Goertek Inc. Annual Report 2021
Goertek Inc.
Annual Report 2021
March 2022
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Goertek Inc. Annual Report 2021
Section Ⅰ Important Notes, Contents and Interpretations
The Board of Directors, the Board of Supervisors, directors, supervisors
and senior management of the Company guarantee that the information
presented in this report shall be together be wholly liable for the truthfulness,
accuracy and completeness of its contents and free of any false records,
misleading statements or material omissions, and will undertake individual and
joint legal liabilities.
Jiang Bin, the person in charge of the Company, and Li Yongzhi, the person
in charge of accounting and the accounting department (accounting supervisor)
guarantee that the financial report in this annual report is authentic, accurate
and complete.
All directors have attended the board meeting to review the annual report.
The Company faces the risks in market, operation and management.
Investors are kindly reminded to pay attention to possible investment risks. For
details, see "Section III Discussion and Analysis of Management of the Company,
XI Outlook for the Future Development of the Company" in this report.
The future plans and some forward-looking statements mentioned herein
are planned matters which shall not constitute a substantial commitment of the
Company to investors. Therefore, both investors and relevant persons should
maintain their risk awareness and understand the differences among plan,
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forecast and commitment. Please pay attention to investment risks.
The profit distribution proposal considered and approved by the Board of
Directors of the Company is as follows: based on the total share capital
registered on the record date of equity distribution minus the repurchased
shares in the Company's special repurchase account, the Company will
distribute cash dividend of RMB 2.00 (tax inclusive) for per 10 shares to all the
shareholders, as well as 0 bonus shares (tax inclusive), and there is no conversion
of capital reserves into share capital.
If any discrepancy between the English version and the Chinese version of
the annual report, the Chinese version shall prevail.
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Goertek Inc. Annual Report 2021
Contents
SectionⅠImportant Notes, Contents and Interpretations ................................................................................................... 2
SectionⅡCompany Information and Key Financial Indicators .......................................................................................... 8
Section III Discussion and Analysis of Management of the Company ............................................................................. 13
Section IV Corporate Governance .................................................................................................................................... 48
Section V Environmental and social responsibilities ........................................................................................................ 86
Section VI Important Matters ........................................................................................................................................... 90
Section VII. Changes in Shares and Information about Shareholders ............................................................................ 112
Section VIII Information of Preferred Shares ................................................................................................................. 121
Section IX Information on the Bonds ............................................................................................................................. 122
Section X Financial Report ............................................................................................................................................. 123
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Directory of Reference Files
(1) Financial statements with signatures and seals of the legal representative, the person in charge of accounting and the person in
charge of accounting department (accounting supervisor);
(2) The originals of 2021 annual report and its abstract signed by the legal representative of the Company;
(3) The originals of the audit report with the seal of Zhongxi Certified Public Accountants (special general partnership) Co., Ltd. and
the signature and seal of the certified public accountants;
(4) The originals of all company documents and announcements publicly disclosed in newspapers designated by China Securities
Regulatory Commission (CSRC) during the reporting period.
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Goertek Inc. Annual Report 2021
Interpretation
Terms Refers to Content of interpretation
Company, the Company, Goertek Inc. Refer to Goertek Inc.
Goertek Group Refers to Goertek Group Co., Ltd., Controlling shareholder of the Company
Weifang Goertek Electronics Co., Ltd., wholly owned subsidiary of
Weifang Goertek Refers to
the Company
Weifang Goertek Microelectronics Co., Ltd., controlled subsidiary of
Weifang Goertek Microelectronics Refers to
the Company
Goertek Optical Technology Co., Ltd., wholly owned subsidiary of
Goertek Optical Refers to
the Company
Goertek Technology Vina Company Limited, wholly owned
Goertek Technology (Vietnam) Refers to
subsidiary of the Company
ODM Refers to Original Design and Manufacturing
JDM Refers to Joint Design and Manufacturing
The micro electro-acoustic components that transform electrical
signal into acoustic signal, generate driving force, through the
magnetic line cutting of voice coil in magnetic field, to drive the
Micro speaker Refers to diaphragm vibration, which then pushes the air for sounding.
Compared with the micro receiver, it's characterized by higher
power, wide frequency response and high fidelity, which is generally
used for playing the sound.
Based on micron/nano technology, Micro electro mechanical system
(MEMS) is a technology developed for designing, processing,
manufacturing, measuring and controlling micron/nano materials.
MEMS can integrate mechanical components, optical system and
MEMS Refers to
electric control system of driving components into a whole unit of
micro system, featured with miniaturization, intelligence,
multi-function, high integration and being suitable for mass
production
The acoustic component composed of one or several micro speakers
Speaker module Refers to and other electronic devices, which are assembled together through
an injection molded housing.
A portable device that can be worn or carried directly, or integrated
Smart wearable devices Refers to
into the user's clothes or accessories
Virtual Reality/VR Refers to A computer simulation system that can create and experience virtual
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Goertek Inc. Annual Report 2021
world by using computer to generate a simulation environment into
which the users immerse.
A technology that perfectly integrates virtual information with the
real world. By making extensive use of multimedia, 3D modeling,
real-time tracking and registration, intelligent interaction, sensing
Augmented Reality/AR Refers to and other technical means, it applies the computer-generated text,
images, 3D models, music, video and other virtual information to the
real world after simulation. These two kinds of information
complement each other to enhance the real world.
The new types of smart wireless earphones represented by TWS
(True Wireless Stereo) earphones connect the left and right
earphones with smart phones and other terminal devices through
Smart wireless earphones Refers to
Bluetooth technology to form an independent stereo system, which
realizes touch control, voice control, body information collection and
other functions by adding various sensors.
Also known as SiP (System in Package) packaging module at the
system level, it integrates multiple chips and passive components
into the same package through advanced packaging such as
Micro-system module Refers to technologies 3D packaging to form a module with whole or main
functions of an electronic system, so as to realize the optimal
combination of performance, volume, weight and other indicators. It
is a comprehensive emerging microelectronics technology.
A detection device that is capable of feeling the measured
information, and able to transform the perceived information into
electrical signals or other required forms of information for output
Sensor Refers to
based on certain rules, in order to meet the requirements of
information transmission, processing, storage, display, recording and
control.
Company Law Refers to Company Law of the People's Republic of China
Securities Law Refers to Securities Law of the People's Republic of China
Articles of Association Refers to Articles of Association of Goertek Inc.
CSRC Refers to China Securities Regulatory Commission
yuan (RMB), ten thousand yuan (RMB), hundred million yuan
RMB, RMB 10,000, RMB 100,000,000 Refer to
(RMB)
Reporting period Refers to January 1, 2021 to December 31, 2021
Explanation on Other Matters
In this report, any difference between the sum of partial sums and the sum of detailed items is due to rounding.
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Goertek Inc. Annual Report 2021
Section II Company Information and Key Financial Indicators
I. Company Information
Stock abbreviation Goertek Inc. Stock code 002241
The stock exchange where stocks
Shenzhen Stock Exchange
are listed
Name of the Company in Chinese 歌尔股份有限公司
Abbreviation of the Company in
歌尔股份
Chinese
Name of the Company in English
Goertek Inc.
(if any)
Abbreviation of the Company in
Goertek
English (if any)
Legal representative of the
Jiang Bin
Company
Registered address 268 Dongfang Road, High-tech Industrial Development District, Weifang
Postal code of registered address 261031
Previous changes of registered
No change
address of the Company
Business address 268 Dongfang Road, High-tech Industrial Development District, Weifang
Postal code of business address 261031
Company website http://www.goertek.com
E-mail ir@goertek.com
II. Contacts and Contact Information
Board Secretary Securities Affairs Representative
Name Jia Jun'an Xu Yanqing, Xu Dapeng
268 Dongfang Road, High-tech Industrial 268 Dongfang Road, High-tech Industrial
Contact address
Development District, Weifang Development District, Weifang
Tel. 0536-3055688 0536-3055688
Fax 0536-3056777 0536-3056777
E-mail ir@goertek.com ir@goertek.com
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Goertek Inc. Annual Report 2021
III. Information Disclosure and Place of the Report
Website of the stock exchange for release of the
Shenzhen Stock Exchange (http://www.szse.cn)
Annual Report
Name and website of the media for release of the Securities Times, China Securities Journal, Shanghai Securities News,
Annual Report Securities Daily, CNINFO（http://www.cninfo.com.cn）
Place where the Annual Report is available for
Office of Board of Directors of the Company
inspection
IV. Changes in Registration
Organization code 91370700729253432M
The changes in main business since the Company
No change
was listed (if any)
Changes of controlling shareholders of the
No change
Company (if any)
V. Other Relevant Information
Accounting firm engaged by the Company
Name of the accounting firm Zhongxi Certified Public Accountants (special general partnership) Co., Ltd.
Business address Room 1101, No. 11, Chongwenmenwai Street, Dongcheng District, Beijing
Names of accountants signing the
Du Yeqin, Mou Huiling
report
The sponsor institution engaged by the Company to perform continuous supervision during the reporting period
√ Applicable □ Not applicable
Business address of the sponsor Duration of continuous
Name of the sponsor institution Name of sponsor representative
institution supervision
9th Floor, Building B, Kayheng
Center, No.2 Chaoyangmennei From June 12, 2020 to
China Securities Co., Ltd. Guan Feng, Huang Zhenyue
Street, Dongcheng District, December 31, 2021
Beijing
The financial advisor engaged by the Company to perform continuous supervision during the reporting period
□ Applicable √ Not applicable
Ⅵ. Key Accounting Data and Financial Indicators
Whether the Company performed a retrospective adjustment or restatement of previous accounting data
□ Yes √ No
2021 2020 Year-on-year change 2019
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Operating revenue (RMB) 78,221,418,618.02 57,742,742,893.96 35.47% 35,147,806,427.74
Net profit attributable to shareholders of
4,274,702,999.38 2,848,007,269.61 50.09% 1,280,542,212.61
the Company (RMB)
Net profit attributable to shareholders of
the Company excluding non-recurring 3,832,421,177.27 2,758,911,040.03 38.91% 1,348,634,308.27
profits and losses (RMB)
Net cash flow from operating activities
8,598,475,527.88 7,682,256,113.68 11.93% 5,451,430,414.59
(RMB)
Basic earnings per share (RMB / share) 1.29 0.89 44.94% 0.40
Diluted earnings per share (RMB / share) 1.28 0.89 43.82% 0.40
Weighted average return on net assets 17.61% 16.40% 1.21% 8.19%
December 31, 2021 December 31, 2020 Year-on-year change December 31, 2019
Total assets (RMB) 61,079,051,133.27 49,117,826,313.41 24.35% 34,660,304,627.21
Net assets attributable to shareholders of
27,327,747,993.97 19,653,252,273.26 39.05% 16,107,163,639.60
the Company (RMB)
The Company's net profit before and after deducting non-recurring profits and losses in the last three fiscal years, whichever is lower,
is negative, and the audit report of last year shows that there is uncertainty in company's ability to continue as a going concern.
□ Yes √ No
The net profit before and after deducting non-recurring profits and losses, whichever is lower, is negative.
□ Yes √ No
Ⅶ. Differences in accounting data between domestic and foreign accounting standards
1. Differences in net profits and net assets in the financial reports disclosed according to international
accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
During the reporting period, there is no difference in net profits and net assets in the financial reports disclosed pursuant to
international accounting standards and Chinese accounting standards
2. Differences in net profits and net assets in the financial reports disclosed according to foreign accounting
standards and Chinese accounting standards
□ Applicable √ Not applicable
During the reporting periods no differences in net profits and net assets in the financial reports disclosed according to foreign
accounting standards and Chinese accounting standards at the same time
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Ⅷ. Key Quarterly Financial Indicators
Unit: RMB
The first quarter The second quarter The third quarter The fourth quarter
Operating revenue 14,028,169,300.89 16,259,628,386.33 22,501,367,860.88 25,432,253,069.92
Net profit attributable to
965,953,650.11 765,076,109.61 1,601,494,203.24 942,179,036.42
shareholders of the Company
Net profit attributable to
shareholders of the Company
601,329,147.56 808,228,696.46 1,609,128,973.48 813,734,359.77
excluding non-recurring profits and
losses (RMB)
Net cash flow from operating
873,274,388.66 3,108,904,252.54 1,776,650,281.67 2,839,646,605.01
activities
Whether there is significant difference between the above individual or aggregate financial indicators and that of what disclosed in
the quarterly reports and semi-annual reports disclosed by the Company
□ Yes √ No
Ⅸ. Items and Amounts of Non-recurring Profits and Losses
√ Applicable □ Not applicable
Unit: RMB
Item 2021 2020 2019 Explanation
Profits and losses on disposal of non-current
assets (including the write-off portion of the -122,148,708.58 -219,544,001.32 -195,445,840.66
provision for asset impairment)
Government subsidies included in the
current profits and losses (except those
closely related to the Company's normal
business, comply with national policies and 464,119,437.91 221,372,903.17 177,315,056.36
regulations, and continuously grant in
accordance with a certain standard quota or
quantity)
In addition to the effective hedging business
related to normal business of the Company,
the profits and losses from the changes in
fair value arising from holding
held-for-trading financial assets and 185,179,920.90 102,685,404.04 -81,283,474.24
held-for-trading financial liabilities, as well
as the investment income obtained from the
disposal of held-for-trading financial assets,
held-for-trading financial liabilities and
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Goertek Inc. Annual Report 2021
available-for-sale financial assets
Other non-operating revenue and
expenditures other than those mentioned 13,554,671.71 5,874,633.40 13,488,075.24
above
Other profit and loss items that meet the
2,603,363.20 3,236,394.55 685,750.54
definition of non-recurring profit and loss
Less: Impact of income tax 84,270,186.15 21,159,380.84 -17,148,337.10
Impact of minority shareholders'
16,756,676.88 3,369,723.42
interest (after tax)
Total 442,281,822.11 89,096,229.58 -68,092,095.66 --
Details of other profit and loss items that meet the definition of non-recurring profit and loss：
√ Applicable □ Not applicable
It mainly refers to returned service charge for withholding individual income tax and other fees.
Description of defining the non-recurring profit and loss items, which are listed in Explanatory Announcement No. 1 on Disclosure of
the Information regarding the Companies Offering Their Securities to the Public - Non-recurring Profit and Loss, as recurring profit
and loss
□ Applicable √ Not applicable
The Company did not classify any item of the non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on
Disclosure of the Information regarding the Companies Offering Their Securities to the Public - Non-recurring Profit and Loss, as
recurring profit and loss in the reporting period.
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Section III Discussion and Analysis of Management of the Company
Ⅰ. The situation of the industry during the reporting period
During the reporting period, the Company's main business divides into three segments including precision components business,
smart audio device business and smart hardware business. The main business of the company is categorized into the industry of the
manufacturing of computer, communication, and other electronic equipment. The Company's main products include acoustics, optics,
microelectronics, structural components and other precision components, as well as smart hardware products such as TWS smart
earphones, virtual reality (VR)/augmented reality (AR) products, smart wearable devices, gaming console and accessories, and smart
home products. The Company serves the leading global customers in the technology and consumer electronics industry by providing
them with vertically integrated product solutions of precision components and smart hardware, as well as the related design, R&D
and manufacturing services.
In the mobile era when the smartphones became the core hardware devices, a large number of outstanding well-known
enterprises in technology and consumer electronics industry had emerged worldwide based on the integration of advanced hardware
devices, software content and innovative applications, and drove the whole industry and related enterprises in its industrial chain to
achieve significant growth and enterprise development through a long period of time in the past. As the growth of the smartphone
industry has slowed down in recent years, the global technology and consumer electronics industry has begun the transition from the
mobile era to the post-mobile era.
According to the statistics of IDC, a well-known consulting agency, the global smartphone shipment in 2021 reached about 1.35
billion units, with approximately 5.3% YoY increase, which has resumed growth in the post-epidemic era. But regarding to its overall
performance in recent years, the growth of global smartphone industry has slowed down significantly. Therefore, the players in the
global consumer electronics industry are actively exploring and planning on new opportunities of the future growth of the business.
At the same time, advanced communication technologies such as 5G, along with AI, intelligent interaction, sensor, software
algorithm are further integrated into the new generation of smart hardware products, thus creating a large number of new applications
and demands. These new smart hardware products represented by VR/AR devices, smart wireless earphones, smart wearable devices
and smart home products, have developed rapidly in recent years.
According to the statistics of IDC, the global shipment of virtual reality (VR) products reached about 9.36 million units in 2021,
with approximately 68.6% YoY increase. The global shipment of augmented reality (AR) products reached about 330,000 units, with
approximately 13.8% YoY increase. The global VR industry continues its rapid development in 2021. More well-known
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Goertek Inc. Annual Report 2021
manufacturers in consumer electronics and Internet industries actively invest in VR, which promotes the continuous development of
related hardware technology and software content. The global market size of AR products is still relatively small, and AR hardware
technology still faces challenges in chips, optical display, communication, power consumption, size and weight. However, AR
products have shown great market potential, and have attracted the global attention.
According to the statistics of Futuresource, a famous consulting agency, the global shipment of TWS smart earphones reached
about 300 million units in 2021, with approximately 37% YoY increase. With more mature intelligent voice interaction functions and
continuous improvement of user experience, the penetration rate of TWS smart earphones in overall earphone market continues to
increase and is expected to keep growing in future. According to the statistics of CCS Insight, another well-known consulting agency,
the global shipment of smart wearable products represented by smart watches and smart bands reached about 232 million in 2021,
with approximately 20.2% YoY increase. While the market size is growing steadily, high-accuracy health monitoring technology is
also under developing and improvement, which is expected to create new applications and market demands for smart wearable
products in the future.
The rapid development of the new generation of smart hardware products has also boosted the demand for related precision
components such as high-precision optical components and modules, precision acoustic components, MEMS sensors and
micro-system modules, haptic components, and precision structural parts, thus creating new directions and market space for precision
components products.
With the new development stage of the industry and the rise of smart hardware products, the industry also shows a clearer
competition pattern. From the perspective of brand and enterprises, the global technology and consumer electronics industry shows a
centralized trend in the competition. The leading enterprises with strong competitiveness and brand awareness demonstrate clear
competitive advantages by leveraging their resource in technologies, talents, funds, brands and industrial ecosystem, and thus lead
the technology and product innovation in the industry to a certain extent.
From the perspective of supply chain, global technology and consumer electronics industry continued to shift the middle-end of
the supply chain to China and other developing countries. In particular, with the continuous improvement of China's
political/economic environment, fundamental infrastructure, industrial layout, management/technical talent resources and other
aspects, the overall competitiveness of electronic manufacturing enterprises of China is improved significantly, thus effectively
undertake the demand of global industry, and obtain new development opportunities.
II. The Company’s main business during the reporting period
The Company is committed to serve the leading customers in the global technology and consumer electronics industry by
providing vertically integrated product solutions of precision components and smart hardware, as well as related design, R&D and
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manufacturing services.
The Company's main business divides into three segments including precision components business, smart audio device
business and smart hardware business. The precision components business focuses on acoustics, optics, microelectronics, structural
components, and other precision components. The related products include micro speaker/receiver, speaker module, haptic
component (actuator), wireless charging device, antenna, MEMS microphone, MEMS sensors, micro-system module, VR optical
component and module, AR optical component, AR light engine, precision structural parts and etc. The above-mentioned products
are widely applied in devices such as smartphones, tablets, smart wireless earphones, VR, AR, smart wearable and smart home
devices. Smart audio device business focuses on providing products related to audio, voice interaction, artificial intelligence, and
other technologies. The main products include smart wireless earphones (TWS), wired/wireless earphones, smart speakers, etc. Smart
hardware business focuses on providing products related to entertainment, health and home security. The main products include VR,
AR, smart wearable products, gaming consoles and accessories, smart home products, etc.
The Company has innovative competitive advantages in the fields of acoustics, optics, MEMS microelectronics and precision
manufacturing, and owns many intellectual property rights in the field of precision parts and components. In addition, the Company
has accumulated rich experience in projects by cooperating with industry-leading customers in the field of smart audio device and
smart hardware through "ODM", "JDM" and other business modes. During the reporting period, the Company maintained a good,
long-term cooperative relationship with leading customers in the global technology and consumer electronics industry, kept growing
in the number of patent applications and in technological capabilities. As a result, the company has been constantly recognized by
global customers for its product solutions and service capability, and remains being an industry-leading manufacturer in the fields of
micro speakers, MEMS microphones, MEMS sensors, TWS, VR products, smart wearable products, gaming console and accessories,
etc.
During the reporting period, due to the continuous growth of demand of smart hardware products such as VR, TWS, smart
wearable products, gaming consoles and accessories, and the related precision components, the Company has achieved significant
growth in revenue and net profit. At the same time, the Company further improved its position in the industry. During the reporting
period, the Company won many honors, including being ranked the 3rd company in the Top-100 China electronic component
enterprises based on comprehensive economic indexes, the 86th company in the Top-500 private enterprises in China's
manufacturing industry, the 164th company in the Top-500 private enterprises in China, as well as being the executive member
company of CITIF.
Ⅲ. Analysis of Core Competitiveness
1. Industry-leading precision and intelligent manufacturing capabilities
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In technology and consumer electronics related fields, the Company has been widely recognized for precision manufacturing
capabilities and obtains great reputation. Relying on the core capabilities and long-term experience in the field of precision
manufacturing, the Company has continuously improved the processing accuracy, efficiency and quality of precision components and
smart hardware products. The Company has in-house development capabilities of various core raw materials, and The Company
adopted multiple advanced processes and technologies such as ultra-high-precision mold, high-precision metal/non-metal processing,
ultrasonic technology and laser technology, to build industry-leading precision manufacturing capabilities in the production of
precision optical components, MEMS microphones, MEMS sensors, micro-system modules and precision structural parts, thus
ensuring the delivery of the products with high precision, high efficiency and high quality.
At the same time, the Company actively explores the development of intelligent manufacturing mode based on the capacities of
advanced equipment development and flexible automation production. In the fields of automation, machine vision and AI related to
intelligent manufacturing, the Company has built a future-oriented core capability of intelligent manufacturing by continuing
investing in independent R&D, introducing global advanced technologies, core equipment and best practice experience for system
integration, thus improving the manufacturing in all aspects through the application of information, automation, artificial intelligence
and other technologies. The Company promotes the transformation of its manufacturing to a more digitalized, connected, intelligent,
and service-oriented model, and to build the core capabilities of future-oriented intelligent manufacturing.
2. Multi-technologies integration platform and strong team of R&D personnel
The Company has established a product R&D and manufacturing platform integrating materials, structures, electronic circuits,
software algorithms, wireless communication, advanced technology, testing, automation and other technologies. Through
cross-domain technology integration, the Company provides customers with advanced and systematic solutions for precision
components and smart hardware products. The Company attaches great importance to the integration and cultivation of outstanding
talents in the fields of acoustics, optics, microelectronics, wireless communication, precision manufacturing, automation, and other
sectors around the world. The Company has set up a team of technical personnel with profound technical strength and rich
experience in product projects, and has made a long-term cooperation with many well-known universities and scientific research
institutions, such as Beijing University of Aeronautics and Astronautics, Tsinghua University, Shanghai Jiao Tong University, Harbin
Institute of Technology, Nanjing University, Southeast University, Changchun Institute of Optics, Fine Mechanics and Physics
(CIOMP), Shandong University, China Ocean University(OUC), Changchun University of Science and Technology and Dalian
University of Technology, which forms an open and comprehensive technology R&D platform in support of continuous innovation
and R&D of technologies and products.
During the reporting period, the Company applied for 3,468 patents, including 2,539 invention patents. A total of 2,675 patents
has been granted, including 1,036 invention patents. Till December 31, 2021, the Company has totally applied for 25,818 patents
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(including 3,322 foreign patent applications), including 13,102 invention patents; Total of 15,525 patents have been granted,
including 4,165 invention patents.
3. Continuous strategic innovation and transformation, and stable high-value customer relationships
Facing the complex macroeconomic situation of domestic and overseas and the slowdown in the growth of the smartphone
industry, the management of the Company actively carries out strategical innovation and transformation. While continuing to
consolidate the core competitive advantages in the conventional precision component business, the Company firmly grasps the
innovation opportunities of smart hardware products in technology and consumer electronics industry. Relying on the high-value
customer resources and good customer relationships worldwide, the Company focuses on the market and technology and continues to
explore new business growth opportunities in the fields of TWS, VR / AR, gaming and accessories, smart wearable devices, etc. The
Company optimizes the allocation of strategical resource, supports strategical product development, continues strengthening and
further utilize the customer resource advantages by closely following the world-class customers, in an effort to transform the needs of
high-value customers into an inexhaustible driving force for the Company's sustainable development.
4. Excellent core management team
Although the Company experiences a rapid and sound development, the core management team keeps a steady and efficient
style as always. Facing the challenges and demands of smart hardware products in the post mobile era such as rapid development,
high quality, high precision manufacturing, short delivery cycle and complex customer certification process, the core management
team promptly response to the market and makes changes and innovations continuously, to keep and enhance the Company's
capabilities of strategic management, operation, R&D, precision and intelligent manufacturing. The Company attaches importance to
and promotes the internationalization, specialization and rejuvenation of its core management team, and actively brings in senior
management talents and professionals from many international leading enterprises. At the same time, the Company has strengthened
the echelon of its talent team, more and more young talents grow up into the Company's core management team through training and
practice. The Company boasts a management team with both experience and vitality that continues to promote the Company's stable
and fast development in the future.
IV. Analysis of Main Business
1. Overview
In 2021, the national economy was recovering after the outbreak of the epidemic, new changes presented in both domestic and
overseas, and more challenges appeared in the process to maintain the stability of the economy. Under that situation, China
government maintained the continuity and pertinence of macro policies, provided necessary support for economic recovery, and
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adopted a series of effective measures, such as optimizing enterprise supporting policies, improving business environment,
strengthening technology innovation and stabilizing the industry and supply chain, which finally supported China's economy to
achieve a relatively high growth rate among its fellow countries.
Facing the complex global political and economic environment, the repeated COVID-19 outbreaks in some countries and
regions, as well as the challenges in global supply chain operation, the management and all staff of the Company made their best
efforts to respond, and successfully completed business development, project delivery, epidemic prevention and control, operation
improvement and other important work. Finally, the Company has achieved excellent business results with a remarkable growth in
both revenues and profits in 2021.
In recent years, the growth of the global smartphone market has slowed down. However, COVID-19 has impacted people's lives
and work style, bringing in significant increase of demand for smart hardware devices in the applications such as online
telecommuting, social entertainment, sports and health. As a result, the emerging market of smart hardware products represented by
VR, TWS, smart wearable, gaming consoles and accessories maintained a stable and rapid growth. Due to the Company's strategical
investment in smart hardware business in recent years, the growth of the new smart hardware product market has accelerated the
sound development of the Company's business, in both precision components, smart audio devices and smart hardware sectors.
During the reporting period, the Company continued to uphold the product strategy of "precision components + smart hardware"
by actively promoting the business of precision components, such as acoustics, optics, microelectronics and structural parts, as well
as smart hardware products such as VR/AR, smart wireless earphones (TWS), smart wearable and smart home devices. Especially,
the businesses in VR, TWS, gaming consoles and accessories has experienced a rapid growth. By continuing to focus on leading
customers in the technology and consumer electronics industry and to improve customer service and relationships, the Company’s
business development have also achieved fruitful results. The promotion of the internal reform of the Company has realized more
efficient decision-making process, and the continuous improvement of the internal management and operation, lays a good
foundation for the further development of the Company in the future.
During the reporting period, the Company achieved a revenue of RMB 78,221.4186 million, with a 35.47% YoY increase. The
Company realized a net profit attributable to shareholders of listed companies of RMB 4,274.703 million, with a 50.09% YoY
increase. The operating cost of the Company was RMB 67,167.6667 million, with a 38.54% YoY increase.
During the reporting period, the total amount of the Company's sales expenses, administrative expenses, R&D expenses and
financial expenses was RMB 6,733.702 million, with an 11.81% YoY increase.
During the reporting period, the Company further strengthened the development of new technologies, products and techniques,
actively brought in high-level R&D talents, and invested RMB 4,301.3428 million in R&D, accounting for 5.50% of the revenue and
15.40% of the latest audited net assets of the Company.
18
Goertek Inc. Annual Report 2021
During the reporting period, the net cash flow from operating activities of the Company was RMB 8,598.4755 million, with an
11.93% YoY increase. The main reasons are as follows: during the reporting period, the Company expanded the business scale,
improved the operating cycle, and thus the net cash flow from operating activities increased.
2. Revenue and cost
1) Composition of operating revenue
Unit: RMB
2021 2020
Proportion in Proportion in Year-on-year change
Amount Amount
operating revenue operating revenue
Total of operating
78,221,418,618.02 100% 57,742,742,893.96 100% 35.47%
revenue
Classified by industry
Electronic
76,946,324,805.73 98.37% 56,531,616,437.84 97.90% 36.11%
components
Other business
1,275,093,812.29 1.63% 1,211,126,456.12 2.10% 5.28%
income
Classified by product
Precision
13,840,133,491.33 17.69% 12,205,410,031.94 21.13% 13.39%
components
Smart audio device 30,297,084,891.23 38.73% 26,674,264,183.42 46.20% 13.58%
Smart hardware 32,809,106,423.17 41.94% 17,651,942,222.48 30.57% 85.87%
Other business
1,275,093,812.29 1.63% 1,211,126,456.12 2.10% 5.28%
income
Classified by region
Domestic 7,571,525,782.78 9.68% 6,999,168,774.17 12.12% 8.18%
Overseas 70,649,892,835.24 90.32% 50,743,574,119.79 87.88% 39.23%
Classified by sales mode
Direct selling 77,770,329,729.13 99.42% 57,438,222,579.69 99.47% 35.40%
Distribution 451,088,888.89 0.58% 304,520,314.27 0.53% 48.13%
(2) Industries, products, regions and sales modes accounting for more than 10% of the Company's
operating revenue or operating profit
√ Applicable □ Not applicable
Unit: RMB
19
Goertek Inc. Annual Report 2021
YoY change (%) YoY change (%)
Gross profit YoY change (%)
Operating revenue Operating cost of operating of gross profit
margin of operating cost
revenue margin
Classified by industry
Electronic
76,946,324,805.73 66,054,072,404.35 14.16% 36.11% 39.24% -1.92%
components
Classified by product
Precision
13,840,133,491.33 10,641,616,932.91 23.11% 13.39% 14.57% -0.79%
components
Smart audio
30,297,084,891.23 27,167,160,928.24 10.33% 13.58% 19.64% -4.54%
device
Smart hardware 32,809,106,423.17 28,245,294,543.20 13.91% 85.87% 82.89% 1.40%
Classified by region
Domestic 6,878,087,190.33 5,921,035,748.23 13.91% 7.59% 8.97% -1.10%
Overseas 70,068,237,615.40 60,133,036,656.12 14.18% 39.75% 43.15% -2.04%
Classified by sales mode
Direct selling 76,499,084,617.78 65,666,703,312.23 14.16% 36.05% 39.18% -1.93%
Distribution 447,240,187.95 387,369,092.12 13.39% 47.68% 50.64% -1.70%
If the statistical caliber of the Company's main business data has been adjusted in the reporting period, adjusted statistics of main
business are based on the caliber at the end of the reporting period of last year.
□ Applicable √ Not applicable
(3) Whether the Company's revenue from physical products sales is greater than the revenue from
providing services
√ Yes □ No
Classification of
Item Unit 2021 2020 Year-on-year change
industry
Sales volume Ten thousand PCS 540,341.87 413,499.31 30.68%
Electronic
Output volume Ten thousand PCS 546,976.95 416,352.11 31.37%
components industry
Inventory volume Ten thousand PCS 34,036.09 27,401.01 24.21%
Reasons for changes in the relevant data over 30% year-on-year
√ Applicable □ Not applicable
During the reporting period, both of the production volume and sales volume of the Company increased.
(4) Fulfillment of major sales contracts and major procurement contracts signed by the Company as of the
reporting period
□ Applicable √ Not applicable
20
Goertek Inc. Annual Report 2021
5) Composition of operating cost
Classification of industry
Unit: RMB
2021 2020
Classification Year-on-year
Item Proportion in Proportion in
of industry Amount Amount change
operating cost operating cost
Direct 55,843,214,176.77 84.54% 39,047,644,492.84 82.31% 43.01%
materials
Electronic Direct labor 4,058,480,923.72 6.14% 3,401,428,878.80 7.17% 19.32%
components expenses
Manufacturi 6,152,377,303.86 9.31% 4,990,659,944.90 10.52% 23.28%
ng expenses
Explanation
During the reporting period, the Company's overall sales volume increased. At the same time, the sales revenue of Smart audio
devices and intelligent hardware products with relatively high material cost increased.
(6) Whether there is any change in consolidation scope during the reporting period
√ Yes □ No
During the reporting period, the Company established a subsidiary company GOERTEK MICROELECTRONICS KOREA
CO.,LTD.
(7) Significant changes or adjustments in the Company's business, products or services during the
reporting period
□ Applicable √ Not applicable
(8) Major customers and suppliers
Major customers of the Company
Sales revenue from top five customer 67,695,045,138.61
Proportion of total sales revenue from top five customers in
86.54%
total annual sales amount
Proportion of sales revenue from related parties among top
0.00%
five customers in total annual sales amount
Information of top five customers
No. Name of customer Sales amount (RMB) Proportion in total annual sales amount
1 Customer 1 33,238,529,094.59 42.49%
21
Goertek Inc. Annual Report 2021
2 Customer 2 18,457,651,840.69 23.60%
3 Customer 3 8,715,498,516.63 11.14%
4 Customer 4 3,918,367,657.28 5.01%
5 Customer 5 3,364,998,029.42 4.30%
Total -- 67,695,045,138.61 86.54%
Other information of major customers
√ Applicable □ Not applicable
The top five customers do not have associated relationship with the Company, and the Company's directors, supervisors, senior
management, core technicians, shareholders holding more than 5% of total shares, actual controllers and other related parties do not
directly or indirectly own rights and interests in the main customers.
Major suppliers of the Company
Total purchase amount from top five suppliers (RMB) 19,062,697,560.63
Proportion of total purchase amount from top five suppliers in
30.54%
total annual purchase amount
Proportion of purchase amount from related parties among top
0.00%
five suppliers in total annual purchase amount
Information of top five suppliers
Proportion of total annual purchase
No. Name of supplier Purchase amount (RMB)
amount
1 Supplier 1 7,471,595,122.65 11.97%
2 Supplier 2 5,464,068,547.98 8.75%
3 Supplier 3 2,732,526,729.39 4.38%
4 Supplier 4 1,834,123,435.48 2.94%
5 Supplier 5 1,560,383,725.13 2.50%
Total -- 19,062,697,560.63 30.54%
Other information of major suppliers
√ Applicable □ Not applicable
The top five suppliers do not have associated relationship with the Company, and the Company's directors, supervisors, senior
management, core technicians, shareholders holding more than 5% of total shares, actual controllers and other related parties do not
directly or indirectly own rights and interests in the main suppliers.
3. Expenses
Unit: RMB
Year-on-year
2021 2020 Note of significant change
change
22
Goertek Inc. Annual Report 2021
Selling expenses 444,869,977.08 476,066,518.64 -6.55% No significant change
Administrative
1,951,657,773.32 1,629,730,793.00 19.75% No significant change
expenses
The main reasons are as follows: Reduced loss on
exchange during the reporting period; convertible
Financial
167,099,982.36 490,688,772.09 -65.95% bonds were converted into common stocks of the
expenses
Company, interest expense reduced; interest
income from money funds increased
R&D expenses 4,170,074,282.10 3,425,971,011.65 21.72% No significant change
4. R&D Investment
√ Applicable □ Not applicable
Names of major Status of Expected benefits to future
Purpose of project Objectives
R&D projects project development of the Company
According to specific technical
Develop a new generation requirements of the customers, the
of micro speaker module Company has completed the research The project helps consolidate the
R&D project of products with high and development of a number of Company's competitive
micro speaker sensitivity, low distortion, In progress advanced micro speaker module advantage and market share in the
module large amplitude, products, and realized the mass field of acoustic precision
waterproof and dustproof production in smart phones, tablet components.
features. computers, smart wearable and other
products for main customers.
Develop new generation
The project facilitates the
of MEMS sensors and Complete the R&D, verification and
business expansion the Company
R&D project of micro-system module mass production of MEMS sensors
in the field of MEMS sensors and
MEMS sensor products that are applied and micro-system module products
In progress micro-system modules, and
and micro to smart wireless for terminal products, such as TWS
further enhances the Company's
system module earphones, smart wearable smart wireless earphones, smart
comprehensive strength in the
devices and other wearable devices.
field of MEMS.
products.
Develop the precision The project helps enhance the
optical components and Company's competitive
Complete the R&D and mass
R&D project of module products by using advantage and market share in the
production of optical lens and module
VR/AR emerging optical field of VR/AR precision optical
products for new generation of
precision technologies such as components and modules,
In progress all-in-one VR products, and improve
optical “Pancake” promote the Company's ability to
the ability of comprehensive solution
components and folded-lightpath lenses provide customers with
of optical devices and light-engine
modules and waveguide customized VR / AR optical
modules for AR products.
technology, and promote solutions, and improve the
their application in Company's vertical integration
23
Goertek Inc. Annual Report 2021
Names of major Status of Expected benefits to future
Purpose of project Objectives
R&D projects project development of the Company
VR/AR products. ability and profitability in the
field of VR/AR.
Develop lightweight
Cooperate with customers to complete
all-in-one VR HMD The project helps consolidate the
R&D project of R&D, validation, mass production
products featured with Company's competitive
all-in-one VR In progress and delivery of a variety of
high-definition display, advantage and market share in the
HMD new-generation all-in-one VR HMD
precise motion tracking field of VR.
products.
and other features.
Cooperate with customers to complete It helps consolidate the
R&D project of
Develop a new generation R&D, validation, mass production Company's competitive
TWS smart
of TWS smart wireless In progress and delivery of a variety of advantage and market share in the
wireless
earphones new-generation of TWS smart field of TWS smart wireless
earphones
wireless earphones earphones.
It helps consolidate the
Develop a new generation
R&D project of Company's competitive
of smart wearable devices
smart wearable Cooperate with customers to complete advantage and market share in
with functions of
devices for R&D, validation, mass production smart wearable devices such as
independent In progress
sport and health and delivery of a new generation of smart watches and smart bands,
communication, health
related smart watches and smart bands. and supports the Company's
mornitoring features and
applications smart wearable business for
etc.
further growth.
Complete the R&D and trial
production of a variety of AR glasses
products that, with the functions of
It helps enhance the Company's
Develop wireless data processing and wireless
R&D project of R&D experience and technology
lightweight AR glasses communication, apply advanced
smart wireless accumulation in the field of AR
and their main functional In progress precision optics and micro-display
lightweight AR and facilitates the business
modules for future AR technologies such as optical
glasses expansion of the Company in AR
applications. waveguide and silicon-based LED, so
field.
as to develop the solution capability
for AR glasses and their main
functional modules.
R&D personnel of the Company
2021 2020 Year-on-year change
Number of R&D personnel 12,895 12,177 5.90%
Proportion of R&D personnel 13.46% 13.94% -0.48%
Academic structure of R&D
—— —— ——
personnel
Undergraduate 9,148 8,409 8.79%
24
Goertek Inc. Annual Report 2021
Postgraduate 2,414 1,982 21.80%
PhD 63 58 8.62%
Age of R&D personnel —— —— ——
Below the age of 30 5,105 4,821 5.89%
Aged between 30 to 40 7,162 6,838 4.74%
Over the age of 40 628 518 21.24%
The Company’s investment in R&D
2021 2020 Year-on-year change
Amount of R&D Investment (RMB) 4,301,342,763.66 3,532,801,720.56 21.75%
Proportion of R&D investment in
5.50% 6.12% -0.62%
operating revenue
Capitalized amount of R&D
662,993,650.30 541,498,060.65 22.44%
investment (RMB)
Proportion of capitalized R&D
15.41% 15.33% 0.08%
investment in R&D investment
Reasons and impacts of significant changes in R&D personnel composition of the Company
□ Applicable √ Not applicable
Reasons for significant changes in the proportion of total R & D investment in operating revenue compared with that of previous year
□ Applicable √ Not applicable
Reasons and explanation of its reasonableness of significant changes in capitalized R & D investment
□ Applicable √ Not applicable
5. Cash flow
Unit: RMB
Item 2021 2020 Year-on-year change
Sub-total of cash inflow from
85,523,439,745.15 60,932,031,432.73 40.36%
operating activities
Sub-total of cash outflow from
76,924,964,217.27 53,249,775,319.05 44.46%
operating activities
Net cash flow from operating
8,598,475,527.88 7,682,256,113.68 11.93%
activities
Sub-total of cash inflow from
3,276,323,800.48 505,861,986.28 547.67%
investment activities
Sub-total of cash outflow from
10,044,700,261.35 5,806,999,821.95 72.98%
investment activities
Net cash flow from investing
-6,768,376,460.87 -5,301,137,835.67 27.68%
activities
25
Goertek Inc. Annual Report 2021
Sub-total of cash inflow from
14,003,754,499.97 15,780,475,210.72 -11.26%
financing activities
Sub-total of cash outflow from
13,616,577,139.69 14,138,013,422.54 -3.69%
financing activities
Net cash flow from financing
387,177,360.28 1,642,461,788.18 -76.43%
activities
Net increase in cash and cash
2,224,708,917.50 3,818,588,192.22 -41.74%
equivalents
Main influencing factors of significant year-on-year changes in relevant data
√ Applicable □ Not applicable
(1) The sub-total of cash inflow from operating activities was RMB 85,523.4397 million, with year-on-year increase of 40.36%,
mainly due to the expansion of the Company's sales and the increase of sales receipts and advances received during the reporting
period.
(2) The sub-total of cash outflow from operating activities was RMB 76,924.9642 million, with year-on-year increase of 44.46%,
mainly due to the increase of the Company's purchase of raw materials and payment of employee salaries during the reporting period.
(3) The sub-total of cash inflow from investment activities was RMB 3,276.3238 million, with year-on-year increase of
547.67%, mainly due to the fact that the structural deposits purchased by the Company were collected at maturity during the
reporting period.
(4) The sub-total of cash outflow from investment activities was RMB 10,044.7003 million, with year-on-year increase of
72.98%, mainly due to the increase of the Company's purchase of fixed assets and other long-term assets, and purchase of structured
deposits during the reporting period.
(5) The net cash flow from financing activities was 387.1774 million, with a year-on-year decrease of 76.43%, mainly due to
RMB 3,995 million in cash received by the Company from issuing bonds during the previous reporting period.
The reason for significant difference between the net cash flow from the Company's operating activities during the reporting period
and net profit in current year.
√ Applicable □ Not applicable
The net cash flow from operating activities exceeded the net profit of current year by 99.64%, mainly due to the improvement of
the Company's refined operation capacity, optimization of operation cycle and reduction of capital occupation.
V. Analysis of Non-main Business
√ Applicable □ Not applicable
Unit: RMB
Amount Proportion in total Explanation of the cause Whether it is
26
Goertek Inc. Annual Report 2021
profit sustainable
It is mainly due to the investment income
obtained from transaction of foreign
Investment income 469,239,884.79 10.19% No
exchange and equity disposal of the
Company
It is mainly due to the change in valuation
Gains from changes
-48,848,625.93 -1.06% of the Company's stock foreign exchange No
in fair value
derivatives
It is mainly due to the provision for
Asset impairment -241,075,506.45 -5.23% No
inventory depreciation
It is mainly due to the unpayable
Non-operating
22,444,738.18 0.49% payments and liquidated damages No
revenue
received
Non-operating It is mainly due to the losses on scrapping
99,858,949.06 2.17% No
expenditure of non-current assets of the Company
VI. Analysis of Assets and Liabilities
1. Major changes in asset composition
Unit: RMB
December 31, 2021 January 1, 2021
YoY
Proportion Proportio
change Note of significant change
Amount in total Amount n in total
(%)
assets assets
Cash and bank
10,048,521,696.09 16.45% 7,788,139,761.68 15.72% 0.73% No significant change
balances
Accounts
11,899,214,525.92 19.48% 9,951,611,596.65 20.09% -0.61% No significant change
receivable
During the reporting period, inventory
Inventories 12,082,308,485.38 19.78% 9,170,731,903.19 18.52% 1.26% reserves increased along with business
growth of the Company
Long-term
equity 437,402,203.91 0.72% 337,410,802.56 0.68% 0.04% No significant change
investments
During the reporting period, the
Company raised funds to invest in
projects, increased the purchase of
Fixed assets 18,123,352,480.76 29.67% 14,674,535,924.15 29.63% 0.04%
production equipment, and transferred
of part of the infrastructure projects
reached usable state to fixed assets
27
Goertek Inc. Annual Report 2021
Construction in
2,127,055,853.77 3.48% 2,078,910,639.92 4.20% -0.72% No significant change
progress
Right-of-use
330,796,520.66 0.54% 462,821,988.61 0.93% -0.39% No significant change
assets
During the reporting period, the
Short-term demand for daily operating funds
4,284,859,347.02 7.02% 3,189,865,281.20 6.44% 0.58%
borrowings increased and short-term borrowings
increased
During the reporting period, the goods
Contract
2,210,825,761.69 3.62% 772,033,187.85 1.56% 2.06% were prepared for customers, and
liabilities
advance from customers increased
Long-term
2,204,215,784.74 3.61% 2,754,299,262.02 5.56% -1.95% No significant change
borrowings
From January 1, 2021, the Company
Lease liabilities 210,209,955.40 0.34% 298,830,498.84 0.60% -0.26% implemented the new lease rules, and
payed the rent as agreed
Foreign assets account for a relatively high proportion
□ Applicable √ Not applicable
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB
Impair
Profit and loss Cumulative ment Othe
Purchase amount Sales amount in
Opening from changes in changes in fair accrue r
Item in the reporting the reporting Closing balance
balance fair value in the value included d in chan
period period
report period in equity current ges
period
Financial
assets
1.
Held-for-tra
ding
financial
assets 125,327,442.62 64,914,061.44 2,745,091,734.73 2,635,098,910.00 300,234,328.79
(excluding
derivative
financial
assets)
2. 125,462,174.67 -104,999,182.31 20,462,992.36
28
Goertek Inc. Annual Report 2021
Derivative
financial
assets
3. Other
debt
investments
4.
