of listed companies.
II. How the Company Ensures its Assets, Personnel, Finances, Organization and Business areIndependent of its Controlling Shareholders and Actual ControllersThe Company owns fully its independent business and possesses the capacity to operate independently. Itensures its assets, personnel, finances, organization and business are independent of the actual controllers.
1. Asset independence
The actual controllers of the Company are Mr. Liu Qingfeng and his actors in concert, USTC Holdings Co.,Ltd. Their assets are strictly separated from those of iFLYTEK and there has been no misappropriation ofCompany assets. There has also been no misappropriation of Company assets by the Company’s other significantshareholders. The Company also does not provide guarantees for individuals, its shareholders or any otherbusiness they control with its assets, rights or credibility; there is no exploitation by its shareholders or theiraffiliated parties. The Company holds complete and full proof of title to its assets, including its property, land-userights, main production and operational equipment, trademarks and software copyright, and no legal disputes orpotential disputes exist.
2. Personnel independence
The Company’s directors, supervisors and senior management members are elected in strict accordance with theCompany Law, Articles of Association and the rules of procedure for shareholders’ general meetings and theBoard of Directors. No senior management members of the Company have assumed non-directorial orsupervisory roles in other businesses belonging to or controlled by the Company’s actual controllers. All thesenior management members receive their emoluments from the Company and not from the actual controllersand/or other businesses they control. The Company has an independent and comprehensive human-resourcesmanagement system and has devised independent and related systems, including the Rules for the Management ofRecruitment Contracts, Rules for the Management of Human-Resources Files, Rules for Training Management,Rules for the Management of Salary Payment, Measures for the Management of Employee Performance, Rules forthe Management of Attendance Records, Rules for the Management of Benefits and Rules for the Management ofRecruitment and Transfers. The Company signs independent labour contracts with employees and manages itsemployees in a systematic and standardized manner. The Company fully and independently manages its humanresources, salaries and emoluments and social benefits.
3. Financial independence
The Company has an independent financial-accounting department with independent financial accountants.Furthermore, the Company has set up independent accounting and financial-management systems and performsindependent financial decisions. The Company has independently opened up a bank account and independentlypays taxes.
4. Organizational independence
The Company has a sound and independent corporate-governance structure and has developed sound rules ofprocedure for shareholders’ general meetings, the Board of Directors, Board of Supervisors, Special Committeesof the Board of Directors, secretary to the Board of Directors and the management. Moreover, the Company hasformulated the Regulations on the Management of Controlled Subsidiaries, so that the bodies and personnelconcerned may perform their duties according to the law. The Company has built comprehensive and efficientbusiness, technical and functional departments. The setting up of the Company’s departments are independent of
its shareholders and any other units or individuals.
5. Business independence
The Company is independently engaged in the development and sales of software and possessescomprehensives systems for business, development and design, project control, procurement, finances and qualitycontrol. The Company is capable of independently launching its business on the market. No horizontalcompetition exists between the Company and its actual controllers and/or significant shareholders. Wheretransactions with the Company’s actual controllers, significant shareholders and related parties do take place, theCompany strictly follows the review and information-disclosure procedures in accordance with the regulatoryrules, and there is no jeopardizing the interests of the Company, especially those of non-significant shareholders.III. Horizontal Competition
□ Applicable √ Not applicable
IV. Annual General Meeting and Extraordinary Shareholders’ General Meetings Convenedduring the Reporting Period
1. Shareholders’ meetings during the reporting period
| Session | Type | Investor participation | Meeting date | Disclosure date | Resolution |
| 1st extraordinary shareholders’ general meeting in 2021 | Extraordinary shareholders’ meeting | 36.80% | 03 February 2021 | 03 February 2021 | Announcement No.: 2021-015 Announcement: “Resolution Announcement of the 1st Extraordinary Shareholders’ General Meeting in 2021” Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and www.cninfo.com.cn |
| 2020 annual general meeting | Annual general meeting | 31.63% | 10 May 2021 | 10 May 2021 | Announcement No.: 2021-047 Announcement: Resolution Announcement of 2020 Annual General Meeting Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and www.cninfo.com.cn |
| 2nd extraordinary shareholders’ general meeting in 2021 | Extraordinary shareholders’ meeting | 37.22% | 13 October 2021 | 13 October 2021 | Announcement No.: 2021-082 Announcement: Resolution Announcement of the 2nd Extraordinary Shareholders’ General Meeting in 2021 Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and www.cninfo.com.cn |
| 3rd extraordinary shareholders’ general meeting in 2021 | Extraordinary shareholders’ meeting | 32.77% | 2021年11月26日 26 November 2021 | 2021年11月26日 26 November 2021 | Announcement No.: 2021-097 Announcement: Resolution Announcement of the 3rd Extraordinary Shareholders’ General Meeting in 2021 Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and www.cninfo.com.cn |
2. Shareholders holding preference shares with restored right to vote requesting the convening ofextraordinary shareholders’ general meetings
□ Applicable √ Not applicable
V. Directors, Supervisors and Senior Management Members
1. Overview
| Name | Position | Status | Gender | Age | Term start date | Term end date | Initial no. of shares held | No. of additional shares held in current period | No. of shares no longer held in current period | Other change in shares | No. of shares held at term end | Reason for changes in share no. |
| Liu Qingfeng | Chairperson | Incumbent | Male | 48 | 13 April 2009 | 09 January 2023 | 97,851,830 | 70,401,437 | 168,253,267 | Note 1 | ||
| Liu Xin | Director | Incumbent | Male | 50 | 05 January 2013 | 09 January 2023 | ||||||
| Wang Bing | Director | Incumbent | Male | 53 | 10 January 2017 | 09 January 2023 | ||||||
| Wu Xiaoru | Director | Incumbent | Male | 49 | 10 April 2010 | 09 January 2023 | 18,033,790 | 18,033,790 | ||||
| Jiang Tao | Director, Vice President, Secretary to the Board of Directors | Incumbent | Male | 47 | 04 February 2016 | 09 January 2023 | 10,022,581 | 10,022,581 | ||||
| Director, | 49 | 23 April | 09 | 355,000 | 200,000 | 555,000 |
| Duan Dawei | Vice President | Incumbent | Male | 2018 | January 2023 | Note 2 | ||||||
| Nie Xiaolin | Director, Vice President | Incumbent | Male | 03 January 2017 | 09 January 2023 | 4,750,600 | 4,750,600 | |||||
| Zhao Xudong | Independent director | Incumbent | Male | 62 | 09 January 2020 | 09 January 2023 | ||||||
| Zhao Xijun | Independent director | Incumbent | Male | 58 | 03 February 2021 | 09 January 2023 | ||||||
| Zhao Huifang | Independent director | Incumbent | Female | 69 | 10 January 2017 | 09 January 2023 | ||||||
| Liu Jianhua | Independent director | Incumbent | 男 Male | 69 | 10 January 2017 | 09 January 2023 | ||||||
| Gao Lingling | Chairperson of the Board of Supervisors | Incumbent | Female | 59 | 05 January 2013 | 09 January 2023 | ||||||
| Zhang Lan | Supervisor | Incumbent | Female | 55 | 10 January 2017 | 09 January 2023 | 1,500 | 1,500 | ||||
| Dong Xueyan | Supervisor | Incumbent | Female | 42 | 10 January 2017 | 09 January 2023 | 157,238 | 157,238 | ||||
| Wang Hongxing | Supervisor | Incumbent | Male | 45 | 09 January 2020 | 09 January 2023 | ||||||
| Lu Xueling | Supervisor | Incumbent | Female | 32 | 18 July 2021 | 09 January 2023 | 10,000 | 10,000 | ||||
| Du Lan | Vice president | Incumbent | Female | 45 | 13 March 2016 | 09 January 2023 | 605,500 | 100,000 | 705,500 | Note 2 | ||
| Wang Ming | Financial | Incumbent | Female | 42 | 09 January | 09 January | 155,250 | 70,000 | 225,250 | Note 2 |
| controller | 2020 | 2023 | ||||||||||
| Hu Yu | Director, Vice President | Resigned | Male | 43 | 10 January 2014 | September 2021 | 13,411,052 | 13,411,052 | ||||
| Chen Tao | Director, Vice President | Resigned | Male | 48 | 10 April 2007 | 26 September 2021 | 12,999,035 | 12,999,035 | ||||
| Zhang Benzhao | Independent director | Resigned | Male | 58 | 08 January 2015 | 03 February 2021 | ||||||
| Qian Jinping | Supervisor | Resigned | Male | 36 | 09 January 2020 | 18 July 2021 | ||||||
| Total | -- | -- | -- | -- | -- | -- | 158,353,376 | 70,401,437 | 0 | 370,000 | 229,124,813 | -- |
Note 1: This is due to private placement proposed by the Company’s actual controller, Mr. Liu Qingfeng;Note 2: This is due to the Company’s employee-stock-option plans and the granting of restricted stock to beneficiaries of therestricted-stock incentive plan in 2021.
Were there dismissals of incumbent directors, supervisors and senior management members during the reportingperiod?
√ Yes □ No
Please see changes to the Company’s directors, supervisors and senior management members for details.Changes to the Company’s directors, supervisors and senior management members
√ Yes □ No
| Name | Position | Condition | Date | Reason |
| Zhang Benzhao | Independent director | End of term of office | 03 February 2021 | Had served as the Company’s independent director for six consecutive years. |
| Zhao Xijun | Independent director | Elected | 03 February 2021 | Elected as independent director following Mr. Zhang’s resignation at the end of his term. |
| Liu Qingfeng | President | Dismissed | 08 February 2021 | To allow Mr. Liu, the Chairman, to focus more on the Company’s future development strategy, building of core mechanisms and strengthening of talent training, the Company’s Board of Directors agreed to relieve him of the duty of the president following his own |
| proposal. | ||||
| Wu Xiaoru | President | Appointed | 08 February 2021 | To better enforce hierarchical management, the Company had been experimenting with rotational presidency since 2014. After the system has matured, the Company’s Chairman no longer needs to hold a current position as the president and may focus on the future. Hence, the presidency system was formally introduced after six years and two rounds of rotational presidency. Following the proposal of the Company’s Chairman, Mr. Liu, the Board of Directors agreed to relieve him of the duty of the president and has engaged Mr. Wu as the president. |
| Qian Jinping | Employee supervisor | Resigned | 18 July 2021 | Qian has taken up the position of CFO at the Company’s subsidiary holding company, Anhui iFLYTEK Healthcare Co., Ltd. To avoid interfering with his work at the Board of Supervisors, Qian resigned from his position as representative employee supervisor. |
| Lu Xueling | Employee supervisor | Elected | 18 July 2021 | Elected as employee supervisor following Mr. Qian’s resignation. |
| Hu Yu | Director | Resigned | 26 September 2021 | Mr. Hu has resigned from his positions as director, Vice President, member of the special committee of the Board of Directors in response to the needs to develop more comprehensive ecology for the AI industry. Mr. Hu became director of the Company’s Consumer Strategy Commission in March 2019 and is no longer in charge of consumer business. The Company’s consumer business has been developing soundly over the last two years. It has an adequate talent pool and its business development is on track, so Mr. Hu’s resignation will not negatively impact the Company’s business development. |
| Chen Tao | Director | Resigned | 26 September 2021 | Mr. Chen has resigned from his positions as director, Vice President, member of the special committee of the Board of Directors in response to the needs to develop more comprehensive ecology for the AI industry. Mr. Chen became director of the Company’s Strategy Commission in March 2019 and is no longer in charge of smart-city business. The Company’s smart-city business has been developing soundly over the last two years. It has an adequate talent pool and its business development is on track, so Mr. Chen’s resignation will not negatively impact the |
| Company’s business development. | ||||
| Jiang Tao | Director | Elected | 13 October 2021 | Elected as non-independent director following Messrs. Chen and Hu’s resignation. |
| Duan Dawei | Director | Elected | 13 October 2021 | Elected as non-independent director following Messrs. Chen and Hu’s resignation. |
2. Position overview
The professional backgrounds, main work experiences and current key duties of the Company’s incumbentdirectors, supervisors and senior management members.Members of the Board of DirectorsMr. Liu Qingfeng, Chairman and Founder of iFLYTEK; Doctor of Signal and Information Processing atUSTC,; Director of the National Engineering Laboratory for Speech and Language Information Processing(NELSLIP); Adjunct Professor and Doctoral Supervisor at the University of Science and Technology of China(USTC); Deputy to China’s 10
th, 11
th
, 12
th
and 13
th
National People’s Congress, Chairperson of the ExecutiveCouncil of the Speech Industry Alliance of China and Chairperson of the CAS’s Artificial IntelligenceIndustry-University-Research Innovation Alliance. Honoured at the 14
thChina’s Economic Person of the Year in2013; nominated as the “Top 100 Outstanding Private Entrepreneurs on the 40
thAnniversary of China’s Reformand Opening-up” in 2018 and awarded the “National Model Worker” title in 2020.Mr. Liu Xin, Director. Holder of a PhD degree. Also serving as Chairperson at Migu Cultural TechnologyCo., Ltd. and Mango Excellent Media Co., Ltd. Previously served as Manager for Industrial Solutions, Head ofTechnical Team and Director of Client Technology of Public Business Department at IBM China; and GeneralManager of Data Department at China Mobile Communications Group Co., Ltd.Mr. Wang Bing, Director. Doctor of Physical Electronics at USTC. Also serving as President at USTCHoldings Co., Ltd.; Director at Basic Education Group of USTC; Director at Time Publishing and Media Co., Ltd.;Director at QuantumCTEk Co., Ltd.; director at CAS Quantumnet Co., Ltd.; Director at Glory China QuantumLidar; Director at Chinainstru & Quantumtech (Hefei) Co., Ltd.; Director at University of Science andTechnology of China Press; and Director at Shandong Glory China Quantum Lidar. Previously served as ViceGeneral Manager at USTC Holdings Co., Ltd.; Deputy Department Head at Scientific Research Department ofUSTC; and Assistant Dean of Institute of Advanced Technology at USTC.
Mr. Wu Xiaoru, Director and President. Senior Engineer and Doctor of Electronic Engineering at USTC.Also serving as the Executive Director at Wuhan iFLYTEK Xingzhi Technology Co., Ltd.; Director at BeijingiFLYTEK Lezhixing Software Co., Ltd.; executive director at Hefei iFLYTEK Duxie Technology Co., Ltd.;Executive Director at Anhui Oriental iFLY Corporation; Executive Director at Guangzhou iFLYTEK YuchangCo., Ltd.; Executive Director at Anhui iFLYTEK Jiecheng Software Technology Co., Ltd.; Executive Director atAnhui iFLYTEK Jiecheng Information Technology Co., Ltd.; Supervisor at iFLYTEK South China Co., Ltd.; andExecutive Director at iFLYTEK Central China (Wuhan) Co., Ltd.Mr. Jiang Tao, Director, Secretary to the Board of Directors and Vice President. Master of SoftwareEngineering at USTC. Also serving as Executive Director at Beijing iFLYTEK Information Technology Co., Ltd.;Executive Director and Manager at Tianjin iFLYTEK Information Technology Co., Ltd.; Executive Director atZhongke iFLYTEK Interconnection (Beijing) Information Technology Co., Ltd.; Deputy Secretary-General at the
Executive Council of the Speech Industry Alliance of China; Executive Director at Beijing iFLYTEK QimingTechnology Co., Ltd.; Executive Director at Xiong’an iFLYTEK AI Technology Co., Ltd.; Executive Director atiFLYTEK Hebei Technology Co., Ltd.; Executive Director at Hefei Feier Smart Technology Co., Ltd.; ExecutiveDirector at Tianjin Zhihui Valley Technological Service Co., Ltd.; Director at Shenzhen iPanel Co., Ltd.; Directorat Beijing Chinese-Foreign Translation & Information Service Co., Ltd.; Director at Shanghai iFLYTEK RuiyuanInformation Technology Co., Ltd.; Executive Director at Beijing iFLYTEK Jizhi Technology Co., Ltd.; ExecutiveDirector at Beijing iFLYTEK Zhiying Technology Co., Ltd.; Executive Director at Beijing iFLYTEK DalaiTechnology Co., Ltd.; Director at Anhui iFLYTEK Healthcare Co., Ltd.; and Independent Director at SangforTechnologies. Previously served as Chief Director at Telecommunication and Value-Added Business Department.Mr. Nie Xiaolin, Director and Vice President. Master of Software Engineering at USTC. Also serving asExecutive Director at Guangdong iFLYTEK Qiming Technological Development Co., Ltd.; Executive Director atBeijing Liyun Popular Education Technology Co., Ltd.; and Director at Beijing Chinese Education HailanInformation Technology Co., Ltd. Previously served as General Manager at the Company’s telecommunicationand value-added services department, Chief Operating Officer and Director of the Marketing Commission andEMT Director of Education Business.Mr. Duan Dawei, Director, Vice President and CFO. Received an MBA at Missouri State University in 2010;Master of Economics at Dongbei University of Finance & Economics (DUFE) in 1999; and Bachelor ofEconomics at DUFE in 1993. Also serving as Director at Tianjin iFLYTEK Leasing Co., Ltd.; Director at AnhuiiFLYTEK Healthcare Co., Ltd.; and Executive Director and General Manager at Naji Investment Management(Shanghai) Co., Ltd. Previously held senior managerial positions at Jilin Chemical Group, Jilin ProvincialElectronic Group, SANY Group and SANY Heavy Industry Co., Ltd. Mr. Duan possesses extensive experience infinancial management at major corporations, portfolio investment and international collaboration and has won“China’s CFO of the Year” in 2008 and “China Best CFO Leadership Award” in 2019. He is also an adjunctsupervisor of Master’s students at Shanghai National Accounting Institute and of the Accounting programme atDUFE.Mr Zhao Xudong, Independent Director. Vice Dean, Professor and Supervisor of doctoral candidates at theCivil, Commercial and Economic Law School of the China University of Political Science and Law; “CheungKong Scholar” of China’s Ministry of Education; president of Commercial Law Research Institute of the ChinaLaw Society; member of the Expert Advisory Committee of the Supreme People’s Procuratorate; and arbitrator atthe China International Economic and Trade Arbitration Commission. Zhao is also a nationally renowned civiland commercial law scholar and possesses extensive research and practical experience in fields such as companylaw and contract law. He has previously served as external director at Beijing TRT Group and independentdirector at Founder Securities Co., Ltd. and CITIC Guoan Information Industry Co., Ltd., both are listedcompanies.