Investment
in other 357,307,056.65 53,916,285.45 129,080,638.64 64,601,040.12 465,677,764.54
equity
instruments
Sub-total of
financial 608,096,673.94 -40,085,120.87 53,916,285.45 2,874,172,373.37 2,699,699,950.12 786,375,085.69
assets
Total of
above 608,096,673.94 -40,085,120.87 53,916,285.45 2,874,172,373.37 2,699,699,950.12 786,375,085.69
amounts
Financial
43,578,775.71 -8,763,505.06 6,427,059.28 43,578,775.71 15,190,564.34
liabilities
Other changes
None
Whether the measurement attributes of major assets of the Company have changed significantly during the reporting period
□ Yes √ No
3. Restrictions on asset rights as of the end of reporting period
Items Book value at year end (RMB) Reasons for restrictions
Cash and bank balances 910,620,794.05 Deposit for bills and borrowings
Notes receivable 6,095,782.39 Bill pledge and others
Other non-current assets 122,540,194.44 When large-denomination certificates of deposit was
pledged to the bank, the bank issued a financing guarantee
Accounts receivable 5,000,000.00 Re-insurance accounts receivable not derecognized
Total 1,044,256,770.88
Ⅶ. Analysis of Investment
1. Overall situation
√ Applicable □ Not applicable
Investment amount in 2021 (RMB) Investment amount in 2020 (RMB) YoY change (%)
29
Goertek Inc. Annual Report 2021
533,092,515.56 207,730,344.46 156.63%
2. Major equity investments acquired during the reporting period
□ Applicable √ Not applicable
30
Goertek Inc. Annual Report 2021
3. Major non-equity investments in progress during the reporting period
√ Applicable □ Not applicable
Unit: RMB
Reasons
Accumulated for failure
Whether it Accumulated
Amount actual to reach the
is the income by
Name of Investment Project invested during investment by Source of Project Estimated planned Disclosure
investment the end of Disclosure index (if any)
project mode industry the reporting the end of the funds progress income progress date (if any)
in fixed the reporting
period reporting and
assets period
period expected
benefits
For details, see
Announcement of Goertek
Inc. on Signing of
Investment Cooperation
Agreement between the
Project of Wholly-owned Subsidiary of
Dongguan the Company and the
Songshan Management Committee of
Electronic Self-raised Not Not Not January 3,
Lake Self-built Yes 119,630,009.50 310,725,561.33 13.93% Dongguan Songshan Lake
components funds applicable applicable applicable 2019
Goertek High-tech Industrial
Industrial Development Zone
Park published in the information
disclosure media such as
CNINFO
(http://www.cninfo.com.cn),
Securities Times, China
Securities Journal,
31
Goertek Inc. Annual Report 2021
Shanghai Securities News,
Securities Daily.
Total -- -- -- 119,630,009.50 310,725,561.33 -- -- -- -- --
4. Financial asset investment
(1) Securities investment
√ Applicable □ Not applicable
Unit: RMB
Profit and
Cumulative Purchase
loss from Sales amount Profit and Book value at
Accounting changes in amount
Type of Security Short Initial Book value at changes in in the loss in the the end of the Accounting Source of
measurement fair value in the
security code name investment cost the beginning fair value in reporting reporting reporting items funds
model included in reporting
the report period period period
equity period
period
Domestic
and Fair value Held-for-trading Self-raised
KOPN KOPN 169,951,481.05 120,327,442.62 63,575,754.04 85,098,910.00 69,142,817.18 98,804,286.66
foreign measurements financial assets funds
stocks
Total 169,951,481.05 -- 120,327,442.62 63,575,754.04 85,098,910.00 69,142,817.18 98,804,286.66 -- --
Date of announcement disclosure
by the Board of Directors for February 11, 2017
approval of securities investment
Date of announcement disclosure
by shareholders meeting for March 2, 2017
approval of securities investment
32
Goertek Inc. Annual Report 2021
(2) Derivatives investment
√ Applicable □ Not applicable
Unit: RMB 10,000
Proportion
of
Actual
investment
Amount of profit and
Name of Initial Amount of Amount of amount in
Whether it is Type of purchase loss
derivative Associated amount of Opening sales during provision for Closing the
related party derivatives Start date End date during the amount
investment relationship derivative balance the reporting impairment balance Company's
transaction investment reporting in the
operator investment period (if any) net asset at
period reporting
the end of
period
the reporting
period
Non 243,551.74 453,225.87 121,138.30 4.34%
Bank associated No Option 330,812.43 330,812.43 4,083.00
relationship
Non 1,288,528.97 1,285,014.09 518,981.98 18.58%
Bank associated No Forward 515,467.10 515,467.10 25,495.32
relationship
Non 191,271.00 227,381.46 178,519.60 6.39%
Bank associated No Swap 214,630.06 214,630.06 4,766.87
relationship
Total 1,060,909.59 -- -- 1,060,909.59 1,723,351.71 1,965,621.42 818,639.88 29.31% 34,345.19
Source of funds for derivatives investment Self-raised funds
Litigation involved (if any) None
Date of announcement disclosure by the Board of
March 27, 2021
Directors for approval of the investment in derivatives
33
Goertek Inc. Annual Report 2021
Date of announcement disclosure by shareholders
May 8, 2021
meeting for approval of the investment in derivatives
1. The financial derivatives transactions carried out by the Company are for the purpose of fixing costs, avoiding and preventing risks of
foreign exchange rate and interest rate, and prohibiting any risk speculation. The trading quota of the Company's financial derivatives
shall not exceed the authorized quota as reviewed and approved by the Board of Directors or the general meeting of shareholders. 2. The
Company has formulated a strict management system for financial derivatives transactions, which clearly stipulates the operating
Risk analysis and control measures for derivatives principles, approval authority, responsible departments and persons, internal operating procedures, information isolation measures,
positions during the reporting period (including but not internal risk reporting system and risk handling procedures, and information disclosure of financial derivatives transactions, in order to
limited to market risk, liquidity risk, credit risk, control trading risks arising therefrom. 3. The Company shall carefully review the terms of contracts signed with qualified banks and
operational risk, legal risk, etc.) other financial institutions, and strictly implement the risk management system to prevent legal risks. 4. The Company's business
personnel will continue to track the changes in the open market price or fair value of financial derivatives, timely assess the changes in
risk exposure of financial derivatives transactions, and regularly report to the management of the Company. If any abnormal situation,
inform the Board of Directors of the risk and take emergency measures accordingly. 5. The internal audit department regularly conducts
internal audit on the compliance of financial derivatives transactions.
In case of changes in market price or fair value of
invested derivatives during the reporting period, the
Changes in the fair value of foreign exchange derivatives are calculated based on the difference between the fair market price and the
analysis of fair value of the derivatives shall disclose
contract price in the month of the settlement date determined by the Company.
the specific methods used and the setting of relevant
assumptions and parameters
Description of whether the accounting policies and
specific accounting principles for the Company's The accounting policies and specific accounting principles for the Company's derivatives have no significant change compared with that
derivatives have changed significantly compared with of previous reporting period.
that of previous reporting period
The Company carries out financial derivatives transactions mainly to avoid foreign exchange risks associated with RMB exchange rate
fluctuations and effectively control the cost uncertainty caused by foreign exchange risks. The Company has formulated the
Special opinions of independent directors on the Management System of Goertek's Financial Derivatives Trading Business, which is conducive to strengthen the management and
Company's derivatives investment and risk control control of the risks associated with financial derivatives transactions. The deliberation, approval, voting and other procedures of this
proposal are in line with the relevant provisions of Company Law, Articles of Association, and overall interests of the Company, without
damage to the legitimate rights and interests of minority shareholders. Therefore, the Company has been approved to carry out the
34
Goertek Inc. Annual Report 2021
business above.
35
Goertek Inc. Annual Report 2021
5. Use of raised funds
√ Applicable □ Not applicable
(1) Overall use of raised funds
√ Applicable □ Not applicable
Unit: RMB 10,000
Total Proportion
The
The total amount of Accumulat of Total
Accumulat Purpose of amount of
amount of raised ed total accumulat amount of
ed amount the raised raised
raised funds with amount of ed total raised
Year of Means of Total fund of raised funds that funds that
funds used changed raised amount of funds that
raising raising raised funds that have not have been
during the purposes funds with raised have not
have been been yet idle for
reporting during the changed funds with been yet
used used more than
period reporting purposes changed used
two years
period purposes
Supplemen
ting
working
Public capital and
issuance of deposited
2020 398,903.00 129,831.49 207,055.93 0.00 0.00 0.00% 191,847.07 0.00
convertibl in the
e bonds special
account
for raised
funds
Total -- 398,903.00 129,831.49 207,055.93 0.00 0.00 0.00% 191,847.07 -- 0.00
Description of overall use of raised funds
The Company actually invested RMB 1,298.3149 million in current period. As of December 31, 2021, the Company had used a
total of RMB 2,070.5593 million of raised funds. The amount of unused raised funds was RMB 1,918.4707 million (interest
excluded), of which RMB 1,200 million was used to temporarily supplement the working capital, and the remaining funds was
deposited in the special account for raised funds of the Company.
(2) Projects in which the raised funds were proposed to be invested
√ Applicable □ Not applicable
Unit: RMB 10,000
Whether Total Total Amount Accumul Investme The date Benefits Whether Whether
Committed investment
the committe investme invested ated nt on which realized it there is
projects and investment
project d nt after during investme progress the during achieved any
of over-raised funds
has been investme adjustme the nt at the end project the the significan
36
Goertek Inc. Annual Report 2021
changed nt of nt (1) reporting amount at of the reaches reporting expected t change
(includin raised period the end of period (3) its period benefits in the
g partial funds the ＝(2)/(1) intended feasibility
changes) reporting usage of the
period (2) state project
Committed investment projects
The project of true Not
August
wireless smart No 218,903 218,903 93,433 164,620.2 75.20% 33,365.12 applicabl No
31, 2022
earphones e
AR/VR and related
August
optical module project No 60,000 60,000 30,375.77 30,375.77 50.63% 46,014.2 Yes No
31, 2022
- AR/VR project
AR/VR and related
Not
optical module project August
No 40,000 40,000 3,168.4 3,168.4 7.92% 825.17 applicabl No
- optical module 31, 2022
e
project
Not Not
Qingdao R&D center August
No 80,000 80,000 2,854.32 8,891.56 11.11% applicabl applicabl No
project 31, 2022
ee
Sub-total of committed 129,831.4 207,055.9
-- 398,903 398,903 -- -- 80,204.49 -- --
investment projects 9 3
Direction of the investment with over raised funds
Not applicable
129,831.4 207,055.9
Total -- 398,903 398,903 -- -- 80,204.49 -- --
9 3
Descriptions and
reasons for failure of Due to the impact of the project and the actual needs of the Company, the project of Qingdao R&D Center
meeting the planned was behind schedule. The Company may accelerate subsequent investment according to the actual needs,
schedule or expected and will strive to achieve the maximum efficiency of the raised funds.
revenue (by project)
Description of
significant change in
Not applicable
the feasibility of the
project
Amount, use of
over-raised funds and Not applicable
progress of use thereof
Change in location of Applicable
the project invested Occurred in previous years
with raised funds
On August 20, 2020, the Company held the 8th meeting of the 5th Board of Directors and the 6th meeting
37
Goertek Inc. Annual Report 2021
of the 5th Board of Supervisors, which reviewed and approved the Proposal on Changing the
Implementation Subject and Implementation Location of Some Investment Projects with Raised Capital
and Increasing the Capital of Wholly-owned Subsidiaries, and agreed to change: the implementation
subject of AR/VR and related optical module projects from Goertek Inc. to wholly-owned subsidiaries
Weifang Goertek and Goertek Optical; The implementation location was changed accordingly from
Goertek Photoelectric Park in Weifang High-tech Zone to Weifang Goertek Plant, east of Gaoxin No.2
Road, south of Yuqing East Street in Weifang comprehensive free trade zone and Goertek Optical Plant,
phase III of Goertek Photoelectric Park in Weifang High-tech Zone; The Company increased the capital to
Weifang Goertek with the raised funds of RMB 600 million and increased the capital to Goertek Optical
with the raised funds of RMB 400 million, for the purpose of specific implementation of above-mentioned
investment projects.
Adjustment on how to
invest the projects with Not applicable
raised funds
Applicable
On July 9, 2020, the Company held the 7th meeting of the 5th Board of Directors and the 5th meeting of
Upfront investment of
the 5th Board of Supervisors, which reviewed and approved the Proposal on Replacing the Self-raised
the project with raised
Funds Invested in the Projects in Advance with the Raised Funds, and agreed to use the raised funds to
funds and replacement
replace the self-raised funds of RMB 315.7238 million invested in the investment projects in advance. The
thereof
fund replacement above has been verified by Zhongxi Certified Public Accountants (special general
partnership) Co., Ltd., and an authentication report has been issued.
Applicable
On July 9, 2020, the Company held the 7th meeting of the 5th Board of Directors and the 5th meeting of
the 5th Board of Supervisors, which reviewed and approved the Proposal on Temporary Replenishment of
Working Capital with Idle Raised Funds. It was agreed that the Company shall use the idle raised funds not
exceeding RMB 2.5 billion to temporarily supplement working capital. The use period shall not exceed 12
months from the date of approval by the Board of Directors. After expiration, it shall be returned to the
special account for raised funds in a timely manner. The Company returned RMB 0.8 billion and RMB 1.7
billion of the raised funds to the special account for raised funds in advance on September 17, 2020 and
November 4, 2020 respectively. On November 5, 2020, the Company held the 11th meeting of the 5th
Temporary
Board of Directors and the 9th meeting of the 5th Board of Supervisors, which reviewed and approved the
replenishment of
Proposal on Temporary Replenishment of Working Capital with Partial Idle Raised Funds. It was agreed
working capital with
that the Company temporarily supplements the working capital with idle raised funds of no more than
idle raised funds
RMB 2,500 million. The validity period shall not exceed 12 months from the date of approval by the Board
of Directors. After expiration, it shall be returned to the special account for raised funds in a timely
manner. The Company returned RMB 0.5 billion and RMB 2 billion of the raised funds to the special
account for raised funds in advance on October 29, 2021 and November 3, 2021 respectively.
On November 8, 2021, the Company held the 24th meeting of the 5th Board of Directors and the 19th
meeting of the 5th Board of Supervisors, which reviewed and approved the Proposal on Temporary
Replenishment of Working Capital with Partial Idle Raised Funds. It was agreed that the Company
temporarily supplements the working capital with idle raised funds of RMB 1,200 million. The validity
period of which shall not exceed 12 months from the date of approval by the Board of Directors. After
38
Goertek Inc. Annual Report 2021
expiration, it shall be returned to the special account for raised funds in a timely manner.
Amount and reasons
for the balance of
raised funds in the Not applicable
implementation of the
project
Purpose of the raised
funds that have not The unused raised funds shall be deposited in the special account for raised funds.
been yet used
Problems or other
situations in the use
None
and disclosure of raised
funds
(3) Changes in the projects in which the raised funds were proposed to be invested
□ Applicable √ Not applicable
There was no change in the projects in which the raised funds were proposed to be invested during the reporting period.
Ⅷ. Sales of major assets and equities
1. Sales of major assets
□ Applicable √ Not applicable
The Company did not sell any major assets during the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
Ⅸ. Analysis of major subsidiaries and associates
√ Applicable □ Not applicable
Major subsidiaries and associates with an impact of more than 10% on the Company's net profit
Unit: RMB
Name Type
of of Main Operating Operating
Registered capital Total assets Net asset Net profit
compan compa business revenue profit
y ny
Electronic
Weifang Subsid 27,282,319,19 1,695,784,11 1,491,760,09
componen 1,405,601,925.00 10,971,185,728.12 3,904,375,154.73
Goertek iary 3.58 6.30 1.98
t
39
Goertek Inc. Annual Report 2021
manufactu
ring
Goertek Electronic
Technol componen
Subsid 20,651,380,53 1,285,740,95 1,280,038,47
ogy t 362,762,400.00 9,395,840,422.98 2,096,244,381.21
iary 6.59 9.38 4.51
(Vietna manufactu
m) ring
Goertek Electronic
(HongK componen
Subsid 19,422,367,89 836,073,059. 706,793,733.
ong) t 1,542,045.00 6,835,046,824.10 1,075,332,121.44
iary 2.29 54 63
Co., manufactu
Limited ring
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not applicable
Approach on acquisition and
Impact on overall production,
Name of company disposal of subsidiaries during the
operation and performance
reporting period
GOERTEK MICROELECTRONICS KOREA CO.,LTD. Newly established No significant impact
Description of major subsidiaries and associates
None
Ⅹ. Structural Entities Controlled by the Company
□ Applicable √ Not applicable
XI. Outlook for the Future Development of the Company
1. Industry trend and competition
In the mobile era, smartphones and related smart hardware products have been the main focus of innovation and the growth
drivers of the global technology and consumer electronics industry over the past many years. However, the growth of smartphone
industry has slowed down in recent years. According to the statistics of IDC, a well-known consulting agency, the global smartphone
shipment in 2022 is expected to reach 1.39 billion units, with year-on-year increase of approximately 3%. It is predicted that the
average annual compound growth rate of smartphone shipments around the world will be about 3% from 2022 to 2025. As the core
hardware in the mobile era, the slowdown of smartphone market also reflects the transition to the post-mobile era of the global
technology and consumer electronics industry.
In the post-mobile era, along with the development of new technologies such as semiconductor, 5G, micro-display, sensor,
intelligent interaction, battery, cloud and edge computing, the new generation of smart hardware products are greatly improved in
40
Goertek Inc. Annual Report 2021
functions, and are suitable for more diversified applications. Many new smart hardware devices with great potential have revealed
themselves. In particular, the products such as VR/AR, smart wearable devices and smart wireless earphones have maintained a rapid
growth in recent years, which attracts extensive attention in the global market. These products are expected to become the driving
force for further development of global intelligent hardware market in the post-mobile era.
According to the statistics of IDC, the global shipment of VR/AR products is expected to reach 19.10 million units in 2022, with
approximately 67.5% YoY increase. The CAGR of global VR shipment from 2022 to 2025 is expected to be about 59.2%. The
number of end users keeps growing steadily along with the upgrade of VR hardware. With the development and maturity of VR
content and applications such as social networking, games, entertainment and live broadcasting, VR products are expected to boost in
the next few years. According to the statistics of IDC, the global shipment of AR products is expected to reach 1.35 million units in
2022, with approximately 309% YoY increase. The CAGR of global AR shipment from 2022 to 2025 is expected to reach
approximately 121.4%. With the concept of "integration of virtual content and real life" and the ability to seamlessly connect to
smartphone ecosystem, AR product shows unlimited future possibilities and great market potentials, and is expected to become one
of the core smart hardware products in consumer electronics industry in the post-mobile era. Many well-known brand companies and
start-ups in the industry continue to explore and tackle the key technological roadblocks in semiconductor chips, optical waveguide,
micro displays, new materials and other fields. The break-thru of those technologies are also expected to create a broader path for AR
products in the next few years.
According to the statistics of CCS Insight, a famous consulting agency, the global shipment of smart wearable products is
expected to reach 270 million units in 2022, with approximately 16.4% YoY increase. In the post epidemic era, consumers pay
greater attention to sports and health. For billions of people over the globe who may have hypertension, diabetes or other sub-health
situations, high precision and reliable health monitoring technologies, especially blood pressure monitoring and non-invasive blood
sugar level monitoring technology, are the focus of innovation in smart wearable devices, and have attracted significant amount of
investment from many industry leaders. The maturity and application of above technologies are expected to bring dramatic growth
for smart wearable products in future.
According to the statistics of Futuresource, a well-known consulting agency, the global shipment of smart wireless earphones is
expected to keep growing steadily in the next few years, and the CAGR of TWS earphones from 2021 to 2025 is expected to reach
about 21.8%. With improved voice interaction function, more product choices, better features and user experience, the TWS product
penetration in the global earphone market is expected to increase continuously.
The rapid development of emerging intelligent hardware products has also boosted the demand for related precision components
such as precision optics and modules, precision acoustic components, MEMS sensors and micro system modules, haptic components
and precision structural parts, which creates new business opportunities for the precision components of the Company.
41
Goertek Inc. Annual Report 2021
From the perspective of competition among brand companies, the global technology and consumer electronics industry may
continue to demonstrate a centralized trend. In the post-mobile era, massive investment in technological innovation and R&D is
required for the development of smart hardware products, for which the "soft power" of the ecosystem, such as developer base, user
base, software applications, entertainment content, community loyalty and data monetization, becomes more and more crucial. The
leading enterprises with capital, talent, technology and ecosystem advantages are expected to strengthen their competitive advantages,
so as to lead technology and product innovation in the industry.
From the perspective of supply chain, the middle-end of supply chain is expected to remain relying on developing countries.
The electronic manufacturers in China are strengthening their overall competitiveness, and continue to expand their business in other
countries. China manufacturers are expected to meet the needs of smart hardware production in the post-mobile era and gain the new
opportunities of development. At the same time, we also need to pay attention to the development and changes of international
political and economic situation. The changes in science, technology, trade and other policies between countries, as well as major
international events and their development, may also have significant impact to the competition and supply chain of global industry.
Therefore, we need to pay continuous attention and respond positively.
2. Strategy for future development
Looking into the future, the Company will actively respond to the strategy of actualizing innovation-driven development and
accelerating the development of modern industrial system, and grasp the opportunities of transformation from the mobile era to the
post-mobile era by closely following the development of 5G, AI, IoT, cloud computing and other advanced technologies. The
Company will continue to strengthen its development in the field of advanced precision components and next generation smart
hardware products, constantly consolidate the strategical cooperation with world-class customers, and earnestly fulfill the economic
and social responsibilities of the enterprises, thus achieving a long-term, stable and healthy growth of the business, and maximize the
enterprise value and the return to shareholders.
(1) Actively grasp the new opportunities in the post-mobile era, and further promote the Company's strategy of "precision
components + smart hardware". Further develop the businesses of precision components, such as acoustics, optics, microelectronics
and structural parts, and the businesses of smart hardware devices, such as VR/AR, smart wireless earphones, smart wearable and
smart home devices. Continue to strengthen the advantages of precision components business in smartphone and other traditional
hardware, and actively develop precision components and system hardware business related to new generation of smart hardware
products. Utilize the synergy between the Company's component and hardware device business, continue to strengthen the core
competence in precision manufacturing and intelligent manufacturing, and provide customers with the first-class vertically integrated
product solutions and "one-stop" R&D and manufacturing services.
(2) Continue the key-account strategy, remain customer orientation, and utilize the Company's advantages in customer resource.
42
Goertek Inc. Annual Report 2021
Focus on serving leading customers in the global technology and consumer electronics industry, and continue to consolidate
long-term strategic cooperation with customers. Closely follow the strategical planning and development of world-class customers,
and to create a global system of R&D, manufacturing and sales services accordingly. Continue to satisfy our customers with our
business, technology, engineering, operation and delivery services, in order to achieve win-win cooperation and to grow with the
world-class customers.
(3) Adhere to technological innovation and continue to invest in R&D. Constantly improve the Company's technical
competitiveness in acoustics, optics, microelectronics, precision manufacturing, automation, IT technology, software algorithm and
so on, and actively expand the layout in emerging technologies such as micro system modules, optical waveguide, nano-imprinting,
haptics and etc., to build the core technical competitiveness of the enterprise. Firmly implement the talent strategy by integrating the
outstanding talents in management and technology fields around the world, build and effectively motivate a first-class talent team,
thus to provide sufficient talents for future development of the Company.
(4) Constantly improve corporate governance and management, and promote the standardized and efficient internal operation.
Continuously improve the internal structure, processes and internal management system. Strengthen the awareness of lean operation,
improve the level of lean operation and seek benefits from it. Being market-oriented and customer-oriented, continues to push
forward internal reform and innovation, and to build core competitiveness upon continuous reform and innovation activities. Create
an excellent corporate culture, undertake the core values of "customer orientation, personnel growth, integrity and pragmatism,
win-win cooperation", and earnestly fulfill the economic and social responsibilities of the enterprise, to become a respected
world-class enterprise.
3. Business operation during the reporting period and business plan for next year
In 2021, the Company grasped the business opportunities of the new generation of smart hardware such as VR, TWS, smart
wearable devices, gaming consoles and accessories, implement the "precision components + smart hardware" strategy and utilized
the synergy between the components business and system device business. The Company adhered to customer-orientation philosophy
and focused on key business accounts, provided customers with high-quality R&D and manufacturing “one-stop” service, and
achieved customer satisfaction. The Company also explored new business opportunities in precision optical components and modules,
micro-system modules, MEMS sensors, haptic components, etc. From internal operation perspective, the Company continuously
improved the level of lean operation, and obtained solid progresses in input/output efficiency, operation cycle, inventory turnover,
and capital cost. The Company continued to invest in R&D and technological innovation, increased the quantity of both patent
applications and patent approvals, strengthened the capabilities of R&D and talent team, and thus further consolidated the core
competitiveness in technology field. The Company also formulated and implemented effective systems and measures to ensure stable
operation of business activities and control the risks. With all the measures above, the Company has finally achieved an excellent
43
Goertek Inc. Annual Report 2021
business performance in 2021.
Looking into the year of 2022, the Company still faces many challenges due to the ongoing global epidemic, the slow recovery
of global economy, the high and fluctuated commodity prices, and other complexities and uncertainties that may applied to the
external environment. On the bright side, there are also new opportunities in global technology and consumer electronics industry.
With the further integration and development of advanced technologies such as 5G, AI and the new generation of smart hardware
products, the Company faces new opportunities in both precision components and smart hardware business. The management and all
staff of the Company will continue to implement our strategy and to achieve business objectives, so as to return the shareholders and
investors with excellent business performance and continuous growth of enterprise value.
(1) Maintain strategic focus and grasp development opportunities. The Company will seize the business opportunities of smart
hardware products in the post-mobile era by adhering to the "precision components + smart hardware" strategy and utilize the
synergy between the components and system device business. With core technological capabilities and advanced precision
component solutions, the Company will further enhance the effort in business development of smart hardware products. And through
that business development, the Company will create more applications and demand for the precision components. By integrating the
core capabilities in precision manufacturing and intelligent manufacturing, the Company will be able to provide first-class "one-stop"
R&D and manufacturing services to global customers.
(2) Adhere to the customer-orientation philosophy and key-accounts strategy, and identify and serve strategic customers. Follow
the strategy and business plan of core customers, the Company will carry out corresponding business, products and capacity plans,
work with the customer in their frameworks and schedules and provide industry-leading R&D and manufacturing services. The
Company will continuously build excellent customer service team to satisfy our customers in long term in all aspects of business,
technology, engineering, operation, and delivery, to enhance customer loyalty and achieve win-win cooperation with customers.
(3) Empower business expansion and create new opportunities. Based on the consolidation of the existing business advantages
in precision components and smart hardware products, the Company will further explore new directions and opportunities. By
grasping the opportunities in micro-system modules, MEMS sensors, precision optical components and modules, haptic components,
precision structured parts, VR, smart home products and other products, the Company will secure the key projects of core customers,
and also follow up with new directions and opportunities in automotive electronics, advanced materials, micro-display technology
and other fields with future potentials.
(4) Improve lean operation and complete successful delivery of key projects. The Company will continue to promote the
awareness and improve the level of lean operation, and to support the business objectives with high-quality and efficient operation.
The Company will make thorough planning of its resources, ensure the delivery of key projects that closely related to the strategy and
the business objectives, and to achieve the goals of the Company.
44
Goertek Inc. Annual Report 2021
(5) Continue to invest in R&D and technological innovation, strengthen core competitiveness with talent strategy. The Company
will continue to invest in R&D and technological innovations centered on future strategic directions, and strengthen the technical
capabilities in the fields of acoustics, optics, microelectronics, precision manufacturing, and intelligent manufacturing. The Company
will embrace the management and technical talents globally, keep bringing in high-level talents, carry out solid efforts in the selection,
cultivation, motivation and retention of talents, and to support the Company's strategic implementation and business development
with high-quality talent echelon.
(6) Effectively control risks and maintain healthy operation. The Company will continue to maintain a sound business strategy,
strengthen risk awareness, pay close attention to changes in the external environment, perform effective control on risk indicators in
production operation of the Company, take the initiative to identify and resolve potential risks, and ensure sustainable development of
production and operation activities.
4. The demand and planning of fund
The Company maintains a healthy asset and liability structure, and obtained a good long-term cooperative relationship with
banks and other major financial institutions. In 2021, the Company successfully completed the conversion and delisting of the
previously issued convertible bonds, and successfully completed the signing of long-term loan agreements between its subsidiary
companies and International Finance Corporation, which further improved the Company's balance sheet structure and cost of funds.
The Company will continue to improve the management of cash, asset-liability ratio and debt structure, to actively avoid liquidity
risks and foreign exchange risks, to control financial derivatives trading activities with strict standards, and thus providing stable and
sufficient financial support to the development of the Company.
5. Future risks
(1) Macroeconomic risks
COVID-19 pandemic has not yet stopped globally, and the global economy is still in recovery. Unfavorable factors that affecting
investment and consumption still exist, which may hinder global technology and consumer electronics industry from rapid
development in the short term. The world political and economic situation remains complex and grim. Trade disputes between major
countries and geopolitical events have brought uncertainties to global economy, which may adversely affect the business of
enterprises. The slow growth of some smart hardware products such as smartphones, may affect the market demand of precision
components, which may bring negative impact to the Company's performance.
(2) Operational risks
① Risks of concentrated customer structure
The competitive pattern of global technology and consumer electronics industry, along with the Company's business model and
key account strategy, determined a relatively concentrated customer structure. As a result, the business income from a few core
45
Goertek Inc. Annual Report 2021
customers accounts for a large proportion of the Company's overall revenue. Although the above customers are global industry
leaders who have significant competitive advantages and market position, and have maintained long-term and stable cooperative
relations with the Company, under some special circumstances, they may bring fluctuations and risks to the Company's business if
their business activities fluctuate.
② Risks of exchange rate fluctuation
The export business accounts for a high proportion of the Company's overall revenue. At the same time, the Company also
imports a considerable number of raw materials, equipment and other products from overseas. These import and export businesses
are primarily settled in US dollars. Although the Company has adopted appropriate risk hedging tools, the significant fluctuation of
RMB/US dollar exchange rate may still bring certain exchange rate risks to the Company.
③ Risks of the leaving of core technical talents
The technology and consumer electronics industry is a talent intensive industry. Therefore, the demand for core technical talents
is strong, and the competition for talents is very fierce. Core technical talents are the key resources for the Company to continuously
improve its core competitiveness and realize long-term development. For this reason, the Company will continue to improve various
incentive and restraint mechanisms in order to retain core technical talents. But due to the fierce competition, loss of core technical
talents may still occur, which may put the Company at a disadvantage in the competition and affect the business development in
some cases.
(3) Risks of management
In recent years, the Company has successfully expanded its business in each product line. The business scale has been expanded
significantly, as well as the variety of products and the size of the staff has grown rapidly. The growing business brings higher
requirements to the Company in overall operation and management ability. The Company implements the strategic plan of
developing core customer business and exploring new opportunities, which also requires the Company's management to maintain
excellent abilities of judgment, execution and management. If the Company's management fails to match the business growth, or fails
to be improved to meet the needs of the Company's development, it may affect the execution of strategic planning and the delivery of
business objectives, thus bringing management risks to the Company.
Ⅻ. Reception, research, communication, interview and other activities during the reporting
period
√ Applicable □ Not applicable
Type of Main content of
Reception Index of basic
Reception time Reception mode reception Reception object discussion and
place information of survey
object information
46
Goertek Inc. Annual Report 2021
provided
Investors participating Refer to the record of
The Company's
in the Company's investor relations
The operation and
March 30, 2021 Other Institution performance activities on March 30,
Company business
presentation meeting 2021 published on
development
of 2020 www.cnifo.com.cn
Refer to the record of
E Fund, Bosera Fund, The Company's
investor relations
The Communication Dacheng Fund, Hua operation and
April 22, 2021 Institution activities on April 22,
Company over phone An Fund and other business
2021 published on
funds development
www.cnifo.com.cn
Refer to the record of
SOOCHOW Fund, The Company's
investor relations
The Communication CR Yuanta Fund, operation and
July 22, 2021 Institution activities on July 22,
Company over phone BOC Fund, YINHUA business
2021 published on
Fund and other funds development
www.cnifo.com.cn
Refer to the record of
Fullgoal Fund, The Company's
investor relations
The Communication Xingquan Fund, 99 operation and
August 27, 2021 Institution activities on August 27,
Company over phone Fund, CCB Fund and business
2021 published on
other funds development
www.cnifo.com.cn
Cninfo.com, record of
E Fund, Hua An The Company's
investor relations
The Communication Fund, GF Securities, operation and
October 27, 2021 Institution activities on October
Company over phone Harvest Fund and business
27, 2021 published on
other funds development
www.cnifo.com.cn
47
Goertek Inc. Annual Report 2021
Section IV Corporate Governance
Ⅰ. Corporate Governance in Practice
During the reporting period, the Company continuously improved the corporate governance structure, the internal management
and control system, and continued to carry out corporate governance activities in strict accordance with the requirements of relevant
laws, regulations and normative documents such as Company Law, Securities Law, Corporate Governance of Listed Companies,
Rules Governing the Listing of Shares on Shenzhen Stock Exchange as well as with relevant documents of China Securities
Regulatory Commission and the relevant instructions of Shandong Securities Regulatory Bureau, so as to further standardize the
Company's operation and improve the level of corporate governance.
By the end of the reporting period, the actual practice of corporate governance met the relevant requirements of the above laws,
administrative regulations, departmental rules and normative documents on the governance of listed companies, and no documents
concerning administrative supervision measures taken by the supervised departments was received.
By the end of the reporting period, the details of actual practice of corporate governance are as follows:
1. Shareholders and shareholders' meetings: The Company has convened and held shareholders' meetings in strict accordance
with the Rules for General Meeting of Shareholders of Listed Companies and the Company’s Rules of Procedure of Shareholders'
Meetings, so as to ensure that all shareholders, especially minority shareholders, enjoy equal status and fully exercise their rights; In
addition, lawyers were engaged to witness the legitimacy of the convening, holding and voting procedures of each general meeting of
shareholders.
2. The Company and controlling shareholders: The Company, with independent business and operation autonomy, is
independent of the controlling shareholders in business, personnel, assets, organisations and finance. The Board of Directors, Board
of Supervisors and internal institutions of the Company operate independently. The controlling shareholders exercise their rights
through shareholders’ meeting , and there was no direct or indirect interference with the Company’s operations and decision-making
beyond the general meeting of shareholders.
3. Directors and the Board of Directors: The Company elects directors in strict accordance with the selection and appointment
procedures stipulated in the Articles of Association. There are three independent directors in the Board, the number of directors and
the composition of the Board of Directors meet the requirements of laws and regulations and the Articles of Association. All directors
can carry out their work in accordance with Rules of Procedure of the Board of Directors and Working System for Independent
Directors, they attended all the Board of Directors meetings, and all the related trainings as required.
48
Goertek Inc. Annual Report 2021
4. Supervisors and the Board of Supervisors: The election of supervisors and the composition of the Board of Supervisors were
in strict accordance with relevant provisions of Company Law and Articles of Association. The Company's supervisors strictly
followed the Rules of Procedure of the Board of Supervisors, All supervisors scrupulously attended the sessions, seriously fulfilled
their duties diligently, and supervised and issued opinions for major issues, related-party transactions, and financial status.
5. Performance appraisals and incentives: The Company has gradually improving its fair and transparent performance evaluation
standards and incentive a restraint mechanisms for directors, supervisors and senior management. The appointment of Company’s
senior management is open and transparent, and in line with the provisions of laws and regulations.
6. Stakeholders: The Company fully respects and safeguards the legitimate rights and interests of stakeholders, actively
communicates and coordinates with stakeholders, to r balance the interests of the society, shareholders, the Company, employees and
other parties, and jointly promotes the Company's development in a sustainable and steady manner.
7. Information disclosure and transparency: The Company duly performed the disclosure obligations in accordance with the
provisions of Rules Governing the Listing of Shares on Shenzhen Stock Exchange, Articles of Association and Investor Relations
Management Rules, and discloses information as per the law, so as to ensure that the information disclosure is true, timely, accurate
and complete. All shareholders were given equal access to the information. The Company has gradually revised and improved the
Insider Information Management Rules, further improved the insider information management, strengthened the confidentiality of
insider information, maintained the fair principle of information disclosure and protected the legitimate rights and interests of
investors. The Company has appointed the secretary of the Board of Directors as the head of investor relations management of the
Company, responsible for the Company's information disclosure and investor relations management. The Company has designated
Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and cninfo.com.cn to disclose Company’s
information in a faithful, accurate and timely manner, strictly in accordance with relevant laws and regulations, so that all
shareholders have a fair chance to get information.
Whether there is any significant difference between actual situation of corporate governance and laws, administrative regulations and
the provisions on governance of listed companies issued by CSRC
□ Yes √ No
There is no significant difference between the actual situation of corporate governance and the laws, administrative regulations and
the provisions on governance of listed companies issued by CSRC
Ⅱ. Particulars about the independence of the Company from controlling shareholder and
actual controller in terms of the assets, personnel, finance, organization and business
The Company is completely separated from the controlling shareholders in terms of business, personnel, assets, organization
and finance. The ownership of the assets are clear and belongs to the Company. The Company has the capability of self-operation in
49
Goertek Inc. Annual Report 2021
its marketing, production and procurement, does not depend on major shareholders or their affiliated enterprises. There is no mixed
operation with major shareholders.
1. Business independence: The Company had its own production, procurement and sales system, and was completely
independent of controlling shareholder in terms of business.
2. Personnel separation: There is a department responsible for the Company's labor, personnel and salary management in the
Company, and rules and regulations has been established for appraisal of employees’ performance. Personnel of the Company were
independent from the controlling shareholder. The Senior Management of the Company did not hold any positions other than director
and supervisor in the related shareholders and other entities with same or similar business.
3. Institutional independence: The Board of Directors, Board of Supervisors, Senior Management and other internal organization
of the Company operated independently, and each functional department is completely independent from controlling shareholder in
terms of authority, personnel, production operation premises and there is no subordinate relationship between the controlling
shareholder and its functional departments.
4. Asset independence: The title relationship between the Company and the controlling shareholder was clear. The Company’s
assets were complete. The Company has independent and complete production system, auxiliary production system and supporting
facilities, as well as land use right, industrial property right, patented technology and other assets.
5. Financial independence: The Company has its own separate financial department and an independent accounting system and
financial management system from the controlling shareholder. The Company makes financial decisions on its own according to the
requirements of relevant accounting systems of listed companies. At the same time, implement vertical and straight-line management
on financial affairs of its subsidiaries. The Company opened accounts in the bank independently, made tax declarations and
performed tax obligations independent of shareholders according to law.
Ⅲ. Horizontal Competition
□ Applicable √ Not applicable
50
Goertek Inc. Annual Report 2021
Ⅳ. Annual General Meeting and Extraordinary General Meeting held during the Reporting Period
1. General meeting of shareholders during the reporting period
Percentage
Session Type of meeting of investor Convening date Disclosure date Meeting resolution
participation
Annual general Resolutions for the Annual General Meeting of Shareholders disclosed by the Company
General meeting of
meeting of 35.29% May 7, 2021 May 8, 2021 on Cninfo (www.cninfo.com.cn) and the four designated newspapers on 8 May
shareholders of 2020
shareholders 2021(Announcement No 2021-083)
The first extraordinary Extraordinary Resolutions for the First Extraordinatry General Meeting of Shareholders in 2021
general meeting of general meeting 48.53% November 25, 2021 November 26, 2021 disclosed by the Company on Cninfo (www.cninfo.com.cn) and the four designated
shareholders in 2021 of shareholders newspapers on 26 November 2021(Announcement No 2021-125)
The second
Extraordinary Resolutions for the Second Extraordinatry General Meeting of Shareholders in 2021
extraordinary general
general meeting 45.94% December 16, 2021 December 17, 2021 disclosed by the Company on Cninfo (www.cninfo.com.cn) and the four designated
meeting of shareholders
of shareholders newspapers on 17 December 2021(Announcement No 2021-132)
in 2021
2. Extraordinary general meeting of shareholders requested by the Preferred shareholders with voting rights restored
□ Applicable √ Not applicable
51
Goertek Inc. Annual Report 2021
V. Directors, Supervisors and Senior Management
1. Basic Information
Number of Number of Number of
shares held shares shares Other increase Number of shares
Appointment Reason for change in
Name Position Gender Age Term start date Term end date at the increased decreased or decrease held at the end of
status shares
beginning of during the during the changes the period
the period period period
Shareholding reduction;
November 7,
Jiang Bin Chairman Incumbent Male 56 July 27, 2007 373,487,406 86,090,000 287,397,406 transfer to persons
2022
acting in concert
Vice November 7,
July 27, 2007 Shares granted to
Chairman 2022
Jiang Long Incumbent Male 48 197,255,197 53,090,000 250,345,197 persons acting in
October 30, November 12,
President concert
2014 2022
February 4, November 7,
Director Incumbent
2016 2022
Vice March 25, November 12,
Incumbent
Duan Huilu President Male 46 2011 2022 4,474,500 1,000,000 3,474,500 Reduction
Chief
August 12, January 27,
Financial Resigned
2010 2021
Officer
Liu November 29, November 7,
Director Incumbent Male 51
Chengmin 2016 2022
Xia Independent October 20, November 7,
Incumbent Female 64
Shanhong Director 2016 2022
52
Goertek Inc. Annual Report 2021
Independent November 8, November 7,
Wang Kun Incumbent Female 46
Director 2019 2022
Wang Independent October 20, November 7,
Incumbent Male 62
Tianmiao Director 2016 2022
Chairman of
Sun September 17, November 7,
Board of Incumbent Male 56 8,889,534 1,800,000 7,089,534 Reduction
Hongbin 2013 2022
Supervisors
Employee
Feng
representativ Resigned Male 48 July 27, 2007 April 27, 2021
Jianliang
e Supervisor
Employee
Xu September 17, October 17,
representativ Incumbent Female 45
Xiaofeng 2013 2022
e Supervisor
Gao Vice November 12,
Incumbent Male 46 April 12, 2012
Xiaoguang President 2022
Vice October 10, November 12,
Liu Chunfa Incumbent Male 46 1,151,864 287,864 864,000 Reduction
President 2013 2022
Jiang Vice October 10, November 12,
Incumbent Male 52
Hongzhai President 2013 2022
Vice
President, October 10, November 12,
Jia Jun'an Incumbent Male 51 200,000 200,000
Secretary of 2013 2022
the Board
Feng Vice October 24, September 10,
Resigned Male 54
Pengbo President 2016 2021
Vice October 24, November 12,
Yu Dachao Incumbent Male 44
President 2016 2022
53
Goertek Inc. Annual Report 2021
Kazuyoshi Vice October 24, November 12,
Incumbent Male 55
Yoshinaga President 2016 2022
Chief
January 27, November 12,
Li Yongzhi Financial Incumbent Male 44
2021 2022
Officer
Employee
October 17,
Wei Wenbin representativ Appointed Male 44 April 27, 2021
2022
e Supervisor
Vice November 12,
Li Youbo Appointed Male 45 June 2, 2021
President 2022
Zhu Vice November 12,
Appointed Male 48 June 2, 2021
Shengbo President 2022
Total -- -- -- -- -- -- 585,458,501 53,090,000 89,177,864 549,370,637 --
54
Goertek Inc. Annual Report 2021
Whether there is any resignation of directors, supervisors and senior management during the reporting period
√ Yes □ No
During the reporting period, chief financial officer Duan Huilu and vice president Feng Pengbo resigned because of job
re-arrangement, and the employee representative supervisor Feng Jianliang resigned during the term of office due to job adjustment.
Changes in directors, supervisors and senior management
√ Applicable □ Not applicable
Name Position Type Date Reason
Chief Financial
Duan Huilu Resigned January 27, 2021 Job arrangement
Officer
Employee
Feng Jianliang representative Resigned April 26, 2021 Job adjustment
supervisor
Employee
Wei Wenbin representative Elected April 27, 2021 Job arrangement
supervisor
Li Youbo Vice President Appointed June 2, 2021 Job arrangement
Zhu Shengbo Vice President Appointed June 2, 2021 Job arrangement
September 10,
Feng Pengbo Vice President Resigned Job arrangement
2021
2. Biographical Information
Professional backgrounds, main working experience and current duties of the Directors, Supervisors and the Senior
Management
Directors:
Mr. Jiang Bin:
Mr. Jiang, Chairman of the company, master's degree holder of business administration from Tsinghua University, bachelor's
degree holder of electronic engineering from Beihang University. Mr. Jiang founded Goertek Inc. in 2001. He has more than 30 years
of working experience in the electro-acoustic industry. He also serves as standing member of the 12th executive committee of the
All-China Federation of Industry and Commerce, rotating chairman of China Electronic Components Association, and vice chairman
of Industry of Virtual Reality Alliance. He has successively won the titles of National Model Worker, Outstanding Entrepreneur of
Chinese Electronic Information Industry, National Labor Medal of Shandong Province, Labor Model of Shandong Province,
Outstanding Entrepreneur of Shandong Province, etc.
Mr. Jiang Long:
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Goertek Inc. Annual Report 2021
Mr. Jiang , Vice Chairman and President of the company, Ph.D in strategic management, the University of Maryland, a master's
degree holder in management science from Renmin University of China, and a bachelor's degree holder in materials engineering
from Tsinghua University. Joined the Company in 2004, Mr. Jiang successively served as vice president, senior vice president and
executive vice president of the company. Mr. Jiang is also the Vice President of China Audio Industry Association and the chairman
of China Electronic Components Association-Electroacoustic Chapter. Mr. Jiang has extensive experience in marketing, sales and
business management.
Mr. Duan Huilu:
Mr. Duan, Director and Vice President of the company, bachelor's degree holder from Shandong University of Finance and
Economics. He joined the company in 2001 and successively served as the company's accountant, finance manager, finance
department manager and chief financial officer. Mr. Duan has more than 20 years of working experience.
Mr. Liu Chengmin:
Mr. Liu, Director of the company, master's degree holder in mechanics from Harbin Institute of Technology. Mr. Liu currently
serves as chairman of Beijing Fargo Capital Co., Ltd., managing partner of Tianjin Longyuan Yunteng Investment Management
Partnership, and technology consultant of China Ping An Trust Co., Ltd. Mr. Liu used to serve as director of the telecom division of
Huawei's domestic marketing department, senior executive vice president of Tencent and president of Tencent Wireless Internet
Business Group. He has rich experience in telecom and Internet.
Ms. Xia Shanhong:
Ms. Xia, Independent Director of the company. Ms. Xia used to serve as deputy director of the Institute of Electronics, Chinese
Academy of Sciences, director, researcher and doctoral supervisor of the State Key Laboratory of Transducer Technology, and
received special government allowance from the State Council. She received a bachelor's degree from Tsinghua University, a
master's degree from the Chinese Academy of Sciences and a doctorate from the University of Cambridge in England. Ms. Xia is the
Royal Fellowship visiting scholar of the Royal Society and the Berkeley Scholarship visiting scholar of the University of California,
Berkeley. She used to be the chief scientist of the National 973 Project, member of the MEMS overall expert group of the National
863 Program and member of its advanced manufacturing technology expert group, member of the expert review team of the
Department of Information Sciences of the National Natural Science Foundation of China, and chairman of the Transducers. Ms. Xia
currently serves as member and director of Chinese Institute of Electronics, director of China Instrument and Control Society as well
as vice chairman of its sensor branch, member of Chinese Society of Micro-Nano Technology, and editorial board member of many
international academic journals.
Mr. Wang Tianmiao:
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Goertek Inc. Annual Report 2021
Mr. Wang, Independent Director of the company. Professor and Ph.D Tutor of Beihang University o, Honorary Director of
Institute of Robotics at Beijing University of Aeronautics and Astronautics， Dean of Zhongguancun College of Innovation Angel.
He received a doctorate and masters’ degree holder from Northwestern Polytechnic University and a bachelor's degree holder from
Xi'an Jiaotong University. He is one of the distinguished professors of the Changjiang Scholars, winner of the National Science Fund
for Distinguished Young Scholars, member of the Advanced Robot Technology Innovation Team for National Defense, chief expert
group leader in the field of advanced manufacturing under 863 National High-tech R&D Program in the 11th Five-Year Plan, head of
the expert group of the Service Robotics program in the 12th Five-Year Plan, and president of the IEEE Robotics and Automation
Society (Beijing region). He is mainly engaged in the research of advanced robot theory and technology, including bionic structure,
medical robot, service robot and so on. Mr. Wang has won two second-class awards of National Science and Technology Progress
Award and one first-class award of Beijing Science and Technology Progress Award. He is also an independent director of Shanghai
STEP Electric Corporation.
Ms. Wang Kun:
Ms. Wang, Independent Director of the company. She serves as an associate professor in the School of Accounting, School of
Economics and Management at Tsinghua University. She received her doctorate in Accounting from Hong Kong University of
Science and Technology and her bachelor's degree in Accounting from Nankai University. She joined the School of Accounting,
School of Economics and Management at Tsinghua University in April 2003, and worked as a lecturer and associate professor. She
served as deputy director and senior researcher of the Research Center of Corporate Governance of Tsinghua University from
January 2010. Ms. Wang served as the Ph. D. program director of the Accounting Department of the School of Economics and
Management of Tsinghua University from January 2011 to December 2013. She has won the Excellence in Teaching Award of the
School of Economics and Management of Tsinghua University for several times. Ms. Wang is also an Independent Director of China
International Futures Co., Ltd. Ms. Wang used to be the Independent Director of Beijing Thunisoft Co., Ltd. and Integrated
Electronic Systems Lab Co., Ltd. Ms. Wang has rich experience in the fields of finance and auditing.
Supervisors:
Mr. Sun Hongbin:
Chairman of the Board of Supervisors. Bachelor in industrial automation from Shandong University. He used to serve as deputy
general manager of the company, manager and director of the business department of China Electronics Import and export Shandong
Corporation. Mr. Sun owns more than 30 years of working experience in marketing, and import & export business.
Ms. Xu Xiaofeng:
Employee Representative of the Board of Supervisors. Bachelor of Business Administration, China University of Petroleum.
She graduated from the Zhengzhou University of Aeronautics, Electrical Technology Major. Ms. Xu joined the company in 2001,
57
Goertek Inc. Annual Report 2021
and successively served as the assistant manager of the quality control department, the enterprise development department and the
operation department, and is now in charge of the company's employee service center. Ms. Xu has rich experience in business
management.
Mr. Wei Wenbin:
Employee Representative of the Board of Supervisors. Graduated from Jilin University majoring in material forming and control
engineering, he is currently in charge of the staff management department of the company. Mr. Wei joined the company in 2004, and
successively served as the head of the company's production and operation management department, human resources management
department, lean manufacturing management department and other related departments.
Senior Management:
Mr. Jiang Long:
Refer to the resume above for details.
Mr. Duan Huilu:
Refer to the resume above for details.
Mr. Gao Xiaoguang:
Vice President of the company. Master's Degree in business administration from Southern Cross University in Australia. He
joined the company in 2001, and successively served as manager of the device marketing department, deputy manager of the device
marketing department, general manager of the device business department and head of the marketing. He has rich experience in
market developing and key client maintaining.
Mr. Liu Chunfa:
Vice President of the company. Mr. Liu graduated from Lanzhou Railway Institute. He successively served as engineer of R &
D department, chief of quality assurance department, assistant manager, technical manager of technical engineering department,
senior product manager, head of manufacturing department, senior manager of R & D department, etc. Mr. Liu has rich experience in
the fields of electroacoustic components, especially in miniature loudspeakers and receivers.
Mr. Jiang Hongzhai:
Vice President of the company. Mr. Jiang graduated from Shandong College of Information Technology.. Joined the company
in 2006, Mr. Jiang is mainly responsible for the management of mold, injection molding, stamping and so on. Mr. Jiang used to serve
as factory director of Yuefeng Electronic Technology (Dongguan) Co., Ltd., and engineer of Weifang Radio Eighth Factory. Mr.
Jiang has more than 20 years of technical management experience in the field of precision machining.
Mr. Jia Junan:
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Goertek Inc. Annual Report 2021
Vice President and the Secretary of the Board. Ph.D in Economics, Xiamen University, Master of Economics, Shandong
University, Bachelor of Economics, Shandong University of Finance and Economics. Mr. Jia is the member of the Chinese Institute
of Certified Public Accountants（CICPA）and the Association of Chartered Certified Accountants（ACCA). Mr. Jia joined the
company in 2010 and served as deputy general manager of financial department. He used to serve as the tax manager of KPMG
Enterprise Consulting (China) Co., Ltd., Qingdao Branch. Mr. Jia holds the Certificate for Secretary of the Board of Directors, and
his qualification complies with relevant provisions of Rules Governing the Listing of Shares on Shenzhen Stock Exchange and the
Articles of Association.
Mr. Yu Dachao:
Vice President of the company. Bachelor's in computer science and engineering, Tianjin University of Technology. He was in
charge of the company's Bluetooth headsets, active 3D glasses and accessories for household video games. He has rich experience in
the R&D and manufacturing of electronic accessories.
Mr. Kazuyoshi Yoshinaga:
Vice President of the company. Japanese. He holds a master's degree in business administration from University of Washington
and a bachelor's degree in mechanics from Tongji University. He used to be the associate partner of IBM and has extensive
experience in the field of strategy and transformation management. He also serves as deputy secretary-general of the China Virtual
Reality Industry Association.
Mr. Li Yongzhi:
Chief Financial Officer of the company and the Head of the Accounting Office. Mr. Li holds a bachelor's degree in management
and a master's degree in business management from Hefei University of Technology. He joined Goertek in 2005 and successively
served as accountant and financial manager of the financial department. Mr. Li is senior accountant and certified management
accountant（CMA), with more than 15 years of experience in corporate finance. After deliberation and approval by the 14th meeting
of the fifth Board of Directors, he was appointed as the Chief Financial Officer of the company. His term of office begins from the
approval date of Board of Directors to the expiration date of the current Board of Directors’ term of office.
Mr. Li Youbo:
Vice President of the company. Mr. Li holds a bachelor's degree in automation from Dalian University of Technology. He
joined the company in 2003 and successively served as engineer, technical manager, head of the business department, etc. Mr. Li has
nearly 20 years of experience in R&D and manufacturing of electroacoustic components.
Mr. Zhu Shengbo:
Vice President of the company. Mr. Zhu graduated from Shenyang University of Technology. He joined the company in 2005
and successively served as production manager, assistant minister, minister, senior minister and head of the business department. He
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Goertek Inc. Annual Report 2021
used to serve as production director of Dongguan Samsung Electro-Mechanics Co., Ltd. Mr. Zhu has more than 20 years of
experience in manufacturing, operation and management of consumer electronic products such as parts, accessories and devices.
Positions held in shareholders’ entities
√ Applicable □ Not applicable
Receive
Position
remuneration or
undertaken in
Name Name of the shareholder entity Term start date Term end date allowance from
shareholder
shareholders’ entity
entity
(Yes/No)
Jiang Bin Goertek Group Co., Ltd. Chairman November 15, 2021 November 14, 2024 No
Jiang Long Goertek Group Co., Ltd. Director November 15, 2021 November 14, 2024 No
Duan Huilu Goertek Group Co., Ltd. Director November 15, 2021 November 14, 2024 No
General
Sun Hongbin Goertek Group Co., Ltd. November 15, 2021 November 14, 2024 Yes
Manager
Positions held in other entities
√ Applicable □ Not applicable
Receive
Position
remuneration or
undertaken
Name Name of other entity Term start date Term end date allowance from
in other
shareholders’
entity
entity (Yes/No)
Weifang Goertek Electronics Co.,
Jiang Bin Chairman November 23, 2019 November 22, 2022 No
Ltd.
Beijing Goertek Investment Executive
Jiang Bin January 22, 2019 January 21, 2022 No
Management Co., Ltd. Director
Weifang Goer Education Investment Executive
Jiang Bin March 22, 2019 March 21, 2022 No
Co., Ltd. Director
Rongcheng Goertek Technology Executive
Jiang Long July 15, 2020 July 14, 2023 No
Co., Ltd. Director
Goertek Technology Vina Company
Jiang Long Chairman January 31, 2019 December 31, 2021 No
Limited
Executive
Jiang Long Goertek Electronics, Inc. May 1, 2020 April 30, 2023 No
Director
Director /
Weifang Goertek Electronics Co.,
Jiang Long General November 26, 2019 November 25, 2022 No
Ltd.
Manager
Executive
Jiang Long Goertek Technology Co., Ltd. December 10, 2021 December 9, 2026 No
Director /
60
Goertek Inc. Annual Report 2021
General
Manager
Executive
Goertek Intelligence Technology Director /
Jiang Long August 18, 2020 August 17, 2023 No
Co., Ltd. General
Manager
Jiang Long Goertek Microelectronics Inc. Chairman October 20, 2020 October 30, 2023 No
Qingdao Goertek Intelligent Sensor Executive
Jiang Long October 22, 2021 October 21, 2024 No
Co., Ltd. Director
Weifang Goertek Microelectronics Executive
Jiang Long December 9, 2019 December 8, 2022 No
Co., Ltd. Director
Shanghai Ganyuzhi Technology Executive
Jiang Long October 14, 2020 October 13, 2023 No
Co., Ltd. Director
Beijing Goertek Microelectronics Executive
Jiang Long August 7, 2020 August 6, 2023 No
Co., Ltd. Director
Wuxi Goertek Microelectronics Co., Executive
Jiang Long August 7, 2020 August 6, 2023 No
Ltd. Director
Shenzhen Goertek Microelectronics Executive
Jiang Long July 23, 2020 July 22, 2023 No
Co., Ltd. Director
Rongcheng Goertek Executive
Jiang Long November 1, 2021 October 31, 2024 No
Microelectronics Co., Ltd. Director
Qingdao Goertek Microelectronics Executive
Jiang Long November 30, 2020 November 29, 2023 No
Research Institute Co., Ltd. Director
Jiang Long Enkris Semiconductor Inc. Director November 18, 2021 November 17, 2024 No
Goertek Technology Vina Company
Duan Huilu Director January 31, 2019 December 31, 2021 No
Limited
Duan Huilu Goertek Technology Co., Ltd. Supervisor August 14, 2021 August 13, 2024 No
Executive
Director /
Duan Huilu Goertek Investment Co., Ltd. December 7, 2015 December 6, 2022 No
General
Manager
Weifang Goertek Electronics Co.,
Duan Huilu Director November 23, 2021 November 22, 2024 No
Ltd.
Executive
Director /
Duan Huilu Weifang Goertek Trading Co., Ltd. August 26, 2020 August 25, 2023 No
General
Manager
Beijing Goertek Investment
Duan Huilu Supervisor January 22, 2019 January 21, 2022 No
Management Co., Ltd.
61
Goertek Inc. Annual Report 2021
Duan Huilu Goertek (HongKong) Co., Limited Director April 26, 2019 April 25, 2022 No
Executive
Qingdao Goertek Commercial Director /
Duan Huilu January 11, 2021 January 10, 2024 No
Factoring Co., Ltd. General
Manager
Weifang Hanhui Enterprise Executive
Sun Hongbin September 18, 2019 September 17, 2022 No
Management Co., Ltd. Director
Director /
Weifang Gaoge Education
Sun Hongbin General September 11, 2018 February 3, 2021 No
Investment Co., Ltd.
Manager
Weifang Hanzhi Enterprise Executive
Sun Hongbin October 11, 2017 October 10, 2023 No
Management Co., Ltd. Director
Weifang Goer Education Investment General
Sun Hongbin March 22, 2019 March 21, 2022 No
Co., Ltd. Manager
Executive
Director /
Sun Hongbin Weifang Goer Real Estate Co., Ltd August 4, 2018 August 3, 2024 No
General
Manager
Executive
Director /
Sun Hongbin Qingdao Goer Real Estate Co., Ltd. May 29, 2017 May 28, 2023 No
General
Manager
General
Sun Hongbin Weifang Goer Farm Co., Ltd. September 23, 2017 September 22, 2023 No
Manager
Weifang Goer Manor Trading Co., Executive
Sun Hongbin January 27, 2018 January 26, 2024 No
Ltd. Director
Executive
Weifang Goer Property Service Co., Director /
Sun Hongbin February 23, 2018 February 22, 2024 No
Ltd General
Manager
Executive
Director /
Sun Hongbin Dotcom Ivestment Co., Ltd June 4, 2015 December 24, 2021 No
General
Manager
Executive
Weifang GoerHome Decoration Director /
Sun Hongbin April 9, 2017 July 14, 2021 No
Engineering Co., Ltd General
Manager
Shandong Goer Education Group General
Sun Hongbin January 3, 2020 January 2, 2023 No
Co., Ltd. Manager
62
Goertek Inc. Annual Report 2021
Director /
Beihang Goer (Weifang) Intelligent
Sun Hongbin General January 22, 2019 August 31, 2021 No
Robot Co., Ltd
Manager
GoerTek Group International Executive
Sun Hongbin August 13, 2018 No
Limited Director
Liu Chunfa Goertek Vina Co., Ltd. Director January 1, 2019 December 31, 2021 No
Goertek Technology Vina Company
Liu Chunfa Director January 31, 2019 December 31, 2021 No
Limited
Shanghai Goertek Technology Co.,
Liu Chunfa Supervisor April 25, 2020 April 24, 2023 No
Ltd.
Yili Precision Manufacturing Co., Executive
Jiang Hongzhai July 5, 2019 July 4, 2022 No
Ltd. Director
Weifang Goertek Communication Executive
Jiang Hongzhai June 26, 2021 June 25, 2024 No
Technology Co., Ltd. Director
Dongguan JoyForce Precision Executive
Jiang Hongzhai December 11, 2019 December 10, 2022 No
Manufacturing Co., Ltd. Director
Kunshan Goertek Electronics Co., Executive
Jiang Hongzhai November 9, 2020 November 8, 2023 No
Ltd. Director
Nanning Goertek Electronics Co.,
Jiang Hongzhai Chairman November 12, 2021 November 11, 2024 No
Ltd.
Jiang Hongzhai Nanning Goertek Trading Co., Ltd. Chairman November 29, 2021 November 28, 2024 No
Executive
Beijing Goertek Technology Co., Director /
Yu Dachao November 30, 2019 November 29, 2022 No
Ltd. General
Manager
Xian Goertek Electronic Executive
Yu Dachao May 7, 2019 May 6, 2022 No
Technology Co., Ltd. Director
Executive
Qingdao Goertek Acoustics Director /
Yu Dachao December 10, 2021 December 9, 2024 No
Technology Co., Ltd. General
Manager
Chairman /
Yishui TECO Electronic
Yu Dachao General December 10, 2019 December 9, 2022 No
Technology Co., Ltd.
Manager
Goertek Technology Vina Company
Yu Dachao Director January 31, 2021 January 30, 2024 No
Limited
Executive
Gao Xiaoguang Yishui Goertek Electronics Co., Ltd. Director / February 13, 2021 February 12, 2024 No
General
63
Goertek Inc. Annual Report 2021
Manager
Executive
Shenzhen Goertek Technology Co., Director /
Gao Xiaoguang October 29, 2021 October 28, 2024 No
Ltd. General
Manager
Shanghai Goertek Technology Co., Executive
Gao Xiaoguang April 25, 2020 April 24, 2023 No
Ltd. Director
Gao Xiaoguang Goertek Electronics, Inc. Manager December 19, 2018 December 18, 2021 No
Non-executi
Gao Xiaoguang AKM Industrial Company Limited March 12, 2015 No
ve director
Jia Jun'an Goertek Investment Co., Ltd. Supervisor December 7, 2021 December 6, 2024 No
Weifang Goertek Electronics Co.,
Jia Jun'an Supervisor November 26, 2019 November 25, 2022 No
Ltd.
Non-executi
Jia Jun'an AKM Industrial Company Limited November 17, 2015 No
ve director
Goertek Optical Technology Co.,
Li Yongzhi Supervisor March 23, 2021 March 22, 2024 No
Ltd.
Goertek Intelligence Technology
Li Yongzhi Supervisor August 18, 2020 August 17, 2023 No
Co., Ltd.
Kunshan Goertek Electronics Co.,
Li Yongzhi Supervisor November 9, 2020 November 8, 2023 No
Ltd.
Qingdao Goertek Commercial
Li Yongzhi Supervisor January 11, 2021 January 10, 2024 No
Factoring Co., Ltd.
Nanning Goertek Electronics Co.,
Li Yongzhi Supervisor November 12, 2021 November 11, 2024 No
Ltd.
Li Yongzhi Nanning Goertek Trading Co., Ltd. Supervisor November 29, 2021 November 28, 2024 No
Xian Goertek Electronic
Li Yongzhi Supervisor May 7, 2019 May 6, 2022 No
Technology Co., Ltd.
Yishui TECO Electronic
Li Yongzhi Supervisor December 10, 2019 December 9, 2022 No
Technology Co., Ltd.
Rongcheng Goertek Technology
Li Yongzhi Supervisor July 15, 2020 July 14, 2023 No
Co., Ltd.
Goertek Technology Vina Company
Li Yongzhi Supervisor January 31, 2019 January 30, 2022 No
Limited
Li Yongzhi Goertek Microelectronics Inc. Director December 23, 2020 December 22, 2023 No
Kazuyoshi Goertek Vina Co., Ltd General December 20, 2021
No
Yoshinaga Manager
Kazuyoshi Goertek Technology Vina Company General September 1, 2021 No
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Goertek Inc. Annual Report 2021
Yoshinaga Limited Manager
Kazuyoshi Goertek Precision Industry Vietnam General September 1, 2021
No
Yoshinaga Company Limited Manager
Shanghai Goertek Technology Co., General
Li Youbo July 23, 2020 July 22, 2023 No
Ltd. Manager
Nanning Goertek Electronics Co.,
Zhu Shengbo Director November 12, 2021 November 11, 2024 No
Ltd.
Zhu Shengbo Nanning Goertek Trading Co., Ltd. Director November 29, 2021 November 28, 2024 No
Zhu Shengbo Goertek Vina Co., Ltd Chairman January 1, 2019 December 31, 2021 No
Zhu Shengbo Goertek Technology Vina Company Director
January 31, 2019 January 30, 2022 No
Limited
Zhu Shengbo Goertek Precision Industry Vietnam Executive October 30, 2020 October 29, 2025
No
Company Limited Director
Zhu Shengbo Goertek Technology (Hong Executive August 7, 2020
No
Kong)Co., Ltd. Director
Weifang Goertek Communication General
Wei Wenbin June 26, 2021 June 25, 2024 No
Technology Co., Ltd. Manager
Description of
incumbency in None
other units
Penalties imposed by securities regulatory authorities on current and outgoing directors, supervisors and senior management of the
company in the past three years
□ Applicable √ Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
The decision-making procedure, basis and actual payment of the remuneration of directors, supervisors and senior management
The remuneration plan of directors and supervisors of the company shall be formulated by the remuneration and assessment
committee of the Board of Directors, which shall be approved by the Board of Directors and submitted to the general meeting of
shareholders for approval before implementation.
The remuneration standard for senior management shall be formulated by the remuneration and assessment committee, and
implemented after approval by the Board of Directors. Allowances for independent directors shall be paid on a regular basis.
Remuneration of directors, supervisors and senior management during reporting period
Unit: RMB 10,000
The total amount Whether to get
Appointment of pre-tax paid by the
Name Position Gender Age
status remuneration related party of
received from the the company
65
Goertek Inc. Annual Report 2021
company
Jiang Bin Chairman Male 56 Incumbent 180 No
Vice Chairman,
Jiang Long Male 48 Incumbent 180 No
President
Xia Shanhong Director Female 64 Incumbent 18 No
Independent
Wang Kun Female 46 Incumbent 18 No
Director
Chairman of
Sun Hongbin Board of Male 56 Incumbent 0 Yes
Supervisors
Employee
Feng Jianliang Representative Male 48 Resigned 15 No
Supervisor
Employee
Xu Xiaofeng representative Female 45 Incumbent 45 No
Supervisor
Director, Vice
Duan Huilu Male 46 Incumbent 120 No
President
Gao Xiaoguang Vice President Male 46 Incumbent 120 No
Liu Chunfa Vice President Male 46 Incumbent 120 No
Jiang Hongzhai Vice President Male 52 Incumbent 120 No
Vice President,
Jia Jun'an Secretary of the Male 51 Incumbent 120 No
Board
Feng Pengbo Vice President Male 54 Resigned 83 No
Yu Dachao Vice President Male 44 Incumbent 120 No
Kazuyoshi
Vice President Male 55 Incumbent 120 No
Yoshinaga
Liu Chengmin Director Male 51 Incumbent 18 No
Independent
Wang Tianmiao Male 62 Incumbent 18 No
Director
Chief Financial
Li Yongzhi Male 44 Incumbent 110 No
Officer
Employee
Wei Wenbin representative Male 44 Incumbent 30 No
Supervisor
Li Youbo Vice President Male 45 Incumbent 70 No
Zhu Shengbo Vice President Male 48 Incumbent 70 No
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Goertek Inc. Annual Report 2021
Total -- -- -- -- 1,695 --
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Goertek Inc. Annual Report 2021
VI. Performance of Directors' Duties during the Reporting Period
1. Board of Directors
Session Convening date Disclosure date Meeting resolution
The 13th meeting of the 5th Resolutions were disclosed by the Company on Cninfo (www.cninfo.com.cn) and the four designated
January 15, 2021 January 16, 2021
Board of Directors newspapers on 16 January 2021(Announcement No 2021-002)
The 14th meeting of the 5th Resolutions were disclosed by the Company on Cninfo (www.cninfo.com.cn) and the four designated
January 27, 2021 January 28, 2021
Board of Directors newspapers on 28 January 2021(Announcement No 2021-012)
The 15th meeting of the 5th Resolutions were disclosed by the Company on Cninfo (www.cninfo.com.cn) and the four designated
January 29, 2021 January 30, 2021
Board of Directors newspapers on 30 January 2021(Announcement No 2021-018)
The 16th meeting of the 5th Resolutions were disclosed by the Company on Cninfo (www.cninfo.com.cn) and the four designated
February 9, 2021 February 10, 2021
Board of Directors newspapers on 10 February 2021(Announcement No 2021-031)
The 17th meeting of the 5th Resolutions were disclosed by the Company on Cninfo (www.cninfo.com.cn) and the four designated
March 1, 2021 March 2, 2021
Board of Directors newspapers on 2 March 2021(Announcement No 2021-044)
The 18th meeting of the 5th Resolutions were disclosed by the Company on Cninfo (www.cninfo.com.cn) and the four designated
March 26, 2021 March 27, 2021
Board of Directors newspapers on 27 March 2021(Announcement No 2021-050)
The 19th meeting of the 5th Resolutions were disclosed by the Company on Cninfo (www.cninfo.com.cn) and the four designated
April 16, 2021 April 17, 2021
Board of Directors newspapers on 17 April 2021(Announcement No 2021-068)
The 20th meeting of the 5th Resolutions were disclosed by the Company on Cninfo (www.cninfo.com.cn) and the four designated
April 21, 2021 April 22, 2021
Board of Directors newspapers on 22 April 2021(Announcement No 2021-074)
The 21st meeting of the 5th Resolutions were disclosed by the Company on Cninfo (www.cninfo.com.cn) and the four designated
June 2, 2021 June 3, 2021
Board of Directors newspapers on 3 June 2021(Announcement No 2021-088)
The 22nd meeting of the 5th Resolutions were disclosed by the Company on Cninfo (www.cninfo.com.cn) and the four designated
August 26, 2021 August 27, 2021
Board of Directors newspapers on 27 August 2021(Announcement No 2021-100)
The 23rd meeting of the 5th
October 26, 2021 The board approved: Proposal on the examination of "Goertek Quarterly Report in Q3 2021”
Board of Directors
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Goertek Inc. Annual Report 2021
Session Convening date Disclosure date Meeting resolution
The 24th meeting of the 5th Resolutions were disclosed by the Company on Cninfo (www.cninfo.com.cn) and the four designated
November 8, 2021 November 9, 2021
Board of Directors newspapers on 8 November 2021(Announcement No 2021-116)
The 25th meeting of the 5th Resolutions were disclosed by the Company on Cninfo (www.cninfo.com.cn) and the four designated
November 30, 2021 December 1, 2021
Board of Directors newspapers on 1 December 2021(Announcement No 2021-127)
69
Goertek Inc. Annual Report 2021
2. Directors’ attendance at Board of Directors and general meeting of shareholders
Directors’ attendance at Board of Directors and general meeting of shareholders
Number of
Whether there Attendance of
Attendance
Attendance by Entrusted is absence in the general
required Attendance in Absence
Name Tele-communi presence person for two meeting of
during the person (times) (times)
cation (times) (times) consecutive shareholders
reporting
times (times)
period (times)
Jiang Bin 13 12 1 0 0 No 3
Jiang Long 13 11 2 0 0 No 2
Duan Huilu 13 13 0 0 0 No 3
Xia Shanhong 13 1 12 0 0 No 1
Wang Tianmiao 13 1 12 0 0 No 1
Liu Chengmin 13 1 10 2 0 Yes 2
Wang Kun 13 1 12 0 0 No 3
Statement on failure to attend the Board of Directors for two consecutive times
Due to the Corona Virus Disease, director Liu Chengmin was unable to personally attend the 16th meeting of the 5th Board of
Directors and the 17th meeting of the 5th Board of Directors, and delegated director Duan Huilu and independent director Wang Kun
to vote respectively.
3. Objections raised by directors to relevant matters of the Company
Whether directors raise any objection to relevant matters of the Company
□ Yes √ No
No objection was raised to relevant matters of the Company during the reporting period.
4. Other details on the performance of duties by directors
Whether proposals made by directors were adopted by the Company
√ Yes □ No
Statement on the adoption or non-adoption of proposals made by the directors
During the reporting period, the directors of the Company carried out work in strict accordance with Company Law, Securities
Law, Corporate Governance of Listed Companies, Rules Governing the Listing of Shares on Shenzhen Stock Exchange,
Self-Regulatory Directives No.1 for Listed Companies on the Shenzhen Stock Exchange - Normative Operation of Listed Companies
on the Main Board, Articles of Association and Rules of Procedure of the Board of Directors. They fulfilled their duty of due
diligence by forming a consensus after full discussion on major governance and business matters of the Company, and resolutely
supervising and driving the implementation of the board resolution, so as to ensure the decision-making process being scientific,
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Goertek Inc. Annual Report 2021
timely and efficient, play a positive role in the sustained, healthy and stable development of the Company, and effectively safeguard
the legitimate rights and interests of the Company and all shareholders.
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Goertek Inc. Annual Report 2021
VII. Performance of Special Committees under the Board of Directors during the Reporting Period
Number Important
Performance Specific
Committee of opinions and
Members Convening date Meeting content of other objections (if
name meetings suggestions
duties any)
held proposed
The audit committee approved: 1.Special Audit Report on the
Deposit and Use of Funds Raised in Q4 2020; 2. Inspection
Report on Related Transactions and Guarantees of the
January 25, 2021 Approved
Company in Q4 2020; 3. Internal Audit Work Report of 2020; 4.
Internal Audit Work Plan of 2021; 5. Proposal on Nominating
Mr. Du Lanzhen as Head of Internal Audit
The audit committee approved: 1. Proposal on Approving of
Financial Accounts of 2020; 2. Proposal on Approving of
Financial Report and Abstract of 2020; 3. Proposal on
Approving of Self-assessment Report on Internal Control of
March 26, 2021 Approved
Wang Kun, Jiang Bin, Xia 2020; 4. Proposal on the Re-appointment of the Accounting
Audit committee 5
Shanhong Firm; 5. Report on the Audit Work of the Accounting Firm of
2020; 6. Report on the Performance of the Audit Committee of
the Board of Directors in 2020
The audit committee approved: 1. Proposal on Approving of
Quarterly Report of the Company in Q1 2021 and Abstract of
April 21, 2021 the Quarterly Report of the Company in Q1 2021; 2. Inspection Approved
Report on Related Transactions and Guarantees in Q1 2021; 3.
Internal Audit Work Report in Q1 2021
The audit committee approved: 1.Proposal on approving of
August 26, 2021 Interim Report of 2021 and Abstract of Interim Report of 2021; Approved
2. Special Audit Report on the Deposit and Use of Raised Funds
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Goertek Inc. Annual Report 2021
Number Important
Performance Specific
Committee of opinions and
Members Convening date Meeting content of other objections (if
name meetings suggestions
duties any)
held proposed
in the Semiannual Period of 2021; 3. Inspection Report on
Related Transactions and Guarantees of the Company in Q2
2021; 4. Internal Audit Work Report in Q2 2021
The audit committee approved: 1. Proposal on Approving of
Quarterly Report in Q3 2021 and Abstract of Quarterly Report
in Q3 2021; 2. Inspection Report on Related Transactions and
October 26, 2021 Approved
Guarantees in Q3 2021; 3. Internal Audit Work Report in Q3
2021; 4. Special Audit Report on the Deposit and Use of Funds
raised in Q3 2021
The remuneration and assessment committee approved:
January 22, 2021 Approved
Proposal on the Remuneration of the Chief Financial Officer
The remuneration and assessment committee approved: 1.
Proposal on approving of Goertek Home No 5 Employee Stock
Ownership Plan (Draft); 2. Proposal on approving of
Remuneration
Jiang Bin, Xia Shanhong, Administrative Measures of Goertek Home No 5 ESOP; 3.
and assessment 3 April 13, 2021 Approved
Wang Tianmiao Proposal on approving of Stock Option Incentive Plan of
committee
Goertek of 2021 (Draft); 4. Proposal on approving of Measures
for the Examination and Administration of the Implementation
of the Goertek Stock Option Incentive Plan of 2021
The remuneration and assessment approved: Proposal on the
May 31, 2021 Approved
Remuneration of Vice President
VIII. Performance of the Board of Supervisors
Whether the Board of Supervisors found out any risk of the Company in its supervision activities during the reporting period.
73
Goertek Inc. Annual Report 2021
□ Yes √ No
The Board of Supervisors has no objection to the matters supervised during the reporting period.
74
Goertek Inc. Annual Report 2021
IX. Personnel of the Company
1. Number of staff, specialty composition and educational level
Number of staff of the parent company at the end of the
37,319
Reporting Period
Number of Staff of major subsidiaries at the end of the Reporting
58,461
Period
Total number of staff at the end of the Reporting Period 95,780
Total number of staff who receive remuneration during the
95,780
Reporting Period
Number of retired staff the Company and its major subsidiaries
0
are required to compensate
Specialty composition
Category Number
Production staff 69,815
Sales staff 670
Technical staff 19,753
Financial staff 306
Administrative staff 5,236
Total 95,780
Educational level
Category Number
PhD 78
Postgraduate 3,435
Undergraduate 16,170
College degree 18,823
Below College degree 57,274
Total 95,780
2. Remuneration policy
Goertek continued to put emphasis on the attraction, motivation and retention of talents, implemented competitive incentive
policies on salary and welfare, and fulfilled the cultural concept of “we make, we share, we grow”.
Facing COVID-19 and economic challenges, the Company still steadily applied employee promotion and salary adjustment plan
to raise the salary level of employees. The Company also implemented special remuneration policies for core positions and talents
75
Goertek Inc. Annual Report 2021
that support the development of strategic business, so as to effectively attract and retain talents, enrich the Company’s talent pool and
improve the quality and quantity of talents. In terms of incentive policy, through the issuance of ESOPs and new stock option plans,
more and more core employees can share the fruit of company growth. The cohesion of the management team and the key staffs has
been effectively enhanced. In addition to material incentives, the Company fully investigated in the demands of employees, strived to
build welfare system with its own characteristics, made full use of related resources, and cared for employees in an all-round way by
providing diversified benefits in children's education, house ownership, health security, and convenient life.
3. Training programmes
In 2021, the Human Resources Management Department followed Goertek's strategy and business development requirements,
improved its all-category, full-field and whole-process talent training system, carried out diversified learning and training activities,
strengthened the construction of a learning organization and promoted organizational performance. Along with the business reform,
after a year of construction of the training system and intensive cultivation of the project, the Company further improved the training
organization, operation and management system for all staffs covering cadres, technical personnel, professionals and new
employees ,Wing Project of Goertek, thus helping the Company to achieve business objectives.
In 2022, the Company will focus on building a global training management center and further reforming talent training mode.
The Company will increase investment in the strengthening of talents training capacity, policy management, training development
and resource management and make substantial breakthroughs in teacher recruitment, curriculum management, organization-related
knowledge management, informatization and digitalization of training and so on, so as to helping the Company to become a leader in
the construction of leadership college, engineering college, new employee training college and professional development college.
That’s how the Company achieves its cultural concept of “we make, we share, we grow”, and its mission of a better life enriched by
technology.
4. Labor outsourcing
□ Applicable √ Not applicable
X. Profit Distribution and Conversion of Capital Reserves into Share Capital
Formulation, execution or adjustment of profit distribution policy, especially the cash dividend during the Reporting Period
√ Applicable □ Not applicable
The Company has strictly implemented the Shareholder Return Plan for the Next Three Years (2019-2021), and clarifies the
standard, ratio, and the decision making procedures of the distribution policy, which ensures the continuity and stability of the profit
distribution policy, in order to fully protect the legitimate rights and interests of minority investors. In addition, the Company has
76
Goertek Inc. Annual Report 2021
conducted share repurchase in 2021. In accordance with the requirements of Company Law, Rules Governing the Listing of Shares on
Shenzhen Stock Exchange and Implementation Rules of Shenzhen Stock Exchange on the Share Repurchase of Listed Companies: the
shares repurchased can be regarded as the amount of cash dividends and shall be included in the relevant calculation of cash
dividends proportion of the year.
Special description of the cash dividend policy
Whether in compliance with provisions in the Articles of Association or requirements of
Yes
the resolution of the extraordinary general meeting of shareholders:
Whether the dividend standard and the proportion are definite and clear: Yes
Whether the related decision-making procedures and mechanisms are complete: Yes
Whether independent directors perform their duties responsibly and play their due roles: Yes
Whether minority shareholders have the opportunity to fully express their opinions and
Yes
demands and their legitimate rights and interests are fully protected:
Whether the conditions and procedures are transparent and comply with regulations The cash dividend policy has not been
while the cash dividend policy is adjusted or changed: adjusted.
The profits of Goertek in the Reporting Period and the parent company's profits distributable to shareholders are positive, but the
Company did not put forward a proposed plan for cash dividend distribution.
□ Applicable √ Not applicable
Profit distribution and conversion of capital reserves into share capital during the reporting period.
√ Applicable □ Not applicable
Number of bonus shares per 10 shares 0
Dividend per 10 shares (RMB) (tax inclusive) 2.00
Conversion of capital reserves into share capital per 10
0
shares (shares)
Shares base of the distribution proposal(shares) 3,342,055,585
Cash dividend amount (RMB) (tax inclusive) 668,411,117.00
Cash dividend amount distributed by other means (such
1,999,998,595.63
as shares repurchase) (RMB)
Total cash dividends (including other means) (RMB) 2,668,409,712.63
Distributable profit (RMB) 15,372,823,358.48
Proportion of total cash dividends (including other
100%
means) in total profit distribution
Cash dividends
If the Company is in developing stage, and there are major capital expenditure arrangements, the minimum proportion of cash
dividends in profit distribution should reach 20%.
Detailed description of the proposal for profit distribution or capitalization from capital reserve funds
According to the standard unqualified opinion audit report issued by ZHONGXI CPAs (Special General Partnership) for Goertek,
77
Goertek Inc. Annual Report 2021
the parent company reports a net profit of RMB 758,580,163.40 in 2021, net distributable profit of RMB 10,437,290,148.25 at the
end of 2021, and the balance of capital reserves of RMB 7,706,634,091.21. The net distributable profit in the consolidated balance
sheet is RMB 15,372,823,358.48. The profit distribution in 2021 is as follows: based on the total share capital registered on the
record date of equity distribution minus the repurchased shares in the Company's special repurchase account, the Company will
distribute cash dividend of RMB 2.00 (tax inclusive) for per 10 shares to all the shareholders, as well as 0 bonus shares (tax
inclusive), and there is no conversion of capital reserves into share capital.
XI. Equity Incentive Plan, Employee Stock Ownership Plan or Other Employee Incentives
√ Applicable □ Not applicable
1. Equity incentive
Stock Option Incentive Plan in 2021(hereinafter referred to as “the Incentive Plan”）：
On April 16, 2021, Goertek convened the 19th meeting of the 5th Board of Directors, which approved Proposal of 2021 Stock
Option Incentive Plan of Goertek Inc. (Draft) and the Summary, Proposal of Rules on the Implementation and Assessment of 2021
Stock Option Incentive Plan, and Proposal of Requesting the General Meeting of Shareholders to Authorize the Board of Directors to
Handle Matters Relevant to 2021 Stock Option Incentive Plan. The 14th meeting of the 5th Board of Supervisors approved relevant
proposals, reviewed the list of participants awarded for the first time, and expressed the review opinions. Independent directors of the
Company expressed their agreed opinions on the Incentive Plan independently.
On April 17, 2021, Goertek disclosed the List of Participants Awarded for the First Time of the Incentive Plan on the website
http//:www.cninfo.com.cn. The Company publicized the names and positions of these participants from April 20 to April 29, 2021.
During the publicity period, the Supervisors did not receive any objections, and no feedback was recorded. On April 30, 2021, the
Company disclosed the Result of Review by the Board of Supervisors on the List of Participants Awarded for the First Time of 2021
Share Option Incentive Plan. On May 8, 2021, the Company disclosed Self-examination Report on the Trading of Shares by Insiders
of the 2021 Share Option Incentive Plan.
On May 7, 2021, the proposals mentioned above were approved on the annual general meeting of 2020. The Board of Directors
were authorized to handle relevant matters regarding the Incentive Plan.
On June 2, 2021, Goertek convened the 21st meeting of the 5th Board of Directors and the 16th meeting of the 5th Board of
Supervisors. Proposal of the Adjustment of Participants Awarded for the First Time of the 2021 Share Option Incentive Plan,
Number of Stock Options and Exercise Price, and the Proposal of Resolution of Grant Stock Options to the Participants were
approved. The Board of Supervisors expressed the results of review on the list of incentive participant. Independent Directors
expressed their agreed opinions on relevant matters independently. Beijing Tian Yuan Law Firm issued the Legal Opinions of Beijing
Tian Yuan Law Firm on Relevant Matters Regarding the Adjustment and First Grant of the 2021 Share Option Incentive Plan.
78
Goertek Inc. Annual Report 2021
On June 24, 2021, Goertek completed the registration of the 2021 Incentive Plan.
Stock options granted to Directors and senior management
□ Applicable √ Not applicable
The Appraisal and incentive mechanism for senior management
The remuneration plan of directors and supervisors of the company shall be formulated by the remuneration and assessment
committee of the Board of Directors, which shall be approved by the Board of Directors and submitted to the general meeting of
shareholders for approval before implementation. The remuneration standard for senior management shall be formulated by the
remuneration and assessment committee, and implemented after approval by the Board of Directors.
2. Implementation of employee stock ownership plan
√ Applicable □ Not applicable
All valid employee stock ownership plans during the reporting period
Shareholding
Participants Number Total shares held Changes Source of funds
percentage
Goertek Home No. 3 ESOP: part of
Directors, Supervisors, senior
management, key management 1,600 1,349,600 None 0.04% self-raised
personnel, and key business
personnel
Goertek Home No. 4 ESOP:
Directors (excluding Independent
Directors), Supervisors, senior
4,000 20,539,684 None 0.60% n.a.
management, key management
personnel and key business
personnel
Goertek Home No. 5 ESOP:
Directors (excluding Independent
Directors), Supervisors, senior
25 11,000,000 None 0.32% self-raised
management, key management
personnel and key business
personnel
Total shares held of Directors, Supervisors and senior management in ESOPs during the reporting period
Number of shares held at
Number of shares held the end of the reporting
Shareholding
Name Position at the beginning of the period
percentage
reporting period at the beginning of the
reporting period
Duan Huilu, Feng Jianliang, Directors, 8,036,551 3,289,000 0.10%
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Goertek Inc. Annual Report 2021
Xu Xiaofeng, Wei Wenbin, Supervisors, senior
Gao Xiaoguang, Liu Chunfa, management
Jiang Hongzhai, Jia Jun’an,
Feng Pengbo, Yu Dachao,
Yoshinaga Kazuyoshi, Li
Yongzhi, Li Youbo, Zhu
Shengbo
Changes of Asset Management Agency during the reporting period
□ Applicable √ Not applicable
Changes in shareholders' equity caused by shares disposal of the participants and other reasons during the reporting period
√ Applicable □ Not applicable
During the reporting period, the Goertek Home No. 3 ESOP, and Home No. 4 ESOP after the expiration of the lock-up period,
sold part of shares in accordance with relevant regulations. By the end of the reporting period, Goertek's Home No. 3 ESOP held
1.3496 million shares, shareholding percentage was 0.04%, while the Home No. 4 ESOP held 20.5397 million shares, shareholding
percentage was 0.60%. The Home No. 5 ESOP held 11 million shares, shareholding percentage was 0.32%.
Exercise of shareholders' rights during the reporting period
During the reporting period, the ESOPs exercised the shareholders' rights to participate in cash dividend of 2020, but did not
participate in voting of the general meeting of shareholders or exercise other shareholders' rights.
Other relevant situations and descriptions related to ESOPs during the reporting period
□ Applicable √ Not applicable
Changes in members of the Management Committee of the ESOPs
□ Applicable √ Not applicable
Financial impacts of the ESOPs during the reporting period and relevant accounting treatment
√ Applicable □ Not applicable
In accordance with the Accounting Standard for Business Enterprises No.11 - Share-based Payments: if an equity-settled
share-based payment in exchange for services received from employees could not exercise until the completion of services for a
vesting period, or until the achievement of a specified performance condition, Goertek at each balance sheet date during the vesting
period recognizes the services received for the current period as related costs or expenses, and capital reserve, at amount equal to the
fair value of the equity instruments at the grant date, based on the best estimate of the number of equity instruments expected to
exercise. The expenses amortization of the Goertek Home No. 4 ESOP and the Goertek Home No. 5 ESOP in 2021 is RMB
422.8195 million and RMB 111.0332 million respectively, which is recognized as related expenses and capital reserve.
Termination of ESOP during the reporting period
□ Applicable √ Not applicable
Explanation on Other Matters
None
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Goertek Inc. Annual Report 2021
3. Other employee incentive measures
□ Applicable √ Not applicable
XII. Construction and implementation of the Company’s Internal Control System During the
Reporting Period
1. Construction and implementation of internal control
During the reporting period, in order to ensure the development of business activities and the realization of Goertek's strategic
goals, Goertek attached great importance to the construction of internal control system. We gradually established a basic compliance,
sound and effective internal control system covering all aspects of operation and management in accordance with the industry and
asset structure characteristics.
(1) Internal supervision
The Company has established the Internal Audit System, and has set up an independent internal audit department, which is
responsible for internal audit work, the audit and efficiency supervision of financial revenue, expenditure, the implementation of
financial system, the Company’s rules and regulations. The internal audit department also responsible for making proposals on the
improvement of the Company's internal control system.
Under the direct leadership of the Audit Committee, the audit department independently carries out internal audit and
supervision， supervising the operation and management, financial condition and internal control implementation of the Company
and its subsidiaries. Besides, the audit department issues independent audit opinions, and regularly reports summaries and working
plans to the Audit Committee.
(2) Risk assessment
In combination with characteristics of the industry and actual operating status, the Company timely assesses internal and
external risks such as environmental risk, business risk and financial risk, weighs the risk and return according to the results of risk
analysis and risk tolerance, determines strategies, and practically makes the risk controllable.
(3) Control activities
The Company constantly implements the workings of internal control in all kinds of business processes, conducts various
internal controls, avoids the mere formality of internal policies and regulations, and improves the effectiveness and soundness of
internal control.
(4) Information disclosure
The Company formulated the Information Disclosure Policy, the Accountability System Regarding Major Errors in the Annual
Report Information Disclosure and the Policy on Management of the Personnel with Inside Information. According to the
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Goertek Inc. Annual Report 2021
requirements of relevant laws and regulations, the Policy on Management of the Personnel with Inside Information has been revised
in time, which has detailed the scope of inside information and related personnel, and the administrative measures on registration of
personnel with inside information in material matters. The Company's information disclosure in 2021 complied with the relevant
laws and regulations of the regulatory authorities and the provisions of the above-mentioned control system.
2. Details of material defects of internal control detected during the Reporting Period
□ Yes √ No
XIII. Management and controls of subsidiaries during the Reporting Period
Not applicable
XIV. Self-assessment Report on Internal Control or Audit Report on Internal Control
1. Self-assessment on internal control
Disclosure date of the Internal
March 30, 2022
Control Self-assessment Report
Disclosure index of the Internal
Disclosed on www.cninfo.com.cn on March 30, 2022
Control Self-assessment Report
Proportion of the total assets of
entities included in the assessment
scope to the total assets of the 100.00%
Company’s consolidated financial
statements
Proportion of the total revenue of
entities included in the assessment
scope to the total revenue of the 100.00%
Company’s consolidated financial
statements
Defect Identification Standard
Category Financial report Non-financial report
The qualitative standard of the
The qualitative standard of the assessment of internal
assessment of internal control defects in
control defects in financial reporting are as follows:
non-financial reporting determined by
Signs of material defects in financial reporting
Goertek are as follows: The
Qualitative criteria include:
identification of defects in non-financial
(1) Fraud of directors, supervisors and senior
report is mainly determined by the
management on the financial report;
impact of defects on the effectiveness of
(2) Corrections of previously disclosed financial
business processes and the possibility of
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Goertek Inc. Annual Report 2021
reports; occurrence. If the possibility of defect
(3) Material misstatement of current period financial occurrence is low, and the defect will
statements identified by certified public accountant reduce the efficiency and effectiveness
but not identified by the Company’s internal control; of work, or increase the uncertainty of
(4) Ineffective supervision on the financial statements the effectiveness, or make it deviate
by the audit committee and the internal audit from the expected goal, it is a general
department. defect. If the possibility of defect
occurrence is relatively high, and the
Signs of important defects in financial reporting
defect will significantly reduce the
include:
efficiency or effectiveness of work, or
(1) Failure to select and apply accounting policies in
significantly increase the uncertainty of
accordance with Generally Accepted Accounting
the effectiveness, or make it
Principles;
significantly deviate from the expected
(2) No anti-fraud procedures and control measures
goal, it is an important defect. If the
have been established;
possibility of defect occurrence is high,
(3) No corresponding control mechanism has been and the defect will seriously reduce the
established or implemented for the accounting efficiency or effectiveness of work, or
treatment of unconventional or special transactions, seriously increase the uncertainty of the
and there is no corresponding compensatory control; effectiveness, or make it seriously
(4) One or more defects is or are existing in the deviate from the expected goal, it is a
control of the financial reporting process, that the material defect
prepared financial statements cannot be reasonably
guaranteed to be true and complete.