Mr. Zhao Xijun, Independent Director. Professor and supervisor of doctoral candidates at the School ofFinance of Renmin University of China (RUC) and recipient of the State Council’s Special Allowance. Currentlyserving as Joint-dean at the China Capital Market Research Institute of RUC; Joint-dean at the Chinese Academyof Financial Inclusion; Member and Secretary-General of the National Supervisory Committee for ProfessionalDegrees in Finance; Deputy Secretary-General and member of the Executive Council of China InternationalFinance Society; Executive Director and Member of the Academic Committee of China Modern Financial Society;Member of the Executive Council of China Financial Society; Executive Vice-president at Beijing InternationalFinancial Society. Zhao is primarily engaged in research in macro-economy and -finance, international financeand capital markets. He has published over 100 theses and papers since becoming a professor and has authoredmore than twenty monographs and textbooks. He has also led and taken part in more than twenty
scientific-research projects.Ms. Zhao Huifang, Independent Director. Holder of a Bachelor’s degree, professor and master students’advisor. Also serving as Independent Director at Sinomach General Machinery Science & Technology Co., Ltd.;Time Publishing and Media Co., Ltd.; and Anhui Transport Consulting & Design Institute Co., Ltd. Previouslyserved as Vice Dean, Dean and Secretary of Branch Party Committee at the College of Management of HefeiUniversity of Technology (HFU); director of MBA/MPA Management Centre at HFU; Member of the Ministry ofEducation’s Special Educational Supervisory Committee for Business Administration; Honorary President at theEngineering University and College Branch of the Accounting Society of China (ASC); Member of the SpecialEducational Committee for Accounting of the ASC; Member of the Executive Council of Anhui Auditing Society;and Member of the Executive Council of Anhui Province Federation of Social Sciences. She has compiledCorporate Accounting, a text book published by Higher Education Press, which has been named as the textbookfor the national 9
th, 10th
, 11
thFive-Year Plans. The book has also won the first prize as Anhui Province’soutstanding scientific achievement (writings). Zhao has led and taken part in many provincial and nationalscientific-research projects and has published articles in renowned journals at home and abroad. She is also therecipient of many provincial and ministerial awards.Mr. Liu Jianhua, Independent Director. Holder of a Bachelor’s degree and first-grade lawyer. Previouslyserved as Director and Deputy Director at Legal Department of the Bureau of Justice in Dangshan County, AnhuiProvince; Office Director at Anhui Foreign-Economy Law Firm; Deputy Director at Anhui Third-Economy LawFirm; Secretary-General and Vice President at Anhui Lawyers Association; and Deputy Secretary of the PartyCommittee of Anhui Lawyers Association.Members of the Board of SupervisorsMs. Gao Lingling, Chairperson of the Board of Supervisors. MBA at the University of Maryland, U.S. andsenior accountant. Also serving as Senior Manager (General-Manager grade) of internal auditing at China MobileCommunications Group Co., Ltd. and China Mobile Ltd. Previously served as Lecturer at Beijing College of Postsand Telecommunications (now Beijing University of Posts and Telecommunications); Deputy Department Headof Finance Department of the former Ministry of Posts and Telecommunications; and Vice General Manager atFinance Department of China Mobile Communications Group Co., Ltd.
Ms. Zhang Lan, Supervisor. Bachelor of Economics and senior accountant. Also serving as Vice Presidentand CFO at USTC Holdings Co., Ltd.; Chairperson of the Board of Supervisors at CAS Quantumnet Co., Ltd.;Supervisor at Hefei USTC Basic Education Group Co., Ltd.; Supervisor at QuantumCTEk Co., Ltd.; Director atAnhui Qasky Quantum Technology Co. Ltd.; and Director at Origin Quantum Computing Technology Co., Ltd.Previously served as Director of Finance and Asset Department at Logistics Group of USTC and Assistant to theHead of Finance Department at USTC.Ms. Dong Xueyan, Supervisor. Bachelor of Chinese Language and Literature at Anhui University. Currentlyserving as Senior Manager at the Company’s President Office. Previously served as Secretary to the Company’sCommunist Youth League of China, Regional Manager and Marketing Director of the Education Department.
Mr. Wang Hongxing, Supervisor. Master of Engineering Management at Peking University and Bachelor ofManagement and Engineering at USTC. Also serving as the Company’s Chief Information Officer and Director atShanghai Zhifei Yuannian Technology Co., Ltd. Previously served as Consulting Director at IBM China Co., Ltd.and Accenture China Co., Ltd. and General Manager of Information Management Department at Founder Groupof Peking University.
Ms. Lu Xueling, Supervisor. Bachelor of Software Engineering at Jiangxi University of Finance and
Economics. Also serving as the Company’s Manager of Operations Management at Strategic OperationsDepartment. Previously served as Head of the testing team and project manager.Senior Management MembersFor the main work experiences of Messrs. Wu Xiaoru, Jiang Tao, Nie Xiaolin and Duan Dawei, who alsoserve as the Company’s directors, please refer to the “Members of the Board of Directors” section.
Ms. Du Lan, Vice President. Doctor of Management Science and Engineering at South China University ofTechnology, senior economist, Member of the Standing Committee of Guangdong Youth Federation and Memberof the Executive Council of Guangdong Provincial Association for Young Scientists. Also serving as Manager atiFLYTEK South China Co., Ltd.; Executive Director and General Manager at Guangzhou Keyu InformationTechnology Co., Ltd.; Executive Director and General Manager at Guangzhou Keyin Information Technology Co.,Ltd.; Director at Guangdong AIAD Technology Co., Ltd.; Managing Partner at Guangzhou YitingshuoInvestment Consulting Partnership (limited partnership); Executive Director at iFLYTEK South China AIResearch Institute (Guangzhou) Co., Ltd.; Executive Director and General Manager at Guangzhou iFLYTEKSuperbrain Technology Co., Ltd.; and independent director at BGI Genomics. Previously served as GeneralManager at General Department of Southern Bases and of the Internet company (under development) of ChinaMobile Communications Group Co., Ltd.
Ms. Wang Ming, Financial Controller. Holder of a Bachelor degree and accountant. Also serving asSupervisor at Xinjiang Shenggu Rongchuang Digital Industrial Development Co., Ltd.; Supervisor at XinjiangYiyu Shenggu Information Technology Co., Ltd.; Supervisor at Guangzhou iFLYTEK ETS Network TechnologyCo., Ltd.; and Supervisor at Tianjin iFLYTEK Financing and Leasing Co., Ltd. Previously served as DeputyManager at Finance Department of Business Tower of Hefei Department Store Building Group, Head ofAccounting Department of Joymart of Hefei Department Store Building Group, General Manager of Business andFinance Department of iFLYTEK and the Company’s Deputy CFO.Concurrent positions held in shareholding units
√ Applicable □ Not applicable
| Name | Unit name | Position | Term start date | Term end date | Remuneration and allowances collected |
| Liu Xin | China Mobile Limited | Chairperson at Migu Cultural Technology Co., Ltd. | 06 February 2015 | Yes | |
| Wang Bing | USTC Holdings Co., Ltd. | President | 25 July 2019 | Yes | |
| Wang Bing | Basic Education Group of USTC | Director | 15 April 2015 | ||
| Wang | University of Science and Technology of China Press | Director | 29 May 2015 |
| Bing | |||||
| Gao Lingling | China Mobile Limited | Senior Manager (General-Manager grade) of internal auditing at China Mobile Ltd. | 01 September 2020 | Yes | |
| Gao Lingling | China Mobile Limited | Senior Manager (General-Manager grade) of internal auditing at China Mobile Communications Group Co., Ltd. | 01 September 2020 | Yes | |
| Zhang Lan | USTC Holdings Co., Ltd. | Vice President, CFO | 01 September 2020 | Yes | |
| Zhang Lan | Basic Education Group of USTC | Supervisor | 01 May 2018 | ||
| Positions in the shareholding units | Directors and supervisors dispatched by shareholding units | ||||
Positions held in other units
√ Applicable □ Not applicable
| Name | Unit name | Position | Term start date | Term end date | Remuneration and allowances collected |
| Liu Qingfeng | Beijing iFLYTEK Educational Technology Co., Ltd. | Chairperson | 30 June 2014 | 27 August 2021 | |
| Liu Qingfeng | Anhui Yanzhi Technology Co., Ltd. | Executive director | 09 December 2019 | ||
| Liu Qingfeng | CAS Holdingss Co., Ltd. | Director | 05 July 2021 | ||
| Liu | Beijing Butel Technology Co., Ltd. | Director | 29 December 2020 |
| Qingfeng | |||||
| Liu Qingfeng | Anhui iFLYTEK Healthcare Co., Ltd. | Chairperson | 24 December 2021 | ||
| Liu Qingfeng | Anhui Yuangou Biotechnology Co., Ltd. | Director | 04 March 2022 | ||
| Liu Xin | Mango Excellent Media Co., Ltd. | Director | 19 September 2019 | 20 May 2024 | |
| Wang Bing | Time Publishing and Media Co., Ltd. | Director | 27 November 2015 | No | |
| Wang Bing | QuantumCTEk Co., Ltd. | Director | 25 May 2018 | No | |
| Wang Bing | CAS Quantumnet Co., Ltd. | Director | 29 November 2016 | No | |
| Wang Bing | Glory China Quantum Lidar | Director | 21 September 2017 | No | |
| Wang Bing | Chinainstru & Quantumtech (Hefei) Co., Ltd. | Director | 26 December 2016 | No | |
| Wang Bing | Shandong Glory China Quantum Lidar | Director | 26 July 2018 | ||
| Wu Xiaoru | Wuhan iFLYTEK Xingzhi Technology Co., Ltd. | Executive director | 24 November 2017 | ||
| Wu Xiaoru | Beijing iFLYTEK Leizhixing Software Co., Ltd. | Director | 29 December 2016 | ||
| Wu Xiaoru | Hefei iFLYTEK Reading and Writing Technology Co., Ltd. | Executive director | 02 January 2019 | ||
| Wu Xiaoru | Anhui Oriental iFLY Corporation | Executive director | 10 January 2017 | ||
| Guangzhou iFLYTEK Yuchang Co., | Executive director | 16 November 2017 |
| Wu Xiaoru | Ltd. | ||||
| Wu Xiaoru | Beijing iFLYTEK Educational Technology Co., Ltd. | Director | 30 June 2014 | 27 August 2021 | |
| Wu Xiaoru | Anhui iFLYTEK Jiecheng Software Technology Co., Ltd. | Executive director | 03 August 2016 | ||
| Wu Xiaoru | Anhui iFLYTEK Jiecheng Information Technology Co., Ltd. | Executive director | 26 April 2016 | ||
| Wu Xiaoru | iFLYTEK South China Co., Ltd. | Supervisor | 27 October 2015 | ||
| Wu Xiaoru | Beijing Huiji Zhiyi Technology Co., Ltd. | Executive director | 05 June 2020 | 14 September 2021 | |
| Wu Xiaoru | iFLYTEK Central China (Wuhan) Co., Ltd. | Executive director | 11 December 2020 | ||
| Nie Xiaolin | Guangdong iFLYTEK Qiming Technological Development Co., Ltd. | Executive director | 11 February 2020 | ||
| Nie Xiaolin | Beijing Liyun Popular Education Technology Co., Ltd. | Executive director | 20 August 2021 | ||
| Nie Xiaolin | Beijing Chinese Education Hailan Information Technology Co., Ltd. | Chairperson | 09 September 2021 | ||
| Jiang Tao | Beijing ZKD iFLYTEK Information Technology Co., Ltd. | Executive director | 02 July 2010 | ||
| Jiang Tao | Tianjin iFLYTEK Information Technology Co., Ltd. | Executive director, manager | 11 November 2011 | ||
| Jiang Tao | Zhongke iFLYTEK Interconnection (Beijing) Information Technology Co., Ltd. | Executive director | 04 August 2016 | ||
| Jiang Tao | Beijing iFLYTEK Qiming Technology Co., Ltd. | Executive director | 04 December 2014 |
| Jiang Tao | Sangfor Technologies | Executive director | 28 December 2016 | 03 December 2022 | No |
| Jiang Tao | Shanghai iFLYTEK Ruiyuan Information Technology Co., Ltd. | Chairperson | 21 January 2020 | ||
| Jiang Tao | Xiong’an iFLYTEK AI Technology Co., Ltd. | Executive director | 13 February 2018 | ||
| Jiang Tao | Tianjin Zhihui Valley Technological Service Co., Ltd. | Executive director | 23 October 2017 | ||
| Jiang Tao | iFLYTEK Hebei Technology Co., Ltd. | Executive director | 21 October 2016 | ||
| Jiang Tao | Hefei Feier Smart Technology Co., Ltd. | Director | 15 June 2020 | ||
| Jiang Tao | Shenzhen iPanel Co., Ltd. | Director | 24 December 2019 | ||
| Jiang Tao | Beijing Chinese-Foreign Translation & Information Service Co., Ltd. | Director | 21 September 2020 | ||
| Jiang Tao | Beijing iFLYTEK Educational Technology Co., Ltd. | Executive director | 27 August 2021 | ||
| Jiang Tao | Beijing iFLYTEK Jizhi Technology Co., Ltd. | Executive director | 28 June 2021 | ||
| Jiang Tao | Beijing iFLYTEK Zhiying Technology Co., Ltd. | Executive director | 28 December 2021 | ||
| Jiang Tao | Beijing iFLYTEK Dalai Technology Co., Ltd. | Executive director | 03 March 2021 | ||
| Jiang Tao | Anhui iFLYTEK Healthcare Co., Ltd. | Director | 24 December 2021 | ||
| Zhang Lan | CAS Quantumnet Co., Ltd. | Chairperson of the Board of Supervisors | 29 November 2016 | ||
| Zhang Lan | QuantumCTEk Co., Ltd. | Supervisor | 02 August 2021 | ||
| Zhang Lan | Anhui Qasky Quantum Technology Co. Ltd. | Director | 22 December 2020 | 21 December 2023 | |
| Origin Quantum Computing | 31 December 2020 | 31 December 2023 |
| Zhang Lan | Technology Co., Ltd. | Director | |||
| Wong Hongxing | Shanghai Zhifei Yuannian Technology Co., Ltd. | Director | 24 November 2021 | ||
| Du Lan | iFLYTEK South China Co., Ltd. | Manager | 27 October 2015 | ||
| Du Lan | Guangzhou Keyu Information Technology Co., Ltd. | Executive director and General Manager | 23 February 2016 | ||
| Du Lan | iFLYTEK South China AI Research Institute (Guangzhou) Co., Ltd. | Executive director | 25 December 2017 | ||
| Du Lan | Guangzhou Keyin Information Technology Co., Ltd. | Executive director and General Manager | 20 November 2015 | ||
| Du Lan | Guangdong AIAD Technology Co., Ltd. | Chairperson | 10 March 2016 | ||
| Du Lan | Guangzhou iFLYTEK ETS Network Technology Co., Ltd. | Chairperson | 08 March 2016 | 26 July 2021 | |
| Du Lan | Guangzhou Yitingshuo Investment Consulting Partnership (limited partnership) | Managing partner | 16 February 2016 | ||
| Du Lan | Guangzhou iFLYTEK Superbrain Technology Co., Ltd. | Executive director and General Manager | 29 May 2018 | ||
| Du Lan | Shenzhen iFLYTEK Smart Technology Co., Ltd. | Executive director | 15 September 2017 | 27 October 2021 | |
| Du Lan | BGI Genomics | Independent director | 16 June 2021 | 15 June 2024 | |
| Duan Dawei | Tianjin iFLYTEK Financing and Leasing Co., Ltd. | Chairperson, manager | 05 November 2019 | ||
| Duan Dawei | Naji Investment Management (Shanghai) Co., Ltd. | Executive director and General Manager | 14 December 2014 | ||
| Anhui iFLYTEK Healthcare Co., Ltd. | 24 December 2021 |
| Duan Dawei | Director | ||||
| Wang Ming | Tianjin iFLYTEK Financing and Leasing Co., Ltd. | Supervisor | 05 November 2019 | ||
| Wang Ming | Guangzhou iFLYTEK ETS Network Technology Co., Ltd. | Supervisor | 11 May 2020 | ||
| Wang Ming | Xinjiang Shenggu Rongchuang Digital Industrial Development Co., Ltd. | Supervisor | 08 January 2021 | ||
| Wang Ming | Xinjiang Yiyu Shenggu Information Technology Co., Ltd. | Supervisor | 12 December 2016 |
Penalties imposed by securities regulators on the Company’s incumbent and former directors, supervisors andsenior management members in the last three years.
□ Applicable √ Not applicable
3. Remuneration of Directors, Supervisors and Senior Management Members
(1) Decision-making procedures, determination basis and actual payment of remuneration for directors,supervisors and senior management membersThe Company has established a comprehensive performance appraisal system and remuneration system fordirectors, supervisors and senior management members. In order to enable the Company to establish an incentiveand restraint mechanism in alignment with the modern enterprise system, motivate directors, supervisors andsenior management members, and improve the performance of the Company’s operations and management, theCompany has formulated clear Guidelines for Remuneration of Directors, Supervisors and Senior ManagementMembers. The remuneration of the Company’s directors, supervisors and senior management members is basedon the Company’s scale and performance, and it is determined comprehensively in line with the Company’sbusiness plan and the responsibilities and performance goals of specific roles.The remuneration of the Company’s directors, supervisors and senior management members is determined inaccordance with the following principles: adhering to the principle of combining performance-based pay withresponsibilities, authority and interests of roles, so as to give full play to the incentive and restraint role ofremuneration; Linking up remuneration with the Company’s financial performance and business objectives whilehaving market rates for reference; remuneration is determined with a view to ensuring sustained and stabledevelopment of the Company. The remuneration standards are established in accordance with the principles ofopenness, justice and fairness. Upon approval by the Remuneration Committee of the Board of Directors, specialincentives or disciplinary programs may be temporarily set up for special matters as a supplement to theremuneration of directors, supervisors and senior management members serving in the Company.The remuneration of directors and senior management members serving in the Company consists of threeparts, namely, annual salary, bonus and benefits. Annual salary consists of annual base salary and annualperformance pay. Supervisors serving in the Company are entitled to monthly supervisor allowances, in addition
to salaries and benefits based on their job grade and performance appraisal. If any adjustment needs to be made tothe remuneration of independent directors based on market conditions or other needs, it shall be reviewed anddecided at the shareholders’ general meetings.The Remuneration and Appraisal Committee of the Board of Directors is responsible for the remunerationmanagement and performance appraisal of directors and senior management members. Board directors,supervisors and senior management members serving in the Company receive remuneration based on their jobtitles and roles, according to the Company’s current remuneration policy. The annual bonus of aforementionedroles shall be determined at the end of the year through appraisal procedures based on the business performancewith the approval from the Board of Directors or the General Meeting of Shareholders. The standards ofallowances for independent directors and supervisors shall be reviewed by the Company’s shareholders’ Generalmeeting; reasonable expenses incurred by independent directors in attending the Company’s board meetings andshareholders’ general meetings to perform their duties in accordance with the relevant provisions of the CompanyLaw and the Company’s Articles of Association shall be borne by the Company.
According to the Company’s Guidelines for Remuneration of Directors, Supervisors and SeniorManagement Members, the annual base salary of the chairman of the Company in 2021 should be RMB33.2144million [the Company’s audited net profit for the year × 2%]; the performance pay should be RMB 42.2349million [(audited net profit for the current year – audited net profit for the previous year) × 4%]; the chairman ofthe Company should receive a total annual compensation package of RMB75.4493 million. Taking into accountthe growth stage of the Company, and in order to better reward outstanding employees of Category A, Mr. LiuQingfeng, Chairman of the Company, took the initiative to cut his annual salary and received an actualcompensation of RMB5.6 million for 2021.