General defects: other internal control defects.
The quantitative standard of the assessment of internal
control defects in financial reporting are as follows:
(1) If one of the following conditions is met, it may be
recognized as a material defect:
Item Impact of defects
Potential
≥ 5%, with an amount ≥ RMB
misstatement
10 million The quantitative standard of the
of total profit
assessment of internal control defects in
Potential
Quantitative criteria non-financial reporting is in accordance
misstatement
≥ 1% with the quantitative standard of defects
of total
in financial reporting.
assets
Potential
misstatement ≥ 1%
of revenue
(2) If one of the following conditions is met, it may be
recognized as an important defect:
Item Impact of defects
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Goertek Inc. Annual Report 2021
Potential 3%≤misstatement <5%
misstatement
of total profit
Potential 0.5≤misstatement <1%
misstatement
of total assets
Potential 0.5≤misstatement <1%
misstatement
of revenue
(3) If one of the following conditions is met, it may be
recognized as a minor defect:
Item Impact of defects
Potential <3% of total profit
misstatement
of total profit
Potential <0.5% of total assets
misstatement
of total assets
Potential <0.5% of total revenues
misstatement
of revenue
Number of material defects in
0
financial reporting
Number of material defects in
0
non-financial reporting
Number of important defects in
0
financial reporting
Number of important defects in
0
non-financial reporting
2. Audit Report on internal control
□ Applicable √ Not applicable
Audit Opinion in Audit Report on Internal Control
In our opinion, the Company has maintained effective internal control of financial reports in accordance with the Basic Rules for
Internal Control of Enterprises as of 31 December 2021.
Disclosure of the Audit Report on
Disclosed
Internal Control
Disclosure date of the Audit Report March 30, 2022
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Goertek Inc. Annual Report 2021
on Internal Control
Disclosure index of the Audit
www.cninfo.com.cn, March 30, 2022
Report on Internal Control
Type of internal control audit report
standard unqualified opinion
opinions
Material defects found in
No
non-financial reporting
Whether the Auditor set out the Audit Report on internal control with any opinions of non-standardization.
□ Yes √ No
Whether the Audit Report on internal control is consistent with the Self-assessment Report on internal control opinion.
√ Yes □ No
XV. Rectification of Problems Identified by Self-examination in the Special Actions on
Governance of Listed Companies
Not applicable
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Goertek Inc. Annual Report 2021
Section V Environmental and social responsibilities
I. Major Environmental Issues
Whether the listed company or its subsidiaries are entities with pollutant discharges announced by local environmental protection
authorities
√ Yes □ No
Type of
Enforced
major Locations Concentrati Total
Name of the Number of standards of Total Discharge
pollutants Type of of on of approved
Company or discharging pollutant discharge exceeding
and name of discharge discharging pollutant discharge
subsidiaries ports concentratio volume the standard
particular ports discharged volume
n
pollutants
Hazardous Indirect Not Not Not Not Not Not
Goertek Inc. None
waste discharge applicable applicable applicable applicable applicable applicable
COD: COD: COD: COD:
Yili
COD; 50mg/L; 500mg/L; 8.523t/a; 23.189t/a;
Precision Intermittent
ammonia 1 In the plant ammonia ammonia ammonia ammonia None
Manufacturi discharge
nitrogen nitrogen: nitrogen: nitrogen: nitrogen:
ng Co., Ltd.
5mg/L 45mg/L 0.168t/a 2.3389t/a
Construction and operation of pollution prevention facilities
In accordance with The Environmental Impact Assessment and Approval, the Company establishes supporting measures for
solid waste storage, disposal and comprehensive utilization, along with leakage prevention and seepage prevention measures, and
ensures the normal operation of all above measures.
In accordance with The Environmental Impact Assessment and Approval, Yili Precision Manufacturing Co., Ltd. constructs
supporting treatment facilities for water and gas waste. Takes measures of noise reduction measures, storage, disposal and
comprehensive utilization of solid waste, and leakage and seepage prevention, and ensures the normal operation of all above
measures.
Environmental impact assessment of construction projects and other administrative licenses for environmental protection
The construction projects of Goertek Inc. have obtained The Environmental Impact Assessment and Approval from the
High-tech Branch of Weifang Municipal Ecology and Environment Bureau in accordance with the regulations, and have obtained
environmental protection acceptance opinions according to The Interim Measures for Environmental Protection Acceptance of
Construction Project Completion.
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Goertek Inc. Annual Report 2021
The construction projects of Yili Precision Manufacturing Co., Ltd. have obtained The Environmental Impact Assessment and
Approval from the Anqiu Branch of Weifang Municipal Ecology and Environment Bureau in accordance with the regulations, and
have obtained environmental protection acceptance opinions according to The Interim Measures for Environmental Protection
Acceptance of Construction Project Completion.
Emergency response plan for unexpected environmental events
In view of various risk factors, combined with The National Environmental Emergency Response Plan and The Guidelines to
Develop Emergency Response Plan for Environmental Pollution Accidents, Goertek has formulated The Environmental Emergency
Response Plan, and has reported the plan to the High-tech Branch of Weifang Municipal Ecology and Environment Bureau for
recording (No. 370708-2021-079-L). Goertek also organizes relevant training and drills on a regular basis, in order to improve the
emergency response ability of employees and achieve continuous improvement.
In view of various risk factors, Yili Precision Manufacturing Co., Ltd. refers to the National Environmental Emergency Plan
and Guidelines to Develop Emergency Response Plan for Environmental Pollution Accidents, formulates the Yili Environmental
Emergency Plan, and puts it on record in Anqiu Branch of Weifang Ecological Environment Bureau (record No.
370784-2020-004-H). Relevant training and drills are organized on a regular basis to further improve employees’ ability to deal with
emergency events and achieve continuous improvement.
Environmental self-monitoring programme
The Company entrusts third-party monitoring organization to monitor the environmental factors of the plant area and issue an
inspection report every year.
The main waste water outlet of Yili Precision Manufacturing Co., Ltd. is equipped with on-line monitoring equipment of COD,
ammonia nitrogen, flow rate and PH value, which is connected with the local department of environmental protection authorities.
Environmental self-monitoring of waste water, waste gas, groundwater and soil pollutants is carried out in strict accordance with the
requirements of the pollutant discharge permit, and related information is disclosed as required. Environmental self-monitoring of
waste water, waste gas, groundwater and soil pollutants is carried out in strict accordance with the requirements of the pollutant
discharge permit, and related information is disclosed as required.
Administrative penalties received for environmental issues during the reporting period
None
Other environmental information that should be disclosed
None
Measures taken to reduce carbon emissions during the reporting period and their effects
√ Applicable □ Not applicable
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Goertek Inc. Annual Report 2021
The Company took “compliant use of energy, improved efficiency, reduce emission, full participation of all staffs and green
development” as its energy management policy, and implemented this policy onto its product manufacturing chain. By taking the
establishment of energy management system as a scientific management basis, the Company optimized its organizational structure of
management, improved systems and processes, and emphasized the focus of management, so as to tap the potential of energy saving,
actively improve the overall level of energy efficiency, and integrate emission reduction and green development targets into its
internal operation.
The Company strived to promote clean energy application, increased the proportion of green energy in all energy sources,
introduced distributed photovoltaic power generation and solar heat collection projects, and successfully achieved the annual
emission reduction of 32,993tCO2e. It also conducted energy-saving-oriented technological transformation to improve equipment
energy efficiency, applied energy-saving technologies such as vacuum pump, frequency conversion, automatic control and so on. An
annual emission reduction of 25,492tCO2e has been reached.
Other information related to environmental protection
None
II. Performance of Social Responsibility
During the reporting period, while the Company was committed to achieving its own development, it has also performed well in
the protection of the rights and interests of shareholders, creditors, employees, suppliers, customers and consumers, as well as in
environmental protection and sustainable development, public relations and social public welfare undertakings. For details, see the
Corporate Social responsibility Report of 2021 released on "www.cninfo.com.cn" on March 30, 2022. For details, see the Corporate
Social responsibility Report of 2021 released on "www.cninfo.com.cn" on March 30, 2022.
III. Consolidate and Carry Forward the Achievements of Poverty Alleviation and Rural
Revitalization
The Company has always responded positively to relevant calls of the authorities at all levels on targeted poverty alleviation,
such as The Poverty Alleviation Plan for the 13th Five-Year Plan Period (2016-2020) issued by the State Council. In addition, the
Company has carried out tailored accurate poverty alleviation efforts according to The Circular on Information Disclosure of Poverty
Alleviation Work of Listed Companies issued by Shenzhen Stock Exchange, and implements relevant arrangements and requirements
of The Opinions of the China Securities Regulatory Commission on Giving Full Play to the Role of the Capital Market to Serve the
National Poverty Alleviation Strategy.
In September, 2020, the Company renewed The Agricultural and Sideline Products Purchasing Agreement with the Anqiu
Bangquan Fruit and Vegetable Planting Professional Cooperative. The Company will purchase products from the cooperative and
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Goertek Inc. Annual Report 2021
keep the price from fluctuation to reduce the production and operation risk of poor households, and ensure that the per capita income
of registered poor households will increase by no less than RMB 2,000 each year. The support duration will be no less than 2 years,
and the agreements could be renewed.
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Goertek Inc. Annual Report 2021
Section VI Important Matters
I. Fulfilment of Commitments
1. The commitments of the Company's actual controllers, shareholders, related parties, purchasers and companies that have been completely fulfilled
during the reporting period or remain valid by the end of the reporting period.
√ Applicable □ Not applicable
Performance
Commitment Commitment
Commitment matters Commitment party Commitment type Commitment content of
time period
commitments
Commitments made during the share
Not applicable
merger reform
Commitments made in the report of
acquisition or in the report of equity Not applicable
changes
Commitments made during asset
Not applicable
restructuring
Mr. Jiang Bin and Mr. Jiang Long promise that the
Mr. Jiang Bin, the actual
Company shares transferred each year during their tenure
controller, and Mr. Jiang long, Commitment to October 8, Long-term Strictly
will not exceed 25% of the total company shares held by
shareholder and the related restricted stock 2007 standing fulfilled
Commitments made during initial them, and the shares will not be transferred within six
party of the actual controller
public offering or refinancing months after their resignation in future
Mr. Jiang Bin and Ms. Hu Horizontal At present, there is no competition between the main
October 8, Long-term Strictly
Shuangmei, the actual competition businesses of Goertek Inc. and the commitment parties
2007 standing fulfilled
controllers of the Company, related (company and persons) in this clause or other entities
90
Goertek Inc. Annual Report 2021
Goertek Group Co., Ltd and commitment controlled by the commitment parties (company and
Mr. Jiang Long, the persons). In future, in order to fundamentally avoid the
shareholders who hold more possibility of competing with Goertek Inc., the
than 5% of the Company shares commitment parties (company and persons) promise as
follows: 1) The commitment parties (company and
persons) will not engage in the same or similar business
as Goertek Inc. in order to avoid direct or indirect
competition to the production and operation of Goertek
Inc. Efforts will be made to urge other entities controlled
by the commitment parties (company and persons) not to
directly or indirectly participate in or carry out any
business activity that compete with the production and
operation of Goertek Inc. 2) If the commitment parties
(company and persons) and the other entities controlled
by the commitment parties (company and persons)
except Goertek Inc., have competitive businesses of the
same kind with Goertek Inc., which may bring unfair
impacts on Goertek Inc. in terms of market share,
business opportunities and resource allocation, etc. The
commitment parties (company and persons) and other
entities controlled by the commitment parties (company
and persons) except Goertek Inc. will voluntarily give up
business competition with Goertek Inc. 3) The
commitment parties (company and persons) undertake to
give Goertek Inc. the pre-emption right on the purchase
of any assets and business to be sold, and will do its best
to ensure that the price of the transaction is determined
on the basis of fair, reasonable and normal commercial
transactions with independent third parties. 4) The
commitment parties (company and persons) will not be
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Goertek Inc. Annual Report 2021
restricted from engaging in or continuing to engage in
existing production business, in particular to provide
Goertek Inc. with relevant materials and services needed
for its operation. Since the date of issuance of this letter
of commitment, the commitment parties (company and
persons) undertake to indemnify Goertek Inc. for any
loss or expense suffered or incurred in violation of any
of the terms of this commitment.
1. In addition to setting a guarantee for the non-public
offering of the exchangeable bonds, the stocks to be
exchanged shall not be subject to other restrictions such
as freeze by judicial domicile before the bond issue. No
restriction is imposed on the sale of shares prepared for
exchange when entering the stock exchange period, and
The 2021
the transfer of this part of shares does not violate the From the
Goertek
controlling shareholder's commitments to the Company, issuance date
Exchangeable
investors and Shenzhen Stock Exchange. 2. The of the
Bonds was
controlling shareholder will not increase its holdings of commitment to
delisted on
Other the Company shares within six months before and after January 11, the completion
Controlling shareholder January 17,
commitments current holders exercise the stock exchanges. 3. The 2021 of current
2022, thus the
controlling shareholder does not have situation stipulated non-public
commitment
in Article 6 of the Several Provisions on Shareholding offering of
has been
Reduction by Shareholders, Directors, Supervisors and exchangeable
completely
Senior Executives of Listed Companies (Announcement bonds
fulfilled
[2017] No. 9, CSRC). 4. The controlling shareholder will
not directly transfer control of Goertek Inc. to others
through the current issuance of exchangeable bonds; 5.
During the stock exchange period, if there are situations
not allowed as stipulated by the Several Provisions on
Shareholding Reduction by Shareholders, Directors,
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Goertek Inc. Annual Report 2021
Supervisors and Senior Executives of Listed Companies
and the Implementing Rules of the Shenzhen Stock
Exchange for the Sale of Shares by Shareholders,
Directors, Supervisors and Senior Management of Listed
Companies, the controlling shareholder undertakes to
suspend the application for share exchange until relevant
circumstances are eliminated.
From the
issuance date
of the
Stock option incentive plan of 2021: The Company commitment to
undertakes not to provide loans or any other form of the completion
Others April 16, Strictly
Equity incentive commitments The Company financial assistance to any participants to obtain relevant of the
commitments 2021 fulfilled
rights and interests under this incentive plan, including implementation
guarantee for their loans of the stock
option
incentive plan
of 2021
Goertek
From the Convertible
issuance date Bond No.2
of the was delisted
Commitment of Commitment of profit dilution counter-measures in
Controlling shareholders and September commitment to on March 11,
Other commitments made to profit dilution accordance with relevant regulations of China Securities
actual controller 10, 2019 the completion 2021, thus the
minority shareholders counter-measures Regulatory Commission
of the commitment
convertible has been
bonds completely
fulfilled
Directors and senior Commitment of Commitment of profit dilution counter-measures in September From the Goertek
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Goertek Inc. Annual Report 2021
management profit dilution accordance with relevant regulations of China Securities 10, 2019 issuance date Convertible
counter-measures Regulatory Commission of the Bond No.2
commitment to was delisted
the completion on March 11,
of the 2021, thus the
convertible commitment
bonds has been
completely
fulfilled
From March 5,
From March 5, 2020 to the end of the use of the funds
2020 to the end
raised from convertible bonds issuing or within 36
of the use of
months after the funds raised are in place, the Company
funds raised or
Others will no longer increase the funds usage in financial March 5, Strictly
The Company within 36
commitments business (including capital investment, borrowing, 2022 fulfilled
months after
guarantee and other forms of capital investment). The
the funds
Company will not use the funds raised directly or in
raised are in
disguise for financial business
place
During the All raised
The Company promises not to carry out venture capital
time period of funds have
investment during the period of temporary liquidity
temporary been returned
replenishment with raised funds, and undertakes to use
liquidity on November
these raised funds during temporary liquidity
Others November 5, replenishment 3, 2021, thus
The Company replenishment only for production and operation related
commitments 2020 with raised the
to the main business. The Company shall not directly or
funds starting commitment
indirectly use raised funds for the Subscription or
from has been
placement of stocks, or for the trading of stocks and their
November 5, completely
derivatives, convertible bonds, etc.
2020 fulfilled
The Company Others The Company promises not to carry out venture capital November 8, During the Strictly
94
Goertek Inc. Annual Report 2021
commitments investment during the period of temporary liquidity 2021 time period of fulfilled
replenishment with raised funds, and undertakes to use temporary
these raised funds during temporary liquidity liquidity
replenishment only for production and operation related replenishment
to the main business. The Company shall not directly or with raised
indirectly use raised funds for the Subscription or funds starting
placement of stocks, or for the trading of stocks and their from
derivatives, convertible bonds, etc. November 8,
2021
The directors and senior management of the Company In the next six
promise not to reduce their holdings of company shares consecutive Completely
Directors and senior Commitment to November
within 6 months from November 18, 2020, not to engage months from fulfilled on
management restricted stock 17, 2020
in insider trading or short-swing trading, and not to buy November 18, May 17, 2021
or sell company stocks during sensitive time periods 2020
1. The commitment parties (company and persons) are
committed, during the time period of being the
controlling shareholders or actual controller of Goertek During the
Microelectronics Co., Ltd. (hereafter referred to as period that the
“Goermicro”), to making Goermicro (including its Company and
holding subsidiaries and branches) the only company the actual
Horizontal engaged in the R&D, production and sales of MEMS controller of
The Company, actual controller competition devices and micro-system modules, among all entities November 8, the Company Strictly
of the Company related controlled by the commitment parties (company and 2021 act as the fulfilled
commitment persons) 2. During the time period when the controlling
commitment parties (company and persons) are the shareholder or
controlling shareholder or actual controller of actual
Goermicro，the commitment parties (company and controller of
persons) undertake that after the completion of the Goermicro
spin-off of Goermicro, all reasonable efforts will be
made to ensure that, except Goermicro and its holding
95
Goertek Inc. Annual Report 2021
subsidiaries, the Company and other enterprises
(hereafter referred to as “affiliated enterprises”)
controlled by the commitment parties (company and
persons) will not engage in business that has significant
adverse impact to the main business of Goermicro and its
subsidiaries. 3. The commitment parties (company and
persons) will supervise and restrict the business activities
of the affiliated enterprises. After the completion of the
spin-off, if any future business opportunities obtained by
the Company and/or affiliated enterprises from any third
party that competes with the main business of Goermicro
and/or its holding subsidiaries, the Company and/or
affiliated enterprises shall immediately notify Goermicro
and make every effort to facilitate the acquisition of such
business opportunities by Goermicro and/or its holding
subsidiaries, or to take other measures conducive to
avoiding and resolving horizontal competition. 4. The
commitment parties (company and persons) undertakes
that no advantage of its (their) status of being the
controlling shareholder (actual controller) will be taken
to engage in or participate in acts that harm the interests
of Goermicro and / or other shareholders (especially
minority shareholders). The commitment parties
(company and persons) will not use the information
learned or known from Goermicro and/or its holding
subsidiaries to assist any third party to engage in
business activities that have a significant adverse impact
on the main business of Goermicro and/or its holding
subsidiaries. 5. If, in the course of actual
implementation, the commitment parties (company and
96
Goertek Inc. Annual Report 2021
persons) violates the above commitments, the
commitment parties (company and persons) will
compensate Goermicro and/or its holding subsidiaries
with the benefits and gains obtained from the transaction.
If the violation of the above commitments causes
economic losses to Goermicro and/or its holding
subsidiaries, the commitment parties (company and
persons) will bear the corresponding liability of
compensation in accordance with laws
1. After the completion of the spin-off of Goermicro, the
commitment parties (company and persons) will exercise
and perform rights and obligations as a
micro-shareholder or actual controller of Goermicro in
good faith, fully respect the independent legal entity
status of Goermicro, and guarantee its independent
operation and decision-making process. 2. After the
completion of the spin-off, the commitment parties
(company and persons) will try its best to avoid and
Commitments reduce affiliate transactions between Goermicro and/or
The Company, actual controller November 8, Long-term Strictly
related to affiliate its holding subsidiaries and the commitment parties
of the Company 2021 standing fulfilled
transactions (company and persons) and their controlled companies
(except Goermicro and/or its holding subsidiaries,
hereafter referred to as "affiliated enterprises" ) . For
affiliate transactions that cannot be avoided or can be
conducted with reasonable causes, the commitment
parties (company and persons) and their affiliated
enterprises will follow the principles of fairness and
openness. Agreements with Goermicro and/or its holding
subsidiaries will be signed in accordance with relevant
laws and regulations. The approval procedures and
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Goertek Inc. Annual Report 2021
information disclosure obligations in accordance with
laws and regulations, articles of association and other
relevant provisions will be performed corresponding.
When the meeting of board of directors and the meeting
of shareholders' of Goermicro deliberate and approve
matters relating to affiliate transactions involving the
commitment parties (company and persons) and
affiliated enterprises, the commitment parties (company
and persons) will urge the directors nominated by the
Company and its affiliates (if any) and itself to withdraw
from the relevant voting. The commitment parties
(company and persons) undertake that the above affiliate
transactions will be carried out strictly and in good faith
in accordance with normal commercial conditions. The
commitment parties (company and persons) and its
affiliated enterprises will carry out the above affiliate
transactions at fair values and will not seek benefits
beyond such transactions from Goermicro and/or its
controlling subsidiaries. The commitment parties
(company and persons) will not harm the legitimate
rights and interests of Goermicro and other shareholders
through affiliate transactions. 3. After the completion of
the spin-off, the commitment parties (company and
persons) and its affiliated enterprises will avoid any
illegal acts to occupy funds and assets of Goermicro
and/or its holding subsidiaries as far as possible. 4. The
commitment parties (company and persons) will urge the
affiliated enterprises to abide by the above commitments.
If the commitment parties (company and persons) and/or
the affiliated enterprises violate the above commitments,
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Goertek Inc. Annual Report 2021
the commitment parties (company and persons) will
compensate for Goermicro and/or its holding
subsidiaries with the benefits and gains obtained from
the transaction. If the violation of the above
commitments causes economic losses to Goermicro
and/or its holding subsidiaries, the commitment parties
(company and persons) will bear the corresponding
liability for compensation in accordance with laws
Whether the commitments are
Yes
fulfilled on time
If the commitments are not fulfilled
within the time limit, specific
reasons for the failure of complying Not applicable
and the work plan for the next step
shall be explained in details
2. If the Company's assets or projects have profit forecasts and the report period is still in the profit forecasting period, the Company shall make statement
on whether the assets or projects reach the original profit forecast and provide relevant reasons
□ Applicable √ Not applicable
II. Non-operational Occupation of Funds by Controlling Shareholders and Other Related Parties to Listed Companies
□ Applicable √ Not applicable
During the reporting period of the Company, there is no non-operational occupation of funds by controlling shareholders or other related parties to the Company.
III. External Guarantee in Violation of Regulations
□ Applicable √ Not applicable
The Company has no violation of external guarantee during the reporting period.
99
Goertek Inc. Annual Report 2021
IV. Explanation of the Board of Directors on the Relevant Information of the Latest “Qualified Audit Report”
□ Applicable √ Not applicable
V. Explanation of the Accounting Firm's “Non-standard Audit Report” by the Board of Directors, the Board of Supervisors and
Independent Directors (if Any) During the Reporting Period
□ Applicable √ Not applicable
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Goertek Inc. Annual Report 2021
VI. Explanation of changes in Accounting Policies, Accounting Estimates or Correction of
Major Accounting Errors Compared with the Financial Report of Previous Year
√ Applicable □ Not applicable
1. Accounting policy changes caused by the implementation of the new accounting standards of lease
On December 7, 2018, the Ministry of Finance issued The Accounting Standards for Enterprises No.21–Leases (2018 Revision)
(Finance and Accounting [2018] No. 35) (hereinafter referred to as “new standards of lease”). With the resolution of the 18th
meeting of the 5th board of directors on March 26, 2021, the Company has implemented the above-mentioned new standards of lease
from January 1, 2021, and related accounting policies has been changed in accordance with the provisions of the new standards of
lease. For details, see “Section 10, Financial Report, V, 37, (1) Important accounting policy changes” in this report.
2. There is no change in accounting estimates during the reporting period.
3. There is no correction of major accounting errors during the reporting period.
VII. Explanation of Changes in the Scope of the Consolidated Statements Compared with
Previous Year's Financial Report
√ Applicable □ Not applicable
During the reporting period, the Company established a subsidiary company GOERTEK MICROELECTRONICS KOREA CO.,
LTD.
VIII. Appointment and Dismissal of Accounting Firms
Accounting firm currently appointed
Zhongxi Certified Public Accountants (special general
Name of the domestic accounting firm
partnership) Co., Ltd.
Remuneration of the domestic accounting firm (RMB million) 200
Consecutive audit service years of the domestic accounting firm 3
Name of certified public accountant of the domestic accounting
Du Yeqin, Mou Huiling
firm
Consecutive audit service years of certified public accountant of
Du Yeqin for 2 years and Mou Huiling for 1 year
the domestic accounting firm
Whether to reappoint accounting firm in current period
□ Yes √ No
Employment of internal control audit accounting firms, financial consultants or sponsors
√ Applicable □ Not applicable
101
Goertek Inc. Annual Report 2021
Due to the demand of public issuance of convertible bonds in 2020, the Company hired China Securities Co., Ltd. as its sponsor,
and the sponsor's representatives were Guan Feng and Huang Zhenyue. The continuous supervision period was from June 12, 2020 to
December 31, 2021. No remuneration was paid during the supervision period of 2021.
IX. Delisting After the Disclosure of Annual Report
□ Applicable √ Not applicable
X. Bankruptcy or Reorganization Related Events
□ Applicable √ Not applicable
No bankruptcy reorganization related events occurred during the reporting period.
XI. Significant Lawsuit and Arbitration Events
□ Applicable √ Not applicable
No significant litigation or arbitration events occurred during the reporting period.
XII. Punishment and Rectification
□ Applicable √ Not applicable
No punishment and rectification occurred during the reporting period.
XIII. Integrity Issues of the Company, Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XIV. Significant Affiliated Transactions
1. Affiliated transactions related to daily operations
□ Applicable √ Not applicable
No significant affiliated transactions related to daily operations occurred during the reporting period.
2. Affiliated transactions involving the acquisition or sale of assets or equity
□ Applicable √ Not applicable
No significant affiliated transactions involving the acquisition or sale of assets or equity occurred during the reporting period.
3. Affiliated transactions of joint external investment
□ Applicable √ Not applicable
No significant affiliated transactions of joint external investment occurred during the reporting period.
102
Goertek Inc. Annual Report 2021
4. Affiliated transactions of credits and liabilities
□ Applicable √ Not applicable
No significant affiliated transactions of credits and liabilities occurred during the reporting period.
5. Business with affiliated financial company
□ Applicable √ Not applicable
There was no deposit, loan, credit granting or other financial business between the Company and the affiliated financial company and
its related parties.
6. Business between the affiliated parties and the financial company controlled by the Company
□ Applicable √ Not applicable
There was no deposit, loan, credit granting or other financial business between the affiliated parties and the financial company
controlled by the Company.
7. Other significant affiliated transactions
□ Applicable √ Not applicable
No other significant affiliated transactions occurred during the reporting period.
XIV. Significant Contracts and Their Executions
1. Trusteeship, contracting and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship occurred during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
No contracting occurred during the reporting period.
(3) Leasing
□ Applicable √ Not applicable
No significant leasing occurred during the reporting period.
2. Significant guarantees
√ Applicable □ Not applicable
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Goertek Inc. Annual Report 2021
Unit: RMB 10,000
External guarantee of the Company and its subsidiaries (excluding guarantees for subsidiaries)
Disclosure Whether Whether
Name of date of the The amount Actual Actual Counter-g the guarantee
Guarantee Collatera Guarantee
guaranteed amount limit of the occurrence amount uarantee guarantee for
type l (if any) period
party limit of the guarantee date guaranteed (if any) is affiliated
guarantee complete parties
Not
applicable
Total amount of external Total amount of actual
guarantee limit approved external guarantee
during the reporting occurred during the
period (A1) reporting period (A2)
Total balance of actual
Total amount of external
external guarantee
guarantee limit approved
occurred at the end of
at the end of the
the reporting period
reporting period (A3)
(A4)
The Company's guarantee to its subsidiaries
Disclosure Whether Whether
Name of date of the The amount Actual Actual Counter-g the guarantee
Guarantee Collatera Guarantee
guaranteed amount limit of the occurrence amount uarantee guarantee for
type l (if any) period
party limit of the guarantee date guaranteed (if any) is affiliated
guarantee complete parties
Goertek
Joint
(HongKong April 17, September
191,271.00 6,375.70 liability 1 year Yes No
) Co., 2020 10, 2020
guarantee
Limited
Goertek
Joint
(HongKong March 27, September
191,271.00 6,375.70 liability 1 year No No
) Co., 2021 10, 2021
guarantee
Limited
Goertek
Joint
(HongKong April 17, October 20,
191,271.00 6,375.70 liability 1 year Yes No
) Co., 2020 2020
guarantee
Limited
Goertek
Joint
(HongKong March 27, October 20,
191,271.00 6,375.70 liability 1 year No No
) Co., 2021 2021
guarantee
Limited
Goertek April 20, 191,271.00 January 16, 72,667.04 Joint 3 years No No
104
Goertek Inc. Annual Report 2021
(HongKong 2019 2020 liability
) Co., guarantee
Limited
Goertek
Joint
(HongKong April 20, January 17,
191,271.00 3,203.79 liability 3 years No No
) Co., 2019 2020
guarantee
Limited
Goertek
Joint
(HongKong April 20, February
191,271.00 70,132.70 liability 3 years Yes No
) Co., 2019 24, 2020
guarantee
Limited
Goertek
Joint
(HongKong April 20, February
191,271.00 45,267.47 liability 3 years No No
) Co., 2019 24, 2020
guarantee
Limited
Goertek
Joint
(HongKong April 17, May 19,
191,271.00 4,239.84 liability 1 year Yes No
) Co., 2020 2020
guarantee
Limited
Goertek
Joint
(HongKong April 17, November
191,271.00 9,563.55 liability 6 months Yes No
) Co., 2020 29, 2020
guarantee
Limited
Goertek
Technology Joint
September August 14,
Vina 63,757.00 318.79 liability 1 year Yes No
11, 2019 2020
Company guarantee
Limited
Goertek
Joint
(HongKong April 17, August 20,
191,271.00 15,939.25 liability 1 year Yes No
) Co., 2020 2020
guarantee
Limited
Goertek
Joint
(HongKong March 27, August 20,
191,271.00 15,939.25 liability 1 year No No
) Co., 2021 2021
guarantee
Limited
Goertek
Technology Joint
September September
Vina 63,757.00 6,056.92 liability 1 year Yes No
11, 2019 24, 2020
Company guarantee
Limited
105
Goertek Inc. Annual Report 2021
Goertek Joint
August 22, September
Technology 80,000.00 39,682.93 liability 8 years Yes No
2018 20, 2018
Co., Ltd. guarantee
Goertek
Technology Joint
March 27, August 16,
Vina 191,271.00 19,127.10 liability 1 year Yes No
2021 2021
Company guarantee
Limited
Goertek
Technology Joint
January 18, June 10,
Vina 45,000.00 2,689.37 liability 1 year Yes No
2020 2020
Company guarantee
Limited
Goertek
Technology Joint
July 10, December
Vina 84,000.00 862.42 liability 1 year Yes No
2020 1, 2020
Company guarantee
Limited
Goertek
Technology Joint
March 27, August 1,
Vina 156,500.00 1,434.22 liability 1 year No No
2021 2021
Company guarantee
Limited
Goertek
Technology Joint
March 27, June 6,
Vina 156,500.00 1,391.11 liability 1 year No No
2021 2021
Company guarantee
Limited
Goertek
Technology Joint
March 27, June 6,
Vina 156,500.00 193.18 liability 1 year No No
2021 2021
Company guarantee
Limited
Goertek
Technology Joint
January 18, February
Vina 45,000.00 28,390.00 liability 1 year Yes No
2020 21, 2020
Company guarantee
Limited
Goertek
Joint
Technology March 27, July 30,
156,500.00 25,928.34 liability 1 year No No
Vina 2021 2021
guarantee
Company
106
Goertek Inc. Annual Report 2021
Limited
Goertek
Technology Joint
January 18, August 27,
Vina 45,000.00 270.28 liability 1 year Yes No
2020 2020
Company guarantee
Limited
Goertek
Technology Joint
July 10, August 20,
Vina 84,000.00 1,748.52 liability 1 year Yes No
2020 2020
Company guarantee
Limited
Goertek
Technology Joint
March 27, October 18,
Vina 156,500.00 3,595.59 liability 1 year No No
2021 2021
Company guarantee
Limited
Goertek
Technology Joint
March 27, June 29,
Vina 156,500.00 6,216.41 liability 1 year No No
2021 2021
Company guarantee
Limited
Weifang
Goertek Joint
January 18, March 2,
Microelectr 4,000.00 882.99 liability 1 year Yes No
2020 2020
onics Co., guarantee
Ltd.
Weifang
Goertek Joint
January 18, March 10,
Microelectr 4,000.00 138.75 liability 1 year Yes No
2020 2020
onics Co., guarantee
Ltd.
Weifang
Goertek Joint
March 27, March 27,
Microelectr 650.00 11.00 liability 1 year No No
2021 2021
onics Co., guarantee
Ltd.
Goertek Joint
July 10, November
Microelectr 32,000.00 26.34 liability 1 year Yes No
2020 19, 2020
onics Inc. guarantee
Goertek March 27, November Joint
2,640.00 47.93 1 year No No
Microelectr 2021 19, 2021 liability
107
Goertek Inc. Annual Report 2021
onics Inc. guarantee
Goertek
Joint
Intelligence March 27, June 10,
1,500.00 196.26 liability 1 year No No
Technology 2021 2021
guarantee
Co., Ltd.
Total amount of
Total amount of actual
guarantee limit to
guarantee to subsidiaries
subsidiaries approved 1,080,040.8 401,664.13
occurred during the
during the reporting
reporting period (B2)
period (B1)
Total amount of
Total balance of actual
guarantee limit to
guarantee to subsidiaries
subsidiaries approved at 1,271,311.8 188,842.99
occurred at the end of
the end of the reporting
the reporting period (B4)
period (B3)
The guarantee of subsidiaries to subsidiaries
Disclosure Whether Whether
Name of date of the The amount Actual Actual Counter-g the guarantee
Guarantee Collatera Guarantee
guaranteed amount limit of the occurrence amount uarantee guarantee for
type l (if any) period
party limit of the guarantee date guaranteed (if any) is affiliated
guarantee complete parties
Not
applicable
Total amount of
Total amount of actual
guarantee limit to
guarantee to subsidiaries
subsidiaries approved
occurred during the
during the reporting
reporting period (C2)
period (C1)
Total amount of
Total balance of actual
guarantee limit to
guarantee to subsidiaries
subsidiaries approved at
occurred at the end of
the end of the reporting
the reporting period (C4)
period (C3)
Total amount of company guarantee (namely the sum of the previous three items)
Total amount of actual
Total amount of guarantee limit external guarantee
approved during the reporting 1,080,040.8 occurred during the 401,664.13
period (A1+B1+C1) reporting period
(A2+B2+C2)
Total amount of external Total balance of actual
1,271,311.8 188,842.99
guarantee limit approved at the external guarantee
108
Goertek Inc. Annual Report 2021
end of the reporting period occurred at the end of
(A3+B3+C3) the reporting period
(A4+B4+C4)
The proportion of the total amount of actual
guarantee (i.e. A4+B4+C4) to the net assets of the 6.91%
Company
Including:
Balance of guarantees for shareholders, actual
controllers and their affiliate parties (D)
Debt guarantee balance provided directly or
indirectly to the guaranteed parties with an 188,784.06
asset-liability ratio of more than 70% (E)
Amount of total guarantees exceeding 50% of net
assets (F)
Total amount of the above three kinds of
188,784.06
guarantees (D+E+F)
Explanation of unexpired guarantee contracts that
have occurred liabilities during the reporting
None
period or where there is evidence that they may
bear possible joint and several liabilities (if any)
Description of external guarantees provided in
None
violation of prescribed procedures (if any)
Specific description of complex guarantees
None
3. Management trust of cash assets
(1) Entrusted financial investment
□ Applicable √ Not applicable
No entrusted financial management occurred during the reporting period.
(2) Entrusted loans
□ Applicable √ Not applicable
No entrusted loans occurred during the reporting period.
4. Other major contracts
□ Applicable √ Not applicable
No other significant contracts occurred during the reporting period.
109
Goertek Inc. Annual Report 2021
XVI. Explanation of Other Significant Matters
√ Applicable □ Not applicable
In accordance with the requirements of laws and regulations, the Company has disclosed the significant matters that occurred
during the reporting period on http://www.cninfo.com.cn, Securities Times, China Securities Journal, Shanghai Securities News and
Securities Daily. Other than that, no other significant matters occurred.
XVII. Significant Matters Occurred to Subsidiaries of the Company
√ Applicable □ Not applicable
On November 10, 2020, the Company held the 12th meeting of the 5th board of directors and the 10th meeting of the 5th board
of supervisors, which approved The Proposal of Planning the Spin-off of the Holding Subsidiary. It agreed to plan and prepare the
spin-off of the Company's holding subsidiary Goertek Microelectronics Co., Ltd. For details, please see The Informative
Announcement of Goertek Inc. on Planning and Preparing the Spin-off of Holding Subsidiary issued on November 11, 2020.
The 17th meeting of the 5th board of directors and the 12th meeting of the 5th board of supervisors were held on March 1, 2021
to approve The Proposal on the Introduction of External Investors of the Holding Subsidiary and Affiliate Transactions. It agreed to
accept a total of RMB 2,149.987749 million capital investment from 15 external investors, including Qingdao Microelectronics
Innovation Center Co., Ltd., Mr. Tang Wenbo, Gongqingcheng Chunlin Equity Investment Partnership (L.P.), Qingdao Henghuitai
Industry Development Fund Co., Ltd., and Goertek Group Co., Ltd., in exchange of 10.4075% of Goermicro's equity after above
capital increase and share expansion. After the above investment, the percentage of shares of Goermicro held by the Company was
diluted from 95.8773% to 85.8989%, which did not change the accounting consolidation scope of the financial statements of the
Company. Details can be found in The Announcement of Goertek Inc. on the Introduction of External Investors of the Holding
Subsidiary and Affiliate Transactions issued on March 2, 2021.
On April 21, 2021, the Company held the 20th meeting of the 5th board of directors and the 15th meeting of the 5th board of
supervisors, which approved The Proposal of “Planning on the Spin-off of Goertek Microelectronics Inc. and Listing on the Growth
Enterprise Board of Shenzhen Stock Exchange” and other related proposals. Details can be found in related announcements
published in China Securities Journal, Securities Times, Shanghai Securities News, Securities Daily and http://www.cninfo.com.cn
on April 22, 2021.
On November 8, 2021, the Company held the 24th meeting of the 5th board of directors and the 19th meeting of the 5th board of
supervisors, which approved The Proposal of “Planning on the Spin-off of Goertek Microelectronics Inc. and Listing on the Growth
Enterprise Board of Shenzhen Stock Exchange (Revised)” and other related proposals. The above-mentioned proposals have been
reviewed and approved by the Company's first extraordinary general meeting of shareholders in 2021. Details can be found in related
110
Goertek Inc. Annual Report 2021
announcements published in China Securities Journal, Securities Times, Shanghai Securities News, Securities Daily and
http://www.cninfo.com.cn on November 9, 2021 and November 26, 2021.
On December 28, 2021, Goermicro received The Notice of Acceptance of Application Documents for Initial Public Offering of
Shares and Listing on GEM of Goertek Microelectronics Inc. (Shenzhen Stock Exchange (2021) No. 549). In accordance with related
regulations, the Shenzhen Stock Exchange checked the application report and related application documents submitted by Goermicro
for initial public offering and listing on GEM, and decided to accept the application. Details can be found in The Informative
Announcement of Goertek on The Acceptance of Shenzhen Stock Exchange of The Application Documents of The Spin-off of Goertek
Microelectronics Inc. and Listing on GEM issued by the Company on December 29, 2021.
111
Goertek Inc. Annual Report 2021
Section VII. Changes in Shares and Information about Shareholders
I. Changes in Shares
1. Changes in shares
Unit: share
Before the change Increases or decreases (+, -) After the change
Bo
Transf
nu
erred
Percenta New s Percentag
Number from Others Sub-total Number
ge shares sh e
reserv
are
es
s
I. Shares Subject to Selling
486,567,825 14.86% -7,656,450 -7,656,450 478,911,375 14.02%
Restrictions
1. State shareholding
2. Shares held by
state-owned corporates
3. Shares held by other
486,567,825 14.86% -7,656,450 -7,656,450 478,911,375 14.02%
domestic shareholders
Including: held by
domestic corporates
held by domestic
486,567,825 14.86% -7,656,450 -7,656,450 478,911,375 14.02%
individuals
4. Shares held by foreign
shareholers
Including: held by
foreign corporates
held by foreign
individuals
II. Shares Without
2,788,870,602 85.14% 148,539,059 148,539,059 2,937,409,661 85.98%
Restrictions
1. RMB ordinary shares 2,788,870,602 85.14% 148,539,059 148,539,059 2,937,409,661 85.98%
2. Domestic listed foreign
shares
3. Overseas listed foreign
112
Goertek Inc. Annual Report 2021
shares
4. Others
III. Total Number of Shares 3,275,438,427 100.00% 140,882,609 140,882,609 3,416,321,036 100.00%
Reasons for changes in shares
√ Applicable □ Not applicable
In accordance with the provisions of the relevant regulations and The Prospectus for the Public Offering of Convertible Bonds
by Goertek Inc., the “Goertek Convertible Bond No.2” issued by the Company can be converted into shares from December 18, 2020.
As of the end of the reporting period, the number of converted shares was 171,217,088 (of which 140,882,609 shares were converted
during the reporting period), and the total share capital of the Company increased to 3,416,321,036 shares.
Approval of changes in shares
√ Applicable □ Not applicable
The 23rd meeting of the 4th board of directors was held on September 10, 2019. The board of directors deliberated and
approved The Proposal on the Public Issuance of Convertible Bonds and other proposals. On September 27, 2019, the Company held
the 2nd extraordinary general meeting of shareholders. The meeting approved the Proposal on “The Plan for the Public Issuance of
Convertible Bonds" and other proposals. Approved by the CSRC Permission [2020] No. 780, the Company publicly issued 40 million
convertible bonds on June 12, 2020, each with par value of RMB 100, and the total issue amount was RMB 4,000 million. With the
consent of “Shen Zheng Shang [2020] No. 610" issued by the Shenzhen Stock Exchange, RMB 4,000 million of convertible bonds
were listed for trading on the Shenzhen Stock Exchange since July 13, 2020. The bond is referred to as “Goertek Convertible Bond
No. 2” and the bond code is “128112”. According to the relevant regulations and The Prospectus for the Public Offering of
Convertible Bonds by Goertek Inc., the “Goertek Convertible Bond No.2” issued by the Company can be converted into shares from
December 18, 2020. The Company has fully redeemed all registered “Goertek Convertible Bond No. 2", as of the redemption
registration date (one trading day before the redemption date: March 2, 2021) Since March 3, 2021, " Goertek Convertible Bond No.
2" was no longer traded or convertible. “Goertek Convertible Bond No. 2" was delisted on March 11, 2021. “Goertek Convertible
Bond No. 2" was delisted on March 11, 2021.
Transfer of ownership change of shares
□ Applicable √ Not applicable
The impact of share changes on the financial indicators such as basic earnings per share, diluted earnings per share and net assets per
share attributable to the Company's common shareholders in the latest year and the latest period
√ Applicable □ Not applicable
During the reporting period, the partial conversion of convertible bonds into shares correspondingly affected basic earnings per
share and diluted earnings per share, but did not have a significant impact. The impact on the net assets per share attributable to the
common shareholders of the Company is as follows:
113
Goertek Inc. Annual Report 2021
2021 2020
Financial indicators After share Before share After share
Before share changes
changes changes changes
Net assets per share attributable to shareholders
7.39 8.00 5.86 6.00
of the Company (RMB)
Other content that the Company considers necessary or that the securities regulator requires to be disclosed
□ Applicable √ Not applicable
2. Changes in restricted shares
√ Applicable □ Not applicable
Unit: share
Closing number
Starting number of Increased in
Name of Decreased in of restricted Type for restricted Date of the removal
restricted shares in reporting
shareholder current period shares in shares of restrictions
reporting period period
reporting period
Restricted shares of
Jiang Bin 305,989,504 25,873,950 280,115,554 January 1, 2021
senior executives
Restricted shares of
Jiang Long 147,941,398 39,817,500 187,758,898 January 1, 2021
senior executives
Restricted shares of
Hu Shuangmei 21,600,000 5,400,000 16,200,000 January 16, 2021
senior executives
Restricted shares of
Sun Hongbin 6,667,150 6,667,150 January 1, 2021
senior executives
Restricted shares of
Duan Huilu 3,355,875 3,355,875 January 1, 2021
senior executives
Restricted shares of
Jia Jun'an 150,000 150,000 January 1, 2021
senior executives
Restricted shares of
Liu Chunfa 863,898 863,898 January 1, 2021
senior executives
Total 486,567,825 39,817,500 31,273,950 495,111,375 -- --
II. Issuance and Listing of Securities
1. Securities issuance (excluding preferred shares) during the reporting period
□ Applicable √ Not applicable
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Goertek Inc. Annual Report 2021
2. Description of changes in the total number of shares, the structure of shareholders, and the structure of
assets and liabilities
√ Applicable □ Not applicable
The 40 million convertible bonds, referred to as “Goertek Convertible Bond No.2”, publicly issued by the Company on June 12,
2020, were listed for trading on the Shenzhen Stock Exchange since July 13, 2020. “Goertek Convertible Bond No.2” could be
converted into shares of the Company since December 18, 2020, and the total share capital changed from 3,275,438,427 to
3,416,321,036 during the reporting period due to the convertion of Goertek Convertible Bond No.2. The changes in the structure of
the Company's assets and liabilities are detailed in Section X Financial Report.