(2) Remuneration of Directors, Supervisors and Senior Management Members during the reportingperiod of the Company
Unit: RMB10000
| Name | Job Title | Gender | Age | Service Status | Total Pre-tax Remuneration Received from the Company | Whether to Receive Compensation from Related Parties of the Company |
| Liu Qingfeng | Chairman | Male | 48 | Incumbent | 560 | |
| Liu Xin | Director | Male | 50 | Incumbent | 2.4 | Yes |
| Wang Bing | Director | Male | 53 | Incumbent | 0 | Yes |
| Wu Xiaoru | Director, President | Male | 49 | Incumbent | 386 | |
| Jiang Tao | Director, Vice President, Secretary of the Board of Directors | Male | 47 | Incumbent | 270 | |
| Director, Vice | 49 | 270 |
| Duan Dawei | President | Male | Incumbent | |||
| Nie Xiaolin | Director, Vice President | Male | 42 | Incumbent | 285 | |
| Zhao Xudong | Independent Director | Male | 62 | Incumbent | 8 | |
| Zhao Xijun | Independent Director | Male | 58 | Incumbent | 7.1 | |
| Zhao Huifang | Independent Director | Female | 69 | Incumbent | 8 | |
| Liu Jianhua | Independent Director | Male | 69 | Incumbent | 8 | |
| Gao Lingling | Chairwoman of the Board of Supervisors | Female | 59 | Incumbent | 2.4 | Yes |
| Zhang Lan | Supervisor | Female | 55 | Incumbent | 0 | Yes |
| Dong Xueyan | Supervisor | Female | 42 | Incumbent | 58.22 | |
| Wang Hongxing | Supervisor | Male | 45 | Incumbent | 180 | |
| Lu Xueling | Supervisor | Female | 32 | Incumbent | 82.94 | |
| Du Lan | Vice President | Female | 45 | Incumbent | 210 | |
| Wang Ming | Finance Director | Female | 42 | Incumbent | 90 | |
| Hu Yu | Director, Vice President | Male | 43 | Resigned | 150 | |
| Chen Tao | Director, Vice President | Male | 48 | Resigned | 200 | |
| Zhang Benzhao | Independent Director | Male | 58 | Resigned | 0.67 | |
| Qian Jinping | Supervisor | Male | 36 | Resigned | 61.57 | |
| -- | -- | -- | -- | 2,840.30 | -- |
| Total | -- | -- | -- | -- | -- |
VI. Directors’ Performance during the Reporting Period
1. Meetings of the Board of Directors during the Reporting Period
| Board Meeting Session | Date | Date of Disclosure | Meeting Resolutions |
| The Ninth Meeting of the Fifth Board of Directors | January 18, 2021 | January 19, 2021 | Announcement No.: 2021-003 Announcement: Announcement on the Resolutions of the Ninth Meeting of the Fifth Board of Directors Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) |
| The Tenth Meeting of the Fifth Board of Directors | January 24, 2021 | January 25, 2021 | Announcement No.: 2021-012 Announcement: Announcement on the Resolutions of the Tenth Meeting of the Fifth Board of Directors Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) |
| The Eleventh Meeting of the Fifth Board of Directors | February 7, 2021 | February 8, 2021 | Announcement No.: 2021-017 Announcement: Announcement on the Resolutions of the Eleventh Meeting of the Fifth Board of Directors Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) |
| The Twelfth Meeting of the Fifth Board of Directors | April 18, 2021 | April 20, 2021 | Announcement No.: 2021-027 Announcement: Announcement on the Resolutions of the Twelfth Meeting of the Fifth Board of Directors Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) |
| The Thirteenth Meeting of the Fifth Board of Directors | April 21, 2021 | April 22, 2021 | Announcement No.: 2021-042 Announcement: Announcement on the Resolutions of the Thirteenth Meeting of the Fifth Board of Directors Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) |
| The Fourteenth Meeting of the Fifth Board of Directors | July 7, 2021 | July 8, 2021 | Announcement No.: 2021-055 Announcement: Announcement on the Resolutions of the Fourteenth Meeting of the Fifth Board of Directors Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) |
| The Fifteenth Meeting of the Fifth Board of Directors | July 18, 2021 | July 20, 2021 | Announcement No.: 2021-061 Announcement: Announcement on the Resolutions of the Fifteenth Meeting of the Fifth Board of Directors Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) |
| The Sixteenth Meeting of the Fifth Board of Directors | August 3, 2021 | August 4, 2021 | Announcement No.: 2021-066 Announcement: Announcement on the Resolutions of the Sixteenth Meeting of the Fifth Board of Directors Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) |
| The Seventeenth Meeting of the Fifth Board of Directors | August 23, 2021 | August 24, 2021 | Announcement No.: 2021-070 Announcement: Announcement on the Resolutions of the Seventeenth Meeting of the Fifth Board of Directors Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) |
| The Eighteenth Meeting of the Fifth Board of Directors | September 26, 2021 | September 27, 2021 | Announcement No.: 2021-074 Announcement: Announcement on the Resolutions of the Eighteenth Meeting of the Fifth Board of Directors Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) |
| The Nineteenth Meeting of the Fifth Board of Directors | October 26, 2021 | October 27, 2021 | Announcement No.: 2021-084 Announcement: Announcement on the Resolutions of the Nineteenth Meeting of the Fifth Board of Directors Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) |
| The Twentieth Meeting of the Fifth Board of Directors | November 10, 2021 | November 11, 2021 | Announcement No.: 2021-089 Announcement: Announcement on the Resolutions of the Twentieth Meeting of the Fifth Board of Directors Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO |
| (http://www.cninfo.com.cn) | |||
| The 21st Meeting of the Fifth Board of Directors | December 26, 2021 | December 28, 2021 | Announcement No.: 2021-101 Announcement: Announcement on the Resolutions of the 21st Meeting of the Fifth Board of Directors Disclosed on Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) |
2. Directors’ Attendance at Board Meetings and Shareholders’ General Meetings
| 2. Directors’ Attendance at Board Meetings and Shareholders’ General Meetings | |||||||
| Director’s Name | Number of Board Meetings That the Director was Required to Attend during the Reporting Period | Number of Board Meetings That the Director Attended On-site | Number of Board Meetings That the Director Attended Virtually | Number of Board Meetings That the Director Appointed a Proxy to Attend | Number of Board Meetings That the Director Did Not Attend | Whether the Director Has Not Attended Two Consecutive Board Meetings in Person | Number of General Meetings of Shareholders That the Director Has Attended |
| Liu Qingfeng | 13 | 12 | 1 | 0 | 0 | No | 4 |
| Liu Xin | 13 | 0 | 13 | 0 | 0 | No | 4 |
| Wang Bing | 13 | 12 | 1 | 0 | 0 | No | 4 |
| Wu Xiaoru | 13 | 11 | 2 | 0 | 0 | No | 4 |
| Jiang Tao | 3 | 1 | 2 | 0 | 0 | No | 4 |
| Nie Xiaolin | 13 | 12 | 1 | 0 | 0 | No | 4 |
| Duan Dawei | 3 | 3 | 0 | 0 | 0 | No | 4 |
| Zhao Xudong | 13 | 1 | 12 | 0 | 0 | No | 4 |
| 11 | 1 | 10 | 0 | 0 | No | 3 | |
| Zhao Xijun | |||||||
| Zhao Huifang | 13 | 12 | 1 | 0 | 0 | No | 4 |
| Liu Jianhua | 13 | 10 | 3 | 0 | 0 | No | 4 |
| Chen Tao (Resigned on September 26, 2021) | 9 | 8 | 1 | 0 | 0 | No | 2 |
| Hu Yu (Resigned on September 26, 2021) | 9 | 6 | 3 | 0 | 0 | No | 2 |
| Zhang Benzhao (Resigned on February 3, 2021) | 2 | 1 | 1 | 0 | 0 | No | 1 |
3. Objections Raised by Directors on Matters Related to the Company
Is there any objection raised by any director on any matter related to the Company?
□ Yes √ No
No objection has ever been raised by any director on any matter related to the Company during the reportingperiod.
4. Other Notes on Directors’ Performance
Was there any recommendation made by any director to the Company has been adopted?
√ Yes □ No
Notes on adopted or rejected recommendations made by directors to the Company
Board directors and independent directors of the Company perform their duties faithfully and diligently instrict accordance with the Rules of Procedure for the Board of Directors, Articles of Association, and Rules on theAppointment of and Procedure for Independent Directors. During the reporting period, directors and independentdirectors of the Company paid close attention to the Company’s operations and management. Independentdirectors checked carefully over the Company’s financial conditions, stock ownership incentive plan, non-publicissuance, related-party transactions, external guarantees, the use and management of raised funds as well as othermajor issues. In addition, independent directors participated in the Company’s decision-making, making objective,fair and independent judgments with their expertise, giving full play to the role of independent directors, and thishas safeguarded the legitimate rights and interests of the Company, all shareholders, especially small and minorityshareholders.During the reporting period, directors of the Company actively offered advice and suggestions. The
Company has attached great importance to recommendations made by directors, adopted and fully implementedthem. Main recommendations and information on implementation are as follows:
Recommendation 1: It is suggested that the Company fully implement the Notice on Matters ConcerningPromoting Listed Companies to Hold Business Performance Briefings issued by the China Securities RegulatoryCommission, and build a benchmark for performance briefings.Information on implementation: The Company believes that performance briefings are key to investorrelations management, and always insists on holding efficient and effective performance briefings. On April 20,2021, with the strong support of the Shenzhen Stock Exchange, the Company successfully held its 2020 annualperformance briefing in the listing ceremony hall of the Shenzhen Stock Exchange, and broadcast live onlinethrough various media outlets, including Panorama. iFLYTEK’s 2020 annual performance briefing was awardedthe “Best Practice Case of Public Companies’ 2020 Annual Report Performance Briefings” by the ChinaAssociation for Public Companies, and was taken as a benchmark in the Dedicated Training for Shenzhen-listedCompanies on Performance Briefings organized by the Shenzhen Stock Exchange and the Dedicated Training forPublic Companies’ on Performance Briefings organized by the China Association for Public Companies, with bothsessions designed to share best practices with Shenzhen-listed companies and other public companies in China.Recommendation 2: It is suggested that the Company actively discuss and formulate the Company’s mediumand long-term development plan in the first year of China’s 14th Five-Year Plan.
Information on implementation: In 2021, the Company pinpointed the goal of striving for “ArtificialIntelligence 2.0” as follows: during China’s “14th Five-Year Plan” period, the Company will strive to “become aleader in China's AI industry, connecting one billion users and realizing RMB100 billion in operating revenue andRMB1 trillion in ecosystem”; artificial intelligence will be an important engine to drive social progress in thecoming ten years, and iFLYTEK based on 20 years of development has a technological research and developmentfootprint covering most of the existing AI research fields. The Company’s achievements in key core technologiesof artificial intelligence are internationally advanced, such as voice interaction, machine vision and machinecognition. At the same time, iFLYTEK has achieved breakthroughs in the application of technologies in variousindustries, and in the design of software and hardware integration products. iFLYTEK has obtained the capabilityto conduct systematic innovations to address major social value propositions and rigid social demands. Againstthis background, in order to realize the long-term vision of “becoming a leader in the AI industry worldwide”, theCompany launched the “IFLYTEK Super Brain 2030 Program” at its 2022 annual meeting at the beginning of2022, and set three milestones for the Program: in the first stage (2022-2023), the Company will launch robotsthat integrate software and hardware, such as interactive companion pets and bionic robot dogs with motion, aswell as the family of professional virtual humans to serve as teachers and doctors, etc.; in the second stage(2023-2025), the Company will launch walking exoskeleton robots and the family of companion virtual humans.The elderly can walk and exercise normally with the exoskeleton robot. In the meanwhile, the Company willlaunch a depression screening platform for teenagers; in the third stage (2025-2030), the Company will roll outcompanion robots that have knowledge and know how to study and the family of independent-learning virtualhumans for families.
VII. Special Committees of the Board of Directors during the Reporting Period
| Committee Name | Members | Number of Meetings Held | Date | Meeting Agenda | Important Comments and Suggestions Made | Other Duties Performed |
| Strategy Committee | Liu Qingfeng, Liu Xin, Wang Bing, Jiang Tao, Zhao Xijun | 3 | April 7, 2021 | To review the Proposal on the Non-public Issuance of the Company’s Shares, Emergency Response Plan for 2021 Non-public Issuance of Shares and Feasibility Analysis Report on the Use of Funds Raised Through 2021 Non-public Issuance of Shares | Agreed | |
| August 2, 2021 | To review the Proposal on Planning for the Spin-off and Listing of Controlled Subsidiaries | Agreed | ||||
| December 19, 2021 | To review the Proposal on Signing the Investment and Cooperation Agreement and Outbound Investments | Agreed | ||||
| Audit Committee | Zhao Huifang, Zhao Xudong, Duan Dawei | 4 | April 7, 2021 | To review the 2020 Special Report on the Deposit and Use of Raised Funds, Proposal on the Company’s Related-Party Transactions, Proposal on Special Explanation on the Occupation of Funds of Controlling Shareholders and Other Related Parties, Internal Control Evaluation Report, Audit and Supervision Department’s 2020 Work Summary and Annual Work Plan for 2021, Proposal on Hiring RSM China (Special General Partnership) as the Company’s 2020 Annual Auditor, and The Company’s 2020 Annual Report | Agreed | To discuss AI-driven digitization to help audit |
| April 18, 2021 | To review the Report on Q1 of 2021, Proposal on the Special Report on the Deposit and Use of Raised Funds, Special Explanation on the Occupation of Funds of Related Parties, and Report on the Audit Project of the Audit and Supervision Department in the First Half of 2021 | Agreed | ||||
| August 22, 2021 | To review the Semi-annual Report 2021, Proposal on the Special Report on the Deposit and Use of Raised Funds, Special Explanation on the Occupation of Funds of Related Parties, and Report on the Audit Project of the Audit and Supervision Department in the First Half of 2021 | Agreed | To discuss the implementation of audit facilitated by AI-driven digitization |
| October 20, 2021 | To review the Report on Q3 of 2021, Proposal on the Special Report on the Deposit and Use of Raised Funds, Special Explanation on the Occupation of Funds of Related Parties, and Report on the Audit Project of the Audit and Supervision Department in the Third Quarter of 2021 | Agreed | ||||
| Nomination Committee | Zhao Xudong, Liu Jianhua, Liu Qingfeng | 2 | January 23, 2021 | To review the Proposal on By-election of Mr. Zhao Xijun as an Independent Director of the Fifth Board of Directors of the Company | Agreed | To build a talent pool of independent directors |
| September 25, 2021 | To review the Proposal on By-election of Independent Directors of the Fifth Board of Directors of the Company | Agreed | ||||
| Remuneration and Appraisal Committee | Zhao Xijun, Liu Jianhua, Wu Xiaoru | 4 | April 7, 2021 | To review the Proposal on the Remuneration of Directors, Supervisors and Senior Management Members in 2020, Proposal on Repurchase and Cancellation of Part of Granted Restricted Shares, and Proposal on Meeting Conditions for Lifting Restrictions on the Third Release Period of the Initial Grant of Restricted Stocks in the Incentive Plan | Agreed | |
| July 13, 2021 | To review the Proposal on Meeting Conditions for Lifting Restrictions on the Third Release Period of the Reserved Parts of the First Phase of Restricted Stocks in the Incentive Plan | Agreed | ||||
| September 17, 2021 | To review the Proposal on iFLYTEK Corporation 2021 Stock Option and Restricted Stock Incentive Plan (Draft) and Its Summary and the Administrative Measures for the Implementation of the 2021 Stock Option and Restricted Stock Incentive Plan of iFLYTEK Corporation | Agreed | Special Research on Stock Incentive and Remuneration Competitiveness in the Industry | |||
| November 5, 2021 | To review the Proposal on Adjusting the Repurchase Price of Restricted Stocks in the Second Restricted Stock Incentive Plan and Repurchase and Cancellation of Part of Granted Restricted Stocks and the Proposal on Meeting Conditions for Lifting Restrictions on the First Release Period of the Restricted Stocks in the Second Restricted Stock Incentive Plan | Agreed |
VIII. Work of the Board of SupervisorsWhether the Board of Supervisors in the supervision of activities during the reporting period identified particularson risks.
□ Yes √ No
The Board of Supervisors had no objection to the supervision matters during the reporting period.IX. Employees of the Company
(1) Number of employees, specialties and education backgrounds
| Number of employees on the payroll of the parent company at the end of the reporting period (person) | 5,203 |
| Number of employees on the payroll of major subsidiaries at the end of the reporting period (person) | 9,104 |
| Total number of employees on the payroll at the end of the reporting period (person) | 14,307 |
| Total number of employees receiving remuneration in the current reporting period (person) | 15,322 |
| Number of retired employees for whom the parent company and major subsidiaries need to bear the expenses (person) | 0 |
| Specialties | |
| Specialty role | Number of employees |
| Production staff | 0 |
| Sales staff | 3,879 |
| Technical staff | 8,367 |
| Finance staff | 227 |
| Administration staff | 513 |
| Managerial staff | 218 |
| Others | 1,103 |
| 合计 Total | 14,307 |
| Education backgrounds | |
| Education level | Number of employees |
| Doctorate degree or above | 116 |
| Master’s degree | 3,734 |
| Bachelor’s degree | 9,550 |
| Associate degree or below | 907 |
| Total | 14,307 |
(2) Remuneration policy
iFLYTEK advocates a labor policy based on compliance with laws and regulations, equality and free will,and strictly abides by the Labor Law of the People’s Republic of China, Labor Contract Law of the People’sRepublic of China, Social Insurance Law of the People’s Republic of China, and Law on the Protection ofWomen’s Rights and Interests of the People’s Republic of China, as well as other relevant laws and regulations,making great efforts in respecting and protecting the legitimate rights and interests of employees, paying closeattention to the health and safety of employees, and respecting labor, knowledge and value creation.In 2021, the Company optimized the structure and proportion of remuneration of employees according to thecharacteristics of competition in the industry, and it has made the Company’s remuneration structure morereasonable. Focus was put on the following work:
1) A transparent and efficient performance evaluation system
In the design of the performance evaluation system, the Company follows the basic principle of “dynamicinterconnection, flexibility and transparency”, and has established a transparent and efficient performanceevaluation system to evaluate employees’ performance on a regular basis, so that employees can fully understandhow well their capabilities match their job responsibilities, with a view to providing solid support to employees intheir pursuit of continuous growth.
Dynamically interconnected organizational evaluation
The Company has been perfecting the talent and organization interconnected evaluation mechanism based onthe quarterly performance of each department and has further refined each department's quarterly goals andcorresponding management mechanisms in alignment with the Company’s annual business goals and on the basisof organizational performance management, and has established a mechanism of dynamic interconnectionbetween organizational performance and employees’ performance pay. This is designed to strengthen theorganizational performance management throughout the process, so as to ensure that organizational goals areachieved while providing employees with more flexible incentives.
Flexible and transparent employee performance evaluation
Based on a complete and goal-oriented performance process, the Company is establishing an employeeperformance evaluation system featured by goal-focused, two-way feedback between superiors and subordinates,and full application of evaluation results to ensure fairness in evaluating individual performance.