3. Existing internal employee shares
□ Applicable √ Not applicable
III. Shareholders and actual controllers
1. Number of shareholders and corresponding shareholding
Unit: share
Total number of
preferred
Total number of Total number of shareholders
Total number common preferred whose voting
of common shareholders as shareholders rights were
shareholders at the end of the whose voting restored at the
178,252 198,374 0 0
the end of the previous month rights were end of the
reporting before disclosure restored at the end previous month
period date of the of the reporting before
annual report period (if any) disclosure date
of the annual
report
Shareholding of shareholders with more than 5% of shares or the top 10 shareholders
Total common The number The number Pledge or freeze status
Increase/decr
shares held at of common of shares
Name of Type of Percenta ease during
the end of the shares held held without
shareholder shareholder ge the reporting Share status Number
reporting with trading trading
period
period restrictions restrictions
Domestic
Goertek Group non-state-o
15.37% 525,183,974 -58,599,695 525,183,974 Pledged 100,400,305
Co., Ltd. wned
corporation
115
Goertek Inc. Annual Report 2021
Hong Kong
Securities Clearing Overseas
9.36% 319,905,460 156,836,627 319,905,460
Company Ltd. corporation
(HKSCC)
Domestic
Jiang Bin 8.41% 287,397,406 -86,090,000 280,115,554 7,281,852
Individual
Domestic
Jiang Long 7.33% 250,345,197 53,090,000 187,758,898 62,586,299 Pledged 15,000,000
Individual
China Securities
Finance
Others 2.43% 83,044,011 83,044,011
Corporation
Limited
National Social
Security Fund Others 0.74% 25,299,922 25,299,922
Portfolio 103
National Social
Security Fund Others 0.71% 24,132,745 24,132,745
Portfolio 601
Shanghai Pudong
Development Bank
Co., Ltd. - E-fund
Yuxiang Return Other 0.69% 23,636,361 23,636,361
Bond Type
Securities
Investment Fund
Bank of
Communications
Co., Ltd. - E-fund
Compet Adv Others 0.62% 21,089,337 21,089,337
Enterprises Alloc
Type Securities
Investment Fund
Abu Dhabi
Overseas
Investment 0.60% 20,654,581 20,654,581
corporation
Authority
Strategic investors or general
legal entities who become the
top 10 shareholders as a result None
of the placement of new shares
(if any)
Explanation of the association Jiang Bin and Jiang Long are brothers; Goertek Group Co., Ltd. is a company controlled by Jiang
116
Goertek Inc. Annual Report 2021
of the above shareholders or Bin and Jiang Long.
their action in concert
Explanation on
entrustment/acceptance and
None
waiver of voting rights by the
aforesaid shareholders
Special notes on the existing
special account of securities The special account of securities repurchasing of Goertek Inc. holds 74,265,451 ordinary shares,
repurchasing in the Top 10 accounting for 2.17%.
shareholders (if any)
Shareholding of top 10 shareholders of shares without sales restrictions
Number of shares without sales restrictions held at the end of the Type of shares
Name of shareholder
reporting period Type of shares Number
Ordinary shares
Goertek Group Co., Ltd. 525,183,974 525,183,974
in RMB
Hong Kong Securities Clearing Ordinary shares
319,905,460 319,905,460
Company Ltd. (HKSCC) in RMB
China Securities Finance Ordinary shares
83,044,011 83,044,011
Corporation Limited in RMB
Ordinary shares
Jiang Long 62,586,299 62,586,299
in RMB
National Social Security Fund Ordinary shares
25,299,922 25,299,922
Portfolio 103 in RMB
National Social Security Fund Ordinary shares
24,132,745 24,132,745
Portfolio 601 in RMB
Shanghai Pudong Development
Bank Co., Ltd. - E-fund Ordinary shares
23,636,361 23,636,361
Yuxiang Return Bond Type in RMB
Securities Investment Fund
Bank of Communications Co.,
Ltd. - E-fund Compet Adv Ordinary shares
21,089,337 21,089,337
Enterprises Alloc Type in RMB
Securities Investment Fund
Abu Dhabi Investment Ordinary shares
20,654,581 20,654,581
Authority in RMB
Industrial And Commercial
Bank of China Limited - Ordinary shares
20,562,486 20,562,486
Selected Stock-type Securities in RMB
Fund of E Fund
Explanation on association or Jiang Bin and Jiang Long are brothers; Goertek Group Co., Ltd. is a company controlled by Jiang
117
Goertek Inc. Annual Report 2021
action in concert among top 10 Bin and Jiang Long.
shareholders of shares without
sales restrictions, or between
top 10 shareholders of shares
without sales restrictions and
top 10 shareholders
Explanation on the top ten
common shareholders’ At the end of the reporting period, the shares held by Goertek Group Co., Ltd., the controlling
participation in the financing shareholder of the Company include the 150,000,000 shares held in the customer credit transaction
and loan businesses of guarantee securities account of Southwest Securities Co., Ltd.
securities trades (if any)
Whether the Company’s top 10 common shareholders and top 10 common shareholders without share sales restrictions agreed on any
repurchase transaction in the reporting period
□ Yes √ No
None of the Company’s top 10 common shareholders and top 10 common shareholders without share sales restrictions agreed on any
repurchase in the reporting period.
2. Particulars about the controlling shareholder
Nature of the controlling shareholder: Private corporate
Type of the controlling shareholder: Legal entity
Legal
Name of the
representative/H
controlling Date of establishment Organization code Business scope
ead of the
shareholder
Company
Residential interior decoration; medical
services; technology import and export;
investment activities conducted with own
Goertek Group Co., funds; non-residential real estate leasing;
Jiang Bin April 24, 2001 913707007286084226
Ltd. technical services; wholesale of edible
agricultural products; tree planting
management; electronic products sales,
etc.
Shareholdings of the
controlling
None
shareholder in other
listed companies
Change of the controlling shareholders in the reporting period
□ Applicable √ Not applicable
No change on the controlling shareholder of the Company in the reporting period
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Goertek Inc. Annual Report 2021
3. Actual controllers of the Company and persons acting in concert with the actual controller
Nature of the actual controllers: Domestic individual
Type of the actual controllers: Individual
Whether he/she has obtained the
Name of the actual controller Relationship with the actual controller Nationality right of residence in another
country or region
Jiang Bin Himself China No
Hu Shuangmei Himself China No
Acting in concert (including agreement,
Jiang Long China No
relative and common control)
Mr. Jiang Bin is the current chairman of the Company; and Mr. Jiang Long is the current vice
Main occupation and title
chairman and president of the Company.
Information about other listed
companies at home and abroad Goertek Inc.
controlled in the last ten years
Change on the actual controllers in the reporting period
□ Applicable √ Not applicable
No change on the actual controllers of the Company in the reporting period
Block Diagram for Property Right and Control Relationship Between the Company and its Actual Controllers
The actual controller controls the Company via trust or other ways of asset management
□ Applicable √ Not applicable
4. All the pledged shares account for 80% of the total shares held by the controlling shareholder or No.1
shareholder of the Company and their persons acting in concert
□ Applicable √ Not applicable
5. Particulars about other corporate shareholders with over 10% shares of the Company
□ Applicable √ Not applicable
119
Goertek Inc. Annual Report 2021
6. Particulars on share sales restrictions for controlling shareholders, actual controllers, or other parties
involved in the reorganization of the Company or in any commitments related to the sales of share
□ Applicable √ Not applicable
IV. Specific Implementation of Share Repurchase in the Reporting Period
Progress of share repurchase
√ Applicable □ Not applicable
Proportion of
Percentage
repurchased
Amount of of the total
RMB amount of shares to the
shares to share
Repurchasing shares to be Amount of total
be capital to Duration for Purpose of
plan disclosure repurchased shares actually underlying
repurchase be repurchase repurchase
date according to the repurchased stocks involved
according repurchase
plan in the equity
to the plan according
incentive plan
to the plan
(if any)
Employee
January 29, 2021 - stock
No less than RMB
July 29, 2021, within ownership plan
1,000,000,000 and
January 30, six months since the or equity
no more than 59,929,533
2021 date of the board of incentive plan
RMB
directors approved for the
2,000,000,000
the repurchase plan employees of
the Company
Progress on reduction and repurchase of shares through centralized bidding
□ Applicable √ Not applicable
120
Goertek Inc. Annual Report 2021
Section VIII Information of Preferred Shares
□ Applicable √ Not applicable
There are no preferred shares in the reporting period.
121
Goertek Inc. Annual Report 2021
Section IX Information on the Bonds
□ Applicable √ Not applicable
122
Goertek Inc. Annual Report 2021
Section X Financial Report
I. Audit Report
Audit Opinion Standard unqualified audit opinion
Audit Report Sign-off Date March 29, 2022
Zhongxi Certified Public Accountants (special general
Name of the audit institution
partnership) Co., Ltd.
Audit Report Number No. 2022S00281 of Zhong Xi Cai Shen
Name of the Certified Public Accountant Du Yeqin, Mou Huiling
Text of the auditor’s report
Auditor’s Report
No. 2022S00281 of Zhong Xi Cai Shen
To all the shareholders of Goertek Inc.,
I. Audit opinion
We have audited the accompanying financial statements of Goertek Inc. (hereinafter referred to as "Goertek"), which comprise
the consolidated and company’s balance sheet as of December 31, 2021, consolidated and company’s income statements,
consolidated and company’s cash flow statements, consolidated and company’s statements of changes in shareholder' equity, and
notes to the financial statements for the year then ended.
In our opinion, the accompanying financial statements have been prepared in all material aspects in accordance with the
Accounting Standards for Business Enterprises, giving a true and fair view of the consolidated and company’s financial position as at
31 December 2021 and of the consolidated and company’s financial performance and cash flows for 2021.
II. Basis for Opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our
responsibilities under those Standards are further described in the “Certified Public Accountants’ Responsibilities for the Audit of the
Financial Statements” section of the audit report. We are independent of Goertek in accordance with the Code of Ethics for Certified
Public
Accountants of China (“Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Key Audit Matters
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Goertek Inc. Annual Report 2021
Key audit matters are those matters that, in our professional judgment, are of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters. We determine that the following matters are critical
audit matters that need to be communicated in the audit report.
(I) Revenue recognition
1. Description of the matters
Goertek is mainly in the business of producing and selling electron components, and for the accounting policy of revenue
recognition, please refer to “32. Income” in “V. Significant Accounting Policies and Accounting Estimates” of notes to the financial
statements. In 2021, the operating revenue in the consolidated financial statements of Goertek is RMB 78,221,418,618.02. Revenue
is one of the key performance indicators of Goertek and is the major source of profit of the Company, and the accuracy and
completeness of revenue recognition has a significant impact on the profits of the Company. Therefore, we identified the recognition
of Goertek’s revenue as a key audit matter.
2. Audit Measures
We performed the following audit procedures in recognition of the operating revenue:
(1) Understood, evaluated, and tested the design and operation effectiveness of internal control related to revenue recognition;
(2) Performed analytical review procedure to analyze the rationality of changes in the operating revenue and gross profits;
(3) Identified the risk in the commodity ownership and the contractual terms related to remuneration transfer, evaluated whether
the accounting policies for revenue recognition in different modes were appropriate, and evaluated whether the time point for
revenue recognition of the Company was consistent with the requirements in the Accounting Standards for Business Enterprises by
checking the major sales contracts or orders, understanding the policies for receipt and return of goods, communicating with the
management and other procedures;
(4) Selected samples to check the sales contracts or orders, sales invoices, shipping orders, declarations for exportation, waybills
(receipt forms), bank slips and other supporting documents related to revenue recognition, and executed external confirmation
procedures on a sampling basis;
(5) Selected samples to reconcile the shipping orders, declarations for exportation, waybills (receipt forms) and other supporting
documents against the product sales revenue recognized before and after the balance sheet date to evaluate whether the revenue was
recognized in the appropriate accounting period.
(II) Government subsidies
1. Description of the matters
124
Goertek Inc. Annual Report 2021
As stated in “36. Deferred income” of Note VII, “51. Other income” of Note VII and “65. Government subsidies” of Note VII of
the financial statements, the government subsidies received by Goertek for the year 2021 was RMB 465,518,187.04, and the
government subsidies included in other income for current year was RMB 464,119,437.91. Goertek has received a large amount of
government subsidies, which casted a relatively significant impact on the net profit of the current year, and appropriate recognition
and measurement of the government subsidies have a significant impact on the accuracy and rationality of financial statements
prepared. Therefore, we identified the recognition and measurement of Goertek’s government subsidies as a key audit matter.
2. Audit Measures
We preformed the following audit procedures in recognition of the government subsidy:
(1) Evaluated the accounting policies related to Goertek’s recognition and measurement of the government subsidies;
(2) Checked all the receipts and documents of Goertek related to the government subsidies for the year 2021; judged whether the
type of the government subsidies is related to assets or income and whether the conditions for government subsidiesw were met
according to the contents of relevant documents;
(3) Checked whether the payer and fund source of the government subsidies is consistent with those in the subsidy document to
evaluate the appropriateness of the fund source of the government subsidy.
(4) In respect of the government subsidies related to the income, checked whether relevant expenses incurred by the Company
as the subsidy beneficiary are included in the profit and loss, and accordingly, checked whether the profit and loss brought forward in
connection with the government subsidies was appropriate to the corresponding expense;
(5) In respect of the government subsidies related to assets, checked whether the amount of the deferred income distributed and
included in the current profit and loss within the service life of relevant asset was correct.
IV. Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management of Goertek (hereinafter referred to as “Management”) is responsible for the preparation and fair presentation of the
financial statements in accordance with the Accounting Standards for Business Enterprises, and for the design, implementation and
maintenance of such internal control necessary to enable that the financial statements are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, Management is responsible for assessing the ability of Goertek to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
Management intends to liquidate Goertek or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial reporting process of Goertek.
V. Certified Public Accounts’ Responsibilities for the Audit of the Financial Statements
125
Goertek Inc. Annual Report 2021
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an audit report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with the Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users made on the basis of these financial
statements.
As part of an audit in accordance with the Auditing Standards, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate for
the circumstances.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by Management.
4. Conclude on the appropriateness of Management’s use of the going concern basis of accounting. And, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Goertek’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our audit
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to express a qualified opinion. Our
conclusions are based on the information obtained up to the date of our audit report. However, future events or conditions may cause
Goertek to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
Goertek to express an opinion on the financial statements. We are responsible for the instruction, supervision and execution of the
Group’s audit, and assume full responsibility for the audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
126
Goertek Inc. Annual Report 2021
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence and communicate with them all relationships and other matters that may reasonably be thought to bear on
our independence and, where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance
in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our
audit report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Zhongxi Certified Public Accountants (special general Certified Public Accountant in China
partnership) Co., Ltd. (Project partner):
Du Yeqin
Beijing, China Certified Public Accountant in China:
Mou Huiling
March 29, 2022
127
Goertek Inc. Annual Report 2021
II. Financial Statements
The currency in the notes to the financial statements is: RMB
1. Consolidated Balance Sheet
Prepared by: Goertek Inc.
December 31, 2021
Unit: RMB
Item December 31, 2021 December 31, 2020
Current assets:
Cash and bank balances 10,048,521,696.09 7,788,139,761.68
Deposit reservation for balance
Lending funds
Held-for-trading financial assets 119,267,279.02 250,789,617.29
Derivative financial assets
Notes receivable 50,094,700.47 93,015,027.25
Accounts receivable 11,899,214,525.92 9,951,611,596.65
Receivable financing 14,575,230.24
Prepayments 97,544,817.98 295,557,594.21
Premiums receivable
Reinsurance accounts receivable
Provision of cession receivable
Other receivables 374,669,355.98 56,282,930.78
Including: Interest receivable
Dividend receivable
Redemptory monetary capital for
sale
Inventories 12,082,308,485.38 9,170,731,903.19
Contract assets
Assets held for sale
Non-current assets due within one
67,724.41
year
Other current assets 475,772,227.60 522,858,736.68
Total current assets 35,161,968,318.68 28,129,054,892.14
Non-current assets:
128
Goertek Inc. Annual Report 2021
Item December 31, 2021 December 31, 2020
Loans and advances disbursed
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 437,402,203.91 337,410,802.56
Investments in other equity
465,677,764.54 357,307,056.65
instruments
Other non-current financial assets 201,430,042.13
Investment properties
Fixed assets 18,123,352,480.76 14,674,535,924.15
Construction in progress 2,127,055,853.77 2,078,910,639.92
Manufacturing biological assets
Oil and gas assets
Right-of-use assets 330,796,520.66
Intangible assets 2,762,793,788.85 2,730,415,540.35
Development expenditure 242,956,092.44 107,970,366.02
Goodwill 16,859,185.08 16,859,185.08
Long-term deferred expenses 207,195,490.25 152,215,032.28
Deferred tax assets 495,124,421.81 275,559,445.74
Other non-current assets 506,438,970.39 257,587,428.52
Total non-current assets 25,917,082,814.59 20,988,771,421.27
Total assets 61,079,051,133.27 49,117,826,313.41
Current liabilities:
Short-term borrowings 4,284,859,347.02 3,189,865,281.20
Borrowings from banks and other
financial institutions
Borrowing funds
Held-for-trading financial
15,190,564.34 43,578,775.71
liabilities
Derivative financial liabilities
Notes payable 2,742,876,464.23 1,797,630,927.08
Accounts payable 18,529,609,655.40 15,526,558,924.33
Advances from customers
Contract liabilities 2,210,825,761.69 772,033,187.85
129
Goertek Inc. Annual Report 2021
Item December 31, 2021 December 31, 2020
Financial assets sold for
repurchase
Customer deposits and deposits
from banks and other financial
institutions
Receivings from vicariously traded
securities
Receivings from vicariously sold
securities
Payroll payable 1,066,570,159.63 1,136,453,967.56
Taxes payable 356,610,000.28 195,498,317.72
Other payables 80,187,733.17 67,844,709.64
Including: Interest payable 8,911,319.91
Dividends payable
Handling charges and
commissions payable
Dividend payable for reinsurance
Liabilities held for sale
Non-current liabilities due within
501,408,170.04
one year
Other current liabilities 14,844,359.01 7,012,595.33
Total current liabilities 29,802,982,214.81 22,736,476,686.42
Non-current liabilities:
Reserve fund for insurance
contracts
Long-term borrowings 2,204,215,784.74 2,754,299,262.02
Bonds payable 3,031,391,335.56
Including: Preferred shares
Perpetual bonds
Lease liabilities 210,209,955.40
Long-term payables
Long-term payroll payable
Provisions
Deferred income 540,321,080.65 538,922,331.52
Deferred tax liabilities 389,933,389.40 323,065,909.80
130
Goertek Inc. Annual Report 2021
Item December 31, 2021 December 31, 2020
Other non-current liabilities
Total non-current liabilities 3,344,680,210.19 6,647,678,838.90
Total liabilities 33,147,662,425.00 29,384,155,525.32
Owners' equity:
Share capital 3,416,321,036.00 3,275,438,427.00
Other equity instruments 317,690,852.25
Including: Preferred shares
Perpetual bonds
Capital reserves 9,478,106,194.30 3,811,658,791.28
Less: Treasury shares 2,291,973,146.75 516,007,644.95
Other comprehensive income -100,146,769.57 -112,010,012.52
Special reserves
Surplus reserves 1,446,536,121.51 1,370,122,868.85
General risk reserve 6,081,200.00 6,081,200.00
Retained earnings 15,372,823,358.48 11,500,277,791.35
Total equity attributable to the owners
27,327,747,993.97 19,653,252,273.26
of the Company
Minority equity 603,640,714.30 80,418,514.83
Total owners' equity 27,931,388,708.27 19,733,670,788.09
Total liabilities and owners' equity 61,079,051,133.27 49,117,826,313.41
Legal representative: Jiang Bin Person in charge of accounting: Li Yongzhi Head of the accounting
institution: Li Yongzhi
2. Parent company balance sheet
Unit: RMB
Item December 31, 2021 December 31, 2020
Current assets:
Cash and bank balances 4,068,082,163.75 2,834,936,444.19
Held-for-trading financial assets 102,214,286.66 182,338,601.65
Derivative financial assets
Notes receivable 15,951,819.79 75,154,389.95
Accounts receivable 8,009,174,174.20 9,745,537,067.95
Receivable financing 12,277,005.37
131
Goertek Inc. Annual Report 2021
Item December 31, 2021 December 31, 2020
Prepayments 33,005,000.34 37,867,760.48
Other receivables 3,927,667,930.14 3,761,565,682.66
Including: Interest receivable
Dividend receivable
Inventories 5,386,290,840.96 2,307,402,064.65
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 89,132,401.04 132,090,455.49
Total current assets 21,643,795,622.25 19,076,892,467.02
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 6,182,937,106.09 5,896,926,627.12
Investments in other equity
instruments
Other non-current financial assets 81,254,792.77
Investment properties
Fixed assets 9,979,950,421.03 8,801,650,213.78
Construction in progress 1,083,563,418.24 313,889,183.09
Manufacturing biological assets
Oil and gas assets
Right-of-use assets 70,843,695.85
Intangible assets 2,283,338,054.04 2,258,621,419.91
Development expenditure 105,363,784.94 12,173,386.98
Goodwill
Long-term deferred expenses 6,206,772.89 417,895.69
Deferred tax assets 233,025,132.43 54,618,987.06
Other non-current assets 297,122,363.13 110,169,734.82
Total non-current assets 20,323,605,541.41 17,448,467,448.45
Total assets 41,967,401,163.66 36,525,359,915.47
Current liabilities:
132
Goertek Inc. Annual Report 2021
Item December 31, 2021 December 31, 2020
Short-term borrowings 3,346,827,327.53 2,426,635,181.20
Held-for-trading financial
4,080,000.00
liabilities
Derivative financial liabilities
Notes payable 2,348,480,930.59 1,616,583,704.36
Accounts payable 9,328,493,202.63 7,583,147,844.25
Advances from customers
Contract liabilities 340,559,741.33 363,007,702.67
Payroll payable 550,001,996.91 606,402,939.12
Taxes payable 37,673,083.32 34,135,334.79
Other payables 3,270,836,911.14 1,440,612,669.29
Including: Interest payable 6,306,124.36
Dividends payable
Liabilities held for sale
Non-current liabilities due within
412,234,240.19
one year
Other current liabilities 9,670,427.10 9,707,204.85
Total current liabilities 19,648,857,860.74 14,080,232,580.53
Non-current liabilities:
Long-term borrowings 990,921,555.56 400,000,000.00
Bonds payable 3,031,391,335.56
Including: Preferred shares
Perpetual bonds
Lease liabilities 52,713,002.49
Long-term payables
Long-term payroll payable
Provisions
Deferred income 186,139,483.46 202,689,088.19
Deferred tax liabilities 373,963,793.59 299,192,361.87
Other non-current liabilities
Total non-current liabilities 1,603,737,835.10 3,933,272,785.62
Total liabilities 21,252,595,695.84 18,013,505,366.15
Owners' equity:
Share capital 3,416,321,036.00 3,275,438,427.00
133
Goertek Inc. Annual Report 2021
Item December 31, 2021 December 31, 2020
Other equity instruments 317,690,852.25
Including: Preferred shares
Perpetual bonds
Capital reserves 7,706,634,091.21 3,815,383,616.46
Less: Treasury shares 2,291,973,146.75 516,007,644.95
Other comprehensive income
Special reserves
Surplus reserves 1,446,533,339.11 1,370,120,086.45
Retained earnings 10,437,290,148.25 10,249,229,212.11
Total owners' equity 20,714,805,467.82 18,511,854,549.32
Total liabilities and owners' equity 41,967,401,163.66 36,525,359,915.47
3. Consolidated income statement
Unit: RMB
Item 2021 2020
I. Total operating revenue 78,221,418,618.02 57,742,742,893.96
Including: Operating revenue 78,221,418,618.02 57,742,742,893.96
Interest income
Earned premium
Total revenue from handling charges and
commissions
II. Total Operating Cost 74,123,260,660.02 54,706,662,977.17
Including: Operating cost 67,167,666,659.66 48,483,805,411.74
Interest expense
Handling charge and commission expense
Surrender value
Net payments for insurance claims
Net amount of withdrawal of insurance
contract reserve
Expenditures of policy dividend
Amortized reinsurance expenditures
Taxes and surcharges 221,891,985.50 200,400,470.05
Selling expenses 444,869,977.08 476,066,518.64
134
Goertek Inc. Annual Report 2021
Item 2021 2020
Administrative expenses 1,951,657,773.32 1,629,730,793.00
R&D expenses 4,170,074,282.10 3,425,971,011.65
Financial expenses 167,099,982.36 490,688,772.09
Including: Interest expenses 209,622,292.85 276,706,601.19
Interest income 91,492,632.72 39,217,451.01
Add: Other income 466,722,801.11 224,609,297.72
Investment income ("-" for loss) 469,239,884.79 138,553,145.35
Including: Investment gains in associated
23,111,753.41 25,126,283.51
enterprise and joint-venture enterprise
Profit or loss arising from derecognition of
-7,852,608.05
financial assets measured at amortised costs
Exchange gains ("-" for loss)
Net exposure hedging income ("-" for loss)
Gains from changes in fair value ("-" for loss) -48,848,625.93 160,215,070.58
Credit impairment losses ("-" for loss) -29,693,677.67 -28,402,825.32
Asset impairment losses ("-" for loss) -241,075,506.45 -207,798,137.99
Gains on disposal of assets ("-" for loss) -31,179,825.99 -62,250,234.59
III. Operating Profit ("-" for loss) 4,683,323,007.86 3,261,006,232.54
Add: Non-operating revenue 22,444,738.18 18,801,027.06
Less: Non-operating expenses 99,858,949.06 57,841,977.98
IV. Total Profit (“-” for total losses) 4,605,908,796.98 3,221,965,281.62
Less: Income tax expenses 298,842,312.64 370,078,167.44
V. Net profit ("-" for net loss) 4,307,066,484.34 2,851,887,114.18
(I) Classification by business continuity
1. Net profit from continuing operations (“-” for net
4,307,066,484.34 2,851,887,114.18
loss)
2. Net profit from discontinued operations (“-” for net
loss)
(II) Classification by ownership
1. Net profit attributable to the shareholders of the
4,274,702,999.38 2,848,007,269.61
Company
2. Minority interests 32,363,484.96 3,879,844.57
VI. Other comprehensive income, net of tax 21,620,809.04 -27,186,319.43
Other comprehensive income, net of tax attributable to
11,863,242.95 -27,509,272.02
the owners of the Company
135
Goertek Inc. Annual Report 2021
Item 2021 2020
(I) Other comprehensive income items which will not
39,220,079.94 7,711,365.44
be reclassified subsequently to profit or loss
1. Changes arising from remeasurement of
defined benefit plan
2. Other comprehensive income that will not
be transferred subsequently to profit or loss under the
equity method
3. Changes in fair value of investments in
39,220,079.94 7,711,365.44
other equity instruments
4. Changes in the fair value of the Company’s
credit risk
5. Others
(II) Other comprehensive income items which will be
-27,356,836.99 -35,220,637.46
reclassified subsequently to profit or loss
1. Other comprehensive income that will be
transferred subsequently to profit or loss under the equity 7,950,273.16 23,160,776.33
method
2. Changes in fair value of debt investments
3. Amount of financial assets reclassified into
other comprehensive income
4. Credit impairment provision of other debt
investments
5. Effective portion of cash flow hedging gains
or losses
6. Differences on translation of foreign
-35,307,110.15 -58,381,413.79
currency financial statements
7. Others
Net other comprehensive income, net of tax, attributable
9,757,566.09 322,952.59
to minority shareholders
VII. Total comprehensive income 4,328,687,293.38 2,824,700,794.75
Total comprehensive income attributable the owners
4,286,566,242.33 2,820,497,997.59
of the Company
Total comprehensive income attributable to minority
42,121,051.05 4,202,797.16
shareholders
VIII. Earnings per share:
(I) Basic earnings per share 1.29 0.89
(II) Diluted earnings per share 1.28 0.89
136
Goertek Inc. Annual Report 2021
In case of consolidation of enterprises under common control during current period, the net profit before consolidation realized by
consolidated party is RMB 0.00. The net profit realized by the consolidated party in the previous period is RMB 0.00.
Legal representative: Jiang Bin Person in charge of accounting: Li Yongzhi Head of the accounting
institution: Li Yongzhi
4. Parent Company Income Statement
Unit: RMB
Item 2021 2020
I. Operating revenue 38,570,677,177.70 34,110,338,839.51
Less: Operating costs 33,462,769,638.76 28,351,975,958.13
Taxes and surcharges 154,866,730.44 170,319,519.27
Selling expenses 366,931,444.56 314,460,991.97
Administrative expenses 1,596,480,325.17 1,328,539,562.59
R&D expenses 2,398,742,531.34 2,064,307,059.29
Financial expenses 194,864,359.66 432,277,098.79
Including: Interest expenses 146,895,744.91 224,966,925.23
Interest income 46,415,186.23 27,722,299.33
Add: Other income 219,224,748.04 42,807,336.38
Investment income ("-" for loss) 197,716,898.27 694,476,722.54
Including: Investment gains in associated
enterprise and joint-venture enterprise
Profit or loss arising from derecognition of
-2,297,194.72
financial assets measured at amortised costs (“-” for loss)
Net exposure hedging income ("-" for loss)
Gains from changes in fair value ("-" for loss) -12,391,097.59 115,960,471.31
Credit impairment losses ("-" for loss) -9,464,407.85 22,732,822.75
Asset impairment losses ("-" for loss) -60,378,317.10 -77,813,666.52
Gains on disposal of assets ("-" for loss) -19,259,431.72 -46,327,143.99
II. Operating Profit ("-" for loss) 711,470,539.82 2,200,295,191.94
Add: Non-operating revenue 14,343,882.35 11,191,626.67
Less: Non-operating expenses 81,884,486.81 50,815,665.01
III. Total profit (“-” for total losses) 643,929,935.36 2,160,671,153.60
Less: Income tax expenses -114,650,228.04 233,595,325.88
IV. Net profit ("-" for net loss) 758,580,163.40 1,927,075,827.72
(I) Net profit from continuing operations (“-” for net 758,580,163.40 1,927,075,827.72
137
Goertek Inc. Annual Report 2021
Item 2021 2020
loss)
(II) Net profit from discontinued operations (“-” for
net loss)
V. Other comprehensive income, net of tax
(I) Other comprehensive income items which will not
be reclassified subsequently to profit or loss
1. Changes arising from remeasurement of
defined benefit plan
2. Other comprehensive income that will not
be transferred subsequently to profit or loss under the
equity method
3. Changes in fair value of investments in
other equity instruments
4. Changes in the fair value of the Company’s
credit risk
5. Others
(II) Other comprehensive income items which will be
reclassified subsequently to profit or loss
1. Other comprehensive income that will be
transferred subsequently to profit or loss under the equity
method
2. Changes in fair value of debt investments
3. Amount of financial assets reclassified into
other comprehensive income
4. Credit impairment provision of other debt
investments
5. Effective portion of cash flow hedging gains
or losses
6. Differences on translation of foreign
currency financial statements
7. Others
VI. Total comprehensive income 758,580,163.40 1,927,075,827.72
VII. Earnings per share:
(I) Basic earnings per share
(II) Diluted earnings per share
138
Goertek Inc. Annual Report 2021
5. Consolidated statement of cash flows
Unit: RMB
Item 2021 2020
I. Cash flows from operating activities:
Cash received from sale of goods or rendering of
79,015,187,941.07 57,009,742,269.73
services
Net increase in customer deposits and deposits
from banks and other financial institutions
Net decrease in deposits with the Central Bank
Net increase in borrowings from other financial
institutions
Cash receipts from original insurance contract
premium
Net cash received from reinsurance business
Net increase in deposits and investments from
policy holders
Cash received from for interests, fees and
commissions
Net increase in borrowing funds
Net increase in repurchase business funds
Net cash received from securities trading
brokerage
Refund of taxes and surcharges 2,491,572,718.66 2,159,494,513.63
Cash received relating to other operating activities 4,016,679,085.42 1,762,794,649.37
Sub-total of cash inflow from operating activities 85,523,439,745.15 60,932,031,432.73
Cash paid for goods and services 63,038,774,946.46 42,635,569,184.82
Net increase in loans and advances to customers
Net increase in deposits with central bank and
other financial institutions
Payments of claims for original insurance
contracts
Net increase in lending funds
Cash paid for interests, fees and commissions
Cash payments of policy dividend
Cash paid to and on behalf of employees 7,719,283,934.60 6,749,284,393.90
Payments of taxes and surcharges 748,229,544.50 692,836,225.96
139
Goertek Inc. Annual Report 2021
Item 2021 2020
Cash paid relating to other operating activities 5,418,675,791.71 3,172,085,514.37
Sub-total of cash outflow from operating activities 76,924,964,217.27 53,249,775,319.05
Net cash flow from operating activities 8,598,475,527.88 7,682,256,113.68
II. Cash flows from investing activities
Cash received from disposal of investments 3,101,972,150.22 205,395,809.87
Cash received from returns on investments 36,359,530.84 3,071,032.35
Net cash received from disposal of fixed assets,
121,860,250.62 50,158,655.80
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries
6,872,916.88 200,825,819.91
and other business units
Cash received relating to other investing activities 9,258,951.92 46,410,668.35
Sub-total of cash inflow from investment activities 3,276,323,800.48 505,861,986.28
Cash paid to acquire fixed assets, intangible assets
6,961,607,745.79 5,599,269,477.49
and other long-term assets
Cash paid to acquire investments 3,083,092,515.56 207,730,344.46
Net increase in pledged loans
Net cash paid to acquire subsidiaries and other
business units
Cash paid relating to other investing activities
Sub-total of cash outflow from investment activities 10,044,700,261.35 5,806,999,821.95
Net cash flow from investing activities -6,768,376,460.87 -5,301,137,835.67
III. Cash flows from financing activities
Cash received from capital contributions 2,178,807,429.01 50,528,721.67
Including: Cash received from capital
2,178,807,429.01 50,528,721.67
contributions by minority shareholders of subsidiaries
Cash received from borrowings 10,317,581,649.46 10,493,168,094.87
Cash received from issuing bonds 3,995,000,000.00
Cash received relating to other financing activities 1,507,365,421.50 1,241,778,394.18
Sub-total of cash inflow from financing activities 14,003,754,499.97 15,780,475,210.72
Cash repayments of borrowings 9,404,218,099.41 11,495,387,428.29
Cash payments for distribution of dividends,
674,578,631.48 571,889,154.03
profits, or cash payments for interest expenses
Including: Cash payments for dividends and
5,932,783.34
profits to minority shareholders of the subsidiaries
Cash payments relating to other financing 3,537,780,408.80 2,070,736,840.22
140
Goertek Inc. Annual Report 2021
Item 2021 2020
activities
Sub-total of cash outflow from financing activities 13,616,577,139.69 14,138,013,422.54
Net cash flow from financing activities 387,177,360.28 1,642,461,788.18
IV. Effect of foreign exchange rate changes on cash and
7,432,490.21 -204,991,873.97
cash equivalents
V. Net Increase in cash and cash equivalents 2,224,708,917.50 3,818,588,192.22
Add: Opening balance of cash and cash
6,913,191,984.54 3,094,603,792.32
equivalents
VI. Closing balance of cash and cash equivalents 9,137,900,902.04 6,913,191,984.54
6. Parent company cash flow statement
Unit: RMB
Item 2021 2020
I. Cash flows from operating activities:
Cash received from sale of goods or
41,440,959,868.63 34,637,760,388.75
rendering of services
Refund of taxes and surcharges 1,790,617,461.55 1,794,636,342.45
Cash received relating to other operating
413,354,244.31 991,600,112.67
activities
Sub-total of cash inflow from operating activities 43,644,931,574.49 37,423,996,843.87
Cash paid for goods and services 33,515,828,921.22 26,854,502,114.47
Cash paid to and on behalf of employees 4,068,784,659.43 3,352,126,718.10
Payments of taxes and surcharges 194,091,540.85 264,439,744.87
Cash paid relating to other operating
1,609,432,568.10 2,384,116,356.74
activities
Sub-total of cash outflow from operating
39,388,137,689.60 32,855,184,934.18
activities
Net cash flow from operating activities 4,256,793,884.89 4,568,811,909.69
II. Cash flows from investing activities
Cash received from disposal of investments 236,295,118.62 246,753,013.74
Cash received from returns on investments 544,414.32 619,011,093.47
Net cash received from disposal of fixed
assets, intangible assets and other long-term 323,227,247.63 374,260,043.85
assets
Net cash received from disposal of
141
Goertek Inc. Annual Report 2021
Item 2021 2020
subsidiaries and other business units
Cash received relating to other investing
8,951,126,589.67 7,265,257,255.90
activities
Sub-total of cash inflow from investment
9,511,193,370.24 8,505,281,406.96
activities
Cash paid to acquire fixed assets, intangible
4,448,253,564.40 2,931,933,621.75
assets and other long-term assets
Cash paid to acquire investments 418,652,038.10 2,187,937,880.00
Net cash paid to acquire subsidiaries and
other business units
Cash paid relating to other investing
8,806,986,219.18 8,331,815,435.05
activities
Sub-total of cash outflow from investment
13,673,891,821.68 13,451,686,936.80
activities
Net cash flow from investing activities -4,162,698,451.44 -4,946,405,529.84
III. Cash flows from financing activities
Cash received from capital contributions
Cash received from borrowings 9,085,440,334.00 7,418,870,421.56
Cash received from issuing bonds 3,995,000,000.00
Cash received relating to other financing
6,191,082,902.13 3,252,923,797.17
activities
Sub-total of cash inflow from financing activities 15,276,523,236.13 14,666,794,218.73
Cash repayments of borrowings 7,202,245,451.93 10,012,913,837.30
Cash payments for distribution of dividends,
618,985,623.65 470,044,905.35
profits, or cash payments for interest expenses
Cash payments relating to other financing
6,373,227,380.30 2,806,526,945.85
activities
Sub-total of cash outflow from financing
14,194,458,455.88 13,289,485,688.50
activities
Net cash flow from financing activities 1,082,064,780.25 1,377,308,530.23
IV. Effect of foreign exchange rate changes on
-5,853,969.14 -21,879,842.75
cash and cash equivalents
V. Net Increase in cash and cash equivalents 1,170,306,244.56 977,835,067.33
Add: Opening balance of cash and cash
2,309,983,958.74 1,332,148,891.41
equivalents
VI. Closing balance of cash and cash equivalents 3,480,290,203.30 2,309,983,958.74
142
Goertek Inc. Annual Report 2021
7. Consolidated statement of changes in owners' equity
Amount of current period
Unit: RMB
2021
Owners' equity attributable to the Company
Other equity instruments Speci
Item Less: Other General Minority Total owners'
Preferr Perpet Capital al Surplus Retained Oth
Share capital Treasury comprehens risk Sub-total equity equity
ed ual Other reserves reserv reserves earnings er
shares ive income reserve
shares bonds es
I. Balance
at 3,275,438,42 317,690,852 3,811,658,79 516,007,644. -112,010,01 1,370,122,86 6,081,200 11,500,277,79 19,653,252,2 80,418,514.8 19,733,670,7
December 7.00 .25 1.28 95 2.52 8.85 .00 1.35 73.26 3 88.09
31, 2020
Add:
Changes in
accounting
policy
Correction
s of errors
in previous
period
Business
combinatio
n under
common
control
143
Goertek Inc. Annual Report 2021
Other
II. Balance
3,275,438,42 317,690,852 3,811,658,79 516,007,644. -112,010,01 1,370,122,86 6,081,200 11,500,277,79 19,653,252,2 80,418,514.8 19,733,670,7
at January
7.00 .25 1.28 95 2.52 8.85 .00 1.35 73.26 3 88.09
1, 2021
III.
Changes in
Current 140,882,609. -317,690,85 5,666,447,40 1,775,965,50 11,863,242. 76,413,252.6 3,872,545,56 7,674,495,72 523,222,199. 8,197,717,92
Period (“-” 00 2.25 3.02 1.80 95 6 7.13 0.71 47 0.18
for
decrease)
(I) Total
comprehen 193,810,124 4,274,702,99 4,468,513,12 42,121,051.0 4,510,634,17
sive .25 9.38 3.63 5 4.68
income
(II) Capital
invested
140,882,609. -317,690,85 4,080,674,27 1,999,998,59 1,903,867,43 2,178,807,42 4,082,674,86
and
00 2.25 6.46 5.63 7.58 9.01 6.59
reduced by
owners
1. Ordinary
shares 140,882,609. -316,184,72 3,209,305,79 1,999,998,59 1,034,005,08 2,178,807,42 3,212,812,51
invested by 00 0.61 3.20 5.63 5.96 9.01 4.97
owners
2. Capital
contributed
from other
equity
instrument
144
Goertek Inc. Annual Report 2021
holders
3. Amounts
of
share-base
871,368,483. 871,368,483. 871,368,483.
d payments
26 26 26
recognized
in owners'
equity
-1,506,131.
4. Other -1,506,131.64 -1,506,131.64
64
(III) Profit 75,858,016.3 -575,516,354. -499,658,337. -505,591,121.
-5,932,783.34
distribution 4 09 75 09
1.
Appropriat
75,858,016.3 -75,858,016.3
ion of
4 4
surplus
reserves
2.
Appropriat
ion of
general
risk
reserve
3.
Dividends
-499,658,337. -499,658,337. -505,591,121.
to owners -5,932,783.34
75 75 09
or
shareholde
145
Goertek Inc. Annual Report 2021
rs
4. Other
(IV)
Internal
carry-over 1,585,773,12 -224,033,093 -181,946,88 173,358,921. 1,801,773,49 -1,691,773,49 110,000,000.0
555,236.32
of 6.56 .83 1.30 84 7.25 7.25 0
shareholde
rs' equity
1. Capital
reserves
converted
into capital
(or share
capital)
2. Surplus
reserves
converted
into capital
(or share
capital)
3. Surplus
reserves
for making
up losses
4.
Carry-over
retained
earnings
146
Goertek Inc. Annual Report 2021
from
defined
benefit
plan
changes
5.
Carry-over
retained
earnings -181,946,88 173,358,921.
555,236.32 -8,032,723.14 8,032,723.14
from other 1.30 84
comprehen
sive
income
1,585,773,12 -224,033,093 1,809,806,22 -1,699,806,22 110,000,000.0
6. Other
6.56 .83 0.39 0.39 0
(V) Special
reserves
1.
Withdrawa
l in current
period
2. Use in
current
period
(VI) Other
IV.
3,416,321,03 9,478,106,19 2,291,973,14 -100,146,76 1,446,536,12 6,081,200 15,372,823,3 27,327,747,9 603,640,714. 27,931,388,7
Balance at
6.00 4.30 6.75 9.57 1.51 .00 58.48 93.97 30 08.27
December
147
Goertek Inc. Annual Report 2021
31, 2021
Amount in previous period
Unit: RMB
2020
Owners' equity attributable to the Company
Other equity instruments Speci
Item Less: Other General Minority Total owners'
Preferr Perpet Capital al Surplus Retained Oth
Share capital Treasury comprehensi risk Sub-total equity equity
ed ual Other reserves reserv reserves earnings er
shares ve income reserve
shares bonds es
I. Balance
at 3,245,103,94 2,996,990,66 395,758,317 -84,500,740. 1,177,415,28 4,896,400 9,163,016,394 16,107,163,63 22,041,359 16,129,204,99
December 8.00 9.12 .37 50 6.08 .00 .27 9.60 .27 8.87
31, 2020
Add:
Changes in
196,303.24 196,303.24 196,303.24
accounting
policy
Corrections
of errors in
previous
period
Business
combinatio
n under
common
148
Goertek Inc. Annual Report 2021
control
Other
II. Balance
3,245,103,94 2,996,990,66 395,758,317 -84,500,740. 1,177,415,28 4,896,400 9,163,212,697 16,107,359,94 22,041,359 16,129,401,30
at January
8.00 9.12 .37 50 6.08 .00 .51 2.84 .27 2.11
1, 2021
III.
Changes in
Current 30,334,479.0 317,690,85 814,668,122. 120,249,327 -27,509,272. 192,707,582. 1,184,800 2,337,065,093 3,545,892,330 58,377,155 3,604,269,485
Period (“-” 0 2.25 16 .58 02 77 .00 .84 .42 .56 .98
for
decrease)
(I) Total
comprehen -27,509,272. 2,848,007,269 2,820,497,997 4,202,797. 2,824,700,794
sive 02 .61 .59 16 .75
income
(II) Capital
invested
30,334,479.0 317,690,85 1,175,630,54 477,129,807 1,046,526,064 50,092,419 1,096,618,484
and
0 2.25 0.76 .72 .29 .94 .23
reduced by
owners
1. Ordinary
shares 30,334,479.0 -68,078,830 703,406,567. 477,129,807 188,532,409.2 50,092,419 238,624,829.1
invested by 0 .06 98 .72 0 .94 4
owners
2. Capital
385,769,68 385,769,682.3 385,769,682.3
contributed
2.31 1 1
from other
149
Goertek Inc. Annual Report 2021
equity
instrument
holders
3. Amounts
of
share-based
472,223,972. 472,223,972.7 472,223,972.7
payments
78 8 8
recognized
in owners'
equity
4. Other
(III) Profit 192,707,582. 1,184,800 -510,942,175. -317,049,793. -317,049,793.
distribution 77 .00 77 00 00
1.
Appropriati
192,707,582. -192,707,582.
on of
77 77
surplus
reserves
2.
Appropriati
1,184,800
on of -1,184,800.00
.00
general risk
reserve
3.
Dividends
-317,049,793. -317,049,793. -317,049,793.
to owners
00 00 00
or
shareholder
150
Goertek Inc. Annual Report 2021
s
4. Other
(IV)
Internal
carry-over -360,962,418 -356,880,48 4,081,938.
-4,081,938.46
of .60 0.14 46
shareholder
s' equity
1. Capital
reserves
converted
into capital
(or share
capital)
2. Surplus
reserves
converted
into capital
(or share
capital)
3. Surplus
reserves for
making up
losses
4.
Carry-over
retained
earnings
151
Goertek Inc. Annual Report 2021
from
defined
benefit plan
changes
5.
Carry-over
retained
earnings
from other
comprehen
sive
income
-360,962,418 -356,880,48 4,081,938.
6. Other -4,081,938.46
.60 0.14 46
(V) Special
reserves
1.