Efforts have been made to establish an open and transparent performance evaluation system throughinformation disclosure, internal audit and other methods, so as to improve employees’ capabilities of managingtheir personal performance. The performance appraisal mechanism based on administrative organizations is beingchanged, and project management requirements are linked to the performance appraisal. By doing so, flexibleperformance appraisal can be completed. By strengthening the dynamic relationship between performance resultsand performance-based compensation, performance will become the main indicator for value distribution.
2) A remuneration incentive system by all and for all
Consistent with the Company’s business and operations, the Company has established a stock ownershipincentive and remuneration incentive and restraint mechanism featured by generating revenues by all and for all,so as to ensure the sustainable and healthy development of the Company.
As for remuneration design, the Company advocates the principle of generating revenues by all and for alland encourages employees to feel the benefits brought by business growth through their own hard work. Through
a simple and clear comprehensive remuneration structure, the matching of rank and remuneration is established,so that each employee can clearly understand the relationship between personal contribution and compensationincentives, and the Company tries to ensure fairness in the following three aspects as much as possible whendesigning remuneration incentives:
Firstly, ensure external equity, i.e., salary competitiveness versus the market. The Company conductsexternal salary surveys on a regular basis every year and determines the Company’s remuneration standards andthe basis for adjustment according to the survey results.Secondly, ensure internal equity, and determine the salary standards for different positions according to thevalue evaluation of positions.Finally, ensure that individual performance is fairly reflected by remuneration. Employee compensation islinked to individual performance, meaning more pay for better performance.In order to further improve the initiative and creativity of the Company’s management and employees, and topromote the Company’s continuous growth, the Company improves the incentive mechanism through theimplementation of the stock ownership incentive plan, with a view to achieving the common development ofemployees and the Company while enhancing the Company’s value. The Company’s 2021 stock option andrestricted stock incentive plan grants 1,683,000 stock options to 70 employees and 24,249,200 restricted shares to2,240 employees. By implementing stock ownership incentives that match the intensity of competition in theindustry, effective to attract and retain outstanding talent, the initiative of the Company’s management and coretechnical/business personnel is fully mobilized.The Company is required to comply with the disclosure requirements for the software and informationtechnology services industry as stated in the Guidelines of Shenzhen Stock Exchange for Self-discipline Regulationof Listed Companies No. 3: Industry Information Disclosure.The Company’s total employee compensation included in the total operating costs in the current period wasRMB3,517.631 million, accounting for 20.08% of the total operating costs. The Company’s profit is sensitive tochanges in the total employee compensation.In 2021, the number of core technical staff of the Company accounted for 10.92% of the total number ofemployees on the payroll, a 1.17% decrease from the 12.09% in 2020. The remuneration of core technical staff ofthe Company accounted for 16.82% of the total employee remuneration, a decrease of 0.05% from the 16.87% in2020.
3. Training plan
iFLYTEK follows its core philosophy of “helping employees achieve ideals and creating value for society”and its outlook on talent, i.e., “talent is the Company’s greatest asset, and the appreciation of talent is the mostimportant dimension in the appreciation of the Company”. The Company always sees talent as its most importantresources and strives to build and continuously improve the talent management system, aiming to establish asound talent development system. In order to establish and improve the internal talent development structure, theCompany continues to improve its rapid talent development system by establishing and improving the jobqualification framework, combining employees’ growth with business development, establishing a benignback-and-forth flow and job rotation mechanism, cultivating more comprehensive talent, and pursuing thecommon success of the Company and employees.
1) Clear career paths
The Company continues to improve career paths of employees, optimizes the job qualification system, androlled out more than 30 career paths, covering operation management, products, technology, algorithm research,
project management, etc., and continuously improves the supporting learning system to help employees in theircareer development. Employees can choose to pursue career development vertically and become industry expertsbased on their actual situation, or they can pursue development opportunities horizontally based on theCompany’s needs and become inter-disciplinary talent by accumulating expertise and experience for differentcareer paths.
2) An established learning and training system
To drive the Company’s business development and employees’ personal growth, the Company hasestablished a hierarchical and role-based talent development system and has been continuously improving it. Avariety of talent development programs have been launched. Those programs involve training sessions for allaspects, including leadership, know-how, general knowledge and skills, covering many roles such as experiencedprofessionals, fresh graduates, business experts, and management personnel, etc. To meet the Company’s andemployees’ development needs, in addition to continuously leveraging internal trainers, the Company has alsobeen vigorously bringing in external high-quality learning resources to provide platforms and resources foremployee development, improving employees’ capabilities and promoting their overall development.
3) An efficient mechanism for accelerated growth
To further motivate employees to pursue personal development, and to develop outstanding talent faster, theCompany has adopted a wide range of development measures. In October 2021, the Company issued the CorePhilosophy and Basic Principles of Management Personnel Administration to align the Company's managementpersonnel administration with unified standards, specify the missions and responsibilities of managementpersonnel, determine the qualification standards for management personnel, and improve relevant mechanismscovering management personnel selection, appointment and development, etc. Meanwhile, the Company hasformed a “continuous source” of talent supply based on a comprehensive talent development system enabled bythe setup of teams of potential successors at all levels. In addition, the Company has also established an internaljob rotation mechanism to ensure the accelerated development of talent enabled by job rotation experience. In2021, a large number of staff members were transferred from back-end research and development (R&D)
positions to front-end positions such as product lines and business lines. Greater efforts will be made in 2022 tofacilitate the talent flow between front-end and back-end positions to efficiently develop a large number ofinter-disciplinary professionals.
4. Labor outsourcing
√ Applicable □ Not applicable
| Total work hours for labor outsourcing (hour) | 688,121.28 |
| Total pay for labor outsourcing (RMB) | 39,772,394.32 |
X. The Company’s Profit Distribution and Conversion of Capital Reserve into Share CapitalThe formulation, implementation or adjustment of the profit distribution policy, especially the cash dividendpolicy, during the reporting period
√ Applicable □ Not applicable
Since its listing, the Company has always attached great importance to rewarding investors, and has clearlystipulated provisions on cash dividends in the Articles of Association under the premise of ensuring theCompany’s sustainable development.
In order to ensure a reasonable, sustainable and stable shareholder return mechanism, increase thetransparency and operability of the decision-making on profit distribution policy, and effectively protect thelegitimate rights and interests of investors, the Company made the “Shareholder Return Plan for the Next ThreeYears (2021-2023)” (hereinafter referred to as the “Plan”) in accordance with the Company Law, the “Notice onthe Further Implementation of Issues Concerning Cash Dividends of Listed Companies” and the “Guidelines forthe Supervision of Listed Companies No. 3 - Cash Dividends of Listed Companies” issued by the China SecuritiesRegulatory Commission, as well as other relevant laws, regulations, normative documents and the relevantprovisions of the Company’s Articles of Association, based on the actual situation of the Company. The Plan wasreviewed and approved at the Company’s first extraordinary general meeting in 2021.
| Special explanation on cash dividend policy | |
| Whether it complies with the Company’s Articles of Association or the resolutions of the shareholders’ general meeting: | Yes |
| Whether the dividend payout standard and ratio are clear and explicit: | Yes |
| Whether the relevant decision-making procedures and mechanisms are complete: | Yes |
| Whether independent directors have performed their duties and played their due roles: | Yes |
| Whether minority shareholders have the opportunity to fully express their opinions and voice demands, and whether their legitimate rights and interests are fully protected: | Yes |
| Whether the terms and conditions and procedures are compliant and transparent if the cash dividend policy is adjusted or changed: | Yes |
The Company was profitable during the reporting period and the parent company’s profit available for distributionto shareholders was positive, but no cash dividend distribution plan was proposed.
□ Applicable √ Not applicable
Profit distribution and conversion of capital reserve into share capital during the reporting period
√ Applicable □ Not applicable
| Number of bonus shares for every 10 shares (share) | 0 |
| Dividend per 10 shares (RMB) (tax included) | 1.00 |
| Equity base of the distribution plan (share) | 2,324,325,245 |
| Amount of cash dividends (RMB) (tax included) | 232,432,524.50 |
| Amount of alternatives to cash dividends (such as share repurchase) (RMB) | 0.00 |
| Total cash dividends (including alternative forms) (RMB) | 232,432,524.50 |
| Distributable profits (RMB) | 469,875,998.25 |
| Proportion of total cash dividends (including alternative forms) to distributable profits | 100% |
| Cash dividends during the reporting period | |
| If the Company is at its mature development stage and major capital expenditure has been planned, the proportion of cash dividends in the distributable profit should be at least 40%. | |
| Detailed description of profit distribution or the capital reserve conversion plan | |
| Based on the total share capital of 2,324,325,245 by March 31, 2022, a dividend of RMB1.00 (tax included) is distributed to all shareholders for every 10 shares, and the remaining undistributed profits will not be distributed for the time being. There are no bonus shares. during the period from the time the Board of Directors reviewed the profit distribution plan to the date of equity registration for the implementation of the profit distribution plan, if the Company’s total share capital changes due to the restricted stock incentive plan or any other reasons, the implementation shall be based on the total share capital on the equity registration date when the distribution plan is implemented in the future, and the above payout ratio should be kept unchanged while adjusting the total amount. | |
XI. Implementation of the Company’s Stock Ownership Incentive Plan, Employee StockOwnership Plan or Other Employee Incentive Measures
√ Applicable □ Not applicable
1. Stock ownership incentive
On 18 April 2021, at the Twelfth Meeting of the Fifth Board of Directors and the Eighth Meeting of the FifthBoard of Supervisors, the Proposal on Repurchase and Cancellation of Part of Granted Restricted Shares wasreviewed and approved. Since some employees have lost the eligibility for the restricted stock incentives due to
resignation or other reasons, the Company will repurchase and cancel the corresponding parts of the restrictedshares that have been granted to aforementioned employees but have not yet been released. For details, pleaserefer to the Announcement on Repurchase and Cancellation of Part of Granted Restricted Shares published bySecurities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO(http://www.cninfo.com.cn) on 20 April 2021.
On 18 April 2021, at the Twelfth Meeting of the Fifth Board of Directors, the Proposal on MeetingConditions for Lifting Restrictions on the Third Release Period of the Initial Grant of Restricted Stocks in theIncentive Plan was reviewed and approved. According to relevant provisions of the Restricted Stock IncentivePlan (Draft) and Summary, the conditions for lifting the restrictions on the third release period of the initial grantof restricted stocks in the Company’s restricted stock incentive plan have been fulfilled. For details, please refer tothe Announcement on Meeting Conditions for Lifting Restrictions on the Third Release Period of the Initial Grantof Restricted Stocks in the Incentive Plan published by Securities Times, China Securities Journal, ShanghaiSecurities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) on 20 April 2021.On 20 May 2021, those shares released from the third release restriction period in the initial grant of theCompany’s first phase of restricted stock incentive plan were listed and circulated. The number of shares releasedfrom restrictions this time was 35,853,180, accounting for 1.6116% of the Company’s total share capital at thattime. The number of people whose shares were released from restrictions this time was 760. For details, pleaserefer to the Indicative Announcement on Shares Released from the Third Release Restriction Period in the InitialGrant of the Company’s First Phase of Restricted Stock Incentive Plan Being Listed and Circulated” published bySecurities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO(http://www.cninfo.com.cn) on May 18, 2021.On 28 May 2021, the repurchase and cancellation of parts of granted restricted shares of the Company’sincentive plan was completed. After the completion of the repurchase and cancellation, the total number of sharesof the Company was changed from 2,224,737,717 to 2,224,132,297. For details, please refer to the Announcementon the Completion of Repurchase and Cancellation of Part of Granted Restricted Shares published by SecuritiesTimes, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO(http://www.cninfo.com.cn) on 29 May 2021.On 18 July 2021, at the Fifteenth Meeting of the Fifth Board of Directors, the Proposal on MeetingConditions for Lifting Restrictions on the Third Release Period of the Reserved Parts of Restricted Stocks in theIncentive Plan was reviewed and approved. According to relevant provisions of the Restricted Stock IncentivePlan (Draft) and Summary, the conditions for lifting the restrictions on the third release period of the reservedparts of restricted stocks in the Company’s restricted stock incentive plan have been fulfilled. For details, pleaserefer to the Announcement on Meeting Conditions for Lifting Restrictions on the Third Release Period of theReserved Parts of Restricted Stocks in the Incentive Plan published by Securities Times, China Securities Journal,Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) on 20 July 2021.On 17 August 2021, those shares released from the third release restriction period in the reserved parts of theCompany’s first phase of restricted stock incentive plan were listed and circulated. The number of shares released
from restrictions this time was 3,638,400, accounting for 0.1582% of the Company’s total share capital at thattime. The number of people whose shares were released from restrictions this time was 354. For details, pleaserefer to the Indicative Announcement on Shares Released from the Third Release Restriction Period of theReserved Parts of the Company’s First Phase of Restricted Stock Incentive Plan Being Listed and Circulatedpublished by Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily andCNINFO (http://www.cninfo.com.cn) on 13 August 2021.
On 26 September 2021 and 13 October 2021, the Proposal on the Company’s Stock Options and RestrictedStock Incentive Plan (Draft) and Summary was reviewed and approved respectively at the Eighteenth Meeting ofthe Fifth Board of Directors of the Company and the Company’s second extraordinary general meeting in 2021.On 26 October 2021, the Proposal on Granting Stock Options to Employees Enrolled in the 2021 StockOptions and Restricted Stock Incentive Plan was reviewed and approved at the Nineteenth Meeting of theCompany’s Fifth Board of Directors. As determined by the Company’s Board of Directors, the options this timewere granted on 26 October 2021. A total of 1,683,000 shares were granted to 70 people at a price of RMB52.95per share. For details, please refer to the Announcement on Granting Stock Options to Employees Enrolled in the2021 Stock Options and Restricted Stock Incentive Plan published by Securities Times, China Securities Journal,Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) on 27 October 2021.On 4 November 2021, the registration of granted stock options of the Company’s 2021 Stock Options andRestricted Stock Incentive Plan was completed. For details, please refer to the Announcement on Completion ofRegistration of Granted Stock Options of the Company’s 2021 Stock Options and Restricted Stock Incentive Planpublished by Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily andCNINFO (http://www.cninfo.com.cn) on 6 November 2021.On 10 November 2021, the Proposal on Adjusting the Repurchase Price of Restricted Stocks in the SecondRestricted Stock Incentive Plan and Repurchase and Cancellation of Part of Granted Restricted Stocks wasreviewed and approved at the Twentieth Meeting of the Fifth Board of Director of the Company. Since someemployees enrolled in the second phase of the Restricted Stock Incentive Plan had been elected as supervisors orresigned, the Company planned to repurchase and cancel the corresponding part of the 449,300 restricted sharesthat had been granted to those employees but had not been released. Meanwhile, due to the 2020 annual dividenddistribution, the Company adjusted the repurchase price of shares included in the second phase of the restrictedstock incentive plan to RMB18.08 per share, according to the relevant rules of the Company’s Second Phase ofRestricted Stock Incentive Plan (Draft). For details, please refer to the Announcement on the Adjustment of theRepurchase Price of Shares in the Second Phase of Restricted Stock Incentive Plan and the Repurchase andCancellation of Part of Granted Restricted Shares published by Securities Times, China Securities Journal,Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) on 11 November 2021. Atthe same time, the Proposal on Meeting Conditions for Lifting Restrictions on the First Release Period of theGrant of Restricted Stocks in the Second Restricted Stock Incentive Plan was reviewed and approved at theTwentieth Meeting of the Fifth Board of Directors of the Company. According to the relevant provisions of theCompany’s Second Phase of Restricted Stock Incentive Plan (Draft), the conditions for lifting restrictions on the
first release period of the grant of restricted stocks in the Second Restricted Stock Incentive Plan have beenfulfilled. For details, please refer to the Announcement on Meeting Conditions for Lifting Restrictions on the FirstRelease Period of the Grant of Restricted Stocks in the Second Restricted Stock Incentive Plan published bySecurities Times, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO(http://www.cninfo.com.cn) on 11 November 2021.On 10 November 2021, the Proposal on Adjusting the List of Recipients Eligible for Restricted Shares andNumbers of Shares to be Granted in the 2021 Stock Options and Restricted Stock Incentive Plan was reviewedand approved at the Twentieth Meeting of the Fifth Board of Directors of the Company. Due to the resignation of8 recipients who were originally eligible for restricted shares as part of the incentive plan and 3 recipients waivingtheir rights to purchase all restricted shares they were eligible for due to their fund shortage or other personalreasons, the Board of Directors of the Company adjusted the equities forfeited by the above 11 incentiverecipients among the rest of incentive recipients, and allocated relevant shares to incentive recipients on theoriginal incentive recipients list excluding directors, supervisors and senior management members. The number ofrestricted stock incentive recipients in this incentive plan has adjusted from 2,264 to 2,253 accordingly, and thetotal number of restricted shares granted remains unchanged. At the same time, the Proposal on GrantingRestricted Shares to Recipients in the 2021 Stock Options and Restricted Stock Incentive Plan was reviewed andapproved at the Twentieth Meeting of the Fifth Board of Directors of the Company. As determined by theCompany’s Board of Directors, the restricted shares this time were granted on 10 November 2021. A total of24,320,200 shares were granted to 2,253 recipients.On 15 December 2021, those shares released from the first release restriction period in the Company’ssecond phase of restricted stock incentive plan were listed and circulated. The number of shares released fromrestrictions this time was 7,855,020, accounting for 0.3414% of the Company’s total share capital at that time. Thenumber of incentive recipients whose shares were released from restrictions this time was 1,804. For details,please refer to the Indicative Announcement on Shares Released from the First Release Restriction Period of theCompany’s Second Phase of Restricted Stock Incentive Plan Being Listed and Circulated published by SecuritiesTimes, China Securities Journal, Shanghai Securities News, Securities Daily and CNINFO(http://www.cninfo.com.cn) on 14 December 2021.
On 15 December, 2021, restricted shares of the Company’s 2021 Stock Options and Restricted StockIncentive Plan were granted and listed. A total of 24,249,200 shares, accounting for 1.0540% of the Company’stotal share capital of 2,300,525,300 shares before the grant, were granted to 2,240 incentive recipients. For details,please refer to the “Announcement on Completion of Granting of Stock Options and Restricted Shares of theCompany’s 2021 Stock Options and Restricted Stock Incentive Plan” published by Securities Times, ChinaSecurities Journal, Shanghai Securities News, Securities Daily and CNINFO (http://www.cninfo.com.cn) onDecember 14, 2021.