Withdrawal
in current
period
2. Use in
current
period
(VI) Other
IV. Balance
at 3,275,438,42 317,690,85 3,811,658,79 516,007,644 -112,010,01 1,370,122,86 6,081,200 11,500,277,79 19,653,252,27 80,418,514 19,733,670,78
December 7.00 2.25 1.28 .95 2.52 8.85 .00 1.35 3.26 .83 8.09
31, 2021
152
Goertek Inc. Annual Report 2021
8. Parent company statement of changes in owners' Equity
Amount of current period
Unit: RMB
2021
Other equity instruments Other Special
Item Less: Treasury Othe Total owners'
Share capital Preferre Perpetua Capital reserves comprehensiv reserve Surplus reserves Retained earnings
Other shares r equity
d shares l bonds e income s
I. Balance at
3,275,438,427.0 3,815,383,616.4 1,370,120,086.4 10,249,229,212.1 18,511,854,549.3
December 31, 317,690,852.25 516,007,644.95
0 6 5 1 2
2020
Add:
Changes in
accounting
policy
Corrections of
errors in
previous
period
Other
II. Balance at
3,275,438,427.0 3,815,383,616.4 1,370,120,086.4 10,249,229,212.1 18,511,854,549.3
January 1, 317,690,852.25 516,007,644.95
0 6 5 1 2
2021
III. Changes in -317,690,852.2 3,891,250,474.7 1,775,965,501.8
140,882,609.00 76,413,252.66 188,060,936.14 2,202,950,918.50
Current Period 5 5 0
153
Goertek Inc. Annual Report 2021
2021
Other equity instruments Other Special
Item Less: Treasury Othe Total owners'
Share capital Preferre Perpetua Capital reserves comprehensiv reserve Surplus reserves Retained earnings
Other shares r equity
d shares l bonds e income s
(“-” for
decrease)
(I) Total
comprehensiv 5,552,363.15 758,580,163.40 764,132,526.55
e income
(II) Capital
invested and -317,690,852.2 4,005,283,568.5 1,999,998,595.6
140,882,609.00 1,828,476,729.70
reduced by 5 8 3
owners
1. Ordinary
shares -316,184,720.6 3,209,305,793.2 1,999,998,595.6
140,882,609.00 1,034,005,085.96
invested by 1 0 3
owners
2. Capital
contributed
from other
equity
instrument
holders
3. Amounts of
share-based
payments 795,977,775.38 795,977,775.38
recognized in
owners' equity
154
Goertek Inc. Annual Report 2021
2021
Other equity instruments Other Special
Item Less: Treasury Othe Total owners'
Share capital Preferre Perpetua Capital reserves comprehensiv reserve Surplus reserves Retained earnings
Other shares r equity
d shares l bonds e income s
4. Other -1,506,131.64 -1,506,131.64
(III) Profit
75,858,016.34 -575,516,354.09 -499,658,337.75
distribution
1.
Appropriation
75,858,016.34 -75,858,016.34
of surplus
reserves
2. Dividends
to owners or -499,658,337.75 -499,658,337.75
shareholders
3. Other
(IV) Internal
carry-over of
-114,033,093.83 -224,033,093.83 -5,552,363.15 555,236.32 4,997,126.83 110,000,000.00
shareholders'
equity
1. Capital
reserves
converted into
capital (or
share capital)
2. Surplus
reserves
converted into
155
Goertek Inc. Annual Report 2021
2021
Other equity instruments Other Special
Item Less: Treasury Othe Total owners'
Share capital Preferre Perpetua Capital reserves comprehensiv reserve Surplus reserves Retained earnings
Other shares r equity
d shares l bonds e income s
capital (or
share capital)
3. Surplus
reserves for
making up
losses
4. Carry-over
retained
earnings from
defined
benefit plan
changes
5. Carry-over
retained
earnings from
-5,552,363.15 555,236.32 4,997,126.83
other
comprehensiv
e income
6. Other -114,033,093.83 -224,033,093.83 110,000,000.00
(V) Special
reserves
1. Withdrawal
in current
156
Goertek Inc. Annual Report 2021
2021
Other equity instruments Other Special
Item Less: Treasury Othe Total owners'
Share capital Preferre Perpetua Capital reserves comprehensiv reserve Surplus reserves Retained earnings
Other shares r equity
d shares l bonds e income s
period
2. Use in
current period
(VI) Other
IV. Balance at
3,416,321,036.0 7,706,634,091.2 2,291,973,146.7 1,446,533,339.1 10,437,290,148.2 20,714,805,467.8
December 31,
0 1 5 1 5 2
2021
Amount in previous period
Unit: RMB
2020
Other equity instruments Other Special
Item Less: Treasury Othe Total owners'
Share capital Preferre Perpetua Capital reserves comprehensiv reserve Surplus reserves Retained earnings
Other shares r equity
d shares l bonds e income s
I. Balance at
3,245,103,948.0 3,030,803,915.6 1,177,412,503.6 15,889,472,810.1
December 31, 395,758,317.37 8,831,910,760.16
0 3 8 0
2020
Add:
Changes in
accounting
policy
Corrections of
157
Goertek Inc. Annual Report 2021
2020
Other equity instruments Other Special
Item Less: Treasury Othe Total owners'
Share capital Preferre Perpetua Capital reserves comprehensiv reserve Surplus reserves Retained earnings
Other shares r equity
d shares l bonds e income s
errors in
previous
period
Other
II. Balance at
3,245,103,948.0 3,030,803,915.6 1,177,412,503.6 15,889,472,810.1
January 1, 395,758,317.37 8,831,910,760.16
0 3 8 0
2021
III. Changes in
Current Period 317,690,852.2
30,334,479.00 784,579,700.83 120,249,327.58 192,707,582.77 1,417,318,451.95 2,622,381,739.22
(“-” for 5
decrease)
(I) Total
comprehensiv 1,927,075,827.72 1,927,075,827.72
e income
(II) Capital
invested and 317,690,852.2 1,141,460,180.9
30,334,479.00 477,129,807.72 1,012,355,704.50
reduced by 5 7
owners
1. Ordinary
shares
30,334,479.00 -68,078,830.06 687,349,380.98 477,129,807.72 172,475,222.20
invested by
owners
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2020
Other equity instruments Other Special
Item Less: Treasury Othe Total owners'
Share capital Preferre Perpetua Capital reserves comprehensiv reserve Surplus reserves Retained earnings
Other shares r equity
d shares l bonds e income s
2. Capital
contributed
from other 385,769,682.3
385,769,682.31
equity 1
instrument
holders
3. Amounts of
share-based
payments 454,110,799.99 454,110,799.99
recognized in
owners' equity
4. Other
(III) Profit
192,707,582.77 -509,757,375.77 -317,049,793.00
distribution
1.
Appropriation
192,707,582.77 -192,707,582.77
of surplus
reserves
2. Dividends
to owners or -317,049,793.00 -317,049,793.00
shareholders
3. Other
(IV) Internal -356,880,480.14 -356,880,480.1
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Goertek Inc. Annual Report 2021
2020
Other equity instruments Other Special
Item Less: Treasury Othe Total owners'
Share capital Preferre Perpetua Capital reserves comprehensiv reserve Surplus reserves Retained earnings
Other shares r equity
d shares l bonds e income s
carry-over of 4
shareholders'
equity
1. Capital
reserves
converted into
capital (or
share capital)
2. Surplus
reserves
converted into
capital (or
share capital)
3. Surplus
reserves for
making up
losses
4. Carry-over
retained
earnings from
defined benefit
plan changes
5. Carry-over
retained
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Goertek Inc. Annual Report 2021
2020
Other equity instruments Other Special
Item Less: Treasury Othe Total owners'
Share capital Preferre Perpetua Capital reserves comprehensiv reserve Surplus reserves Retained earnings
Other shares r equity
d shares l bonds e income s
earnings from
other
comprehensiv
e income
-356,880,480.1
6. Other -356,880,480.14
4
(V) Special
reserves
1. Withdrawal
in current
period
2. Use in
current period
(VI) Other
IV. Balance at
3,275,438,427.0 317,690,852.2 3,815,383,616.4 1,370,120,086.4 10,249,229,212.1
December 31, 516,007,644.95 18,511,854,549.32
0 5 6 5 1
2021
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Goertek Inc. Annual Report 2021
III. Company Profile
Goertek Inc. (hereinafter referred to as “the Company” or “Goertek”) was established on July 27, 2007, through an overall
change of WeiFang IEA Electro-Acoustic Co., Ltd. (hereinafter referred to as "IEA”).
IEA, the predecessor of the Company that was established on June 25, 2001 was a joint venture established by law. In May,
2007, the Company was changed to a domestic enterprise as approved by the document of Wei Wai Jing Mao Wai Zi (2007) No. 172.
It was at the 2nd extraordinary general meeting of shareholders of IEA in 2017, held on June 26, 2007, that Weifang
Yitonggong Electronics Co., Ltd（the name of the Company was changed to “Goertek Group Co., Ltd. ”in October 2016, hereinafter
referred to as “Goertek group”）transferred its 29.40 million shares in IEA to 17 natural persons including Jiang Bin and Jiang Long,
Langfang Development Zone Yongzhen Electronic Technology Co., Ltd.（hereinafter referred to as “Yongzheng Electronic”) and
Beijing Yirun Venture Capital Investment Co., Ltd (hereinafter referred to as “Yirun VCI”）.
On July 18, 2007, Goertek Group, Yongzhen Electronic, Yirun VCI and the 17 persons including Jiang Bin and Jiang Long
jointly entered into an initiator agreement, changing IEA as a whole to Goertek Acoustic Inc. in the form of initiation, in which the
audited net assets of IEA as of June 30, 2007 were taken as the contribution upon stock discount at the proportion of approximately 1：
0.8.
As approved by the document of China Securities Regulatory Commission［2008］NO. 613，the principal undertaker CITIC
Securities Co., Ltd. issued 30 million ordinary shares (Class A shares) ，through offline inquiry and placement in combination with
online subscription, pricing, and issue, at the price of RMB 18.78 per share. The raised funds mentioned above were verified by
Bandung Certified Public Accountants Co., Ltd. which issued the capital verification report (Wan Kuai Ye Zi [2008] No. 19). The
stocks of the Company were listed and traded at Shenzhen Stock Exchange on May 22, 2008.The Company changed its registered
capital to RMB 120 million and completed the industrial and commercial change registration on July 22, 2008.
As reviewed and approved at annual general meeting of shareholders of the Company of 2008, held on April 17, 2009, the
total share capital of the Company, namely 120 million shares as of December 31, 2008, was taken as the basis to convert capital
reserve to share capital. 10 shares for every 10 shares were converted to all shareholders, with total of 120 million shares converted.
Thus, the total share capital of the Company was changed to 240 million shares. The above change in the registered capital has been
verified by Bandung Asia Certified Public Accountants Co., Ltd. which has issued the capital verification report (Wan Ya Kuai Ye Zi
(2009) No. 2427), and the industrial and commercial change registration was completed on July 20, 2009.
As reviewed and approved at annual general meeting of shareholders of the Company of 2009, held on February 26, 2010, the
total share capital of the Company, namely 240 million shares as of December 31, 2009，was taken as the basis to convert capital
reserve to share capital 5 shares for every 10 shares were converted to all shareholders, and total of 120 million shares were
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converted. Thus, the total share capital of the Company was changed to 360 million shares. The above change in the registered
capital has been verified by Crowe Horwath Certified Public Accountants Co., Ltd. which has issued the capital verification report
(Hao Hua Yan Zi [2020] NO. 20). The industrial and commercial change registration was completed on March 30, 2010.
As approved through the Reply on Approving Non-public Issuing of Stocks by Goertek Acoustic Inc. of China Securities
Regulatory Commission (Zheng Jian Xu Ke [2010] NO. 1255), on September 29, 2010, the Company had the principal underwriter
CITIC Securities Co., Ltd. to issue 15.791275 million (Class A shares) to 5 specific objects through private issuing at the price of
RMB 33.01 per share. The net amount of actual raised funds was RMB 506.21998775 million. The raised funds mentioned above
have been verified by Crowe Horwath Certified Public Accountants Co., Ltd. which has issued the capital verification report (Hao
Hua Yan Zi [2010] No. 90. The Company changed its capital to RMB 375.791275 million, and completed the industrial and
commercial change registration on December 13, 2010.
As reviewed and approved at the company's annual general meeting of shareholders of 2010 on May 25, 2011, the total share
of the Company, namely 375.791275 million shares as of December 31, 2010, was taken as the basis to convert capital reserve to
share capital, and 10 shares for every 10 shares were converted to all the shareholders，with total of 375.791275 million shares
converted. Upon such conversion, the total share capital of the Company was changed to 751.58255 million shares. The above
change in registered capital has been verified by Crowe Horwath Certified Public Accountants Co., Ltd. which has issued the capital
verification report (Guo Hao Yan Zi [2011] No.49), and the industrial and commercial change registration was completed on June 24,
2011.
As approved through the Reply on Approving Non-public Issuing of Stocks by Goertek Acoustic Inc. of China Securities
Regulatory Commission (Zheng Jian Xu Ke［2012] No. 108), GF Securities Co., Ltd. issued 96.434183 million shares (Class A shares)
in RMB to 10 specific objects through private issuing at the price of RMB 24.69 per share，and the net amount of the actually raised
funds was RMB 2,320.77885875 million. The raised funds mentioned above have been verified by Crowe Horwath Certified Public
Accounts Co., Ltd. (special general partnership) which has issued the capital verification report (Guo Hao Yan Zi[2012] No. 408A14).
The Company changed its registered capital to RMB 848.016733 million, and completed the industrial and commercial change
registration on May 7, 2012.
As reviewed and approved at company's general meeting of shareholders of 2012 held on May 9, 2013, the total share capital
of the Company, namely 848,016,733 shares as of December 31, 2012, was taken as the basis to distribute cash dividends of RMB
1.5 (tax inclusive) for every 10 shares to all the shareholders, with cash dividends of RMB 127,202,509.95 in total. The Company
also converted capital reserve to share capital, and 8 shares for every 10 shares were converted to all shareholders, with total
678,413,386 shares converted. Upon such conversion, the total share capital of the Company was changed to 1,526,430,119 shares.
The above change in the registered capital has been verified by Crowe Horwath Certified Public Accountants Co., Ltd. (special
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general partnership) which has issued the capital verification report (Guo Hao Yan Zi [2013] No. 408A0001). The industrial and
commercial change registration was completed on June 19, 2013.
On June 2, 2016, the name of Goertek Acoustic Inc. was changed to Goertek Inc. As the holder of the convertible bonds of the
Company requested conversion of shares, the registered capital of the Company was changed to RMB1,526,581,348. The scope of
business was changed to development, manufacturing and sales of: Acoustic, optical and wireless communication technologies and
related products, robots and automation equipment, intelligent electromechanical and information products, precision moulds for
electronic products, precision hardware, semiconductor products and MEMS products, consumer electronics, LED package and
relevant application products; Development and sales of the software related to the above products; Services related to the above
technologies and products; Import and export of goods and technologies (excluding radio transmission and satellite receiving
equipment and the items prohibited by the national laws and regulations). (For the items requiring approval by law, business
activities may only be conducted in respect thereof upon approval of relevant department)
As reviewed and approved at company’s annual general meeting of shareholders of 2016, held on April 14, 2017, the total
share capital of the Company, namely 1,538,642,707 shares as of April 27,2017, which was the profit distribution equity registration
date of the Company, was taken as the basis for the distribution of cash dividends RMB 1.5 (tax inclusive) for every 10 shares to all
the shareholders, with total RMB 230,796,406.05 distributed. 10 shares per every 10 shares were converted to all shareholders as
well.
According to the Proposal on Redemption of “Goertek Convertible Bonds” reviewed and approved at the 8th meeting of the
4th board of directors held by the Company on May 23, 2017, it was resolved to exercise the conditional redemption right of
“Goertek Convertible Bonds “which were not converted to shares at the price of the par value of the bonds plus the accrued interest
for current period. “Goertek Convertible Bonds” was no longer traded and converted from June 30, 2017. Through the above change,
the Company changed its registered capital to RMB 3,245,103,948, and completed the industrial and commercial change registration
on November 3, 2017.
According to the Proposal on Early Redemption of “Goertek Convertible Bonds NO.2” reviewed and approved at the13th
meeting of the 5th board of directors and the 11th meeting of the 5th board of supervisors held by the Company on January 15,
2021,it was resolved to exercise the conditional redemption right of “Goertek Convertible Bonds NO.2 2” to redeem all the “Goertek
Convertible Bonds NO.2”, based on the price of the par value of the bonds plus the accrued interest for the current period. As of
March 3, 2021, “Goertek Convertible Bonds NO.2” was no longer traded and converted. Through the above change, the Company
changed its registered capital to RMB 3,416,321,036, and completed the industrial and commercial registration on June 22, 2021.
The registered address of the headquarters of the Company: 268 Dongfang Road, Weifang Hi-Tech Industrial Development
Zone.
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The Company and its subsidiaries (collectively, “the Group”) are mainly in the business of operating electron components. The
main business of the Group is categorized into the industry of the manufacturing of computer, communication, and other electronic
equipment. The Company's main products include acoustics, optics, microelectronics, structural components and other precision
components, as well as smart hardware products such as TWS smart earphones, virtual reality (VR)/augmented reality (AR) products,
smart wearable devices, gaming console and accessories, and smart home products.
These financial statements have been approved by the Board of directors of the Company on March 29, 2022.
As of December 31, 2021, the Group has included a total of 51 subsidiaries into its scope of consolidation, and for details,
please refer to Note IX “Equity in Other Entities”. In current period, one more subsidiary has been included into its scope of
consolidation in comparison to previous year, and for details, please refer to Note VIII “Changes in the Scope of Consolidation”.
IV. Basis for Preparing the Financial Statement
1. Basis for the preparation
The Group has prepared the financial statements on a going concern basis, based on the actual transactions and matters in
accordance with The Accounting Standards for Business Enterprises - Basic Standards (issued by Order No. 33 of the Ministry of
Finance and amended by Order No. 76 of the Ministry of Finance) issued by the Ministry of Finance, 42 specific accounting
standards, application guidelines of accounting standards for business enterprises, explanations on the accounting standards for
business enterprises and other related regulations (hereinafter collectively referred to as "Accounting Standards for Business
Enterprises") issued and amended on or after 15 February, 2006, and Preparation Rules for Information Disclosure by Companies
Offering Securities to the Public No. 15 - General Provisions on Financial Reports (2014 Revision) issued by CSRC.
According to relevant provisions in the Accounting Standards for Business Enterprises, the accounting calculation of the Group
was on the accrual basis. The value of non-current assets held for sale shall be lesser of non-current assets held for sale less the sales
cost at fair value, or the original book value at the time when the hold-for-sale conditions were met. In case of asset impairment, the
appropriate impairment provision shall be accrued according to relevant regulations.
2. Continue as a going concern
The Company evaluated its ability to continue as a going concern for 12 months after the end of the current reporting period,
without matters or circumstances causing significant doubt over the ability to continue as a going concern. Therefore, these financial
statements were prepared on a going concern basis.
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Goertek Inc. Annual Report 2021
V. Significant Accounting Policies and Accounting Estimates
Notes to specific accounting policies and accounting estimates:
The Group has formulated several specific accounting policies and accounting estimates in respect of the revenue recognition,
R&D expenditure and other transactions and matters, according to the provisions of relevant Accounting Standards for Business
Enterprises on the basis of the actual production and operation characteristics. For details, please refer to the descriptions in “32.
Revenue” and “24(2). Accounting policy for internal research and development expenditure” of Note V. For explanation on the
major accounting judgments and estimates made by the management, please refer to “36. Other important accounting policies and
accounting policies and estimates” of Note V.
1. Statement of compliance with Accounting Standards for Business Enterprises
The financial statements have been prepared by the Group in compliance with the requirements of the Accounting Standards for
Business Enterprises, and give a true and complete view of the financial status of the Company and the Group as at December 31,
2021, as well as the business performance, and cash flows and other relevant information for the year 2021. In addition, the financial
statements of the Company and the Group comply in all material aspects with the requirements concerning disclosure of the financial
statements and the notes specified in Preparation Rules for Information Disclosure by Companies Offering Securities to the Public
No. 15 - General Provisions on Financial Reports (2014 Revision) by CSRC.
2. Accounting period
The accounting period of the Group is divided by annual accounting period and interim accounting period. Interim accounting
period means a reporting period that is shorter than a complete accounting year. The Company adopts the calendar year as its
accounting year, namely January 1 to December 31 of each year.
3. Business cycle
The normal business cycle means the period from the Group’s purchase of the assets for processing to realization of cash or cash
equivalents. The Group takes 12 months as a business cycle and adopts the business cycle as liquidity classification standard for
assets and liabilities.
4. Functional currency
RMB is the currency in the main economic environment in which the Company and its domestic subsidiaries are operated, and
the Company and its domestic subsidiaries take RMB as the functional currency. Goertek (HongKong) Co., Limited, Goertek
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Goertek Inc. Annual Report 2021
Technology (Hong Kong)co.,Limited, Goertek Microelectronics (Hong Kong) Co., Ltd., OPTIMAS CAPITAL PARTNERS FUND
LP and Goertek Microelectronics Holding Co., Ltd. take USD as their functional currency, and all other overseas subsidiaries of the
Company take the lawful currency of the country or region where their registered addresses are located as their functional currency.
The currency adopted by the Group in preparing these financial statements is RMB.
5. Accounting treatments for business consolidation of enterprises under and not under common control
Business consolidation means the transaction or matter in which two or more separate enterprises are consolidated into one
reporting entity. Business consolidation is divided into business consolidation of enterprises under common control and business
consolidation of enterprises not under common control.
(1) Business consolidation of enterprises under common control
Business consolidation of enterprises under common control is the consolidation in which enterprises consolidated are
controlled by the same party or parties before and after the consolidation, and such control is not temporary. In the business
consolidation of enterprises under common control, the party which acquires the control of other enterprises in the business
consolidation is the consolidating party and the other enterprises in the business consolidation are the consolidated parties. Business
consolidation date is the date on which the consolidating party actually acquires the control of the consolidated parties.
The assets and liabilities acquired by the consolidating party are measured on the basis of book value of consolidated parties on
business consolidation date. The difference between the book value of the net assets acquired by the consolidating party and the book
value of the consideration paid for the consolidation (or total par value of the shares issued) is adjusted to capital reserves (share
premiums). Adjustments shall be made to retained earnings in the event that the capital reserves (share premiums) are not sufficient
for write-down.
Any direct costs incurred by the consolidating party as a result of the business consolidation are recognized in the profit or loss
for current period when incurred.
(2) Business consolidation of enterprises not under common control
Business consolidation of enterprises not under common control is the consolidation in which the enterprises consolidated are
not controlled by the same party or parties before and after the business consolidation. In the business consolidation of enterprises not
under common control, the party which acquires the control of other enterprises in the business consolidation on the acquisition date
is the consolidating party and the other enterprises in the business consolidation are the acquired parties. Acquisition date is the date
on which the acquiring party actually acquires the control of the acquired parties.
In the business consolidation of enterprises not under common control, the cost of consolidation includes the fair value of assets
paid, liabilities incurred or assumed and equity securities issued by the acquiring party in exchange for the control of the acquired
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Goertek Inc. Annual Report 2021
parties on the acquisition date, the audit, legal service, assessment, consulting and other intermediate fees incurred for business
consolidation of enterprises, and other management fees, which are recognized in the profit or loss for the current period when
incurred. The costs of the acquiring party for issuing equity or debt securities as part of the business consideration for the business
consolidation are included in the initially recognized amount of these equity or debt securities. The contingent business consideration
shall be included in the consolidation cost at its fair value on the acquisition date, and the goodwill shall be adjusted and combined
accordingly if the contingent consideration needs to be adjusted when new or further evidences arise in connection with the
circumstances existing on the acquisition date within 12 months after the acquisition date. The acquisition cost incurred by the
acquiring party and the identifiable net assets acquired in the business consolidation shall be measured at the fair value on the
acquisition date. If the consolidation cost is higher than the fair value of the identifiable net assets acquired from the acquired parties
on the acquisition date, the difference thereof shall be recognized as the goodwill. If the consolidation cost is lower than the fair value
of the identifiable net assets acquired from the acquired parties in the business consolidation, the fair value of the identifiable assets,
liabilities and contingent liabilities as well as the measurement of the consolidation cost shall be first reviewed. If upon review, the
consolidation cost is still lower than the fair value of the identifiable net assets acquired from the acquired parties in the business
consolidation, such difference shall be recognized in the profit or loss for current period.
If the deductible temporary difference acquired by the acquiring party from the acquired parties is not recognized for failure to
meet the conditions for recognition of the deferred tax assets on the acquisition date, and if new or further information is obtained
within 12 months after the acquisition date, showing that relevant circumstances on the acquisition date have already existed and it is
expected that the economic benefits brought about by the deductible temporary difference of the acquiring party on the acquisition
date may be realized, relevant deferred tax assets shall be recognized and the goodwill shall be reduced. If the goodwill is insufficient
for write-down, the difference will be recognized in the profit or loss for current period. In addition to the above condition, the
deferred tax assets recognized in connection with the consolidation of enterprises shall be recognized in the profit or loss for current
period.
If the business consolidation of enterprises not under common control is realized step by step through multiple transactions,
whether such transactions fall within a “package deal” shall be judged according to the standards for judgment of “package deal” in
the Notice by the Ministry of Finance of Issuing the Interpretation No. 5 of the Accounting Standards for Business Enterprises (Cai
Kuai [2012] No. 19) and Article 51 of the Accounting Standards for Business Enterprises No. 33 - Consolidated Financial
Statements (see 6(2) of Note V). If they fall within "package deal”, see the description in the previous paragraphs of this part and “18.
Long-term equity investments” of Note V for accounting treatment. If they do not fall within “package deal”, relevant accounting
treatment shall be distinguished for individual financial statements and consolidated financial statements:
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Goertek Inc. Annual Report 2021
In the individual financial statements, the sum of the book value of the equity investment of the acquired parties held before the
acquisition date and the increased investment cost on the acquisition date shall be taken as the initial investment cost of such
investment. If other comprehensive income is involved in the equity of the acquired parties held before the acquisition date, the
accounting treatment of other comprehensive incomes while disposing such investment, shall be conducted on the same basis as the
direct disposal of related assets or liabilities by the acquired parties.
In the consolidated financial statements, the equity of the acquired parties held before the acquisition date shall be remeasured at
the fair value of such equity on the acquisition date, and the difference between the fair value and its book value shall be recognized
in investment income in current period. If other comprehensive income is involved in the equity of the acquired parties held before
the acquisition date, the accounting treatment of other comprehensive incomes related, shall be conducted on the same basis as the
direct disposal of related assets or liabilities by the acquired parties.
6. Method for Preparing the Consolidated Financial Statement
(1) Principles for determination of the scope of consolidated financial statements
The scope of the consolidation of consolidated financial statements shall be determined on the basis of control. Control means
that the Group enjoys variable returns through its power in the invested parties and its participation in relevant activities of the
invested parties, and is able to influence the amount of such returns by applying its power in the invested parties. The Company and
all its subsidiaries are included in the scope of consolidation. Subsidiary means the entity controlled by the Group.
The Group shall launch re-assessment, if the changes in relevant facts and circumstances that lead to changes in relevant
elements of the above control definition occur.
(2) Method for preparing the consolidated financial statements
The Company shall include the subsidiaries into the scope of consolidation from the date when it obtains the net assets and
actual control over the production and operation decisions of the subsidiaries. It shall cease to do so as of the date when the actual
control is lost. For the disposal subsidiaries, the business performance and cash flows prior to the disposal date have been
appropriately included in the consolidated income statement and consolidated statement of cash flows. The opening balance of the
consolidated balance sheets shall not be adjusted for the subsidiaries disposed in current period. For the subsidiaries added through
the consolidation of enterprises not under common control, the business performance and cash flows have been appropriately
included in the consolidated income statement and consolidated cash flow statement after acquisition date. The opening balance and
comparative figures of consolidated financial statements shall not be adjusted. For the subsidiaries added during consolidation of
enterprises under common control and the subsidiaries under absorption consolidation, the business performance and cash flows,
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Goertek Inc. Annual Report 2021
from the beginning of current period to consolidation date, have been appropriately included in consolidated income statement and
consolidated cash flow statement. The comparison figures in the consolidated financial statements shall be adjusted at the same time.
In preparing the consolidated financial statements, if the accounting policies or accounting periods of the subsidiaries are
different from those of the Company, the financial statements of the subsidiaries shall be adjusted based on the accounting policies
and accounting periods of the Company. The individual financial statements of the subsidiaries acquired from consolidation of
enterprises not under common control are adjusted based on the fair value of the identifiable net assets on the acquisition date.
All the material account balances, transactions and unrealized profits within the Group shall be offset during preparation of the
consolidated financial statements.
The shareholders' equity and current net profits or losses of the subsidiaries which are not owned by the Company shall be
separately listed under the shareholders' equity and net profit in the consolidated financial statements as minority equity and minority
interests. These current profits or losses of the subsidiaries which are attributable to the minority equity shall be presented as
“minority interests” under the net profit of the consolidated financial statements. If the losses of the subsidiaries attributed to the
minority shareholders are more than the shareholders’ equity owned by the minority shareholders in such subsidiaries at the
beginning of the period, the minority interests shall be offset.
If the control of the previous subsidiaries is lost due to disposal of some equity investments or for any other reasons, the
remaining equity shall be re-measured at fair value on the date when control is lost. The difference between the sum of consideration
received from disposal of equity and the fair value of the remaining equity, and the Company’s share of the previous subsidiaries’ net
assets calculated at the previous shareholding proportion from the acquisition date, shall be recognized in investment income in the
period when control is lost. Other comprehensive income related to the equity investment of the previous subsidiaries shall be
conducted on the same basis as the direct disposal of related assets or liabilities by the acquired parties when the control is lost
(Except for the change caused by the re-measurement of net liabilities or net assets of the defined benefit plan in the previous
subsidiary, the remaining part shall be converted into investment income for current period). Thereafter, such remaining equity shall
be subject to subsequent measurement according to the Accounting Standards for Business Enterprises No. 2 - Long-term Equity
Investments or Accounting Standards for Business Enterprises No. 22 - Confirmation and Measurement of Financial Instruments and
other relevant regulations. For details, please refer to “18. Long-term equity investments” of Note V or “9. Financial instruments” of
Note V.
If the Group disposes of the equity investment of the subsidiaries step by step through multiple transactions until it loses the
control thereof, it is necessary to determine whether such transactions fall within "a package deal". The multiple transactions shall be
taken as "package deal" for accounting treatment, if the terms, conditions and economic impacts of the transactions undertaken to
dispose of the equity investment of the subsidiaries meet one or more of the following conditions: ① these transactions are entered
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Goertek Inc. Annual Report 2021
into at the same time or with their impacts on each other considered; ② a complete business result may only be achieved through
these transactions when taken as a whole; ③ one transaction depends on at least one of the other transactions; ④ one transaction is
not economical on its own, but it is economical when considered together with other transactions. If they do not fall within "package
deal", each of them shall be subject to accounting treatment according to the principles applicable to “Partial disposal of the
long-term equity investments in the subsidiaries without losing control” (for details, please refer to (2)④ of 18 of Note V) and “Loss
of control of the previous subsidiaries due to disposal of some equity investments or for any other reasons”, as appropriate. If the
transactions taken to dispose of the equity investment in the subsidiaries until lost of control are recognized as “package deal”, these
transactions shall be subject to accounting treatment as one transaction in which the subsidiaries are disposed and the control is lost.
However, the difference between the price for each disposal before the control is lost and share of such subsidiaries’ net assets as a
result of disposal of investment, shall be recognized in other comprehensive income in the consolidated financial statements, and be
included in profit or loss for the period when the control is lost.
7. Criteria for determining cash and cash equivalents
Cash and cash equivalents of the Group include cash on hand, deposits available at any time for payment, and short-term
(generally due within three months from the date of purchase) and highly liquid investments which are readily convertible into
known amounts of cash and subject to an insignificant risk of changes in value.
8. Foreign currency business and foreign currency statement translation
(1) Conversion method of foreign currency transaction
A foreign currency transaction of the Group is translated into the functional currency at initial recognition, using the spot
exchange rate prevailing at the date of the transaction (it means, in most cases, the central parity of the foreign exchange rate
announced by the People's Bank of China on that day; the same hereinafter). However, a foreign currency exchange transaction or
other foreign currency exchange involved transaction of the Group is translated into the functional currency using the actual
exchange rate.
(2) Translation method of monetary items denominated in foreign currencies and non-monetary items denominated in foreign
currencies
The foreign currency monetary items on the balance sheet date is translated at the spot exchange rate on the balance sheet date,
and the exchange differences arising therefrom are included in the current profits and losses, except that ① the exchange difference
arising from the special foreign currency borrowing related to the purchase and construction of assets eligible for capitalization is
treated in accordance with the principle of capitalization of borrowing costs; and ② the exchange difference from changes in
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Goertek Inc. Annual Report 2021
carrying amounts, other than amortized cost, of available-for-sale monetary items in foreign currencies is recognized in other
comprehensive income.
Non-monetary items denominated in foreign currency that are measured at historical cost shall still be valued in the functional
currency and converted at the spot exchange rate as of the transaction date. Non-monetary items denominated in foreign currency that
are measured at fair value are converted by using the exchange rate at the date when fair value is determined and the difference
between the converted functional currency amount and the prior amount in functional currency is recorded as profit or loss arising
from a change in fair value (including exchange rate change) for the current period or other comprehensive income.
(3) Translation method of foreign currency financial statements
The foreign currency financial statements of overseas operations shall be converted into Chinese currency statements in
accordance with the following methods: The assets and liabilities items in the balance sheet are translated at the spot exchange rate
on the balance sheet date; except for "retained earnings", other items of shareholder's equity are converted at the spot exchange rate at
the time of occurrence. Revenues and expenses in the profit statement are translated using the average exchange rates prevailing in
the period of the transactions. Retained earnings in the beginning of the year are the retained earnings at the end of the prior year as
translated; retained earnings at the end of the period are calculated and presented according to the translated profit distributions;
exchange differences from translation between translated assets and translated liabilities and equities are recognized in other
comprehensive income as exchange differences from translation. When the Group disposes of, and loses the control over, an overseas
operation, exchange differences from translation which are presented in “equity” of the balance sheet and related to the overseas
operation are, all or based on the disposal proportion, transferred to the profit or loss of the period of disposal.
Cash flows denominated in foreign currencies and cash flows of overseas subsidiaries are translated using the average exchange
rates prevailing in the period of the cash flows. Any impact of exchange rate changes on cash is presented as a separate adjusting
item in the cash flow statement.
The amount in the beginning of the year and the actual amount of the prior year are presented as translated amounts based on the
prior year’s financial statements.
When all the equities of the Group in an overseas operation are disposed, or the control over an overseas operation is lost for a
disposal of partial equity investments or any other reason, exchange differences which are presented in “shareholder’s equity/owner’s
equity” of the balance sheet, related to the overseas operation and attributable to the parent company are all transferred to the profit
or loss of the period of disposal.
If the proportion of equities in an overseas operation declines (but the control over that overseas operation is not lost) for a
disposal of partial equity investments or any other reason, exchange differences which are related to that partial disposal are
attributed to minority equity and not transferred to the profit or loss of the period of disposal. When the disposal of overseas
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operation involves a part of the equities in an associate or joint venture, exchange differences from translation which are related to
the overseas operation are, based on the disposal proportion, transferred to the profit or loss of the period of disposal.
For any monetary item denominated in a foreign currency which is substantially net investment in an overseas operation, in the
consolidated financial statements, exchange differences from the exchange rate changes are recognized in other comprehensive
income as “exchange differences from translation”, and when the overseas operation is disposed, are transferred to the profit or loss
of the period of disposal.
9. Financial instruments
A financial asset or financial liability shall be recognized when the Group becomes a party to a financial instrument contract.
(1) Classification, recognition and measurement of financial assets
Pursuant to the business model of managing financial assets and the contractual cash flow characteristics of financial assets,
financial assets are classified by the Group into financial assets at amortized cost, financial assets at fair value through other
comprehensive income, and financial assets at fair value through profit and loss.
Financial assets, when initially recognized, shall be measured at fair value. For the financial assets measured at fair value
through profit and loss, the related transaction costs shall be included directly into current profits and losses. For the financial assets
or financial liabilities of other categories, the related transaction costs shall be included in the initially recognized amount. For the
accounts receivable or notes receivable arising from the sale of products or the provision of labor services, which do not include or
consider major financing components, the amount of consideration that the Group is expected to be entitled to is taken as the initially
recognized amount.
① Financial assets at amortized cost
The Group’s business model for managing financial assets is aimed to collect contractual cash flow, and the contractual cash
flow characteristics of such financial assets are consistent with the basic lending arrangement, i.e., the cash flow generated on a
specific date is only the payment of principal and interest based on the amount of outstanding principal. For such financial assets, the
Group shall perform subsequent measurements at the amortized cost by effective interest method. The gains or losses arising from
amortization or impairment shall be included in current profits and losses.
② Financial assets at fair value through other comprehensive income
The Group's business model for managing this type of financial assets aims both to collect the contractual cash flow and to sell
it, and the characteristics of contractual cash flow of this type of financial assets shall be consistent with the basic lending
arrangement. The Group measures these financial assets at fair value and the changes thereof shall be included in other
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comprehensive income, but the impairment losses or gains, exchange gains and losses and interest income calculated by the effective
interest method shall be included in current profits and losses.
Apart from that, the Group shall designate some investments in non-trading equity instruments as financial assets measured at
fair value and the changes thereof shall be included in other comprehensive income. The Group will include the relevant dividend
income of this type of financial assets into current profits and losses, and the changes in fair value into other comprehensive income.
Upon the termination of recognition of financial assets, the accumulated gains or losses previously included in other comprehensive
income shall be transferred out of other comprehensive income and transferred to the retained earnings, other than being included in
current profits and losses.
③ Financial assets at fair value through profit or loss
The financial assets except those classified into financial assets measured at amortized cost and financial assets at fair value
through other comprehensive income as mentioned above, are classified by the Group into those measured at fair value through profit
and loss. In addition, at initial recognition, part of the financial assets can be recognized by the Group as financial assets measured at
fair value through profit and loss, to eliminate or significantly reduce accounting mismatch. The financial assets are subsequently
measured by the Group at fair value, and changes in fair value are included in current profits and losses.
(2) Classification, recognition and measurement of financial liabilities
At initial recognition, financial liabilities are classified into financial liabilities at fair value through profit and loss, and other
financial liabilities. For the financial liabilities at fair value through profit and loss, the related transaction costs shall be included
directly in current profits and losses. For other financial liabilities, the related transaction costs shall be included in the initially
recognized amount.
① Financial liabilities at fair value through profit and loss
The financial liabilities at fair value through profit and loss shall include held-for-trading financial liabilities (including
derivatives falling into the category of financial liabilities) and financial liabilities designated as those measured at fair value through
profit or loss at initial recognition.
Held-for-trading financial liabilities (including derivatives falling into the category of financial liabilities) shall be subsequently
measured at fair value. Except for hedging accounting, changes in fair value shall be included in current profits and losses.
The amount of change in the fair value of a financial liability which is designated as those measured at fair value through profit
or loss due to change in the Group’s own credit risks shall be included in other comprehensive income. Upon the termination of
recognition of such liability, the accumulative change in its fair value caused by the change of its own credit risk included in other
comprehensive income is transferred to retained earnings. The changes in its fair value shall be recorded in current gains and losses.
If the treatment of the impact on the credit risk change of the financial liabilities in the above manner will cause or expand the
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accounting mismatch in the profit and loss, the Group will recognize all the gains or losses (including the changes in the Group’s
own credit risks) of the financial liabilities into current profits and losses.
② Other financial liabilities
Other financial liabilities except those caused by the transfer of financial assets that do not conform to the conditions for
derecognition or continue to relate to the transferred financial assets and financial guarantee contracts shall be classified as financial
liabilities measured at amortized cost, which shall be subsequently measured at amortized cost, and the gains or losses arising from
derecognition or amortization shall be included in current profits and losses.
(3) Principle of recognition and measurement method of financial asset transfer
The financial asset shall be de-recognized if: ① The contractual right to receive cash flows of the financial asset is terminated;
② The financial asset has been transferred and almost all risks and rewards in the ownership of the financial asset have been
transferred to the transferee; or ③ The financial asset has been transferred and the enterprise has neither transferred nor retained
almost all risks and rewards in the ownership of the financial asset, but has waived its control over the financial asset.
If the enterprise does not transfer or retain substantially all of the risks and rewards related to the ownership of a financial asset
and if the enterprise does not waive its control over the financial asset, it shall, according to the extent of its continuous involvement
in the transferred financial asset, recognize the relevant financial asset and recognize the relevant liabilities accordingly. The extent
of involvement in the financial asset transferred, refers to the company’s exposure to changes in the value of the financial assets.
If the overall transfer of a financial asset meets the conditions for de-recognition, the difference between the carrying value of
the transferred financial asset and the sum of the transfer consideration received and the change in fair value originally recognized in
other comprehensive income will be recognized in current profits and losses.
If the partial transfer of financial assets meets the conditions for derecognition, the carrying value of the transferred financial
assets is apportioned between the derecognized part and the non-derecognized part according to their respective relative fair values,
and the difference between the sum of the transfer consideration received and the change in fair value originally recognized in other
comprehensive income and apportioned to the de-recognition component and the aforesaid attributed carrying value will be
recognized in current profits and losses.
If a financial asset is sold with the right of recourse or an endorsement, the Group needs to determine whether almost all the
risks and rewards related to the ownership of the financial asset have been transferred. If all the risks and rewards related to the
ownership of the financial asset have been transferred to the transferee, the Group shall de-recognize the financial asset; If all the
risks and rewards related to the ownership of the financial asset have been retained, the Group shall not de-recognize the financial
asset. If none of the risks and rewards related to the ownership of the financial asset has been transferred or retained, the Group shall
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continue to determine whether it retains the control over the asset, and the accounting standard stated in the aforesaid paragraphs
shall apply.
(4) Derecognition of financial liabilities
When the current obligations of a financial liability (or part of it) have been discharged, the financial liability (or that part of the
financial liability) shall be de-recognized by the Group accordingly. When the Group (borrower) signs an agreement with a lender to
replace a financial liability with a new one, in case of substantially different terms of contract between the new one and the original
one, the Group shall derecognize the original one and recognize the new one. If a substantial modification is made to all (or part of)
the original financial liabilities by the Group, the original financial liabilities shall be de-recognized, and at the same time, a new
financial liability shall be recognized in accordance with the modified terms.
If all (or a part of) the financial liability is de-recognized, the difference between the carrying value allocated to the
derecognized part and the consideration paid (including the transferred non-cash assets or the liabilities assumed) is included in
current profits and losses by the Group.
(5) Offset of financial assets and financial liabilities
When the Group has the legal right to offset the recognized financial assets and financial liabilities, which is enforceable for the
time being, and the Group plans to settle on a netting basis or capitalize financial assets and serve financial liabilities, any net amount
from netting of financial assets and financial liabilities shall be included in the balance sheet. Otherwise financial assets and financial
liabilities shall be included separately in the balance sheet and shall not offset each other.
(6) Method of determining the fair value of financial assets and financial liabilities
Fair value refers to the price that market participants can receive by selling an asset or need to pay by transferring a liability in
the orderly transactions on the measurement date. The fair value of a financial instrument in an active market is determined by the
Group at the price quoted in the active market. The quotation in an active market refers to the price that is easily acquired from
exchanges, brokers, industry associations, pricing service agencies, and the like on a regular basis and represents the actual market
transactions in fair trade. If there is no financial instrument in an active market, its fair value shall be determined by the Group via
valuation techniques. Valuation techniques include looking into the prices used in recent market transactions by parties who refer to
familiar situations and trade voluntarily and the current fair value of other financial instruments which are essentially the same, as
well as using the discounted cash flow method, the option pricing model and the like. During valuation, the Group shall adopt the
valuation techniques applicable under the current circumstances and supported by sufficient available data and other information,
select the input values consistent with the characteristics of assets or liabilities considered by market participants in the transactions
of related assets or liabilities, and give priority to the relevant observable input values as much as possible. The unobservable input
values are used only when the relevant input values are unavailable or impracticable.
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(7) Equity instruments
An equity instrument is a contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
The Group’s issuance (including refinancing), repurchase, sales or cancellation of an equity instrument shall be accounted for as a
change to equity. Transaction costs of an equity transaction are accounted for as a deduction from equity. The Group does not
recognize changes in the fair value of equity instruments.
If the Group's equity instruments distribute dividends (covering "interest" incurred by instruments classified as equity
instruments) during the existence thereof, the dividends shall be treated as profit distribution.
10. Impairment of financial assets
The financial assets for which the Group needs to recognize the impairment losses are financial assets measured at amortized
cost, which mainly include notes receivable, accounts receivable, other receivables, contract assets, and so on.
(1) Method for recognizing provision for impairment
Based on the expected credit loss, the Group shall make provision for impairment of the aforementioned items by its applicable
measurement method (general method or simplified method) of expected credit loss and recognize the credit impairment losses.
Credit loss means the difference between all contractual cash flows receivable by the Group in accordance with the contract and
all cash flows expected to be received, discounted at the original actual interest rate, i.e., the present value of all cash shortages.
Purchased or originated credit-impaired financial assets shall be discounted by the Group according to credit-adjusted effective
interest rate adjusted by credit of such financial assets.
According to the general methods to measure expected credit impairment losses, the Group evaluates whether the credit risk of
the financial assets (including other applicable items; the same hereinafter) has increased significantly since the initial recognition at
each balance sheet date. If the credit risk of the financial instrument has increased significantly since the initial recognition, the
Group measures its loss allowance according to the amount equivalent to the expected credit loss of the financial instrument over its
expected lifetime; if the credit risk has not increased significantly since initial recognition, the Group measures its loss allowance
according to the amount equivalent to the expected credit loss of the financial instrument in the next 12 months. When assessing
expected credit loss, the Group gives consideration to all reasonable and well-founded information, including forward-looking
information.
For financial instruments with relatively low credit risks on the balance sheet date, the Group assumes that their credit risks have
not increased significantly since initial recognition, and measures loss allowance based on the expected credit loss within the next 12
months.
(2) Criteria for judging whether the credit risks have increased significantly since initial recognition
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When the default probability of a financial asset within the expected duration determined on the balance sheet date is
significantly higher than that in initial recognition, it suggests that the credit risks of the financial asset have significantly increased.
Except under special circumstances, the Group determines whether credit risks have increased significantly since initial recognition
by estimating the changes in lifetime risk of default occurring based on the changes in 12-month risk of default occurring as a
reasonable .
(3) Grouping method for assessing the expected credit risks
The Group carries out separate credit risk evaluation for financial assets with significantly different credit risks, including
receivables in dispute with the other party or involving litigation or arbitration; accounts receivable where there are obvious signs
that the debtor may not be able to fulfill the repayment obligation, etc.
Except for the financial assets that are individually assessed for credit risks, the Group shall classify the financial assets into
different groups in view of the common risk characteristics, and assess the credit risks on the basis of groups.
(4) Accounting treatment methods for impairment of financial assets
At the end of a period, the Group shall calculate the expected credit loss of all types of financial assets. If the expected credit
loss is greater than the carrying value of its current provision for impairment, the difference shall be recognized as impairment loss; if
it is less than the carrying value of current provision for impairment, the difference shall be recognized as impairment gain.
(5)Determination method for measurement of credit impairment losses of various financial assets
①Notes receivable
For accounts receivable, the Group measures loss allowance according to the amount equivalent to the expected credit loss over
the lifetime. Depending on their credit risk characteristics, notes receivable are classified into different groups:
Items Basis for determining groups
Bank acceptance notes The accepter is a bank with low credit risk
Commercial acceptance notes By accepter’s credit risk (the same as that of accounts payable)
②Accounts receivable
For accounts receivable not containing significant financing components, the Group measures loss allowance according to the
amount equivalent to the expected credit loss over the lifetime.