The Company’s restricted stock incentive plan has played a positive role in retaining key staff members andthe turnover rate of incentive recipients is much lower than the average level of the artificial intelligence (AI)industry. None of the key staff members who have been granted more than 100,000 shares as part of the incentive
plan has left the Company, enabling the Company to maintain stability of high-end talent repository in heatedcompetition for talents.Incentive Stock Options for Directors and Senior Management Members of the Company
√ Applicable □ Not applicable
Unit: Share
| Name | Job title | Number of stock options held at the beginning of the year | Number of newly granted stock options during the reporting period | Number of exercisable option shares during the reporting period | Number of exercised option shares during the reporting period | Exercise price of the shares exercised during the reporting period (RMB/share) | Number of stock options held at the end of the reporting period | Market price per share at the end of the reporting period (RMB/share) | Number of restricted shares held at the beginning of the reporting period | Number of unlocked restricted shares in the current reporting period | Number of newly granted restricted shares during the reporting period | Grant price of restricted shares (RMB/share) | Number of restricted shares held at the end of the reporting period |
| Hu Yu | Vice President | 2,490,000 | 2,490,000 | ||||||||||
| Wu Xiaoru | President | 2,400,000 | 2,400,000 | ||||||||||
| Chen Tao | Vice President | 2,400,000 | 2,400,000 | ||||||||||
| Jiang Tao | Vice President | 2,328,000 | 2,328,000 | ||||||||||
| Nie Xiaolin | Vice President | 2,076,000 | 2,076,000 | ||||||||||
| Zhang Shaobing | Finance Director (resigned after | 696,000 | 696,000 |
| end of term) | |||||||||||||
| Du Lan | Vice President | 300,000 | 300,000 | 100,000 | 26.48 | 100,000 | |||||||
| Duan Dawei | Director, Vice President | 300,000 | 90,000 | 200,000 | 26.48 | 410,000 | |||||||
| Wang Ming | Finance Director | 60,000 | 18,000 | 70,000 | 26.48 | 112,000 | |||||||
| Total | -- | 0 | 0 | 0 | 0 | -- | 0 | -- | 13,050,000 | 12,798,000 | 370,000 | -- | 622,000 |
Performance Evaluation Mechanism of and Incentives for Senior Management MembersIn order to establish an incentive and restraint mechanism in alignment with the modern enterprise system,motivate directors, supervisors and senior management members, and improve the performance of the Company’soperations and management, the Company has formulated clear Guidelines for Remuneration of Directors,Supervisors and Senior Management Members upon the review and approval by the shareholders’ meeting.According to the Guidelines, the remuneration of the Company’s directors, supervisors and senior managementmembers is based on the Company’s business scale and performance, and is determined comprehensively in linewith the Company’s business plan and the responsibilities and performance of specific roles. The remuneration ofdirectors, supervisors and senior management members adheres to the principle of combining performance-basedpay with rights and obligations, so as to bring the incentive and restraining force of remuneration into effect;Remuneration plans are set with the Company’s financial performance and business objectives while havingmarket rates for reference, and determined with a view to ensuring sustained and stable development of theCompany. The remuneration standards are established in accordance with the principles of openness and fairness.The Remuneration and Appraisal Committee of the Board of Directors evaluates the performance of directors andsenior management members and determines their remuneration.
2. Implementation of the employee stock ownership plan
□ Applicable √ Not applicable
3. Other employee incentive programs
√ Applicable □ Not applicable
iFLYTEK’s perspective on talent is based on recognizing that “talent is the greatest asset to the Companyand talent development is the most important dimension of the Company’s growth”. The Company always followsits core philosophy of “helping employees achieve ideals and creating value for society”, striving to provideemployees with development opportunities to achieve career success and community respects while enablingemployees to share the benefits of the Company’s growth through mechanisms of “generating revenues by all andfor all” and incremental performance management.The Company has been perfecting the employees and organization resonance mechanism based on thequarterly performance reviews of each department, and has been further refining the quarterly goals of eachdepartment and corresponding management mechanisms in alignment with the Company’s annual business goals,and has established a dynamic connection between organizational performance and employees’ merit-based salarysystem. Processes are streamlined to enhance organizational performance management and ensure thatorganizational goals are achieved while providing employees with more flexible incentives.Based on a complete and goal-oriented performance process, the Company is establishing a goal-focusedemployee performance evaluation system featured by two-way feedback between employees and their supervisors,feedback and results are well documented and fully examined to ensure fairness in evaluating individualperformance. Efforts have been made to establish an open and transparent performance evaluation system throughinformation disclosure, internal audit and other methods, so as to improve employees’ capabilities of managingtheir personal performance. The traditional performance review mechanism based on administrative organizationsis being changed to introduce project management requirements and bring more flexibility into the appraisal. Bystrengthening the dynamic relationship between performance results and performance-based compensation,performance becomes the main indicator for value distribution.As for remuneration system and design, the Company advocates the principle of generating revenues by alland for all, and encourages employees to reach for the benefits brought by business growth through their own hardwork. Through a simple and clear remuneration structure with matching job grades, each employee can clearlyunderstand the relationship between personal contribution and compensation incentives, and the Company tries toensure fairness in the following three aspects when designing remuneration incentives: firstly, external equity, i.e.,salary competitiveness versus the market. The Company conducts external salary surveys on a regular basis everyyear, and determines the Company’s remuneration standards and the basis for adjustment according to the surveyresults; secondly, internal equity, the Company determines the salary standards for different positions according tothe value evaluation of those positions; finally, the Company tries to ensure that individual performance is fairlyreflected by remuneration. Employee compensation is linked to individual performance, meaning an accuratereflection of the work contributed.The Company is required to comply with the disclosure requirements for the software and informationtechnology services industry as stated in the Guidelines of Shenzhen Stock Exchange for Self-discipline Regulationof Listed Companies No. 3: Industry Information Disclosure.
The Company allocated RMB134.8802 million for stock ownership incentives classified as accrued expenses,accounting for 8.67% of the net profit attributable to shareholders of the listed company. RMB71.3502 million
was used on stock option incentives for key tech personnel, accounting for 52.90% of the Company’s stock optionincentives in the current reporting period.XII. Establishment and Implementation of the Internal Control System during the ReportingPeriod
1. Establishment and Implementation of the Internal Control System
The Company attaches great importance to the establishment and improvement of an internal control system,and acts in full accordance with the enterprise internal control standards to refine business processes, accuratelyidentify and evaluate internal and external risks faced by the Company, improve internal control measures,optimize information systems, strengthen internal supervision, regularly conduct internal control self-assessmentand improve the internal control system. Based on the actual situation of the Company, the Company hasformulated a series of policies, including the Internal Control Policy, Internal Audit Policy, Policy on MakingMajor Operational Decisions, External Investment Management Policy, Administrative Measures for ExternalFinancial Assistance, Administrative Measures for Fundraising, Related-Party Transaction Policy, SignificantInformation Internal Reporting Policy, Seal Management Regulations, and Fund Management Policy, and strictlyimplement the internal control guidelines for listed companies to maintain standardized corporate management.Based on iFLYTEK’s competitiveness in its world-leading artificial intelligence (AI) technology, theCompany actively adopts AI to empower internal control. The Company has applied AI in integrating informationand data from different systems within the Company and has been using risk models and algorithms to automatemost of the internal control processes, further improving the accuracy, efficiency and intelligence of internalcontrol. Digital audit has been applied in employee self-service expense reimbursement, making automaticproblem identification possible, forming a relatively sophisticated problem prevention and control system foremployees expense reimbursement.
Figure AI-empowered Internal Control
The Company sets up functional departments according to the actual needs of operation and management. Asdesigned, each department has clear work scopes and responsibilities, continuously establishes and optimizessystems and processes according to business development and is responsible for the actual transformation andimplementation. Each department provides guidance, supervision and support to branches and controlledsubsidiaries, and carry out rectification when problems are identified. The work scope, responsibilities andobjectives of each branch, controlled subsidiary, and position are clearly defined, delegation, inspection andaccountability mechanisms are established, with appropriate authorization and clear responsibilities at all levels,to ensure that functions are performed within the scope of authorization.In order to strengthen the management of subsidiaries, establish an effective control mechanism, conduct riskcontrol on the organization, resources, assets, investment, operation and other aspects of the listed company, andimprove the overall operational efficiency and anti-risk capability of the listed company, the Company hasformulated the Regulations on the Management of Controlled Subsidiaries covering the governance, day-to-dayoperation, financial management, business and investment decision-making, significant information reporting,internal audit supervision and inspection, human resources management, performance appraisal and managementof controlled subsidiaries. The Company centralizes financial management, and assigns directors, supervisors andsenior management members to oversee controlled subsidiaries. The Company manages the businesses ofcontrolled subsidiaries by defining the responsibilities and obligations of the assigned directors and supervisors.Individuals in charge of the controlled subsidiaries report work to upper management assigned with correspondingduties at the end of each year, so as to ensure that the Company’s management measures can be effectivelyimplemented.The Audit and Supervision Department determines the main business units, business and matters that need tobe included in the audit scope in strict accordance with the risk-based audit approach, covering the main aspectsof the Company’s operation and management. The main business units included in the audit scope include theCompany, wholly-owned and controlled subsidiaries. The total assets of the business units in the audit scopeaccount for 100% of the total assets recorded in the Company’s consolidated financial statements, and the totaloperating revenue accounts for 100% of the total operating revenue recorded in the Company’s consolidatedfinancial statements. The main business and matters included in the audit scope include: corporate governance,development strategy, organizational structure, human resources, corporate culture, work ethics and competence,information and communication, internal supervision and other processes and procedures involved incorporate-level control structure in the Company’s internal control and management manual and relevant rules onimplementation; funds, investment, sourcing and procurement, sales, inventory, fixed asset management,engineering projects, research and development, business outsourcing, budget management, guarantee business,storage and use of raised funds, related-party transactions and other processes and fields involved in thebusiness-level control structure.
2. Specifics of Major Defects Identified in Internal Control during the Reporting Period
□ Yes √ No
XIII. Management and Control of the Company during the Reporting Period
| Company Name | Acquisition Plan | Milestones | Problems Encountered | Actions Taken | Status | Follow-up Plan |
| Anhui Imaging Union Cloud Health Technology Co., Ltd. | On 12 July 2021, Anhui iFLYTEK Healthcare Co., Ltd. (“iFLYTEK Healthcare”), a controlled subsidiary of the Company, and Anhui Imaging Union Cloud Health Technology Co., Ltd. (“Imaging Union”) signed an Investment Cooperation Agreement (the “Agreement”). According to the Agreement, after the completion of this investment, iFLYTEK Healthcare will hold 51% of the shares of Imaging Union, and the shareholding ratio of Anhui iFLYTEK Yunchuang Technology Co., Ltd. which is the Company’s wholly-owned subsidiary in Imaging Union will drop to 7.03%. The Company will indirectly control 58.03% of the shares of Imaging Union through iFLYTEK Healthcare and iFLYTEK Yunchuang, making Imaging Union a controlled subsidiary of iFLYTEK Healthcare and iFLYTEK. iFLYTEK and iFLYTEK Healthcare provide professional guidance, supervision and support to Imaging Union. In view of the footprint and expert resources that Imaging Union has developed in the Internet-based healthcare over the past years, Imaging Union’s keeps its remote imaging and digital imaging businesses independent, and will leverages iFLYTEK’s leading position in the industry, client base and management to expand the domestic market together. | According to iFLYTEK’s Regulations on the Management of Controlled Subsidiaries, after the acquisition, integration and adjustment will be made in the following aspects: 1. Personnel: By July 2021, iFLYTEK has appointed 3 members to the Board of Directors of Imaging Union (5 directors in total), to obtain effective control over major decisions. In August 2021, iFLYTEK assigned members of iFLYTEK Healthcare to serve as the president, Vice President, finance director and other management roles of Imaging Union. 2. Finance: The finance director of iFLYTEK Healthcare has been appointed to work with the finance team from Imaging Union to standardize and integrate work processes according to financial management rules and requirements of iFLYTEK Healthcare. 3. Business: Teams of the two sides work together to formulate business plans for imaging, and integrate resources of both sides to explore business | A systematic internal control management structure was not established in this subsidiary before the acquisition. | iFLYTEK’s standardized internal control management system has been established at Imaging Union. In the meantime a professional compliance team has been put in place to supervise and audit Imaging Union to ensure asset security and standardized operation. | By now, a standardized internal control process has been established at Imaging Union and it has been integrated into the overall management framework of iFLYTEK. | Internal controls at Imaging Union and guidance will be further strengthened. |
XIV. Self-Assessment Report on Internal Controls or Internal Control Auditor's Report
1. Self-Assessment Report on Internal Controls
opportunities of digitalimaging and remoteimaging.Date of disclosure of the full text of theAssessment Report on Internal Controls
| Date of disclosure of the full text of the Assessment Report on Internal Controls | April 22, 2022 | ||
| Disclosure index of the full text of the Assessment Report on Internal Controls | 2021 Assessment Report on Internal Controls published on CNINFO (http://www.cninfo.com.cn) | ||
| The ratio of the total assets of the business units included in the assessment scope to the total assets of the Company’s consolidated financial statements | 100% | ||
| The ratio of the operating revenue of the business units included in the assessment scope to the operating revenue of the Company’s consolidated financial statements | 100% | ||
| Defect identification standards | |||
| Category | Financial statements | Non-financial statements | |
| Qualitative classification criteria | Material defects: A defect in internal controls alone or in combination with other deficiencies that are reasonably likely to result in a failure to prevent or detect and correct a material misstatement in a financial statement in a timely manner, such as the following scenarios: (1) directors, supervisors or senior management members conduct fraudulent practices; (2) the Company corrects a published financial statement; (3) a certified public accountant finds that there is a material misstatement in the current financial statement, but the internal controls fail to detect the misstatement during the operation process; (4) ineffective supervision of the internal controls by the Company’s audit committee and internal | The following scenarios may be identified as material defects, and other scenarios may be identified as major defects or general defects depending on the degree of impact: (1) unreasonable decision-making procedures of the Company; (2) violation of national laws and regulations, such as environmental pollution; (3) brain drain (managerial or technical personnel); (4) frequent negative news covered by media; (5) defects identified in the assessment of internal controls are not corrected, especially material and major defects; (6) important business lacks institutional control or the institutional control fails systematically. | |
| audit office; (5) other defects that may affect the correct judgment of the users of the financial statement. Major defects: A defect in internal controls alone or in combination with other defects that have a reasonable possibility of resulting in failure to prevent or detect and correct a misstatement in a financial statement in a timely manner that, though not at or above the level of significance, should still catch the attention of the Board of Directors and senior management members. General defects: Defects in internal controls that do not constitute material defects and major defects. | ||
| Quantitative classification criteria | Material defects: The property loss caused by the defect exceeds or equals 1% of the total assets in the consolidated financial statements; major defects: The property loss caused by the defect exceeds or equals 0.5% but less than 1% of the total assets in the consolidated financial statements; general defects: The property loss caused by the defect is less than 0.5% of the total assets in the consolidated financial statements. | Material defects: The property loss caused by the defect exceeds or equals 1% of the total assets in the consolidated financial statements; major defects: The property loss caused by the defect exceeds or equals 0.5% but less than 1% of the total assets in the consolidated financial statements; general defects: The property loss caused by the defect is less than 0.5% of the total assets in the consolidated financial statements. |
| Number of material defects in financial statement (pcs) | 0 | |
| Number of material defects in non-financial statements (pcs) | 0 | |
| Number of major defects in financial statement (pcs) | 0 | |
| Number of major defects in non-financial statement (pcs) | 0 | |
2. Assurance Report on Internal Controls
√ Applicable □ Not applicable
| Deliberation in the Assurance Report on Internal Controls |
| iFLYTEK has maintained effective internal control over financial reporting in all material aspects as of December 31, 2021 in |
| accordance with the Basic Norms for Enterprise Internal Control and relevant regulations. | |
| Disclosure of Internal Control Auditor’s Report | Disclosed |
| Date of disclosure of the full text of the Internal Control Auditor’s Report | 22 April 2022 |
| Disclosure index of the full text of the Internal Control Auditor’s Report | Assurance Report on Internal Controls published on CNINFO (http://www.cninfo.com.cn) |
| Type of opinion on the Internal Control Auditor’s Report | Unqualified opinion |
| Any material defects in non-financial statements? | No |
Whether the accounting firm has issued an internal control auditor’s report with a modified opinion
□ Yes √ No
Whether the internal control auditor’s report issued by the accounting firm is consistent with the conclusion of the self-assessmentreport of the Board of Directors
√ Yes □ No
XV. Rectification of Problems Identified in the Corporate Governance Campaign of theListed CompanyBased on the uniform requirements established by the Listing Department of the China Securities RegulatoryCommission (CSRC), and in accordance with the requirements of the Notice on Conducting Effective CorporateGovernance of Listed Companies laid out by Anhui Securities Regulatory Bureau of the CSRC, the Company hasconducted self-inspection on 118 issues in the Self-Inspection Checklist for Corporate Governance of ListedCompanies. The self-inspection result shows that no rectification by the Company is needed for any issue.
Section V Environmental and Social ResponsibilityI. Major Environmental IssuesWhether the listed company or its subsidiaries are key corporate polluters announced by the environmentalprotection authority
□ Yes √ No
Administrative penalties for environmental pollution during the reporting period
| Company name | Reason for the penalty | Violation of regulations | Penalty result | Impact on the production and operation of the listed company | The Company’s rectification measures |
| N/A | N/A | N/A | N/A | N/A | N/A |
Reference to other environmental pollution information disclosed by key corporate polluters
The artificial intelligence (AI) industry is an eco-friendly high-tech industry with high added value. TheCompany’s AI technology and software-focused product application and development do not involve thedischarge of traditional industrial wastewater/exhaust gas/waste/noise in day-to-day operations. Based on itsworld-leading AI technology with proprietary intellectual property rights, iFLYTEK actively engages AI inpursuing low-carbon and sustainable growth, and advances environmental protection and development throughmultiple measures in infrastructure construction, day-to-day production, environmental protection in worklocations and resource conservation.Measures taken to reduce carbon emissions during the reporting period and effects
√ Applicable □ Not applicable
AI improves efficiency and facilitates energy conservation and emission reduction
AI and big data play an important role in carbon emission reduction, carbon monitoring, green finance,carbon emissions trading and other relevant areas. iFLYTEK actively pursues innovation in industry solutions tomanage emission peak and achieve carbon neutrality, and works with scientific research institutions for this goal.On the strength of the urban platform and digital base, iFLYTEK continues to conduct research on carbonemission assessment, detection and analysis, and explores decision support system models to provide low-carbonplanning and optimization solutions for cities and their administrators, helping to build green communities.
iFLYTEK’s Artificial Intelligence Open Platform actively utilizes AI to improve industrial efficiency andpromote energy conservation and emission reduction. iFLYTEK’s AI Open Platform has achieved in-depthcoverage of AI applications in the industrial sectors, helping industrial businesses achieve upgrading indigitalization and intelligence. In 2021, industrial and enterprise digital transformation applications accounted for60% of new applications on iFLYTEK’s AI Open Platform.
Vehicle exhaust emission is one of the typical scenarios of carbon emissions. According to the estimate made
by China Automotive Technology and Research Center, carbon emissions by automobiles account for more than80% of carbon emissions in China’s transportation sector, and about 7.5% of carbon emissions in China.iFLYTEK’s “Transportation Super Brain” solutions utilize AI to learn big data in transportation, empower refinedmanagement of urban transport, and enable data-driven decision-making. Taking “Hefei Transportation SuperBrain” as an example, traffic big data is entirely linked to the Super Brain monitoring platform to enable accuratemonitoring of traffic flow at crossroads and in each section of roads, realize real-time traffic congestion warningand identification of locations where traffic congestion occurs frequently, and provide data-based research supportfor traffic management. This has effectively improved the traffic efficiency and reduced carbon emissions. So far,more than 200 million pieces of various types of data are integrated and converged on Transportation Super Brainon a daily basis, covering 2,417 intersections, 1,017 roads and 50 grid areas in the urban area of Hefei. Since theoperation of Transportation Super Brain, the traffic efficiency within the 15-square-kilometer demonstration areahas been significantly improved. Among the five traffic congestion alleviation plans released by Hefei, a total of96 regular traffic congestion locations have been identified, 93% of which were identified via TransportationSuper Brain. With the Transportation Super Brain running, a signal timing optimization plan can be generatedevery 2 minutes; data archiving has been completed for 2,156 intersections; signal timing at 756 intersections hasbeen optimized. During the operation period, the traffic flow rate of an area increased by 12.9% on average; thetraffic flow during the morning and evening peak hours on weekdays increased by 8.3%, and the traffic queuedecreased by 11.7%.Reasonable use of resources for energy conservation and environmental protectioniFLYTEK attaches great importance to energy conservation and environmental protection and the impact onsurroundings. The Company strictly implements relevant national and industry regulations in infrastructureconstruction, office waste and wastewater disposal, lighting, and greening of the industrial park, makes greatefforts in saving energy, reducing emissions, and creating a nice, green and healthy work environment. TheCompany advocates the concept of green office, and keeps promoting the development of “paperless and smartoffice” by improving the OA system and iFLYTEK Smart Conference System for online meetings.iFLYTEK advocates energy conservation, emission reduction, safety and environmental protection.iFLYTEK attaches great importance to energy conservation and environmental protection and the impact onsurroundings. The Company strictly implements relevant national and industry regulations in infrastructureconstruction, office waste and wastewater disposal, lighting, and greening of the industrial park, makes greatefforts in saving energy, reducing emissions, and creating a nice, green and healthy work environment.The Company arranges administrative and services staffs to study the Implementation Plan for EnergyConservation and Consumption Reduction Initiative. In terms of the use of air conditioners, it is specified in theCircular of the General Office of the State Council on Strictly Implementing the Temperature Control Standardsfor Air Conditioners in Public Buildings that the temperature setting for indoor air conditioning in office areas,such as, offices and conference rooms, in summer shall not be lower than 26℃ and shall not be higher than 20℃in winter.” In this regard, the supervision and control center sets and controls the use of VRN central airconditioners to reduce the utilization rate of air conditioners to the greatest extent, and effectively control the
power consumption and carbon emissions. In addition, the Company has further refined the centralized controlsystem by adopting innovative technologies to add a water cooling system to air conditioners’ outdoor units, usingthe condensate to cool the units in summer. By doing so, great results have been achieved in energy saving andconsumption reduction, and it has been estimated that the energy consumed can be reduced by 20% in summer.Meanwhile, spot checks are conducted to ensure that the Company’s regulations are strictly followed and thatemployees’ awareness of energy conservation and environmental protection can be further strengthened.The Company has published the Administrative Measures for the Management of Company Vehicles tooptimize fuel use and vehicle maintenance, reduce exhaust emissions, and frequently use electric buses intransportation services. iFLYTEK community has launched several volunteering activities and encouragedemployees to help each and travel green. In addition, the Company has developed an internal carpooling software- “AI Carpooling”, so as to effectively promote energy conservation and emission reduction.Practicing “Green Office” initiative and focusing on sustainable developmentiFLYTEK has formulated the Code for Office Environment Management, adhering to the four principles of“keeping the office clean, orderly, green and safe”. The Company continues to optimize codes of conducts whileworking to establish scoring and evaluation system to create better workplace environment.The Company advocates the concept of green office, and keeps promoting the development of “paperless andsmart office” by improving the OA system and iFLYTEK Smart Conference System for online meetings. TheCompany also advocates employees to develop good habits of electricity saving, paper recycling, double-sidedprinting, and saving water and ink cartridges. In terms of power supply and lighting in work areas, lamps arebeing replaced with energy-saving ones; lighting circuits are being optimized to enable zone controls, and patrolsare carried in unmanned offices to switch lights off in time.The Company encourages everyone to take ownership, save company and community resources, live greenand contribute to the development of an environment-friendly society. The above ideal has been deeply rooted inthe minds of iFLYTEK employees and been practiced every day. In terms of digital management, iFLYTEK hasdeveloped a variety of intelligent applications covering multiple scenarios, such as “AI + office, AI + recruitment,AI + finance, and AI + industrial park”. By improving efficiency, the Company strives for energy conservationand emission reduction.II. Corporate Social ResponsibilityFor details, please refer to the 2021 Environmental, Social and Governance (ESG) Report and CorporateSocial Responsibility Report disclosed by the Company on CNINF (http://www.cninfo.com.cn) on 22 April 2022.III. Building on Achievements of Poverty Alleviation and Rural Vitalization
(1) Promote the sharing of high-quality educational resources in urban and rural areas through the“AI-enabled Non-profit Education Program”Education in impoverished areas is one of the biggest challenges in poverty alleviation. The fundamental
solution to poverty is to address the generational poverty through education and cultivation. Providing small-sizeschools in rural areas with quality and balanced education services is connecting the “last mile” of compulsoryeducation, “For the next generation to live a good life, they need to develop literacy.” In view of the reality thatexperienced teachers are not likely to be placed in all urban and rural areas, iFLYTEK starts to increase thesupplies of high-quality educational resources in rural areas where educational resources are scarce, and promotethe sharing of those educational resources through technologies and applications.
iFLYTEK has launched the “AI-enabled Non-profit Education Program” which is designed to promote thedevelopment of education through AI and help solve the problem of generational transmission of poverty from theroot. AI stands for “artificial intelligence”, and it is also pronounced like “love” in mandarin Chinese. Theprogram aims to make students in rural areas feel cared and supported through AI-empowered education.iFLYTEK has provided teaching tools, educational toys, curriculums and other products, conducted trainings forteachers in rural areas and run volunteer teaching programs to help left-behind children in underdeveloped areas,so they can catch up with the recent technological progress and grow up happily.
In September 2021, iFLYTEK launched a non-profit AI-empowered education event named “SaluteTeachers -- iFLYTEK Dictionary Pens for Free”, nearly 9,000 teachers from nearly 7,000 schools in 290 areas of31 provinces across China received iFLYTEK dictionary pens for free. In December 2021, at a donationceremony named “Salute Teachers – Village Teachers as Dream Builders”, iFLYTEK donated iFLYTEKdictionary pens with a total value of RMB1.08 million to the China Teacher Development Foundation, as well asiFLYTEK dictionary pens to each of 1,210 teachers who had been awarded the title of “Outstanding VillageYoung Teachers”.
In November 2021, the Xingfu Primary School in Wufeng County of Hubei Province received neweducational tools and devices worth RMB700,000, including iFLYTEK Xiaofei robots, AI Futurist, AI courses,AI education application platform, etc. With AI-enabled education products, children in rural schools can take thesame classes as students from schools in cities, covering subjects such as English, arts and music. AI-empoweredsmart education is helping the Xingfu Primary School to pursue innovative changes.
In 2021, iFLYTEK Non-profit Education also provided big data precision learning software and iFLYTEKdictionary scanner pens to Xunwu Middle School in Jiangxi Province and 3 other schools, and deployed ahigh-configuarted scanning and scoring device with installing system in each school. In addition, iFLYTEKNon-profit Education donated smart classroom systems, big data precision learning software, and products forEnglish listening and speaking classes to Lushui No.1 Middle School in Nujiang of Yunnan Province, a batch ofsmart education systems worth RMB1.05 million to Qinzhou Foreign Language School in Guangxi ZhuangAutonomous Region, and smart education systems and products worth RMB1 million to Baise EducationFoundation in Guangxi.
At present, iFLYTEK’s AI-enabled Non-profit Education Program has rolled out initiatives in manyprovinces and regions across China, including Anhui, Henan, Sichuan, Guizhou, Xinjiang, Hebei, Shanxi, Hubei,Inner Mongolia and Shandong, using technologies to help children in rural schools pursue their dreams. Thestories of iFLYTEK’s AI-enabled Non-profit Education Program has been reported by many media outlets such as
People’s Daily, China Youth Daily, and Xinhua News Agency.
(2) Improve literacy by breaking language barrier first, and bridge the “last mile” in rural vitalizationAt present, over 80% of the population in China can speak Putonghua (i.e., standard Mandarin), but the ratevaries greatly between eastern and western China, as well as between urban and rural areas, limiting people inremote and impoverished areas to develop skills, work in cities, and explore business opportunities. A studyconducted by the Institute of Quality Development Strategy of Wuhan University reveals that the ability to speakPutonghua has a significant positive impact on migrant workers’ income. “Compared with those migrant workerswith below Putonghua skills, the income of migrant workers who have medium- and high-level Putonghua skill is
19.4%-21.0% higher and 30.3%-34.9% higher respectively.” Due to historical reasons and geographicalconditions, the popularization rate of Putonghua is low in some ethnic minorities regions and underdevelopedareas in China, which has hindered people to get rid of poverty and enjoy economic growth.Promoting Putonghua can break the language barrier and is beneficial for the rural vitalization andintegration of remote areas into the overall economic and social development of the entire country. iFLYTEK, asone of the leaders from speech intelligence industry in China, is committed to promoting Putonghua andcontributing to poverty alleviation, so the underprivileged people will be able to speak the common language, findmore job opportunities and increase their income.As a strategic partner of the Ministry of Education of China and the State Language Commission in ITapplication in education, iFLYTEK has signed a strategic cooperation framework of “Poverty Alleviation byPromoting Putonghua” with the Ministry of Education, the State Language Commission, the Poverty AlleviationOffice of the State Council and China Mobile, to leverage its world-leading AI technology and extensiveexperience in IT application in education to promote Putonghua. The Company facilitates the deployment of itsapplications and AI-enabled educational products in poverty-stricken areas across China, striving to helpregistered people in need to learn Putonghua and fight poverty. iFLYTEK has undertaken many key projects ofthe State Language Commission of China to assist in Putonghua proficiency exams and teaching, building andoperating a global Chinese learning platform to promote Putonghua through technological means.The intelligent Putonghua assessment and aided teaching technology developed by iFLYTEK is an advancedtechnical achievement with its capability on par with human experts, as recognized by the State LanguageCommission. This technology has been widely used in the National Putonghua Proficiency Test taken by over 70million people, as well as the Putonghua Proficiency Test for Chinese Ethnic Minorities (MHK) taken by 3.4million person-times in total. To advance poverty alleviation through promoting Putonghua, iFLYTEK hasdeveloped an app named “Language Poverty Alleviation” , using AI technologies such as speech synthesis,speech recognition and speech evaluation to help people learn to speak Putonghua and recognize frequently usedcharacters, covering listening, speaking, reading and writing. From old revolutionary base areas to remote villages,from mountain villages to ethnic minorities areas, the “Language Poverty Alleviation” app has been widely usedin Yunnan, Sichuan, Tibet, Xinjiang, Qinghai, Gansu and across China, building a language bridge for millions ofusers to communicate with the outside world.
In September 2021, the State Language Commission issued the Notice on the Second List of Organizations
Selected for the National Language and Characters Promotion Bases, and iFLYTEK is the one and onlyhigh-tech company on the list.
In the first year with the rollout of the “14th Five-Year Plan” and the blueprint for China’s development,iFLYTEK is focusing on the overall needs of national development strategy and taking a step-by-step approach tobuild preschool smart teaching assistant system, “Chang Yan Guo Tong” (meaning Language Connecting China)for teachers, a national common language product system for colleges and universities, and a national commonlanguage product system for farmers and herdsmen. The Company is building national common language learningdemonstration areas in Xinjiang, Tibet, Inner Mongolia and other regions to promote communication andexchanges among different ethnic groups.
(3) Job opportunities created by AI
The modernization in rural areas is a new engine for rural vitalization, and iFLYTEK is actively exploringnew ways for this cause. By launching the AI Job Creation Program, iFLYTEK is exploring ways to create jobsthrough AI and improve livelihood through IT application and intelligence technologies.
In 2021, iFLYTEK set up a Hakka annotation center in Xunwu, Jiangxi Province and created 18 types offull-time jobs including “speech/audio annotators”, continuing to provide targeted support for local employmentthrough AI. The AI Job Creation Program launched by iFLYTEK has effectively addressed the issues in creatingjobs in the nearby neighborhood for the local people.
In Bijie, Guizhou Province, iFLYTEK has created jobs related to Guizhou dialect annotation, opticalcharacter recognition (OCR) and iFLYREC transcription. In addition, the Company has created opportunities forlocal developers to bring online work to offline scenarios through iFLYTEK’s Voice Cloud Platform, enablingdevelopers to participate in the “Poverty Alleviation Workshop” program to continuously upskill local people anddrive industrial development.
As a Chinese saying goes, “Give people fish and you feed them for a day. Teach them how to fish and youfeed them for a lifetime.” iFLYTEK is using AI technologies to enable sectors such as data annotation, so thesesectors can generate more job opportunities and infuse momentum to other sectors. As a reliable brand theCompany is practicing its corporate and social responsibilities by utilizing AI technologies to bring innovativeways for rural vitalization.
Section VI Significant EventsI. Performance of Commitments
1. Commitments that have been completed by parties concerned such as the actual controllers,shareholders, related parties, and acquirers of the Company and the Company during the reporting periodor were still underway before the end of the reporting period
√ Applicable □ Not applicable
| Commitment | Made by | Type of commitment | Content | Time of commitment | Duration | Status of performance |
| Commitment made in the acquisition report or equity interests change report | I. The Company's actual controllers (Liu Qingfeng and USTC Holdings Co., Ltd.) | Commitment by the actual controllers | Avoiding horizontal competition, related-party transactions and fund misappropriation; and ensuring the independence of the listed company | 20 November 2014 | Period of acting in concert | Normally performed |
| II. Yang Jun, Wang Binbin, Zhang Shaohua, Xu Guiqin, Zhu Peng, Beijing Le Jiao Rong Zhi Investment Development Partnership Company (Limited Partnership), and Beijing Jia Hui Jin Yuan Investment Development | Other Commitments | Commitment to avoiding horizontal competition, and commitments to reducing and standardizing related-party transactions, etc. | 09 December 2016 | Period of being a shareholder of the listed company | Normally performed |
| Partnership Company (Limited Partnership) | ||||||
| Commitment made at IPO or refinancing | I. Liu Qingfeng, the Company's actual controller | Commitment at IPO | 1. While I'm working at iFLYTEK, the number of shares I transfer each year will not exceed twenty-five percent of the total number of shares held in iFLYTEK. And, if I leave iFLYTEK, I will not transfer the shares held in iFLYTEK within six months from my departure. 2. during the period of holding the shares of iFLYTEK, I will not engage in any business that is the same with or similar to the business of iFLYTEK; will not directly invest in or acquire any enterprise or project with the same or similar business as iFLYTEK, and will not provide assistance to the competing enterprises in any way. If for any reason I render iFLYTEK in any horizontal competition, I will actively take effective measures to abandon such competition. | 24 April 2008 | Period of acting as an actual controller | Normally performed |
| II. Ningbo Saite Equity Investment Partnership Enterprise and Nanjing Chuangyi Investment Management Center (Limited Partnership) | Other Commitments | Commitment to avoiding horizontal competition, and commitments to standardizing related-party transactions, etc. | 17 March 2017 | Period of being a shareholder of the listed company | Normally performed | |
| III. Liu Qingfeng | Other Commitments | 1. I will not reduce my shareholding in the listed company within six months before the benchmark date for the pricing of the listed company's private | 01 April 2021 | From the benchmark date for the pricing of the | Normally performed |
| offering, i.e. 19 January 2021; 2. I will not involved in any circumstance of reducing my shareholding in the listed company or have a plan for doing so from the benchmark date for the pricing of the listed company's private offering, i.e. 19 January 2021 to the end of the six months after the completion of the private offering; 3. I'm not involved in any circumstance of violating Article 44 of the Securities Law and Paragraph 7 of Article 39 of the Administrative Measures for Securities Issuance of Listed Companies; and 4. What I've committed is true, accurate and complete. In the event that I break the above commitments and reduce my shareholding, all the proceeds from the shareholding shall belong to the listed company, and I'm willing to take the legal liability accordingly. | listed company's private offering, i.e. 19 January 2021 to the end of the six months after the completion of the private offering | |||||
| IV. Liu Qingfeng and Anhui Yanzhi Technology Co., Ltd. | Commitment on restriction upon sales of shares issued in refinancing | The shares purchased by all are subject to a lock-up period of 18 months, and they are expected to circulate on 19 January 2023 starting from the first day of listing. | 19 January 2021 | Subject to a lock-up period of 18 months from the first day of listing | Normally performed | |
| Stock ownership incentive commitment | The Company and awardees | Other Commitments | The Company undertakes not to provide the awardees with loans or any other forms of financial assistance, including provision of guarantee for their loans, in respect of their entitlement to the relevant stock options or restricted shares under this incentive plan. The awardees undertake that if the Company cannot grant the rights and interests or exercise the arrangements for such rights and interests due to false records, | 19 September 2020 and 27 September 2021 | Period of implementing the stock ownership incentives | Normally performed |
| misleading statements or material omissions in the information disclosure documents, the awardees will return all the benefits obtained from this incentive plan to the Company after the relevant information disclosure documents are confirmed to contain false records, misleading statements or material omissions. | |||
| Has the commitment been performed in time (yes/no) | Yes | ||
If theperformance
of thecommitment
is notcompletedwithin thespecified
period,
pleaseprovidedetailedreasons and
thefollow-up
actions.
2. The Company made forecasts on the profitability of an asset or a project, and the reporting period waspart of the profit forecasting period. The Company made explanation on whether the profit of theasset/project went as predicted and why.
□ Applicable √ Not applicable
II. Appropriation of Funds for Non-operating Purposes by Controlling Shareholder andOther Related Parties
□ Applicable √ Not applicable
During the reporting period, there was no misappropriation of the listed company’s funds by its controlling
shareholder or other related parties for non-operating purposes.
III. Illegal External Guarantees
□ Applicable √ Not applicable
The Company did not provide any illegal external guarantee during the reporting period.
IV. The Board of Directors' Explanation to the Non-standard Audit Report for the RecentPeriod
□ Applicable √ Not applicable
V. Explanation by the Board of Directors, the Board of Supervisors, and IndependentDirectors, if Any, to the Non-standard Audit Report Issued by the Accounting Firm duringthe Reporting Period
□ Applicable √ Not applicable
VI. Description of Any Changes in Accounting Policies and Accounting Estimates orCorrections of Significant Accounting Errors over the 2020 Financial Report
□ Applicable √ Not applicable
The Company did not change accounting policies and accounting estimates or corrected any significantaccounting errors during the reporting period.VII. Description of Any Changes in the Scope of Consolidated Statement over the 2020Financial Report
√ Applicable □ Not applicable
Please see “VIII. Changes in the Scope of Consolidated Statement” in "Section X Financial Report" for details.