Except for accounts receivable for which credit risk is assessed separately, depending on their credit risk characteristics,
accounts receivable are classified into different groups:
Methods of
Items Basis for determining groups
calculation
Except for the receivables for which the loss allowance of impairment has been
Accounts receivable Aging analysis
calculated separately, the Group shall determine, through present situation
aging group method
analysis, the proportion of allowance for bad debt based on the expected credit
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loss rate of identical or similar receivables in previous years with similar credit
risk characteristics classified by aging
Accounts receivable Aging analysis
Accounts receivable arising from factoring business of factoring companies
factoring aging group method
The parent and subsidiary companies included in the consolidated financial No allowance for bad
Related party group
statements are divided into groups according to equity relationship. debt
③ Other receivables
Impairment loss is measured by the Group as the amount equivalent to the expected credit loss in the next 12 months or over the
lifetime, based on whether the credit risk of other receivables has increased significantly since initial recognition. Except for other
receivables for which credit risk are assessed separately, depending on their credit risk characteristics, they are classified into
different groups in such way as “accounts receivable” are classified.
11. Notes receivable
For further details, please see this Note V. 9. “Financial Instruments” and 10. “Impairment of Financial Assets”.
12. Accounts receivable
For further details, please see this Note V. 9. “Financial Instruments” and 10. “Impairment of Financial Assets”.
13. Receivable financing
Notes receivable and accounts receivable which are classified as measured at fair value through other comprehensive income are
presented under “financing of receivable” if they have original maturity up to one year (including one year) or under other debt
investment if they have original maturity more than one year. For relevant accounting policies, please see this Note V. 9. “Financial
Instrument” and 10. “Impairment of Financial Assets”.
14. Other receivables
For further details, please see this Note V. 9. “Financial Instruments” and 10. “Impairment of Financial Assets”.
15. Inventories
(1) Classification of inventory
Inventory types include among others raw materials, goods in stock, revolving materials and unfinished in process.
(2) Valuation methods of inventory acquired and sold
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When inventory is acquired, it is measured based on actual cost, including purchase cost, processing cost and other costs. When
inventory is acquired and sold, it is priced according to the monthly weighted average method.
(3) Determination method of the net realizable value of inventory and calculation method of depreciation allowance
Net realizable value means the estimated selling price of inventory less the estimated cost to be incurred by the time of
completion, the estimated selling expense and related taxes. In determining the net realizable value of inventory, based on obtained
evidence, the Group considers the purpose of the inventory and the impact of any matters occurring after the balance sheet date.
On the balance sheet date, inventory is measured at cost or net realizable value (whichever is lower). If the net realizable value
is lower than its cost, the Group will make provision for inventory depreciation. The provision for inventory depreciation is generally
made at the difference between an inventory item’s cost and its net realizable value. For the inventory with a large quantity and
relatively low unit price, the inventory depreciation allowance is accrued based on the inventory category; for inventories associated
with product series manufactured and sold in the same area, with the same or similar end use or purpose, and are difficult to be
measured separately from other items, the depreciation allowances are consolidated and accrued. For raw materials with a large
quantity and low unit price, the provision of inventory depreciation is generally made according to the time the inventory has been
kept.
After the provision of inventory depreciation is made, if the original trigger for inventory write-down has disappeared so that the
net realizable value of the inventory is higher than the carrying value, the amount of provision of inventory depreciation shall be
reversed, and the reversed amount shall be recognized in current profits and losses.
(4) The inventory system is a perpetual inventory system.
(5) Amortization method of revolving materials
The Group’s revolving materials include low-value consumables and packaging materials. Large revolving materials are
amortized at the time of receipt over months of the expected service life. Other low-value consumables are amortized at the time of
receipt using the one-off amortization method. Packaging materials are amortized at the time of receipt using the one-off
amortization method.
16. Contract assets
The Group records the right where the customer has not paid the contract consideration but the Group has performed its contract
obligation and the Group is not prevented from being unconditionally paid by the customer (depending on the lapse of time only) as a
contract asset in the balance sheet. Contract assets and contract liabilities under the same contract are listed on a net basis. Contract
assets and contract liabilities under different contracts will not be offset.
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Please refer to this Note V. 10. "Impairment of financial assets" for details of the determination method and accounting
treatment method of the expected credit loss of contract assets.
17. Contract costs
If the incremental cost incurred by the Group to acquire the contract is expected to be recovered, it is recognized as an asset as
the contract acquisition cost. However, if the amortization period for the asset does not exceed one year, the asset shall be recorded in
current profits and losses at the time of occurrence.
A cost incurred for performing a contract which does not fall within the regulated scope of accounting standards for business
enterprises other than Accounting Standards for Business Enterprises No. 14 - Income (revised in 2017) shall be recognized as an
asset if: ① such cost directly relates to a current or expected contract, including direct labor, direct materials, manufacturing costs
(or similar costs), costs clearly borne by customers and other costs only incurred due to the contract; ② such cost increases the
resources of the Group to fulfill its obligations in the future; and ③ such cost is expected to be recoverable.
The assets related to contract costs are amortized on the same basis as the revenue recognition of goods related to the assets, and
are recorded in the current profits and losses.
18. Long-term equity investments
Long-term equity investment in this part refers to the long-term equity investment through which the Group has control, joint
control or significant influence over investee. The long-term equity investments through which the Group does not have control, joint
control or significant influence over investee, is taken as a financial asset at fair value recorded in current profits and losses. If it is
non-trading, the Group can choose to designate it as a financial asset at fair value recorded in other comprehensive income at initial
recognition. For details about the relevant accounting policy, please see this Note V. 9. “Financial Instrument”.
Joint control refers to the Group’s common control of an arrangement in accordance with relevant agreement, and the relevant
activities of the arrangement must be unanimously agreed by the participants sharing the control before a decision can be made.
Significant influence refers to the Group’s right to participate in the decision-making of an invested entity's financial and operational
policies, but not to control or jointly control the formulation of these policies with other parties.
(1) Determination of investment cost
For long-term equity investments arising from business combination under the same control, the proportion of the carrying value
of the stakeholders’ equity of the merged party in the consolidated financial statements of the final controlling party is regarded as
the initial investment cost of long-term equity investments on the combination date. If there is a difference between the initial
investment cost of long-term equity investments and the cash paid, non-cash assets transferred, and carrying value of liabilities
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assumed, the capital reserve shall be adjusted. Where the capital reserve is insufficient to absorb the difference, retained earnings
shall be adjusted. The investments cost which adopts the equity securities issued as the consideration should be adopted as the initial
investments cost of the long-term equity investments according to the proportion of the carrying value of the stakeholders’ equity of
the merged party in the consolidated financial statements of the final controlling party, and adjust the capital reserve by the difference
between the initial investments cost of long-term equity investments and the amount of issued stock’s face value (regarded as capital
stock). If the capital reserve is insufficient to absorb the difference, retained earnings should be adjusted. If the equity of the acquiree
under the same control is acquired step by step through multiple transactions leading to a merger of enterprises under the same
control, the transactions shall be confirmed whether they belong to a “package transaction”: If they belong to a “package transaction”,
all transactions shall be treated as one transaction over which the acquiree has control. If it is not a “package transaction”, the Group
regards the initial cost of the long-term equity investments as the proportion of the shareholders' equity/owners' equity of the acquired
enterprise to the carrying amount in the consolidated financial statements of the final controller at the date of combination. If there is
a difference between the initial investments cost of long-term equity investments on the date of combination and the sum of the
carrying value of the long-term equity investments before the merger plus the carrying value of the new share payment consideration
on the date of combination, the capital reserve shall be adjusted. Where the capital reserve is insufficient to absorb the difference,
retained earnings shall be adjusted. If the equity investment held before the combination date is measured using the equity method or
recorded as a financial asset at fair value in other comprehensive income. The other comprehensive income recognized as a result
will not be accounted temporarily.
For the acquisition of long-term equity investments involving enterprises under common control, the Group regards the initial
cost of the long-term equity investments at that date as business combination cost, including the sum of fair values of assets paid,
liabilities incurred or borne, and equity securities issued, by the buyer. If the equity of the acquiree is acquired step by step through
multiple transactions leading to a merger of enterprises under different control, the transactions shall be confirmed whether they
belong to a “package transaction”: If they belong to a “package transaction”, all transactions shall be treated as one transaction over
which the acquiree has control. If it is not a “package transaction”, the sum of the carrying value of the original equity investments
plus the new investments cost is regarded as the initial investments cost calculated by the cost method. If the previous equity is
measured using the equity method, the relevant other comprehensive income will not be accounted temporarily.
Acquisition-related costs including auditing fees, legal services fees, valuation advice fees and other relevant management fees
are generally recognized in profit or loss as incurred.
A long-term equity investments acquired other than through a business combination is initially measured at the cost, and such
cost is determined at the amount of cash paid by the Group, the fair value of the equity securities issued by the Group, the value
agreed in an investments contract or agreement, the fair value or carrying value of asset exchanged in the non-monetary asset
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exchange, or the fair value of the long-term equity investments. Costs, taxes and other necessary expenses directly related to the
acquisition of the long-term equity investments are also included in the investments cost. If an investments addition results in the
joint control or significant influence over investee, other than the control over investee, the cost of long-term equity investments is
the sum of the fair value of the original equity investments determined according to Accounting Standards for Business Enterprises
No. 22 - Recognition and Measurement of Financial Instruments and the cost of the investments addition.
(2) Method of subsequent measurement and recognition of profits and losses
The long-term equity investments through which the Group has joint control (except for joint operation) or significant influence
over investee shall be calculated by the equity method. The Group's financial statements use the cost method to calculate long-term
equity investments that constitutes control over invested entities.
① Long-term equity investments calculated by cost method
Under the cost method, a long-term equity investments is measured at initial investments cost. Increasing or reducing
investments will adjust the cost of long-term equity investments accordingly. Except for actual price paid when the investment is
obtained or the cash dividends or profits that are included in the consideration that has been declared but not yet disbursed, the
current investment income shall be recognized according to the cash dividends or profits declared by the invested entity.
② Long-term equity investments accounted under equity method
When the initial investments cost of long-term equity investments accounted under equity method is greater than the
investments, the difference in the fair value share of the identifiable net assets of the invested entity is enjoyed, without adjusting the
initial investments cost of long-term equity investments; when the initial investments cost is less than the investments, the difference
in the fair value share of the identifiable net assets of the invested entity is included in the current profits and losses, and the cost of
long-term equity investments shall be adjusted accordingly.
When the equity method is adopted, according to the share of the net profit and loss and other comprehensive income realized
by the invested entity, the investments income and other comprehensive income shall be recognized respectively, and the book value
of the long-term equity investments shall be adjusted; the book value of the long-term equity investments is reduced correspondingly
in accordance with the portion of the profits or cash dividends declared and distributed by the invested entity; for changes in owner’s
equity other than net profit and loss, other comprehensive income and profit distribution of the invested entity, the book value of
long-term equity investments shall be adjusted and included in capital reserve. The share of net profit and loss of the invested entity
shall be recognized, based on the fair value of various identifiable assets of the invested entity when the investment is made, after
adjustment of the net profit of the invested entity. When the accounting policy and accounting period adopted by the invested entity
are inconsistent with those of the Group, the investment income and other comprehensive income shall be recognized based on the
adjusted financial statements of the invested entity in accordance with the Group's accounting policies and accounting period. For the
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Group's transactions with its associates and joint ventures, if the invested or sold asset does not constitute a business, unrealized
profits or losses resulting from the transactions are recognized as investment income or loss to the extent that those attributable to the
Group's equity interest are eliminated. However, unrealized losses resulting from the Group's transactions with its invested entity in
respect of impairment losses on the transferred assets should not be eliminated. If the asset invested by the Group to its associates and
joint ventures constitutes a business, to the extent that the investor realizes long-term equity investments other than control, the fair
value of the invested business shall be the initial investments cost of the additional long-term equity investments, and the difference
between the initial investments cost and the carrying value of the invested business shall be recorded in the profit or loss of the
current period. If the asset sold by the Group to its associates and joint ventures constitutes a business, the difference between the
consideration received and the carrying value of the invested business shall be recorded in the profit or loss of the current period. If
the Group acquires an asset that is a business from its associates or joint ventures, the accounting treatment pursuant to the
Accounting Standards for Business Enterprises No. 20 - Business Combination shall apply, the gain or loss from the transaction shall
be fully recognized.
The Group de-recognizes its share of net losses of the invested entity after the carrying amount of the long-term equity
investments together with any long-term interests that substantially constitute part of its net investments in the invested entity shall be
written down to zero. In addition, if the Group has the obligation to bear additional losses to the invested entity, the expected
liabilities shall be recognized according to the expected obligations and be recorded in the investment losses of the current period.
Where net profits are subsequently made by the invested entity, the Group resumes recognizing its share of those profits only after its
share of the profits exceeds the share of losses previously not recognized.
③ Acquisition of minority equity
When preparing consolidated financial statements, if there is a difference between the new long-term equity investments
acquired as a result of the purchase of minority shares and the share of net assets continuously calculated from the date of purchase
(or merger) of the subsidiary based on the new shareholding ratio, the capital reserve shall be adjusted. Where capital reserve is
insufficient to offset the difference, the retained earnings are adjusted.
④ Long-term equity investments disposal
In consolidated financial statements, where a parent company disposes of a long-term equity investments in a subsidiary while
the control over the subsidiary is reserved, the difference between the disposing price and the net assets of the subsidiary obtained
from disposal of the long-term equity investments shall be recognized in the shareholder’s equity. If partial disposal by a parent
company of a long-term equity investments in a subsidiary and the control over the subsidiary is lost, the accounting policy stipulated
in this Note V. 6.(2) “Method for Preparing the Consolidated Financial Statements” shall apply.
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For disposal of long-term equity investments in other situations, the difference between the disposed equity’s book value and the
actual proceeds is included in the current profits and losses.
When the Group reduces its ownership interest in investee but continues to use the equity method, other comprehensive income
previously recorded as owners' equity is disposed in proportion, subject to the accounting treatment applicable to the assets or
liabilities related to direct disposal of the invested entity. The equity recognized by the Group, other than the change of the net profits
and loss, other comprehensive income and profit distribution of the invested entity, is transferred to current profits and losses in
proportion.
When the Group reduces its ownership interest but the Group continues to use the cost method, for the other comprehensive
income recognized by the Group using equity method prior to the control over the investee or under financial instrument recognition
and measurement standard, other comprehensive income previously recorded as owners' equity is subject to the accounting treatment
applicable to the assets or liabilities related to direct disposal of the invested entity and is transferred to current profits and losses in
proportion. Then the other changes in owners’ equity recognized by the Group using equity method, not arising from the change of
the net profits and loss, other comprehensive income or profit distribution of the invested entity, are reclassified to profit and loss in
proportion.
If the Group loses its control over the invested entity due to the disposal of a portion of an equity investment, the equity method
is adopted in the preparation of individual financial statements when the remaining equity allows the Group to exercise joint control
or hold significant influence on the invested entity, and the remaining equity after disposal is regarded as being adjusted by the equity
method at the time of acquisition; if the remaining equity after disposal does not allow the Group to exercise joint control or hold
significant influence on the invested entity, it is calculated in accordance with the relevant provisions of financial instrument
recognition and measurement standards, and the difference between the fair value and the book value on the day when the control is
lost is recorded in current profits and losses. If other comprehensive income recognized, using the equity method or under the
standards for recognition and measurement of financial instruments before the Group obtains the control over the invested entity, is
subject to the accounting treatment applicable to the assets or liabilities related to direct disposal of the invested entity when the
control over the invested entity is lost, changes in the owners’ equity of the net assets of the invested entity recognized using the
equity method, except for net profits and losses, other comprehensive income and profit distributions, shall be transferred to current
profits and losses when the control over the invested entity is lost. Other comprehensive income and other owners’ equity are
transferred in proportion when the remaining equity after disposal is calculated by the equity method. If the remaining equity after
disposal is calculated in accordance with the standards for recognition and measurement of financial instruments, other
comprehensive income and other owners’ equity are transferred in full.
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If joint control or significant influence on the invested entity is lost by the Group due to the disposal of some equity investments,
the remaining equity after disposal is calculated according to the financial instrument recognition and measurement standards. The
difference between the fair value and the book value on the day when joint control or significant influence is lost is recorded in
current profits and losses. Other comprehensive income of the equity investment previously recognized using the equity method is
subject to the accounting treatment applicable to the assets or liabilities related to direct disposal of the invested entity when the
Group stops using the equity method. Owners' equity recognized by the Group, other than the change of the net profits and loss, other
comprehensive income and profit distribution of the invested entity, is reclassified to profit and losses fully when the Group stops
using the equity method.
The equity investments in the subsidiary is disposed of step by step by the Group through multiple transactions until the control
is lost. The aforementioned transactions, if belong to package transactions, are disposed as one transaction for disposal of the equity
investments of the subsidiary and loss of control. The difference between the price of each disposal before the control is lost and the
carrying value of long-term equity investments related to the disposed equity are recorded in other comprehensive income, and then
transferred to the profit or loss of the current period when the control is lost.
19. Investment properties
Measurement of investment properties
Measurement by cost method
Depreciation or amortization method
Investment property means the property held for the purpose of rent earning or capital appreciation, or both. It includes the land
use rights that have been leased, the land use rights that are held for transfer upon appreciation, and the leased buildings. In addition,
the vacant buildings held by the Group for the purpose of leases will also be reported as investment property, if the board of directors
(or similar authority) makes a resolution in written form that expressly indicates that the buildings will be used for leases and the
intention of holding will not change in the short term.
Investment property is initially measured at cost. Subsequent expenses related to investment property shall, if economic profits
related to the property are likely to be gained and its costs can be measured reliably, be recorded as the cost of investment property.
Other subsequent expenditures are recorded in the current profits and losses when incurred.
The Group adopts the cost model for subsequent measurement of investment property. The investment property is depreciated or
amortized in accordance with policies consistent with building or land use rights.
For method of impairment test and method of provision for impairment of investment property, please see this Note V. 25.
“Impairment of Long-term Assets”.
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When self-use property or inventory is converted to investment property, or investment property is converted to self-use
property, the value after the conversion shall be recognized at the carrying value before the conversion.
When investment property is disposed or permanently withdrawn from use and is not expected to obtain economic benefits from
its disposal, the investment property shall be de-recognized. The disposal income from the sale, transfer, abandonment or destruction
of investment property less its carrying value and relevant taxes shall be recognized in current losses and profits.
20. Fixed assets
(1) Recognition criteria
Fixed assets mean the tangible assets held with a service life exceeding one fiscal year for the production of goods, provision of
labor services, leasing or management. A fixed asset may be recognized when it satisfies the following conditions: Economic benefits
relating to the fixed asset are likely to be gained by the Group, and the cost of the fixed asset can be measured reliably. Fixed assets
are initially measured at cost, with the influence of estimated abandonment cost taken into account.
(2) Depreciation methods
Category Depreciation methods Depreciable life Ratio of remaining value Annual depreciation
Houses and buildings Straight-line method 20-30 years 5%-10% 3%-4.75%
Production equipment Straight-line method 5-10 years 5%-10% 9%-19%
Test equipment Straight-line method 5-10 years 5%-10% 9%-19%
Office equipment Straight-line method 5 years 5%-10% 18%-19%
Transportation
Straight-line method 5 years 5%-10% 18%-19%
equipment
Estimated net residual value of a fixed asset is the estimated amount that the Group would currently obtain from disposal of the
asset, after the estimated costs of disposal is deducted, if the asset were already of the age and in the condition expected at the end of
its useful life.
(3) Recognition basis, valuation and depreciation method of fixed assets leased by financing
See Note 35. “Lease “for details
21. Construction in progress
The cost of construction in progress is determined at the actual construction expense, including various construction
expenditures incurred during the period of construction, capitalized borrowing costs and other related expenses before the project
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reaches the predetermined conditions for use. Construction in progress is transferred to fixed assets when it has reached the working
condition for its intended use.
For the method of impairment test and method of provision for impairment of construction in progress, please see this Note V.
25. “Impairment of Long-term Assets”.
22. Borrowing costs
Borrowing costs include interest on borrowing, amortization of discount or premium, auxiliary expenses and exchange
differences due to foreign currency borrowing, etc. Borrowing costs that can be directly attributable to the acquisition, construction
or production of assets eligible for capitalization shall be capitalized when the asset expenditure has been incurred, the borrowing
cost has been incurred, and the acquisition, construction or production necessary to make the asset reach the predetermined
conditions for use or sale has started, and the capitalization shall discontinue when the constructed or produced assets eligible for
capitalization reach the predetermined conditions for use or sale. The remaining borrowing costs are recognized as costs at the time
of occurrence.
The amount to be capitalized is the actual interest expense incurred on the specific borrowings less any bank interest earned
from unused funds of the designated borrowings or any investment income arising from the temporary investment of those funds.
The amount to be capitalized on the general borrowings is calculated by applying a capitalization rate to the weighted average of the
excess amounts of cumulative expenditures on the asset over and above the amounts of the specific borrowings. Capitalization rate is
calculated and determined based on the weighted average interest rate of general borrowings.
During the period of capitalization, exchange differences arising from special borrowings in a foreign currency shall be fully
capitalized, and exchange differences arising from general borrowings in a foreign currency shall be recognized in profits and losses.
Assets eligible for capitalization refer to fixed assets, investment properties, inventories and other assets that need to go through
quite a long time of acquisition or production activities to reach the predetermined usable or salable state.
If an abnormal interruption of assets eligible for capitalization occurs in the process of acquisition, construction or production
and continues over 3 months, the capitalization of borrowing costs shall cease and shall not restart until the acquisition, construction
or production of such assets resume.
23. Right-of-use assets
For recognition methods and accounting of right-of-use assets, please see this Note V. 35. “Lease”.
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24. Intangible assets
(1) Valuation method, service life and impairment test
Intangible assets mean the identifiable non-monetary assets owned or controlled by the Group without physical substance.
The intangible assets shall be initially measured at cost. Expenses related to the intangible assets are recognized in the cost of
intangible assets when it is likely that the associated economic benefits will be gained by the Group and the associated costs can be
measured reliably. Other expenses related to the intangible assets are recognized in profit or loss for the period in which it is incurred.
The acquired land use right is generally recognized as intangible assets. Expenses related to land use right and construction cost
from buildings such as self-built factory, etc. are recognized as intangible assets and fixed assets, respectively. In the case of
purchased buildings, related costs are shared between the cost of land use rights and the cost of buildings. The related costs that
cannot be allocated reasonably are recognized as fixed assets.
When an intangible asset with a finite useful life is available for use, its original cost is amortized over its estimated useful life
using the straight-line method. Intangible assets with uncertain service life shall not be amortized.
For an intangible asset with a finite useful life, the Group reviews its useful life and amortization method at the end of the
period, and accounts for any change as a change in an accounting estimate. For an intangible asset with uncertain service life, the
Group reviews its useful life. If it is evident that the duration of associated economic benefits is predictable, the useful life is
estimated and the asset is amortized pursuant to amortization policies for intangible assets with finite useful life.
(2) Accounting policy for internal research and development expenditure
The expenditure for research and development projects in the Group is divided into research phase expenditure and development
phase expenditure.
The classification into the expenditure in the research phase or the expenditure in the development phase in relation to internal
R&D projects of the Group conforms to the following standards:
Expenditures in the research phase are defined as those spent in an innovative, explorative and planned investigation to acquire
and understand new scientific or technical knowledge. The research is the preparation in documents and other aspects for further
development. It is very uncertain whether the completed research will move onto the development phase and whether the
development will lead to the emergence of an intangible asset. Therefore, the Group includes the expenditures in the research phase
in expenses and recognize them in the profit or loss of the current period.
Expenditures in the development phase refer to the expenditures incurred during the stage of applying research results or other
knowledge to a project or design to produce new or substantially improved materials, devices and products before commercial mass
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production or use. As the development phase comes after the research phase, the majority of basic conditions for a new product or
technology have been established. Thus, the Group recognizes the expenditures in development phase eligible for capitalization as
intangible assets. Gross expenditures incurred in the period from the point when the conditions for capitalization are satisfied to the
point when intangible assets are ready for the intended purpose are capitalized. No adjustment will be made further for any
expenditure that has been included in expense and recognized in profit or loss before the same intangible asset has met the conditions
for capitalization in the development phase.
Expenditures in the research phase are included in the current profits and losses when incurred.
Expenditures in the development phase are recognized as intangible assets only when the following conditions are all satisfied,
or are included in the profit or loss of the current period:
① Having completed the intangible assets, enabling them to be technically feasible for use or sale;
② Having the intention to complete the intangible assets and use or sell them;
③ Having the proof that the intangible asset can generate economic benefits, that there is a market for the product produced
using the intangible asset or for the intangible asset itself, and that the intangible asset is useful and will be used internally;
④ Having sufficient technical, financial and other resources to complete the development of the intangible assets, and having
the ability to use or sell the intangible asset;
⑤ Expenditures attributable to the development phase of the intangible asset can be measured reliably.
If it is impossible to distinguish between expenditures in the research phase and expenditures in the development phase, the
R&D expenditures incurred shall be included in the profit or loss of the current period.
(3) Method of impairment test and method of provision for impairment of intangible assets
For the method of impairment test and method of provision for impairment of intangible assets, please see this Note V. 25
“Impairment of Long-term Assets”.
25. Impairment of long-term assets
For non-current and non-financial assets including fixed assets, construction in progress, intangible assets with finite useful life,
investments properties measured at cost, and long term equity investments in subsidiaries, associates and joint ventures, the Group
assesses whether there is an indication of impairment at the date of balance sheet. If there is such an indication, the Group estimates
the recoverable amount and carries out an impairment test. An impairment test shall be conducted every year for intangible assets
with uncertain goodwill and service life and those have not yet reached the usable state, regardless of whether there are signs of
impairment.
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If the impairment test results show that the recoverable amount of an asset is lower than its book value, the provision for
impairment is accrued according to the difference and is recorded in the impairment loss. The recoverable amount is the higher of the
net amount of the fair value of the asset less the disposal expenses and the present value of the expected future cash flow of the asset.
The fair value of an asset is measured as the price agreed in a sales contract concluded in good faith. In absence of any such sales
contract, if there is an active market for the asset, the best information available is used as a basis to estimate the fair value of the
asset. Disposal expenses include legal fees, taxes and transportation fees related to the disposal of an asset, and direct expenses
incurred to make the asset salable. The present value of expected future cash flows of an asset is measured by applying an
appropriate discount rate to the expected future cash flows generated during the continuous use of the asset at the time of final
disposal. The asset impairment provision is calculated and recognized on the basis of individual assets. In the case of difficulty in
estimating the recoverable amount of an individual asset, the recoverable amount of the asset group to which the individual asset
belong is calculated. An asset group is the smallest unit of combined assets that can generate cash inflows independently.
For goodwill listed separately in the financial statements, the carrying amount of such goodwill arising from business
combinations is allocated to relevant asset groups or asset group portfolios. If the test results show that the recoverable amount of
asset groups or asset group portfolio containing allocated goodwill is lower than its book value, the corresponding impairment loss
shall be recognized. The amount of impairment loss shall firstly be deducted from the carrying amount of goodwill embodied in the
asset groups or asset group portfolios, then be deducted from the carrying amounts of other assets based on the proportions of their
carrying amounts in the asset groups or asset group portfolios.
The impairment losses of assets will not be reversed in subsequent periods once recognized.
26. Long-term deferred expenses
Long-term deferred expenses refer to expenses that have already incurred but should be borne by the current and future
instalments for a period of more than one year. Long-term deferred expenses shall be amortized according to the straight-line method
within the estimated period of benefit.
27. Contract liabilities
Contract liability is defined as the Group's obligation to transfer goods to a customer for received or receivable consideration
from the customer. The Group presents as a contract liability, at the earlier time point of actual payment by a customer or the
payment due, if the Group has paid the contract consideration or the Group has acquired the right to collect unconditionally before
the goods are transferred by the Group to the customer. Contract assets and contract liabilities under the same contract are listed on a
net basis. Contract assets and contract liabilities under different contracts will not be offset.
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28. Employee remuneration
(1) Accounting treatment of short-term remuneration
Short-term employee benefits include employee wages or salaries, bonuses, allowances and subsidies, employee welfare fees,
medical insurance contributions, maternity insurance contributions and work injury insurance contributions, housing provident fund
contributions, union running costs and employee education costs, and non-monetary benefits. During the accounting period when the
employees provide services for the Group, the short-term remuneration actually incurred is recognized as a liability and recorded in
the current profits and losses or related asset costs. The non-monetary welfare in short-term remuneration should be measured at fair
value.
(2) Accounting treatment of post-employment benefits
Post-employment benefit mainly covers basic pension insurance and unemployment insurance. Most of post-employment
benefit plans are mainly defined benefit plans. The defined benefit plans of the Group are basic pension insurance and unemployment
insurance, and the contributions thereto are recorded in the asset cost or the profit or loss of the current period when they occur.
(3) Accounting treatment of dismission welfare
Where the Group terminates the labor relationship with an employee before the labor contract expires, or offers proposed
compensation for encouraging the employee to accept the redundancies voluntarily, if the Group cannot unilaterally withdraw the
termination benefits provided by the termination of labor relations plan or reduction proposal, and the Group recognizes the costs
related to the reorganization involving the payment of the termination benefits (whichever comes first), the employee remuneration
liabilities arising from the termination benefits are recognized and recorded in the current profits and losses. However, termination
benefits which are expected not to be fully paid within twelve months after the end of the annual reporting period are accounted for
as other long-term employee remuneration.
Internal employee retirement programs are accounted for, using the above method applicable to termination benefits. The Group
recognizes in the profit or loss of the current period (termination benefits) employee salaries and contributions to the employee's
social insurance covered by its internal retirement program from the day when the employees stop their services until their statutory
retirement dates, when the conditions for recognizing liabilities are satisfied.
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(4) Accounting treatment of other long-term employee benefits
If other long-term employee benefit provided by the Group for its employees constitutes the defined contribution plan, the
accounting treatment for the defined contribution plan applies. In any other circumstance, the accounting treatment for the defined
benefit plan applies.
29. Lease liabilities
For recognition methods and accounting of lease liabilities, please see this Note V. 35. “Lease”.
30. Provisions
An obligation relating to a contingent is recognized as a provision when it meets the following conditions: (1) the Group has a
present obligation related to a contingency; (2) it is probable that an outflow of economic benefits will be required to settle the
obligation; and (3) the amount of the obligation can be measured reliably.
A provision is measured against the best estimate of the consideration required to settle the present obligation at the balance
sheet date, taking into account factors pertaining to a contingency such as the risks, uncertainties and time value of money.
If all or part of the expenses required to settle the provision are expected to be compensated by a third party, the amount of
compensation is recognized separately as an asset when it is basically recognized that it can be received, and the recognized
compensation amount doesn’t exceed the book value of the provision.
31. Share-based payment
(1) Accounting treatment of share-based payment
Share-based payment is a transaction where equity instruments are granted or equity instrument-based liabilities are assumed for
the consideration of the services provided by employees or other parties. Share-based payment is classified into cash-settled
share-based payment and equity-settled share-based payment.
① Equity-settled share-based payment
Equity-settled share-based payments made for the consideration of the services provided by the employees, is measured at the
fair value of equity instruments on the date of grant to the employees. In the case that the right can be exercised after the completion
of services in the waiting period or satisfaction of stipulated performance conditions, the fair value amount shall, on the basis of the
best estimate of the quantity of equity instruments with vesting in the waiting period, be recorded in relevant cost or expense using
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the straight-line method. In the case that the right can be exercised immediately after the grant, it is recorded in relevant cost or
expense on the grant date, and the capital reserve is increased accordingly.
On each balance sheet date during the waiting period, the Group makes the best estimate based on the latest available follow-up
information such as changes in the number of employees with vested rights, and revises the estimated number of equity instruments
with vesting. The impact of the above estimation is recorded in the cost or expense of the current period, and the capital reserve
adjusted accordingly.
Equity-settled share-based payments made for the consideration of the services provided by other parties shall, if the fair value
of the services can be measured reliably, is measured at fair value at the date of acquisition, and if the fair value of the services
cannot be measured reliably but the fair value of the equity instruments can be measured reliably, is measured at fair value at the date
of acquisition. They are recorded in the cost or expense, and the shareholder’s equity is increased accordingly.
② Cash-settled share-based payment settled
Cash-settled share-based payment shall be measured according to the fair value of liabilities determined on the basis of shares or
other equity instruments undertaken by the Group. In the case that the right is exercised immediately after the grant, it is recorded in
relevant cost or expense, and the liability is increased accordingly. If the right is exercised only after the completion of services in the
waiting period and satisfaction of stipulated performance conditions, on each balance sheet date within the waiting period, based on
the best estimate of the vesting condition and according to the fair value of the liabilities assumed by the Group, the services acquired
in the current period are recorded in the costs or expenses, and the liability is increased accordingly.
On each balance sheet date and settlement date before the settlement of related liabilities, the fair value of liabilities shall be
re-measured, and the changes shall be recorded in the current profits and losses.
(2) Accounting treatment related to modification and termination of share-based payment plan
When the Group modifies the share-based payment plan, if the fair value of the granted equity instruments is increased by
modification, the increase of the services acquired shall be recognized according to the increase of the fair value of the equity
instruments. The increase of fair value of equity instruments refers to the difference between the fair values of equity instruments
before and after modification on the modification date. If the total fair value of share-based payment is reduced by modification or
other ways that are unfavorable to employees, the accounting treatment of the acquired services will continue, as if the change never
happened unless the Group cancels some or all of the granted equity instruments.
During the waiting period, if the granted equity instruments are cancelled, the Group will treat the cancellation of the granted
equity instruments as accelerated exercise, and immediately record the amount to be recognized in the remaining waiting period into
the current profits and losses, and recognize the capital reserve at the same time. If the employee or other party can choose to meet
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the non-vesting condition but fails to meet it during the waiting period, the Group will treat it as cancellation for granting equity
instruments.
32. Revenue
Accounting policies adopted for revenue recognition and measurement
(1) Principles of revenue recognition
If a contract between the Group and a customer meets the following conditions, revenue is recognized when the customer
obtains the control over the goods: the parties to the contract have approved the contract and pledged to perform their obligations; the
contract defines the rights and obligations of the parties about transfer of the goods or provision of the services; the contract contains
payment terms about the proposed transferred goods; the contract has commercial substance, which means that the performance of
the contract would change the risks, time distribution or amount of the future cash flows of the Group; and the consideration to which
the Group is entitled for transferring the goods to the customer is very likely to be recovered.
At the contract commencement date, the Group identifies each individual performance obligation existing under the contract,
and apportions the trading price to each individual performance obligation based on the proportion of the selling prices of the goods
committed by the individual performance obligations. The trading price is determined by taking into account of the influence of
variable consideration, major financing components in the contract, non-cash consideration, consideration payable to customers and
other factors.
If each individual performance obligation under the contract meets any of the following conditions, the Group will, according to
the progress of performance in the relevant performance period, recognize the part of trading price apportioned to the individual
performance obligation as a revenue: the customer obtains and consumes economic benefits from the performance by the Group at
the time of performance; the customer has control over the goods in production during the performance by the Group; the goods
produced during the performance by the Group have irreplaceable use, and the Group is entitled to be paid for the completed part of
the obligation up to now in the entire contract period. The performance schedule is determined by output method or input method
according to the nature of the goods transferred. If the performance schedule cannot be reasonably determined and the incurred costs
of the Group are expected to be compensated, the revenue is recognized according to the amount of the incurred costs until the
performance schedule can be reasonably determined.
If none of the above condition is met, the Group will, at the point when the customer obtains the control over the goods,
recognize the part of trading price apportioned to the individual performance obligation as a revenue. To determine whether the
customer obtains the control over the goods, the Group considers the following indications: the Group enjoys the current right to be
paid for the goods, and the customer has the current obligation to pay for the goods; the Group has transferred legal ownership of the
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goods to the customer, and the customer has owned the legal ownership over the goods; the Group has delivered the goods physically
to the customer, and the customer has possessed the goods in kind; the Group has passed on to the customer major risks and rewards
of the ownership of the goods, and the customer has received the major risks and rewards of the ownership of the goods; the
customer has accepted the goods; and any other indication that the customer has obtained the control over the goods.
(2) Specific methods for revenue recognition
① Domestic sales
A. General sales mode
The Group arranges production according to a sales contract or order with a customer; upon shipment from the warehouse, the
products are transported and delivered to the place of delivery designated by the customer; the customer’s warehousing employee
checks the quantity of the products and also carries out a spot check for the quality of the products; after the quantity and quality are
accepted, the employee will sign and stamp on the receipt for confirmation. The revenue is recognized when the Group obtains the
signed and stamped receipt or when the Group obtains the signed and stamped receipt and makes a reconciliation with the customer.
B. VMI sales mode
The Group arranges production according to a sales contract or order with a customer; upon shipment from the warehouse, the
products are transported and delivered to the place of delivery designated by the customer; the customer’s warehousing employee
checks the quantity of the products and also carries out a spot check for the quality of the products; after the quantity and quality are
accepted, the employee will sign and stamp on the receipt for confirmation. The revenue is recognized after the customer accepts the
products.
② Overseas sales
A. General sales mode
The Group arranges production according to a sales contract or order with a customer; the export delivery is made through
customs clearance after the products are verified as qualified through inspection; for the purpose of delivering the products, the
revenue is recognized at the time of control transfer depending on specific terms of trade.
B. VMI sales mode
The Group arranges production according to a sales contract or order with a customer; the export is made through customs
clearance after the products are verified as qualified through inspection; after the Group completes export declaration formalities and
obtains an export declaration form, and the products are transported to the place designated by the customer, the revenue is
recognized when the customer accepts the products.
Different operating modes in the same kind of business lead to different accounting policies for revenue recognition
None
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33. Government subsidies
Government subsidies refer to the monetary assets and non-monetary assets obtained by the Group from the government free of
charge, excluding the investment made by the government as an investor which enjoys the corresponding owner's equity.
Government subsidies are divided into asset-related government subsidies and income-related government subsidies. Asset-related
government subsidies refer to the government subsidies obtained by the Group and used for acquiring or forming long-term assets by
other means. Other government subsidies are defined as government subsidies related to income. If no target of grants is specified in
government documents, government subsidies are classified into government subsidies related to assets and government subsidies
related to income as follows: (1) if the government document stipulates grants for a defined project, the grants will be divided
according to the proportion of expenditures transformed into assets and expenditures recorded in expenses in the budget of the
defined project, and the proportion will be reviewed at each balance sheet date and be changed if necessary; and (2) if the
government document contains general statement on the purpose of grants, other than a defined project, the grants will be treated as
government subsidies related to income. Government subsidies in the form of monetary assets shall be measured at the amount
received or receivable. Government subsidies in the form of non-monetary assets shall be measured at fair value. If the fair value
cannot be reliably acquired, the government subsidies shall be measured at nominal amount. Government subsidies measured at
nominal amount shall be directly recorded in the current profits and losses.
The Group recognizes and measures government subsidies generally at the time of receipt according to the actually received
amounts. However, at the end of the period, the subsidy shall be measured according to the amount receivable when there is
conclusive evidence that it can meet the relevant conditions stipulated by the financial support policy and is expected to receive
financial support funds. A government subsidy measured at the amount receivable shall meet the following conditions: (1) the
amount of grant receivable has been confirmed in a governmental document or can be reasonably estimated according to any
officially issued measures for the management of financial support funds, without significant uncertainty in the estimated amount; (2)
the measurement is based on the financial support projects and its measures for the management of financial support funds officially
released and proactively disclosed by local fiscal authority according to the Government Information Disclosure Regulations, and the
measures are inclusive (applicable to any eligible enterprise), other than for specific enterprises; (3) the relevant grant approval
document has clearly stated the period of payment, and as the payment of the grant is guaranteed by corresponding fiscal budgets,
there is reasonable assurance that the payment will be made within certain time of period; and (4) other relevant conditions should be
met according to the actual situation of the Group and the grant (if any).
Asset-related government subsidies are recognized as deferred income, and shall be recorded in current profits and losses in
stages according to a reasonable and systematic method within the service life of the relevant assets. If income-related government
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subsidies are received as compensation for related costs or losses in future periods, they are recognized as deferred income, and are
recorded in current profits and losses during the period when the related costs or losses are recognized; those received as
compensation for related costs or losses incurred are directly included in current profits and losses.
If a government subsidy contains an asset-related component and an income-related component, the two components are subject
to separate accounting treatment. If it is difficult to distinguish them, the subsidy shall be classified as income-related government
subsidies.
Government subsidies related to the daily operating activities of the Group shall be recorded in other income according to the
nature of operating business. Government subsidies unrelated to the daily activities are recorded in non-operating revenue.
Where any recognized government subsidy needs to be returned, in the case of related deferred income balance, the carrying
amount of the deferred income balance shall be written down, and any excess shall be recognized in the profit or loss of the current
period. In other circumstances, the returned subsidy is directly recorded in the profit or loss of the current period.
34. Deferred tax assets/liabilities
(1) Current income taxes
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods are measured at the amount
expected to be paid (or returned) according to the requirements of tax laws. The taxable income as basis for the current income tax
expense is calculated after appropriate adjustment is made to the pre-tax accounting profit of the year according to the requirements
of tax laws.
(2) Deferred tax assets and liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their tax bases, or between the
carrying amounts of those items that are not recognized as assets or liabilities and of which the tax bases can be determined according
to tax laws and tax bases, deferred tax assets and liabilities are recognized using the balance sheet liability method.
For temporary differences associated with the initial recognition of goodwill and the initial recognition of an asset or liability
arising from a transaction (not a business combination) that affects neither accounting profits nor taxable profits (or deductible losses)
at the time of transaction, no deferred tax liability is recognized. In addition, for the taxable temporary differences associated with
investments in subsidiaries, associates and joint ventures, if the Group is able to control the timing of the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future, no deferred tax liability is
recognized. Except for the above exceptions, the Group recognizes deferred tax liabilities arising from all other taxable temporary
differences.
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For temporary differences associated with the initial recognition of an asset or liability arising from a transaction (not a business
combination) that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred
tax liability is recognized. In addition, for the deductible temporary differences associated with investments in subsidiaries, associates
and joint ventures, the corresponding deferred tax asset shall not be recognized if it is not probable that the temporary difference will
reverse in the foreseeable future, or if it is not probable that taxable profits will be available in the future against which the deductible
temporary difference can be utilized. For the above exceptions, deferred tax assets for deductible temporary differences are
recognized by the Group to the extent that it is probable that taxable profits will be available against which the deductible temporary
differences can be utilized.
For deductible losses and tax credits that can be carried forward to later years, the corresponding deferred tax assets are
recognized to the extent that the future taxable income that can be used to offset the deductible losses and tax credits is likely to be
obtained.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates, according to tax laws, that are expected
to be applicable when the asset is realized or the liability is settled.
On the balance sheet date, the carrying amount of deferred tax assets shall be reviewed. If it is unlikely to obtain sufficient
taxable income in the future to offset against the profits arising from deferred tax assets, the carrying amount of the deferred tax
assets shall be written down. When it is probable that sufficient taxable income will be available, such written-down amount shall be
subsequently reversed.
(3) Income tax expenses
Income tax expenses include current income tax and deferred income tax.
Except that current income taxes and deferred taxes arising from transactions or events recognized in other comprehensive
income or directly recorded in shareholders’ equity are recorded in other comprehensive income or shareholders’ equity, and that
deferred taxes arising from business combinations adjust the carrying amount of goodwill, all other current income taxes and
deferred tax expenses or gains are recorded in the profit or loss of the current period.
(4) Income tax offset
When there is a legal right to settle on a net basis and the intention is to settle on a net basis or to realize assets and to settle
liabilities simultaneously, the current income tax assets and current income tax liabilities of the Group are offset and presented as net
amount.
When there is a legal right to settle current income tax assets and current income tax liabilities on a net basis, and the deferred
tax assets and deferred tax liabilities are related to the income tax levied by the same tax administration department on the same tax
payer or to different tax payers, but in each future period of reversing material deferred tax assets and liabilities, the tax payers
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involved intend to settle the current income tax assets and liabilities on a net basis or realize assets and settle liabilities at the same
time, the deferred tax assets and deferred tax liabilities of the Group are offset and presented as net amount.
35. Lease
(1) Accounting treatment method of operating lease
For more information, see this section (3) - the determination method and accounting treatment method of leasing under the new
leasing standard.
(2) Accounting treatment method of financial lease
For more information, see this section (3) - the determination method and accounting treatment method of leasing under the new
leasing standard.
(3) The determination method and accounting treatment method of leasing under the new leasing standard
Lease refers to a contract under which a lessor assigns the right to use an asset to a lessee for consideration, for a defined period.
If a contract is signed or changed after the date of initial implementation, the Group considers, at the date of commencement or
change, whether the contract is a lease or contains a lease. Except for changes in the terms and conditions of the contract, the Group
will not re-consider whether the contract is a lease or contains a lease.
(1) The Group as lessee
① Right-of-use assets
Except for short-term leases and leases for low-value assets, the Group recognizes the right-of-use assets of a lease at the lease
commencement date. The lease commencement date refers to the day from which the lessor offers the leased asset to the Group for
its use. The right-of-use assets shall be initially measured at cost. The cost includes:
A. initially measured amounts of lease liabilities;
B. any lease payments made at or before the lease commencement date, less the relative amount of any lease incentives enjoyed
if there are lease incentives;
C. any initial direct costs incurred by the Group;
D. an estimate of costs to be incurred by the Group in dismantling and removing the underlying assets, restoring the site on
which it is located or restoring the underlying asset to the condition required by the terms of the lease.
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With reference to the provisions of Accounting Standards for Business Enterprises No. 4 - Fixed Assets concerning depreciation,
the Group calculates the depreciation of right-of-use assets. If the Group can reasonably determine that it will obtain the ownership of
leased assets when the lease term expires, the right-of-use assets are depreciated over the remaining service life of the leased assets.
If the Group cannot reasonably determine that it will obtain the ownership of leased assets when the lease term expires, the
right-of-use assets are depreciated over the shorter of the lease term and the remaining service life of the leased assets.
The Group determines whether the right-of-use assets are impaired and performs accounting treatment for recognized
impairment loss according to the regulations of Accounting Standard for Business Enterprise No. 8 – Impairment of Assets.
② Lease liabilities
Except for short-term leases and leases for low-value assets, the Group initially measures a lease liability at the lease
commencement date according to the present value of the lease payment not made as of that date. When measuring the present value
of a lease payment, the Group uses the interest rate implicit in the lease as the discount rate, and adopts the incremental borrowing
rate as the discount rate if the interest rate implicit in the lease is not determinable.
The lease payment refers to the amount paid by the Group to the lessor related to the right to use the leased assets during the
lease term, including:
A. The fixed amount and substantial fixed amount less the relative amount of any lease incentives enjoyed if there are lease
incentives;
B. The index or rate based variable amount which is determined at the time of initial measurement according to the index or rate
prevailing at the lease commencement date;
C. The exercise price of the call option when the Group reasonably decides to exercise the call option;
D. The payment for exercising the option to terminate the lease, provided that it is reflected in the lease period that the Group
will exercise the option to terminate the lease; and
E. The estimated amount to be paid according to the residual value of guarantee provided by the Group.
Variable lease payments not included in the measurement of lease liabilities, when actually incurred, shall be recorded in the
current profits and losses or related asset costs.