VIII. Appointment and Dismissal of Accounting FirmAccounting firm currently engaged by the Company
| Name of the domestic accounting firm | RSM Certified Public Accountants (Special General Partnership) |
| Payment to the domestic accounting firm (RMB10,000) | 420 |
| Years of provision of continued auditing services by the domestic accounting firm | 20 |
| Practicing CPAs of the domestic accounting firm | Zhang Liangwen, Yao Bei, and Ren Gangming |
| Years of provision of continued auditing services by practicing CPAs of the domestic accounting firm | Zhang Liangwen-three years, Yao Bei-four years, and Ren Gangming-one year |
Change of the accounting firm during the reporting period (yes/no)
□ Yes √ No
Engagement of the accounting firm for internal control audit, financial advisor or sponsor
□ Applicable √ Not applicable
IX. De-listing after the Disclosure of the Annual Report
□ Applicable √ Not applicable
X. Bankruptcy and Reorganization
□ Applicable √ Not applicable
During the reporting period, the Company was not involved in any matters relating to bankruptcy andreorganization.XI. Material Legal Proceedings and Arbitrations
□ Applicable √ Not applicable
The Company was not involved in any material legal proceedings or arbitrations during the reporting period.XII. Penalties and Rectifications
□ Applicable √ Not applicable
The Company was not subject to any penalties and did not make any rectifications during the reporting period.XIII. Integrity of the Company and Its Controlling Shareholder and Actual Controllers
□ Applicable √ Not applicable
XIV. Significant Related-Party Transactions
1. Related-party transactions related to day-to-day operations
√ Applicable □ Not applicable
| Related party | Relationship | Type of the related-party transaction | Content of the related-party transaction | Pricing principle of the related-party transaction | Price of the related-party transaction | Amount (RMB10,000) | Percentage in the amount of the same kind of transactions | Approved transaction amount (RMB10,000) | Exceeding the approved amount or not | Related-party transaction settlement method | Market price of accessible same kind of transactions | Disclosed on | Index to disclosure |
| China Mobile Limited | Investor with signific | General related-party | Sale of goods and provision | Market-set | Nil | 67,507.73 | 3.69% | 65,000 | Yes | Bank transfer | Nil | 20 April 2021 | The Announcement on |
| and its subsidiaries | ant influence on the Company | transaction | of labor services | price | Anticipated General Related-Party Transactions in 2021 (Announcement No.: 2021-030) published on 20 April 2021 | ||||||||
| China Mobile Limited and its subsidiaries | Investor with significant influence on the Company | General-related party transaction | Purchase of goods and acceptance of labor services | Market-set price | Nil | 4,288.16 | 0.58% | 1,400 | Yes | Bank transfer | Nil | 20 April 2021 | The Announcement on Anticipated General Related-Party Transactions in 2021 (Announcement No.: 2021-030) published on 20 April 2021 |
| Total | -- | -- | 71,795.89 | -- | 66,400 | -- | -- | -- | -- | -- | |||
| Details on return of sold goods in large value | Not applicable | ||||||||||||
| Actual performance during the reporting period, if any, where the total amount of general related-party transactions to occur during the reporting period is estimated by category | The total amount of general related-party transactions to do with China Mobile Limited and its subsidiaries in 2021 was estimated at RMB664 million. Where, the actual amount arrived at RMB717.9589 million, RMB53.9589 million more than the estimated amount, representing 0.43% of the Company's audited net assets in 2020. | ||||||||||||
| Reasons for large difference between the transaction price and the referential market price, if applicable | Not applicable | ||||||||||||
2. Related-party transactions arising from acquisition or sales of assets or equity
□ Applicable √ Not applicable
The Company did not engage in any related-party transactions arising from acquisition or sales of assets or equityduring the reporting period.
3. Related-party transactions in joint external investment
□ Applicable √ Not applicable
The Company did not conduct any related-party transactions in joint external investment during the reportingperiod.
4. Related creditor's rights and debts
□ Applicable √ Not applicable
The Company did not have any related creditor's rights and debts during the reporting period.
5. Transactions with related finance companies
□ Applicable √ Not applicable
The Company did not have any deposit, loan, credit or other financial business with any related financecompanies or such finance company's related parties.
6. Transactions between finance companies controlled by the Company and their related parties
□ Applicable √ Not applicable
None of the finance companies controlled by the Company had have any deposit, loan, credit or other financialbusiness with their related parties.
7. Other material related-party transactions
□ Applicable √ Not applicable
The Company did not engage in other material related-party transactions during the reporting period.XV. Major Contracts and Fulfillment
1. Trust, sub-contract and lease
(1) Trust
□ Applicable √ Not applicable
The Company did not take any trust during the reporting period.
(2) Sub-contract
□ Applicable √ Not applicable
The Company did not conduct any contracting during the reporting period.
(3) Lease
□ Applicable √ Not applicable
The Company did not have any lease during the reporting period.
2. Material guarantees
√ Applicable □ Not applicable
Unit: RMB10,000
| External guarantees by the Company and its subsidiaries (excluding guarantees to subsidiaries) | ||||||||||
| Name of the guaranteed | Date of disclosure of the announcement on the guarantee amount | Amount of guarantee | Date of actual occurrence | Amount of guarantee actually provided | Guarantee type | Collateral (if any) | Counter guarantee (if any) | Period of guarantee | Performance completed or not | Guarantee to a related party or not |
| Financial leasing customer | 25 October 2019 | 50,000 | 19 June 2020, 29 December 2020, 30 December 2020, and 30 November 2021 | 7,593.29 | Joint and several liability guarantee | Land use right, and houses and buildings | All financial leasing customers provided counter guarantee | 24 or 36 months | No | No |
| Supply chain financing customers | 25 October 2019 | Joint and several liability guarantee | Yes | No | ||||||
| Tongling Tianyuan Equity Investment Group Corporation | 19 April 2019 | 24,000 | 14 June 2019 and 22 March 2021 | 14,808 | Joint and several liability guarantee | Tongling Development Investment Group Corporation provided counter guarantee | From the date of approval by the Board of Directors to the expiration of the project's loan term | No | No | |
| Total amount of approved external | 74,000 | Total amount of external guarantees | 18,393.13 | |||||||
| guarantees during the reporting period (A1) | actually provided during the reporting period (A2) | |||||||||
| Total amount of approved external guarantees at the end of the reporting period (A3) | 74,000 | Total amount of the outstanding external guarantees actually provided at the end of the reporting period (A4) | 22,401.29 | |||||||
| Provision of guarantees by the Company to its subsidiaries | ||||||||||
| Name of the guaranteed | Date of disclosure of the announcement on the guarantee amount | Amount of guarantee | Date of actual occurrence | Amount of guarantee actually provided | Guarantee type | Collateral, if any | Counter guarantee, if any | Period of guarantee | Performance completed or not | Guarantee to a related party or not |
| Anhui Zhixue Technology Co., Ltd. | 20 April 2021 | 12,000 | 16 July 2021 | 3,341.94 | General guarantee; joint and several liability guarantee | The next twelve months | No | No | ||
| Hefei iFLYTEK Read & Write Technology Co., Ltd. | 20 April 2021 | 10,000 | 16 July 2021 | 1,997.55 | General guarantee; joint and several liability guarantee | The next twelve months | No | No | ||
| Anhui Tingjian Technology Co., Ltd. | 2021年04月20日 20 April 2021 | 10,000 | 2021年07月16日 16 July 2021 | 3,447.76 | General guarantee; joint and several liability guarantee | The next twelve months | No | No | ||
| Anhui iFLYTEK Jiecheng Software Technology | 20 April 2021 | 15,000 | 16 July 2021 | 1,384.61 | General guarantee; joint and several liability | The next twelve months | No | No | ||
| Co., Ltd. | guarantee | |||||||||
| iFLYTEK (International) Limited | 20 April 2021 | 30,000 | General guarantee; joint and several liability guarantee | The next twelve months | No | No | ||||
| Tianjin iFLYTEK Jizhi Technology Co., Ltd. | 20 April 2021 | 30,000 | 10 December 2021 | 273.57 | General guarantee; joint and several liability guarantee | The next twelve months | No | No | ||
| iFLYTEK (International) Limited Iflytek (International) Limited | 20 April 2021 | 8,000 | 24 May 2021 | 3,006.96 | General guarantee; joint and several liability guarantee | The next twelve months | No | No | ||
| iFLYTEK (Shanghai)Technology Co., Ltd. | 20 April 2021 | 3,000 | 30 July 2021 | 1.92 | General guarantee; joint and several liability guarantee | The next twelve months | No | No | ||
| Zhejiang iFLYTEK Intelligent Technology Co., Ltd. | 20 April 2021 | 3,000 | 17 September 2021 | 364.98 | General guarantee; joint and several liability guarantee | The next twelve months | No | No | ||
| Anhui Institute of Information Technology | 20 April 2021 | 10,000 | 22 June 2021 | 4,706.73 | General guarantee; joint and several liability guarantee | The next twelve months | No | No | ||
| Anhui Institute of Information Technology | 26 September 2021 | 20,000 | General guarantee; joint and several liability | Till the 2021 Annual General Meeting of the | No | No |
| guarantee | Company | |||||||||
| Hainan Shenggu Technology Co., Ltd. | 26 September 2021 | 1,200 | General guarantee; joint and several liability guarantee | Till the 2021 Annual General Meeting of the Company | No | No | ||||
| iFLYTEK South Asia & Southeast Asia Information Technology (Yunnan) Co., Ltd. | 20 April 2021 | 2,000 | General guarantee; joint and several liability guarantee | The next twelve months | No | No | ||||
| Shenzhen iFLYTEK Interactive Electronics Co., Ltd. | 26 September 2021 | 10,000 | General guarantee; joint and several liability guarantee | Till the 2021 Annual General Meeting of the Company | No | No | ||||
| Tianjin iFLYTEK Information Technology Co., Ltd. | 20 April 2021 | 3,000 | General guarantee; joint and several liability guarantee | The next twelve months | No | No | ||||
| Anhui iFLYTEK Healthcare Co., Ltd. | 20 April 2021 | 10,000 | 14 September 2021 | 575.98 | General guarantee; joint and several liability guarantee | The next twelve months | No | No | ||
| Bills pool pledge business | 20 April 2021 | 50,000 | 14 September 2021 | 32,054.59 | General guarantee; joint and several liability guarantee | The next twelve months | No | No | ||
| Total amount of approved guarantees | 227,200 | Total occurrence amount of guarantees | 57,421.52 | |||||||
| provided to subsidiaries during the reporting period (B1) | provided to subsidiaries during the reporting period (B2) | ||||||||||
| Total amount of approved guarantees provided to subsidiaries at the end of the reporting period (B3) | 227,200 | Total occurrence amount of guarantees actually provided to subsidiaries at the end of the reporting period (B4) | 51,156.59 | ||||||||
| Provision of guarantees by the subsidiaries to other subsidiaries | |||||||||||
| Name of the guaranteed | Date of disclosure of the announcement on the guarantee amount | Guaranteed Limit | Date of actual occurrence | Amount of guarantee actually provided | Guarantee type | Collateral, if any | Counter guarantee, if any | Period of guarantee | Performance completed or not | Guarantee to a related party or not | |
| Total amount of the Company's guarantees (the sum of the first three items) | |||||||||||
| Total amount of approved guarantees during the reporting period (A1+B1+C1) | 301,200 | Total amount of guarantees actually provided during the reporting period (A2+B2+C2) | 75,814.65 | ||||||||
| Total amount of approved guarantees at the end of the reporting period (A3+B3+C3) | 301,200 | Total amount of the outstanding guarantees actually provided at the end of the reporting period (A4+B4+C4) | 73,557.88 | ||||||||
| Percentage of the total amount of actual guarantees (A4+B4+C4) in the Company's net assets | 4.38% | ||||||||||
3. Entrustment of others for cash assets management
(1) Entrusted wealth management
□ Applicable √ Not applicable
The Company did not entrust any wealth management during the reporting period.
(2) Entrusted loan
□ Applicable √ Not applicable
The Company did not have any entrusted loan during the reporting period.
4. Other major contracts
□ Applicable √ Not applicable
The Company did not have any other major contracts during the reporting period.XVI. Explanations about Other Significant Events
√ Applicable □ Not applicable
(i). Private offering of stocks in 2021According to the Approval of the Non-public Offering of Shares by iFLYTEK Co., Ltd. (Z.J.X.K.[2021] No.1769) issued by the China Securities Regulatory Commission, the Company was granted an approval of privatelyoffering no more than 75,938,058 new shares, and the number of shares to be issued might be adjustedaccordingly in the event of a change in the total share capital under the strengthening of share capital and othercircumstances. After the implementation of the Company's 2020 interests distribution plan, the number of sharesin this non-public offering was changed from no more than 75,938,058 shares (inclusive) to no more than76,393,048 shares. The Company received the confirmation of acceptance of the registration application foradditionally issued shares in this non-public offering from China Securities Depository & Clearing CorporationLtd. Shenzhen Branch on 12 July 2021, and the shares issued were registered and listed on 19 July 2021.Through this issuance, firstly, the Company replenished its liquidity, helping it actively grasp theopportunities of the times and strategic opportunities in the AI industry to consolidate and enhance its position inthe industry, and also boost its sustainable profitability and core competitiveness; and secondly, shares were issuedto Mr. Liu Qingfeng, the actual controller of the Company, and Anhui Yanzhi Technology Co., Ltd. controlled byMr. Liu. In this way, Mr. Liu Qingfeng would share weal and woe with the Company over a long term. Throughsubscription to shares in this non-public offering, the shareholding ratio of Mr. Liu Qingfeng and the proportion ofvoting rights controlled by the actual controller of the Company were enlarged, which further enhanced thestability of the control over the Company and consolidated the control position of the actual controller. In themeanwhile, the actual controller's subscription to shares privately issued by the Company demonstrated his firmconfidence in the AI industry and the Company's future development prospects, thus benefiting the long-termstable development of the Company.(ii) Proposed spin-off and listing of iFLYTEK Healthcare, a controlled subsidiaryAccording to the overall strategic layout of the Company, in view of the healthy and sound development ofAnhui iFLYTEK Healthcare Co., Ltd. ("iFLYTEK Healthcare"), a subsidiary controlled by the Company, theCompany held the Sixteenth Meeting of the Fifth Board of Directors on 3 August 2021, which reviewed andapproved the Proposal on Spin-off and Listing of a Controlled Subsidiary, a move intended to accelerateiFLYTEK Healthcare's development and iterations of products and services, and help it grow business rapidly byresponding flexibly to market changes and seizing market opportunities. The Board of Directors agreed to plan forthe spin-off and listing of iFLYTEK Healthcare, a subsidiary controlled by the Company (hereinafter referred to as
the "spin-off and listing"). After the completion of the spin-off and listing, the Company will maintain acontrolling interest in iFLYTEK Healthcare.(iii). The Stock Option and Restricted Stock Incentive Plan in 2021On the premise of fully protecting the interests of shareholders, the Company incorporates long-termincentives into total compensation management as a normalized measure, for purposes of further improving thecorporate governance structure, mobilizing the whole team to work hard together, establishing a sound long-termeffective incentive mechanism, attracting and retaining outstanding talents through the implementation of stockownership incentives that match the intensity of industrial competition, fully stimulating the enthusiasm ofmanagement members and core technical/business personnel, effectively combining the interests of shareholders,the Company's interests and the personal interests of core and key employees, and focusing the attention of allparties on the long-term development of the Company. The Company held the Eighteenth Meeting of the FifthBoard of Directors on 26 September 2021 and the Second Extraordinary Shareholders’ Meeting in 2021 on 13October 2021, both of which reviewed and approved the Stock Option and Restricted Stock Incentive Plan in 2021(Draft) and related proposals. Please see Section IV of this report for details.XVII. Significant Events of the Company's Subsidiaries
√ Applicable □ Not applicable
Section VII Changes in Shares and Particulars of Shareholders
I. Changes in Shares
1. Changes in shares
Unit: Share
| Before the change | Increase/decrease (+, -) | After the change | |||||||
| Number | Percentage | Issuance of new shares | Bonus shares | Shares transferred from capital reserve | Other | Subtotal | Number | Percentage | |
| I. Shares subject to selling restrictions | 198,261,755 | 8.91% | 100,642,248 | -54,417,273 | 46,224,975 | 244,486,730 | 10.52% | ||
| 1. State-owned shares | |||||||||
| 2. Shares held by state-owned legal persons | |||||||||
| 3. Shares held by other domestic investors | 198,061,755 | 8.90% | 100,462,248 | -54,357,273 | 46,104,975 | 244,166,730 | 10.51% | ||
| Including: shares held by domestic legal persons | 5,991,611 | 5,991,611 | 5,991,611 | 0.26% | |||||
| Shares held by domestic natural persons | 198,061,755 | 8.90% | 94,470,637 | -54,357,273 | 40,113,364 | 238,175,119 | 10.25% | ||
| 4. Shares held by foreign investors | 200,000 | 0.01% | 180,000 | -60,000 | 120,000 | 320,000 | 0.01% | ||
| Including: shares held by foreign legal persons | |||||||||
| Shares held by foreign natural persons | 200,000 | 0.01% | 180,000 | -60,000 | 120,000 | 320,000 | 0.01% | ||
| II. Shares not subject to selling restrictions | 2,026,475,962 | 91.09% | 53,811,853 | 53,811,853 | 2,080,287,815 | 89.48% | |||
| 1.RMB-denominated ordinary shares | 2,026,475,962 | 91.09% | 53,811,853 | 53,811,853 | 2,080,287,815 | 89.48% | |||
| 2. Domestically listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III. Total number of shares | 2,224,737,717 | 100.00% | 100,642,248 | -605,420 | 100,036,828 | 2,324,774,545 | 100.00% |
Reason for share change
√ Applicable □ Not applicable
The share change was a result of the automatic adjustment to the locked-up shares of senior managementmembers at the beginning of each year, the listing of shares privately offered in 2021, the listing of shares grantedunder the Stock Option and Restricted Stock Incentive Plan in 2021, the removal of restriction upon sales for thethird removal period under the first-phase restricted stock incentive plan, the removal of restriction upon sales forthe first removal period under the second-phase restricted stock incentive plan, and the repurchase andcancellation of part of the restricted stocks already granted.Approval of share change
√ Applicable □ Not applicable
The non-public offering of stocks by the Company in 2021 was approved at the Ninth and the ThirteenthMeeting of the Fifth Board of Directors of the Company and the First Extraordinary Shareholders’ Meeting of theCompany in 2021; the repurchase and cancellation of part of the restricted stocks already granted was approved atthe Twelfth Meeting of the Fifth Board of Directors of the Company and the Annual General Meeting of theCompany for 2020; the removal of restriction upon sales for the third removal period under the first-phaserestricted stock incentive plan was approved at the Twelfth and the Fifteenth Meeting of the Fifth Board ofDirectors of the Company; the removal of restriction upon sales for the first removal period under thesecond-phase restricted stock incentive plan was approved at the Twentieth Meeting of the Fifth Board ofDirectors of the Company; and the matters relating to the Stock Option and Restricted Stock Incentive Plan in2021 were approved at the Eighteenth and the Nineteenth Meeting of the Fifth Board of Directors of the Companyand the Second Extraordinary Shareholders’ Meeting of the Company in 2021.Ownership transfer in respect of share change
√ Applicable □ Not applicable
Upon review and confirmation by China Securities Depository & Clearing Corporation Ltd. Shenzhen Branch,the Company completed the repurchase and cancellation of 605,420 shares of restricted stocks already granted on
28 May 2021. Following the repurchase and cancellation, the total number of shares of the Company was changedto 2,224,132,297 from 2,224,737,717. The Company registered the shares it privately offered in 2021 with ChinaSecurities Depository & Clearing Corporation Ltd. Shenzhen Branch, and the newly increased 76,393,048 shareswere listed officially on 19 July 2021, following which the total number of shares of the Company was changed to2,300,525,345 from 2,224,132,297. Under the Stock Option and Restricted Stock Incentive Plan in 2021, theCompany granted 24,249,200 shares to 2,240 people. The granted shares got listed on 15 December 2020 afterbeing reviewed and confirmed by China Securities Depository & Clearing Corporation Ltd. Shenzhen Branch.After the grant of these restricted stocks, the Company increased the total number of its shares to 2,324,774,545from 2,300,525,345.Implementation progress of share repurchase
□ Applicable √ Not applicable
Implementation progress of reduction of repurchased shares via centralized bidding
□ Applicable √ Not applicable
Effects of share change on basic/diluted earnings per share, net assets per share attributable to ordinaryshareholders of the Company, and other financial indicators in the past year/period
√ Applicable □ Not applicable
During the reporting period, non-public offering increased the Company's shares by 76,393,048, the repurchaseand cancellation of some restricted stocks already granted reduced shares by 605,420, and the Company granted24,249,200 shares under the Stock Option and Restricted Stock Incentive Plan in 2021. The above factorscombined to make the closing balance of shares 100,036,828 more than the opening balance, which diluted basicearnings per shares and diluted earnings per share, and net assets per share attributable to ordinary shareholders ofthe Company in the period.Other content deemed necessary by the Company or required by the securities regulatory authority to disclose
□ Applicable √ Not applicable
2. Changes in shares subject to selling restrictions
√ Applicable □ Not applicable
Unit: Share
| Name of shareholder | Balance of shares subject to the restriction on sales at the beginning of the period | Increase of shares subject to the restriction on sales | Number of restricted shares relieved in 2021 | Balance of shares subject to the restriction on sales at the end of the period | Reason for the restriction | Date of relieve |
| 778 people rewarded for the first time under the first-phase | 36,134,700 | -281,520 | 35,853,180 | 0 | For stock ownership incentive | The third sale restriction removal period: From the first trading day 48 months after the first day of grant to the last trading day within 60 months as of the day of grant. The |
| restricted stock incentive plan | number of relieved shares was 40% of the number of restricted stocks granted. The stocks relieved this time were put into circulation on 20 May 2021. | |||||
| 367 people rewarded with the reserved stocks under the first-phase restricted stock incentive plan | 3,730,200 | -91,800 | 3,638,400 | 0 | For stock ownership incentive | The third sale restriction removal period: From the first trading day 36 months after the first day of grant to the last trading day within 48 months as of the day of grant. The number of relieved shares was 40% of the number of restricted stocks granted. The stocks relieved this time were put into circulation on 17 August 2021. |
| 1,900 people rewarded under the second-phase restricted stock incentive plan | 26,864,800 | -232,100 | 7,855,020 | 18,777,680 | For stock ownership incentive | The first sale restriction removal period: From the first trading day 12 months after the first day of grant to the last trading day within 24 months as of the day of grant. The number of relieved shares was 30% of the number of restricted stocks granted, and they were in circulation on 15 December 2021. The second sale restriction removal period: From the first trading day 24 months after the first day of grant to the last trading day within 36 months as of the day of grant. The number of relieved shares was 30% of the number of restricted stocks granted. The third sale restriction removal period: From the first trading day 36 months after the first day of grant to the last trading day within 48 months as of the day of grant. The number of relieved shares was 40% of the number of restricted stocks granted. |
| Liu Qingfeng | 70,401,437 | 70,401,437 | Additional issue of 70,401,437 restricted stocks | The stocks privately offered this time were subject to a lock-up period of 18 months, and they are expected to circulate on 19 January 2023 starting from the first day of listing on 19 July 2021. | ||
| Anhui Yanzhi Technology Co., Ltd. | 0 | 5,991,611 | 0 | 5,991,611 | 5,991,611 Additional issue of 5,991,611 restricted stocks | The stocks privately offered this time were subject to a lock-up period of 18 months, and they are expected to circulate on 19 January 2023 starting from the first day of listing on 19 July 2021. |
| 2,240 people rewarded under | 0 | 24,249,200 | 0 | 24,249,200 | For stock ownership | The first sale restriction removal period: From the first trading day 12 months after the |
| the Stock Option and Restricted Stock Incentive Plan in 2021 | incentive | first day of grant to the last trading day within 24 months as of the day of grant. The number of relieved shares was 30% of the number of restricted stocks granted, and they were expected to begin circulation on 15 December 2021. The second sale restriction removal period: From the first trading day 24 months after the first day of grant to the last trading day within 36 months as of the day of grant. The number of relieved shares was 30% of the number of restricted stocks granted. The third sale restriction removal period: From the first trading day 36 months after the first day of grant to the last trading day within 48 months as of the day of grant. The number of relieved shares was 40% of the number of restricted stocks granted. | ||||
| Directors, supervisors and senior management members | 131,532,055 | 6,465,253 | 125,066,802 | Locked-up shares of senior management members | On the first trading day of each year, CSDC Shenzhen Branch calculates the statutory number of shares transferable by the listed company's directors, supervisors and senior management members in the year at 25% of the number of shares registered under them on the last trading day of the prior year. | |
| Total | 198,261,755 | 100,036,828 | 53,811,853 | 244,486,730 | -- | -- |
II. Details of Securities Issuance and Listing
1. Securities issuances (excluding preference shares) during the reporting period
√ Applicable □ Not applicable
| Name of the stock and its derivative | Issuing date | Issuing price (or interest rate) | Number issued | Listing date | Number approved for trading | End date of transactions | Index to disclosure | Disclosed on |
| Stock | ||||||||
| RMB-denominated ordinary shares (A | 06 July 2021 | 33.38 | 76,393,048 | 19 July 2021 | The Report on the Listing of Privately Offered Stocks & also the Announcement on Listing (Summary) (Announcement No.: 2021-058) published on the | 16 July 2021 | ||
| share) | Securities Times, the China Securities Journal, the Shanghai Securities News, the Securities Daily and CNINFO (www.cninfo.com.cn) | |||||||
| RMB-denominated ordinary shares (A share) | 30 November 2021 | 26.48 | 24,249,200 | 15 December 2021 | The Announcement on Completion of Grant of Restricted Stocks under the Stock Option and Restricted Stock Incentive Plan in 2021 (Announcement No.: 2021-100) published on the Securities Times, the China Securities Journal, the Shanghai Securities News, the Securities Daily and CNINFO (www.cninfo.com.cn) | 14 December 2021 |
Notes to securities issuances (excluding preference shares) during the reporting periodThe shares issued during the reporting period were the ordinary A shares of the Company issued to LiuQingfeng and Anhui Yanzhi Technology Co., Ltd. in the Company's non-public offering of stocks in 2021 and theordinary A shares of the Company issued to specified targets under the Stock Option and Restricted StockIncentive Plan in 2021.
2. Explanation on the Company's Total Shares and Changes in Its Shareholder Structure, as Well asChanges in Its Balance Sheet Structure
√ Applicable □ Not applicable
During the reporting period, non-public offering increased the Company's shares by 76,393,048, therepurchase and cancellation of some restricted stocks already granted reduced shares by 605,420, and theCompany granted 24,249,200 shares under the Stock Option and Restricted Stock Incentive Plan in 2021. Theabove factors combined to make the closing balance of shares 100,036,828 more than the opening balance. As ofthe end of the reporting period, the Company had 2,324,774,545 shares as share capital; it had total assets ofRMB31,394,037,754.41 and a gearing ratio of 44.78%.
3. Existing internal employee stocks
□ Applicable √ Not applicable
III. Shareholders and Actual Controllers
1. Number and shareholding of shareholders of the Company
Unit: Shares
| Total number of ordinary shareholders at the end of the reporting period | 237,966 | Total number of ordinary shareholders at the end of the last month before the disclosure of the Annual Report | 222,631 | Total number of holders of preference shares with voting rights resumed at the end of the reporting period, if any (see Note 8) | 0 | Total number of holders of preference shares with voting rights resumed at the end of the last month before the disclosure of the Annual Report (if any) (see Note 8) | 0 | ||||
| Shareholding by shareholders that hold more than 5% of the shares of the Company or by the largest 10 shareholders | |||||||||||
| Name of shareholder | Nature of shareholder | Shareholding ratio | Shares held at the end of the reporting period | Increase/decrease of shares held during the reporting period | Number of held shares subject to selling restrictions | Number of held shares not subject to selling restrictions | Pledged, marked or frozen shares | ||||
| Status of shares | Number | ||||||||||
| China Mobile Limited | State-owned legal person | 10.66% | 247,714,216 | -10,253,200 | 247,714,216 | ||||||
| Liu Qingfeng | Domestic natural person | 7.24% | 168,253,267 | 70,401,437 | 143,790,309 | 24,462,958 | Pledged | 82,360,000 | |||
| Hong Kong Securities Clearing Company Limited | Foreign legal person | 5.23% | 121,625,705 | 22,121,985 | 121,625,705 | ||||||
| USTC Holdings Co., Ltd. | State-owned legal person | 3.59% | 83,497,837 | 83,497,837 | |||||||
| Anhui Yanzhi Technology Co., Ltd. | Domestic non-state-owned legal person | 2.46% | 57,291,611 | 5,991,611 | 5,991,611 | 51,300,000 | Pledged | 5,991,611 | |||
| Zhang Wei | Foreign natural person | 2.15% | 49,999,900 | 47,499,900 | 49,999,900 | ||||||
| Wang Ping | Domestic natural person | 2.01% | 46,733,956 | 46,733,956 | ||||
| Ge Weidong | Domestic natural person | 1.70% | 39,596,000 | -11,273,407 | 39,596,000 | |||
| Wang Renhua | Domestic natural person | 1.32% | 30,716,902 | -2,035,000 | 30,716,902 | |||
| Wu Xiaoru | Domestic natural person | 0.78% | 18,033,790 | 13,525,342 | 4,508,448 | |||
| Strategic investors or general legal persons became the largest 10 shareholders as a result of allotment of new shares, if any (see Note 3) | As a strategic investor, China Mobile Limited subscribed for 70,273,975 shares in the non-public offering in 2013. Subject to a lock-up period of 36 months, these shares went in circulation on 25 April 2016. | |||||||
| Note on connected relations or concerted actions of the above shareholders: | Of the above-mentioned shareholders, Mr. Liu Qingfeng becomes the Company's actual controller as a result of his signing of the Acting-in-Concert Agreement with USTC Holdings Co., Ltd.; Anhui Yanzhi Technology Co., Ltd. is a company controlled by Mr. Liu Qingfeng. Save as disclosed above, the Company is not aware of any connected relation or concerted action among the other shareholders. | |||||||
| Explanation on the above shareholders' involvement in entrusting its or being entrusted with voting right, and waiver of its voting right | On 26 December 2016, Liu Qingfeng signed the Power of Attorney with the principals Wang Renhua, Chen Tao, Wu Xianghui, Jiang Tao, Huang Haibing, Wang Zhiguo, Yan Jun, Hu Yu, Wu Xiaoru, Xu Yulin and Hu Hongwei, agreeing that the named principals would delegate to Liu Qingfeng the exercise of the rights to make proposals, vote and nominate over all the shares held by them at iFLYTEK, for a term starting from the date of signing of such agreement to the date when the principals no longer held any shares of iFLYTEK. On 9 April 2019, Liu Qingfeng signed the Power of Attorney with the principals Nie Xiaolin, Hu Guoping and Yang Jun, agreeing that Nie Xiaolin, Hu Guoping and Yang Jun would delegate to Liu Qingfeng the exercise of the rights to make proposals, vote and nominate over all the shares held by them at iFLYTEK, for a term starting from the date of signing of such agreement to the date when the principals no longer held any shares of iFLYTEK. Of the above-mentioned 10 shareholders, Wang Renhua and Wu Xiaoru have entrusted Liu Qingfeng to exercise their voting rights. | |||||||
| Shareholding by the largest 10 holders of shares not subject to selling restrictions | ||||||||
| Name of shareholder | Number of held shares not subject to selling restrictions at the end of the reporting period | Type of shares | ||||||
| Type of shares | Number | |||||||
| China Mobile Limited | 247,714,216 | RMB-denominated ordinary shares | 247,714,216 | |||||
| Hong Kong Securities Clearing Company Limited | 121,625,705 | RMB-denominated ordinary | 121,625,705 | |||||
| shares | |||
| USTC Holdings Co., Ltd. | 83,497,837 | RMB-denominated ordinary shares | 83,497,837 |
| Anhui Yanzhi Technology Co., Ltd. | 51,300,000 | RMB-denominated ordinary shares | 51,300,000 |
| Zhang Wei | 49,999,900 | RMB-denominated ordinary shares | 49,999,900 |
| Wang Ping | 46,733,956 | RMB-denominated ordinary shares | 46,733,956 |
| Ge Weidong | 39,596,000 | RMB-denominated ordinary shares | 39,596,000 |
| Wang Renhua | 30,716,902 | RMB-denominated ordinary shares | 30,716,902 |
| Liu Qingfeng | 24,462,958 | RMB-denominated ordinary shares | 24,462,958 |
| Cathay Fortune Corporation | 16,745,917 | RMB-denominated ordinary shares | 16,745,917 |
| Explanation on connection or acting-in-concert relationship among the largest 10 holders of floating shares not subject to selling restrictions, between the largest 10 holders of floating shares not subject to selling restrictions and the largest 10 shareholders | Mr. Liu Qingfeng becomes the Company's actual controller as a result of his signing of the Acting-in-Concert Agreement with USTC Holdings Co., Ltd.; Anhui Yanzhi Technology Co., Ltd. is a company controlled by Mr. Liu Qingfeng. Save as disclosed above, the Company is not aware of any connected relation or concerted action among the other shareholders. | ||
| Explanation on participation of the largest 10 ordinary shareholders into the securities margin trading business, if any (see Note 4) | Zhang Wei held 2,799,900 shares of the Company's stock (0 shares at the beginning of the period) through an ordinary securities account and 47,200,000 shares of the Company's stock (2,500,000 shares at the beginning of the period) through an unsecured securities account; Wang Ping held 46,733,956 shares (46,733,956 shares at the beginning of the period) through an unsecured securities account; Ge Weidong held 21,596,000 shares of the Company's stock (20,019,407 shares at the beginning of the period) through an ordinary securities account and 18,000,000 shares of the Company's stock (30,850,000 shares at the beginning of the period) | ||
through an unsecured securities account; Cathay Fortune Corporation held 16,745,917 shares ofthe Company's stock (0 shares at the beginning of the period) through an unsecured securitiesaccount.
Whether the largest 10 ordinary shareholders and the largest 10 holders of ordinary shares not subject to sellingrestrictions of the Company engaged in repurchase agreement transactions during the reporting period
□ Yes √ No
The largest 10 ordinary shareholders and the largest 10 holders of ordinary shares not subject to selling restrictionsof the Company did not engage in repurchase agreement transactions during the reporting period.
2. Controlling shareholder of the Company
Nature of the controlling shareholder: No controlling entityType of the controlling shareholder: NoExplanation on the fact that the Company does not have a controlling shareholder:
The Company features decentralized shareholdings. No single shareholder can exercise control over theCompany.Changes in controlling shareholders during the reporting period
□ Applicable √ Not applicable
The Company's controlling shareholders did not change during the reporting period.
3. Actual controllers of the Company and their persons acting in concert
Nature of the actual controllers: domestic natural person; other domestic entity
(1) Type of the actual controller: natural person
| Name of the actual controller | Relationship with the actual controller | Nationality | Residence in other country/territory obtained (yes/no) |
| Liu Qingfeng | Himself | Chinese | No |
| Occupation and position | Founder and Chairman of iFLYTEK, Director of the National Engineering Laboratory for Speech and Language Information Processing (NELSLIP), Adjunct Professor and Doctoral Supervisor at the University of Science and Technology of China, Deputy to China’s 0th, 11th, 12th and 13th National People’s Congress, Chairperson of the Speech Industry Alliance of China, and Chairperson of the Artificial Intelligence Industry-University-Research Innovation Alliance of the Chinese Academy of Sciences. | ||
| Chinese and foreign listed companies controlled over the past 10 years | No | ||
(2) Type of the actual controller: legal person
| Name of the actual | Legal representative or | Date of incorporation | Organizational code | Main business |
| controller | person-in-charge | |||
| USTC Holdings Co., Ltd. | Wang Bing | 23 March 1988 | 913401001491854105 | Commercialization and promotion of scientific and technological achievements, high-tech business incubation, investment management, and asset operation. |
| Equity interests in other Chinese and foreign listed companies controlled by the actual controller during the reporting period | USTC Holdings Co., Ltd. is the actual controller of QuantumC Tek Co., Ltd. ("QuantumC"), directly holding 13.50% of the shares of QuantumC and controlling 8.26% of the voting shares of QuantumC through the proxy of Pan Jianwei, combining to 21.76% of the voting shares of QuantumC (data from QuantumC's 2020 annual report). | |||
Changes in the actual controllers during the reporting period
□ Applicable √ Not applicable
The Company's actual controllers did not change during the reporting period.Block diagram of ownership and control relationships between the Company and its actual controllers
Control of the Company by the actual controller via trust or other asset management method
□ Applicable √ Not applicable
4. Shares accumulatively pledged by the Company's controlling shareholder or largest shareholder and itspersons acting in concert accounting for 80% of the total number of shares held by them in the Company
□ Applicable √ Not applicable
5. Other corporate shareholders holding more than 10% shares
√ Applicable □ Not applicable
| Name of corporate shareholder | Legal representative | Date of incorporation | Registered capital (in RMB10,000 | Main business or management activities |
| or person-in-charge | ) | |||
| China Mobile Limited | Yang Jie | 27 February 2004 | 164,184.83 | Operation of the Global System for Mobile Communications (GSM) services; IP telephony services; Internet access services, and Internet backbone data transmission services; design of investment in and construction of mobile communications, IP telephony and Internet networks; installation, construction and maintenance of mobile communications, IP telephony and Internet facilities; operation of system integration, roaming settlement and clearing, technology development, technical services, advertising business, and equipment sales related to mobile communications, IP telephony and Internet services, as well as other telecommunications and information services; sale and lease of mobile phone terminal equipment, IP phone equipment, Internet equipment and accessories, and provision of relevant after-sales service; business training, and conference services; accommodation (student accommodation) (the operation limited to branches); catering services, and swimming pools (the operation limited to branches). (In respect of the items that need to be approved according to law, relevant activities shall be carried out only after being approved by the competent department.) |
6. Restrictions on reduction of shares held by the controlling shareholder, actual controllers, restructuringparty and other commitment makers
□ Applicable √ Not applicable
IV. Specific Implementation of Share Repurchases during the Reporting Period
Implementation progress of share repurchase
□ Applicable √ Not applicable
Implementation progress of reduction of repurchased shares via centralized bidding
□ Applicable √ Not applicable