From the lease commencement date, the Group calculates the interest expense of lease liabilities for each period of the lease
term at a fixed periodic interest rate and records it in current profits and losses or related asset costs.
After the lease commencement date, the Group will re-measure a lease liability and adjust the right-of-use assets if:
A. In the case of any change to the lease term or the result of evaluation on the call option, the lease liability will be re-measured
by the Group according to the changed lease payment and the present value calculated based on the modified discount rate.
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B. In the case of changes in the amount to be paid estimated based on the residual value of guarantee or the index or rate for
calculating the lease payment, the Group will re-measure the lease liability according to the changed lease payment and the present
value calculated from the original discounting rate.
③ Short-term leases and leases for low-value assets
For short-term leases and leases for low-value assets of buildings, transport vehicles, machinery equipment and office
equipment, the Group chooses not to recognize right-of-use assets or lease liabilities. The short-term lease refers to the lease that does
not contain the call option and has a lease period of no more than 12 months from the lease commencement date. The lease for
low-value assets refers to the lease under which individual lease asset has a low value if it is brand new. In each period within the
lease term, the Group records the lease payments of short-term leases and leases for low-value assets into the profit or loss of the
current period or the relevant asset cost using the straight-line method.
④ Change of lease
When a lease changes and the following conditions are satisfied, the Group will treat such change as an independent lease:
A. The Group expands the lease scope by acquiring the right to use one or more additional leased assets;
B. The increased consideration is in line with the price of the expanded part of the lease scope as adjusted for the contract
change.
If a lease change is not treated as an independent lease, at the effective date of the lease change, the Group will re-apportion the
changed contract price, re-determine the lease term, and re-measure the lease liability according to the changed lease payment and
the present value calculated based on the modified discount rate.
If the lease change narrows the lease scope or shortens the lease term, the Group will reduce the carrying value of the
right-of-use assets accordingly, and record the gain or loss from the terminated or partially terminated lease in the profit or loss of the
current period. If any other lease change triggers the re-measurement of the lease liability, the Group will adjust the carrying value of
the right-of-use assets accordingly.
(2) The Group as lessor
① Division of a lease
If a contract contains the lease component and the non-lease component, the Group will apportion the contract consideration
according to the provisions of Accounting Standards for Business Enterprises No. 14 - Revenue concerning apportionment of trading
price, and the basis for apportionment the respective prices of the lease component and the non-lease component.
② Classification of a lease
A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset. Leases which
are not financing leases are defined as operating leases.
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A. The Group as lessor under operating leases
The Group adopts the straight-line method in each period of the lease term, and recognizes the lease receipts arising from
operating leases in rental income. The initial direct expenses related to an operating lease incurred by the Group are capitalized when
incurred, apportioned during the lease term on the same recognition basis as rental income, and recorded in the current profit and loss
by installments.
The variable lease payment received by the Group under an operating lease not included in the lease receipt is recorded in the
profit or loss of the current period at the time of actual occurrence.
B. The Group as lessor under financial leases
At the lease commencement date, the Group measures the carrying value of the financing lease receivable as net lease
investment, and de-recognizes the financing lease asset. The net lease investment is the sum of the unsecured residual value and the
present value of the lease payment receivable at the lease commencement date discounted by the interest rate implicit in the lease.
The lease payment refers to the amount paid by the lessee as the Group transfers the right to use the leased assets during the
lease term, including:
(A). the fixed amount and substantial fixed amount paid by the lessee less the relative amount of any lease incentives received;
(B). The lessee’s index or rate based variable amount which is determined at the time of initial measurement according to the
index or rate prevailing at the lease commencement date;
(C). The exercise price of the call option when the Group reasonably decides that the lessee is to exercise the call option;
(D). The payment made by the lessee for exercising the option to terminate the lease, provided that it is reflected in the lease
period that the lessee will exercise the option to terminate the lease; and
(E). The residual value of guarantee provided by the lessee, a party in association with the lessee and any independent third
party who has economic capacity to perform the guarantee obligation.
Variable lease payment receivable not included in the measurement of lease net investment shall, when actually incurred, be
included in the current profits and losses.
The Group measures and recognizes the interest income of each period within the lease term according to the fixed periodic
interest rate.
③ Sublease
The Group as the sub-lessor considers the original lease and the sublease as two independent contracts. The Group classifies the
sublease according to the right-of-use assets arising from the original lease, other than the underlying asset of the original lease.
④ Change of lease
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If an operating lease changes, the Group will, from the effective date of the change, considers the change as a new lease, and the
lease payment received in advance or receivable related to the lease before the change as new lease payments.
When a lease changes and the following conditions are satisfied, the Group will treat such change as an independent lease:
A. The Group expands the lease scope by acquiring the right to use one or more additional leased assets;
B. The increased consideration is in line with the price of the expanded part of the lease scope as adjusted for the contract
change.
If a financing lease change is not treated as an independent lease, the Group will treat the changed lease as follows:
A. Assuming that the change takes effect at the lease commencement date, and the lease is classified as an operating lease, the
Group will, from the effective date of the lease change, consider the change as a new lease and the net lease investment prior to the
effective date of the lease commencement as the carrying value of the leased asset;
B. Assuming that the change takes effect at the lease commencement date, and the lease is classified as a financing lease, the
Group will apply the provisions of Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of
Financial Instruments concerning the modification or re-negotiation of contract.
36. Other important accounting policies and accounting estimates
While using accounting policies, due to the uncertainty in operating activities, the Group needs to make judgment, estimates and
assumptions on the carrying value of accounts which cannot be measured accurately. The judgment, estimates and assumptions are
made based on the historical experience of the Group’s management and other factors that are considered to be relevant. The
judgments, estimates and assumptions would affect the reported amounts of incomes, expenses, assets and liabilities, as well as the
disclosure of contingent liabilities at the balance sheet date. However, the actual results from the uncertainty in the estimates may
differ from the current estimates made by the Group’s management, subject to further significant adjustments to the carrying amounts
of the affected assets or liabilities.
The above judgments, estimates and assumptions will be reviewed periodically by the Group on the going-concern basis. If a
change in accounting estimates only affects the period in which the change occurs, the affected amount will be recognized in the
period in which the change occurs. If the change affects both the period in which the change occurs and future periods, the affected
amount will be recognized in the period in which the change occurs.
At the balance sheet date, the major fields in which the Group is required to make the judgments, estimates and assumptions on
the amounts in the financial statements are shown below:
(1) Revenue recognition
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As stated in this Note V. 32. “Revenue”, the Group’s revenue recognition involves the following significant accounting
judgments and estimates: identification of customer contracts; estimation of the recoverability of the considerations enjoyed due to
the transfer of goods to customers; identification of performance obligations in contracts; estimation of the variable consideration in a
contract and the amount of accumulated recognized income that is unlikely to be significantly reversed when the relevant uncertainty
is eliminated; whether there is material financing component in a contract; estimation of separate selling prices of individual
performance obligations in a contract; determination on whether the performance obligation shall be performed in a time span or at a
point of time; and determination of performance progress.
The Group makes judgments based on historical experience and practices, and major changes in judgments and estimates would
have impact (and even significant impact) on the change of operating income, operating cost, and profit and loss during the current or
future periods.
(2) Classification of a lease
① Identification of a lease
While identifying that a contract is or contains a lease, the Group needs to assess whether there is an identified asset and the
customer has the right to use the asset for a certain period. During assessment, the Groups shall consider the nature or substantial
replacement of the asset, and whether the customer has the right to obtain almost all economic benefits arising from the use of the
asset during the period and can control the use of the asset.
② Classification of a lease
The Group as the lessor classifies leases into operating leases and financing leases. In the classification process, the management
needs to make appropriate analysis and judgment on whether all risks and rewards related to the ownership of leased assets have been
substantially transferred to the lessee.
③ Lease liabilities
The Group, as a lessee, initially measures the lease liability at the present value of lease payments that are unpaid at the lease
commencement date. For measuring the present value of the lease payment, the Group estimates the discounting rate in use and the
lease term of the lease contract with an option of renewal or termination. For assessing the lease term, the Group considers all the
facts and circumstances related to the economic benefits brought by the exercise of the option by the Group, including expected
changes in the facts and circumstances from the lease commencement date to the option exercise date. Different judgments and
estimates would affect the recognition of lease liabilities and right-of-use assets and further affect the profit or loss of subsequent
periods.
(3) Impairment of financial assets
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The Group assesses impairments of financial instruments using the expected credit loss model, where the Group is required to
make significant judgments and estimates, as well as consider all reasonable and evidence-based information, including
forward-looking information. In making the judgments and estimates, the Group predicts expected changes in debtor's credit risk
based on historical data, as well as economic policies, macroeconomic indicators, industry risks, external market conditions,
technical conditions, changes in customer conditions and other factors.
(4) Provisions for the decline in value of inventories
Under accounting policies for inventories, the Group measures inventories according to the lower of cost and net realizable
value. For the inventories with cost higher than net realizable value as well as obsolete and unsalable inventories, the Group
calculates provisions for the impairment of inventories. The inventories are impaired to their net reliable value, depending on the
assessment of salability of inventories and their net realizable value. To identify inventory impairment, the management is required to
make judgments and estimates after obtaining conclusive evidence, as well as considering the purpose of inventories held, the impact
of events occurring after the balance sheet date and other factors. Any difference between actual results and prior estimates will, in
the period when relevant estimates are changed, affect the carrying amount of inventories and the provision for inventory impairment
or reversal thereof.
(5) Fair value of financial instruments
If there is no financial instrument in an active trading market, its fair value is determined by the Group through various valuation
methods. The valuation techniques include disclosed cash flow modeling,etc. In the valuation process, the Group needs to estimate
future cash flow, credit risk, market volatility and correlation, etc. and choose an appropriate discounting rate. These relevant
assumptions are uncertain, and their changes would affect the fair value of financial instruments. For equity instrument investments
or contracts with public quotes, the Group will not regard costs as the best fair value estimate.
(6) Impairment provision for long-term assets
For non-current assets other than financial assets, the Group will, at the balance sheet date, judges whether there is an indication
of impairment. For intangible assets with an uncertain service life, the impairment test will be carried out annually and when there is
an indication of impairment. The impairment test will be carried out for non-current assets other than financial assets, when there is
an indication that the carrying amount cannot be recovered.
When the carrying value of an asset or group of assets is higher than the recoverable amount, the higher of the net of the fair
value less disposal costs and the present value of estimated future cash flows represents the impairment.
The net of the fair value less disposal costs is determined by the sales agreement price or observable market price of similar
assets in fair trade reduced by incremental costs directly attributable to the disposal of the asset.
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Important judgments shall be made on the output, selling price, related operating costs and discount rate used in calculating
present value of the asset (or a group of assets) in estimation of present value of future cash flows. When estimating the recoverable
amount, the Group uses all relevant information available, including the output, selling price and related operating costs predicted on
the basis of reasonable and evidence-based assumptions.
The Group tests goodwill for any impairment annually at least. This requires estimating the present value of future cash flows of
an asset group or group portfolio to which goodwill has been allocated. When estimating the present value of future cash flows, the
Group needs to predict cash flows generating from an asset group or group portfolio in the future, and chooses an appropriate
discount rate to determine the present value of future cash flows.
(7) Depreciation and amortization
The Group depreciates and amortizes investment property, fixed assets and intangible assets over their respective service life,
using the straight-line method, with their respective residual value taken into account. The Group periodically reviews the service life
of assets to determine the amounts of depreciation and amortization expenses for each reporting period. The service life is determined
by the Group based on its historic experience acquired on similar assets and expected technical developments. For significant
changes in prior estimates, depreciation and amortization expenses will be adjusted in the coming periods.
(8) Development expenditures
When determining capitalized amounts, the Group’s management needs to assume estimated future cash flows, appropriate
discount rates and expected return periods of relevant assets.
The Group’s management believes that the products with its self-developed proprietary technology have a broad market and
good prospects, and the market reaction to the products produced with these intangible assets also supports the management’s
pre-estimated income arising from the project. However, the increasing competition makes the management reconsider the
assumptions about market share and estimated gross profits of the products. After a thorough review, the Group’s management
believes that the carrying value of intellectual properties can be fully recovered notwithstanding a lowered rate of return of the
products. The Group will continue to keep close attention on relevant developments. Once there is an indication that it is necessary to
adjust the assumptions of relevant accounting estimates, the Group will make adjustment in the period when that indication appears.
(9) Deferred tax assets
To the extent that it is likely that there will be sufficient taxable profits to cover the losses, the Group recognizes deferred tax
assets for all unused tax losses. In this case, the Group’s management shall make important judgments to estimate the time and
amount of future taxable profits and, by taking into account of its tax plan, to determine the amount of deferred tax assets that should
be recognized.
(10) Income tax
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In normal operating activities of the Group, there are some transactions with certain uncertainties in final tax treatment and
calculation. Tax deductible expenses for some items are subject to review and approval by tax authority. Any difference between
final results and initially estimated amounts due to these tax matters exerts impact on income taxes and deferred taxes of the period
when the final results are determined.
37. Changes in important accounting policies and accounting estimates
(1) Changes in important accounting policies
√ Applicable □ Not applicable
Contents and causes of changes in accounting
Approval procedure Notes
policies
On December 7, 2018, the Ministry of Finance 1. The changes are made according to state policies; 2.
issued The Accounting Standards for Enterprises At the 18th meeting of the 5th Board of Directors and
No.21–Leases (2018 Revision) (Finance and the 13th meeting of the 5th Board of Supervisors held
Accounting [2018] No. 35) (hereinafter referred to on March 26, 2021, the Proposal on Changing
as “new standards of lease”). According to the Accounting Policies was reviewed and adopted, and the
resolution adopted on March 26, 2021 at the 18th independent directors expressed the opinion of approval
meeting of the 5th Board of Directors of the Group, of the prop In accordance with relevant provisions of
the Group has implemented the above-mentioned Rules Governing the Listing of Shares on Shenzhen
New Lease Standards from January 1, 2021 and Stock Exchange and Articles of Association, this issue
made changes to relevant accounting policies of changing accounting policies was submitted to the
according to the provisions of the New Lease Board of Directors to review and approve, without the
Standards. need of the submission to the Shareholders’ Meeting.
Changes in accounting policies resulting from the implementation of the New Lease Standards:
On December 7, 2018, the Ministry of Finance issued The Accounting Standards for Enterprises No.21–Leases (2018 Revision)
(Finance and Accounting [2018] No. 35) (hereinafter referred to as “new standards of lease”). According to the resolution adopted on
March 26, 2021 at the 18th meeting of the 5th Board of Directors of the Group, the Group has implemented the above-mentioned
New Lease Standards from January 1, 2021 and made changes to relevant accounting policies according to the provisions of the New
Lease Standards.
Pursuant to the new lease standards, for existing contracts prior to the initial implementation date, the Group chooses not to
re-evaluate whether it is a lease or it contains a lease.
The Group chooses to adjust the cumulative impact of the lease contracts that have not been completed as of January 1, 2021
only. The balances of retained earnings and other related items on financial statements at the beginning of the period when the New
Lease Standards are initially implemented (i.e., January 1, 2021) are adjusted for the cumulative impact amount of the initial
implementation, and the information in the comparative period is not adjusted.
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At the effective date of the New Lease Standards (i.e., January 1, 2021), the Group’s transitional measures and their impact are
described below:
A. The Group as lessee
The Group does not have financing lease prior to the effective date.
For the operating leases before the effective date (except for short-term leases and leases for low-value assets which are
accounted for using a simplified method), the Group has right-of-use assets measured at the amount of lease liabilities and adjusted
for prepaid rental. At the effective date, the Group tests right-of-use assets for any impairment and adjusts their carrying value.
B. The Group as lessor
For the subleases which are classified as operating leases at the effective date and are surviving after the effective date, the
Group re-values and re-classifies them as a sublessor, based on the remaining lease term and the terms and conditions of the original
leases and the subleases, at the effective date.
C. The impact from the implementation of new lease standards on financial statements as of January 1, 2021 is as follows:
Unit: RMB
Amount as of December 31, 2020 (before
Amount as of January 1, 2021 (after change)
change)
Report items
Consolidated Company’s Company’s
Consolidated Statements
Statements Statements Statements
Prepayments 295,557,594.21 37,867,760.48 250,349,223.52 23,024,960.48
Right-of-use assets 462,821,988.61 133,419,713.77
Other non-current assets 257,587,428.52 250,950,629.05
Accounts payable 15,526,558,924.33 15,525,355,089.28
Non-current liabilities due
113,350,154.66 56,366,215.71
within one year
Lease liabilities 298,830,498.84 62,210,698.06
(2) Changes in important accounting estimates
□ Applicable √ Not applicable
(3) Adjustments to related items of financial statements at the beginning of the current year upon initial
implementation of the new lease standards since 2021
√ Applicable □ Not applicable
Whether it is necessary to adjust the accounting items of the balance sheet at the beginning of the year
√ Yes □ No
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Goertek Inc. Annual Report 2021
Consolidated Balance Sheet
Unit: RMB
Item December 31, 2020 January 1, 2021 Amount adjusted
Current assets:
Cash and bank balances 7,788,139,761.68 7,788,139,761.68
Deposit reservation for
balance
Lending funds
Held-for-trading financial
250,789,617.29 250,789,617.29
assets
Derivative financial assets
Notes receivable 93,015,027.25 93,015,027.25
Accounts receivable 9,951,611,596.65 9,951,611,596.65
Receivable financing
Prepayments 295,557,594.21 250,349,223.52 -45,208,370.69
Premiums receivable
Reinsurance accounts
receivable
Provision of cession
receivable
Other receivables 56,282,930.78 56,282,930.78
Including: Interest
receivable
Dividend
receivable
Redemptory monetary
capital for sale
Inventories 9,170,731,903.19 9,170,731,903.19
Contract assets
Assets held for sale
Non-current assets due
67,724.41 67,724.41
within one year
Other current assets 522,858,736.68 522,858,736.68
Total current assets 28,129,054,892.14 28,083,846,521.45 -45,208,370.69
Non-current assets:
Loans and advances
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Item December 31, 2020 January 1, 2021 Amount adjusted
disbursed
Debt investments
Other debt investments
Long-term receivables
Long-term equity
337,410,802.56 337,410,802.56
investments
Investments in other equity
357,307,056.65 357,307,056.65
instruments
Other non-current financial
assets
Investment properties
Fixed assets 14,674,535,924.15 14,674,535,924.15
Construction in progress 2,078,910,639.92 2,078,910,639.92
Manufacturing biological
assets
Oil and gas assets
Right-of-use assets 462,821,988.61 462,821,988.61
Intangible assets 2,730,415,540.35 2,730,415,540.35
Development expenditure 107,970,366.02 107,970,366.02
Goodwill 16,859,185.08 16,859,185.08
Long-term deferred
152,215,032.28 152,215,032.28
expenses
Deferred tax assets 275,559,445.74 275,559,445.74
Other non-current assets 257,587,428.52 250,950,629.05 -6,636,799.47
Total non-current assets 20,988,771,421.27 21,444,956,610.41 456,185,189.14
Total assets 49,117,826,313.41 49,528,803,131.86 410,976,818.45
Current liabilities:
Short-term borrowings 3,189,865,281.20 3,189,865,281.20
Borrowings from banks and
other financial institutions
Borrowing funds
Held-for-trading financial
43,578,775.71 43,578,775.71
liabilities
Derivative financial
liabilities
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Goertek Inc. Annual Report 2021
Item December 31, 2020 January 1, 2021 Amount adjusted
Notes payable 1,797,630,927.08 1,797,630,927.08
Accounts payable 15,526,558,924.33 15,525,355,089.28 -1,203,835.05
Advances from customers
Contract liabilities 772,033,187.85 772,033,187.85
Financial assets sold for
repurchase
Customer deposits and
deposits from banks and other
financial institutions
Receivings from vicariously
traded securities
Receivings from vicariously
sold securities
Payroll payable 1,136,453,967.56 1,136,453,967.56
Taxes payable 195,498,317.72 195,498,317.72
Other payables 67,844,709.64 67,844,709.64
Including: Interest
8,911,319.91 8,911,319.91
payable
Dividends payable
Handling charges and
commissions payable
Dividend payable for
reinsurance
Liabilities held for sale
Non-current liabilities due
113,350,154.66 113,350,154.66
within one year
Other current liabilities 7,012,595.33 7,012,595.33
Total current liabilities 22,736,476,686.42 22,848,623,006.03 112,146,319.61
Non-current liabilities:
Reserve fund for insurance
contracts
Long-term borrowings 2,754,299,262.02 2,754,299,262.02
Bonds payable 3,031,391,335.56 3,031,391,335.56
Including: Preferred
shares
Perpetual bonds
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Goertek Inc. Annual Report 2021
Item December 31, 2020 January 1, 2021 Amount adjusted
Lease liabilities 298,830,498.84 298,830,498.84
Long-term payables
Long-term payroll payable
Provisions
Deferred income 538,922,331.52 538,922,331.52
Deferred tax liabilities 323,065,909.80 323,065,909.80
Other non-current liabilities
Total non-current liabilities 6,647,678,838.90 6,946,509,337.74 298,830,498.84
Total liabilities 29,384,155,525.32 29,795,132,343.77 410,976,818.45
Owners' equity:
Share capital 3,275,438,427.00 3,275,438,427.00
Other equity instruments 317,690,852.25 317,690,852.25
Including: Preferred
shares
Perpetual bonds
Capital reserves 3,811,658,791.28 3,811,658,791.28
Less: Treasury shares 516,007,644.95 516,007,644.95
Other comprehensive
-112,010,012.52 -112,010,012.52
income
Special reserves
Surplus reserves 1,370,122,868.85 1,370,122,868.85
General risk reserve 6,081,200.00 6,081,200.00
Retained earnings 11,500,277,791.35 11,500,277,791.35
Total equity attributable to the
19,653,252,273.26 19,653,252,273.26
owners of the Company
Minority equity 80,418,514.83 80,418,514.83
Total owners' equity 19,733,670,788.09 19,733,670,788.09
Total liabilities and owners'
49,117,826,313.41 49,528,803,131.86 410,976,818.45
equity
Adjustment explanation
The Company has implemented the Accounting Standards for Business Enterprises No. 21 - Lease amended by the Ministry of
Finance from January 1, 2021.
Balance Sheet of the Parent Company
Unit: RMB
Item December 31, 2020 January 1, 2021 Amount adjusted
213
Goertek Inc. Annual Report 2021
Item December 31, 2020 January 1, 2021 Amount adjusted
Current assets:
Cash and bank balances 2,834,936,444.19 2,834,936,444.19
Held-for-trading financial
182,338,601.65 182,338,601.65
assets
Derivative financial assets
Notes receivable 75,154,389.95 75,154,389.95
Accounts receivable 9,745,537,067.95 9,745,537,067.95
Receivable financing
Prepayments 37,867,760.48 23,024,960.48 -14,842,800.00
Other receivables 3,761,565,682.66 3,761,565,682.66
Including: Interest
receivable
Dividend
receivable
Inventories 2,307,402,064.65 2,307,402,064.65
Contract assets
Assets held for sale
Non-current assets due
within one year
Other current assets 132,090,455.49 132,090,455.49
Total current assets 19,076,892,467.02 19,062,049,667.02 -14,842,800.00
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity
5,896,926,627.12 5,896,926,627.12
investments
Investments in other equity
instruments
Other non-current financial
assets
Investment properties
Fixed assets 8,801,650,213.78 8,801,650,213.78
Construction in progress 313,889,183.09 313,889,183.09
Manufacturing biological
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Goertek Inc. Annual Report 2021
Item December 31, 2020 January 1, 2021 Amount adjusted
assets
Oil and gas assets
Right-of-use assets 133,419,713.77 133,419,713.77
Intangible assets 2,258,621,419.91 2,258,621,419.91
Development expenditure 12,173,386.98 12,173,386.98
Goodwill
Long-term deferred
417,895.69 417,895.69
expenses
Deferred tax assets 54,618,987.06 54,618,987.06
Other non-current assets 110,169,734.82 110,169,734.82
Total non-current assets 17,448,467,448.45 17,581,887,162.22 133,419,713.77
Total assets 36,525,359,915.47 36,643,936,829.24 118,576,913.77
Current liabilities:
Short-term borrowings 2,426,635,181.20 2,426,635,181.20
Held-for-trading financial
liabilities
Derivative financial
liabilities
Notes payable 1,616,583,704.36 1,616,583,704.36
Accounts payable 7,583,147,844.25 7,583,147,844.25
Advances from customers
Contract liabilities 363,007,702.67 363,007,702.67
Payroll payable 606,402,939.12 606,402,939.12
Taxes payable 34,135,334.79 34,135,334.79
Other payables 1,440,612,669.29 1,440,612,669.29
Including: Interest
6,306,124.36 6,306,124.36
payable
Dividends payable
Liabilities held for sale
Non-current liabilities due
56,366,215.71 56,366,215.71
within one year
Other current liabilities 9,707,204.85 9,707,204.85
Total current liabilities 14,080,232,580.53 14,136,598,796.24 56,366,215.71
Non-current liabilities:
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Goertek Inc. Annual Report 2021
Item December 31, 2020 January 1, 2021 Amount adjusted
Long-term borrowings 400,000,000.00 400,000,000.00
Bonds payable 3,031,391,335.56 3,031,391,335.56
Including: Preferred
shares
Perpetual bonds
Lease liabilities 62,210,698.06 62,210,698.06
Long-term payables
Long-term payroll payable
Provisions
Deferred income 202,689,088.19 202,689,088.19
Deferred tax liabilities 299,192,361.87 299,192,361.87
Other non-current liabilities
Total non-current liabilities 3,933,272,785.62 3,995,483,483.68 62,210,698.06
Total liabilities 18,013,505,366.15 18,132,082,279.92 118,576,913.77
Owners' equity:
Share capital 3,275,438,427.00 3,275,438,427.00
Other equity instruments 317,690,852.25 317,690,852.25
Including: Preferred
shares
Perpetual bonds
Capital reserves 3,815,383,616.46 3,815,383,616.46
Less: Treasury shares 516,007,644.95 516,007,644.95
Other comprehensive
income
Special reserves
Surplus reserves 1,370,120,086.45 1,370,120,086.45
Retained earnings 10,249,229,212.11 10,249,229,212.11
Total owners' equity 18,511,854,549.32 18,511,854,549.32
Total liabilities and owners'
36,525,359,915.47 36,643,936,829.24 118,576,913.77
equity
Adjustment explanation
The Company has implemented the Accounting Standards for Business Enterprises No. 21 - Lease amended by the Ministry of
Finance from January 1, 2021.
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Goertek Inc. Annual Report 2021
(4) Explanation of comparative data at early stage of retroactive adjustment after the initial
implementation of the new lease standards in 2021
□ Applicable √ Not applicable
38. Others
None
VI. Taxable Items
1. Main tax types and rates
Tax types Taxation basis Tax rate
Output taxes are calculated by applying 13%, 9% and 6% tax rates
to taxable income, and value added taxes are calculated and paid
VAT 13%, 9%, 6%
according to the difference resulting from the deduction of the
allowed deductible input tax in the period.
City maintenance and
7% and 5% of the amount of actually-paid turnover tax 7%、5%
construction tax
15% or 25%, or the national or local statutory tax rate prevailing in
Enterprise income tax 25%、15%
an overseas subsidiary’s jurisdiction
Education surcharge 3% of the amount of actually-paid turnover tax 3%
Local education surcharges 2% of the amount of actually-paid turnover tax 2%
Disclose the specific information in the case of tax payers with different tax rates of enterprise income tax
Name of taxpayer Rate of income tax
Goertek Inc. 15%
Weifang Goertek Electronics Co., Ltd. 15%
Goertek Microelectronics Inc. 25%
Qingdao Goertek Microelectronics Research Institute Co., Ltd. 25%
Qingdao Goertek Intelligent Sensor Co., Ltd. 15%
Weifang Goertek Microelectronics Co., Ltd. 15%
Rongcheng Goertek Microelectronics Co., Ltd. 25%
Beijing Goertek Microelectronics Co., Ltd. 25%
Shenzhen Goertek Microelectronics Co., Ltd. 25%
Wuxi Goertek Microelectronics Co., Ltd. 25%
Shanghai Ganyuzhi Technology Co., Ltd. 25%
Goertek Microelectronics Holdings Co., Ltd. 16.5%
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Goertek Inc. Annual Report 2021
Goertek Microelectronics (Hong Kong) Co., Ltd. 16.5%
The federal tax rate for enterprise income tax is 21%, and the local
GOERTEK MICROELECTRONICS CORPORATION
enterprise income tax rate in California is 8.84%.
Tax rate is 10% if the income is less than KRW 200 million; 20% if
the income is KRW 200 million-20 billion; 22% if the income is
GOERTEK MICROELECTRONICS KOREA CO.,LTD.
KRW 20 billion-300 billion; and 25% if the income is more than
KRW 300 billion.
Weifang Goertek Trading Co., Ltd. 25%
Yishui Goertek Electronics Co., Ltd. 25%
Yili Precision Manufacturing Co., Ltd. 15%
Weifang Goertek Communication Technology Co., Ltd. 25%
Goertek Optical Technology Co., Ltd. 15%
Goertek Technology Co., Ltd. 25%
Beijing Goertek Technology Co., Ltd. 15%
Qingdao Goertek Acoustics Technology Co., Ltd. 25%
Shenzhen Goertek Technology Co., Ltd. 15%
Shanghai Goertek Technology Co., Ltd. 25%
Nanjing Goertek Technology Co., Ltd. 25%
Shenzhen Mototek Smart Technology Co., Ltd. 15%
Weifang Lokomo Precision Industry Co., Ltd. 15%
Goertek Investment Co., Ltd. 25%
Beijing Goertek Investment Management Co., Ltd. 25%
Olive Smart Hardware Investment Center LP --
Dongguan JoyForce Precision Manufacturing Co., Ltd. 15%
Goertek Intelligence Technology Co., Ltd. 15%
Rongcheng Goertek Technology Co., Ltd. 25%
Qingdao Goertek Commercial Factoring Co., Ltd. 25%
Kunshan Goertek Electronics Co., Ltd. 25%
Nanning Goertek Electronics Co., Ltd. 15%
Nanning Goertek Trading Co., Ltd. 25%
Xian Goertek Electronic Technology Co., Ltd. 25%
Yishui TECO Electronic Technology Co., Ltd. 25%
Goertek Vina Co., Ltd 20%
Goertek Precision Industry Vietnam Company Limited 20%
Goertek Technology Korea Co., Ltd. Tax rate is 10% if the income is less than KRW 200 million; 20% if
218
Goertek Inc. Annual Report 2021
the income is KRW 200 million-20 billion; 22% if the income is
KRW 20 billion-300 billion; and 25% if the income is more than
KRW 300 billion.
Goertek (HongKong) Co., Limited 8.25%/16.5%
Goertek Technology (Hong Kong)Co., Ltd. 16.5%
Goertek Technology Vina Company Limited 20%
GoerTek Audio Technologies Aps 22%
Goertek Seiki Techonology 株式会社 38%
Optimas Capital Partners Fund LP --
The federal tax rate for enterprise income tax is 21%, and the local
Goertek Electronics, Inc.
enterprise income tax rate in California is 8.84%.
Goertek Technology Taiwan Co., Ltd. 20%
Goertek Technology (Japan) Co., Ltd. 38%
2. Tax preference
(1) According to the Reply to the Filings of the First Batch of High-Tech Enterprises in Shandong Province in 2020 issued by
the Office of Leading Group for the Recognition and Management of National High-Tech Enterprises, the Company and its
subsidiaries, Weifang Goertek Electronics Co., Ltd. and Weifang Goertek Microelectronics Co., Ltd., have been recognized as
high-tech enterprises for a 3-year validity period, and their preferential period for the purpose of enterprise income tax is from
January 1, 2020 to December 31, 2022. The enterprise income tax rate of 15% applies to the Company and its subsidiaries, Weifang
Goertek Electronics Co., Ltd. and Weifang Goertek Microelectronics Co., Ltd., for year 2021.
(2) According to the Reply to the Filings of High-Tech Enterprises in Qingdao City in 2020 issued by the Office of Leading
Group for the Recognition and Management of National High-Tech Enterprises on January 15, 2021, a subsidiary, Qingdao Goertek
Intelligent Sensor Co., Ltd., has been recognized as a high-tech enterprise for a validity period of 3 years, and its preferential period
for the purpose of enterprise income tax is from January 1, 2020 to December 31, 2022. The enterprise income tax rate of 15%
applies to the subsidiary, Qingdao Goertek Intelligent Sensor Co., Ltd., for year 2021.
(3) According to the Reply to the Filings of the First Batch of High-Tech Enterprises in Shandong Province in 2019 issued by
the Office of Leading Group for the Recognition and Management of National High-Tech Enterprises on January 22, 2020, a
subsidiary, Yili Precision Manufacturing Co., Ltd. has been recognized as a high-tech enterprise for a validity period of 3 years, and
its preferential period for the purpose of enterprise income tax is from January 1, 2019 to December 31, 2021. The enterprise income
tax rate of 15% applies to the subsidiary Yili Precision Manufacturing Co., Ltd. for year 2021.
(4) According to the Announcement on Filing the First Batch of High-Tech Enterprises in Shandong Province in 2021 issued by
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Goertek Inc. Annual Report 2021
the Office of Leading Group for the Recognition and Management of National High-Tech Enterprises on January 4, 2022, a
subsidiary, Goertek Optical Technology Co., Ltd., has been recognized as a high-tech enterprise for a validity period of 3 years, and
its preferential period for the purpose of enterprise income tax is from January 1, 2021 to December 31, 2023. The enterprise income
tax rate of 15% applies to the subsidiary, Goertek Optical Technology Co., Ltd., for year 2021.
(5) According to the Reply to the Filings of the Third Batch of High-Tech Enterprises in Beijing City in 2020 (GKHZ [2021]
No.37) issued by the Office of Leading Group for the Recognition and Management of National High-Tech Enterprises on January
22, 2021, a subsidiary, Beijing Goertek Technology Co., Ltd., has been recognized as a high-tech enterprise for a validity period of 3
years, and its preferential period for the purpose of enterprise income tax is from January 1, 2020 to December 31, 2022. The
enterprise income tax rate of 15% applies to the subsidiary, Beijing Goertek Technology Co., Ltd., for year 2021.
(6) According to the Reply to the Filings of the Second Batch of High-Tech Enterprises in Shenzhen City in 2019 (GKHZ [2020]
No.47) issued by the Office of Leading Group for the Recognition and Management of National High-Tech Enterprises on February
17, 2020, a subsidiary, Shenzhen Goertek Technology Co., Ltd., has been recognized as a high-tech enterprise for a validity period of
3 years, and its preferential period for the purpose of enterprise income tax is from January 1, 2019 to December 31, 2021. The
enterprise income tax rate of 15% applies to the subsidiary, Shenzhen Goertek Technology Co., Ltd., for year 2021.
(7) According to the Announcement on Filing the First Batch of High-Tech Enterprises in Shenzhen in 2021 issued by the Office
of Leading Group for the Recognition and Management of National High-Tech Enterprises on January 17, 2022, a subsidiary,
Shenzhen Mototek Smart Technology Co., Ltd., has been recognized as a high-tech enterprise for a validity period of 3 years, and its
preferential period for the purpose of enterprise income tax is from January 1, 2021 to December 31, 2023. The enterprise income tax
rate of 15% applies to the subsidiary, Shenzhen Mototek Smart Technology Co., Ltd., for year 2021.
(8) According to the Notice on Publishing a List of the Second Batch of Proposed Recognized High-Tech Enterprises in
Shandong Province in 2020 issued by the Office of Leading Group for the Recognition and Management of National High-Tech
Enterprises on December 8, 2020, a subsidiary, Weifang Lokomo Precision Industry Co., Ltd. has been recognized as a high-tech
enterprise for a validity period of 3 years, and its preferential period for the purpose of enterprise income tax is from January 1, 2020
to December 31, 2022. The enterprise income tax rate of 15% applies to the subsidiary, Weifang Lokomo Precision Industry Co., Ltd.
for year 2021.
(9) According to the Notice on Publishing the Filings of the Second Batch of High-Tech Enterprises in Guangdong Province in
2021 issued by the Office of Leading Group for the Recognition and Management of National High-Tech Enterprises on December
20, 2021, a subsidiary, Dongguan Yili Precision Manufacturing Co., Ltd. has been recognized as a high-tech enterprise for a validity
period of 3 years, and its preferential period for the purpose of enterprise income tax is from January 1, 2021 to December 31, 2023.
The enterprise income tax rate of 15% applies to the subsidiary, Dongguan Yili Precision Manufacturing Co., Ltd. for year 2021.
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Goertek Inc. Annual Report 2021
(10) According to the Reply to the Filings of the Second Batch of High-Tech Enterprises in Guangdong Province in 2019
(GKHZ [2020] No.50) issued by the Office of Leading Group for the Recognition and Management of National High-Tech
Enterprises on February 18, 2020, a subsidiary, Goertek Intelligence Technology Co., Ltd., has been recognized as a high-tech
enterprise for a validity period of 3 years, and its preferential period for the purpose of enterprise income tax is from January 1, 2019
to December 31, 2021. The enterprise income tax rate of 15% applies to the subsidiary, Goertek Intelligence Technology Co., Ltd.,
for year 2021.
(11) According to the Announcement of the Ministry of Finance, the State Taxation Administration and the National
Development and Reform Commission on Continuing the Enterprise Income Tax Policies for the Large-Scale Development of
Western China (No. 23/2020), from January 1, 2021 to December 31, 2030, enterprise income tax will be levied at a reduced rate of
15% for encouraged industrial enterprises located in the western region. The enterprise income tax rate of 15% applies to the
subsidiary, Nanning Goertek Electronics Co., Ltd., for year 2021.
(12) Goertek (HongKong) Co., Limited is an entity eligible for the two-tier profit tax system. The tax rate of 8.25% is applied to
the taxable profit which does not exceed HKD 2,000,000, and the tax rate of 16.5% is applied to the part of taxable profit which
exceeds HKD 2,000,000.
(13) According to the Announcement of the State Administration of Taxation on Issues Concerning the Implementation of the
Inclusive Income Tax Deduction and Exemption Policies for Small Low-Profit Enterprises (State Administration of Taxation
Announcement No.2/2019), from January 1, 2019 to December 31, 2021, for small low-profit enterprises, 25% of the part of the
annual taxable income not exceeding RMB 1 million shall be determined as valid taxable income and enterprise income tax will be
levied at a reduced rate of 20%; 50% of the part of the annual taxable income between RMB 1 million and RMB 3 million shall be
determined as valid taxable income and enterprise income tax will be levied at a reduced rate of 20%. According to the
Announcement of the Ministry of Finance and the State Taxation Administration on Implementing the Preferential Income Tax
Policies for Micro and Small Enterprises and Individual Industrial and Commercial Households (Announcement No.12/2021 of the
Ministry of Finance and the State Taxation Administration) and the Announcement of the State Taxation Administration on Matters
Concerning the Implementation of Preferential Income Tax Policies Supporting the Development of Small Low-Profit Enterprises
and Individual Industrial and Commercial Households (Announcement No.8/2021 of the State Taxation Administration), from
January 1, 2021 to December 31, 2022, for small low-profit enterprises, 12.5% of the part of the annual taxable income not exceeding
RMB 1 million shall be determined as valid taxable income and enterprise income tax will be levied at a reduced rate of 20%. The
above preferential tax policies are applicable to the subsidiary, Beijing Goertek Microelectronics Co., Ltd., and enterprise income tax
is levied at the actual tax rate of 2.5% in 2021.
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Goertek Inc. Annual Report 2021
3. Others
None
VII. Notes to consolidated financial statements
1. Cash and bank balances
Unit: RMB
Item Closing balance Opening balance
Cash on hand 160,703.83 183,125.46
Bank deposits 9,137,740,198.21 6,913,008,859.08
Other monetary capital 910,620,794.05 874,947,777.14
Total 10,048,521,696.09 7,788,139,761.68
Including: Total amounts deposited
1,091,856,806.03 1,341,665,954.60
abroad
The total funds restricted by
910,620,794.05 874,947,777.14
mortgage, pledge or freeze are as follows:
Explanation on Other Matters
Balances in other currencies at the end of the year involve notes, bonds and L/C margins.
2. Held-for-trading financial assets
Unit: RMB
Item Closing balance Opening balance
Financial assets at fair value through profit
119,267,279.02 250,789,617.29
and loss
Including:
Investments in equity
98,804,286.66 125,327,442.62
instruments
Derivative financial assets 20,462,992.36 125,462,174.67
Total 119,267,279.02 250,789,617.29
3. Notes receivable
(1) Notes receivable listed by classification
Unit: RMB
Item Closing balance Opening balance
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Goertek Inc. Annual Report 2021
Bank acceptance notes 48,384,771.72 93,015,027.25
Commercial acceptance notes 1,709,928.75
Total 50,094,700.47 93,015,027.25
Unit: RMB
Closing balance Opening balance
Bad-debt Bad-debt
Book balance Book balance
provision provision
Category Propo
Propor
Book value Am rtion Book value
Proporti Amo tion of
Amount Amount Proportion oun of
on unt accrua
t accru
l
al
Notes receivable
with bad debt 50,094,700.47 100.00% 50,094,700.47 93,015,027.25 100.00% 93,015,027.25
reserves by group
Including:
Bank
48,384,771.72 96.59% 48,384,771.72 93,015,027.25 100.00% 93,015,027.25
acceptance notes
Commercial
1,709,928.75 3.41% 1,709,928.75
acceptance notes
Total 50,094,700.47 100.00% 50,094,700.47 93,015,027.25 100.00% 93,015,027.25
(2) Accrual, recovery or return of bad debt reserve in current period
None
(3) Notes receivable pledged at the end of the period
Unit: RMB
Item Amount pledged at the end of the period
Bank acceptance notes 4,385,853.64
Total 4,385,853.64
(4) Notes receivable endorsed or discounted by the Group at the end of the period and not yet due on the
balance sheet date
Unit: RMB
Amount derecognized at the end of the Amount not derecognized at the end of the
Item
period period
223
Goertek Inc. Annual Report 2021
Bank acceptance notes 76,909,941.48
Commercial acceptance notes 1,709,928.75
Total 76,909,941.48 1,709,928.75
(5) Notes that have been transferred to accounts receivable by the Group at the end of the period due to the
non-performance of the contract of the drawer
None
(6) Notes receivable actually written off in the current period
None
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Goertek Inc. Annual Report 2021
4. Accounts receivable
(1) Accounts receivable disclosed by classification
Unit: RMB
Closing balance Opening balance
Book balance Bad-debt provision Book balance Bad-debt provision
Category
Proportion Book value Proportion Book value
Amount Proportion Amount Amount Proportion Amount
of accrual of accrual
Accounts receivable for bad
531,002.50 0.01% 531,002.50 100.00%
debt reserves by item
Accounts receivable with bad
12,025,540,710.73 100.00% 126,326,184.81 1.05% 11,899,214,525.92 10,058,824,426.15 99.99% 107,212,829.50 1.07% 9,951,611,596.65
debts reserves by group
Including:
Accounts receivable
11,857,375,456.09 98.60% 125,485,358.54 1.06% 11,731,890,097.55 9,858,116,092.81 98.00% 106,209,287.83 1.08% 9,751,906,804.98
aging group
Accounts receivable
168,165,254.64 1.40% 840,826.27 0.50% 167,324,428.37 200,708,333.34 2.00% 1,003,541.67 0.50% 199,704,791.67
factoring aging group
Total 12,025,540,710.73 100.00% 126,326,184.81 1.05% 11,899,214,525.92 10,059,355,428.65 100.00% 107,743,832.00 1.07% 9,951,611,596.65
Bad debt reserves on a group basis: Accounts receivable aging group
Unit: RMB
Closing balance
Name
Book balance Bad-debt provision Proportion of accrual
Within 1 year 11,841,985,759.80 118,419,857.60 1.00%
1 to 2 years 3,586,193.03 1,075,857.91 30.00%
2 to 3 years 11,627,720.47 5,813,860.24 50.00%
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Goertek Inc. Annual Report 2021
Over 3 years 175,782.79 175,782.79 100.00%
Total 11,857,375,456.09 125,485,358.54 --
226
Goertek Inc. Annual Report 2021
Description for basis of determining the group:
For further details, please see this Note V. 10. “Impairment of financial assets”.
Bad debt reserves by group: Accounts receivable factoring aging group
Unit: RMB
Closing balance
Name
Book balance Bad-debt provision Proportion of accrual
Undue 168,165,254.64 840,826.27 0.50%
Overdue 1-90 days
Overdue 91-180 days
Overdue 181-360 days
Overdue more than 360 days
Total 168,165,254.64 840,826.27 --
Description for basis of determining the group:
For further details, please see this Note V. 10. “Impairment of financial assets”.
Disclosed by age of accounts receivable
Unit: RMB
Aging Book balance
Within 1 year (including 1 year) 12,010,151,014.44
1 to 2 years 3,586,193.03
2 to 3 years 11,627,720.47
Over 3 years 175,782.79
3 to 4 years 68,408.50
4 to 5 years 34.29
Over 5 years 107,340.00
Total 12,025,540,710.73
(2) Accrual, recovery or return of bad debt reserve in current period
Provision for bad debts of the current period:
Unit: RMB
Changes in amount of the current period
Category Opening balance Withdrawal or Closing balance
Accrual Write-off Other
write-back
Accounts receivable for
bad debt reserves by 531,002.50 102,177.68 633,180.18
item
Accounts receivable 107,212,829.50 19,113,355.31 126,326,184.81
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Goertek Inc. Annual Report 2021
with bad debts reserves
by group
Total 107,743,832.00 19,215,532.99 633,180.18 126,326,184.81
Among them, significant information of bad debt reserves withdrawn or written back in the current period:
None
(3) Accounts receivable actually written off in current period
Unit: RMB
Item Written off amount
Accounts receivable actually written off 633,180.18
Among them, significant information of accounts receivable written off:
None
(4) Accounts receivable of the 5 highest closing balance by debtor
Unit: RMB
Closing balance of accounts Proportion of total Closing Closing balance of bad debt
Company name
receivable balance of accounts receivable provision
Customer 1 3,340,717,904.53 27.78% 33,407,179.05
Customer 2 2,141,740,691.91 17.81% 21,417,406.92
Customer 3 1,944,785,829.66 16.17% 19,447,858.29
Customer 4 1,146,613,449.59 9.54% 11,466,134.49
Customer 5 715,446,129.70 5.95% 7,154,461.30
Total 9,289,304,005.39 77.25%
(5) Amount of assets and liabilities formed by transferring accounts receivable and continuing to be
involved
None
(6) Accounts receivable derecognized due to transfer of financial assets
Transfer method of financial assets Amount of receivables derecognized Gains or losses related to derecognition
Buyout factoring 1,673,167,869.71 -7,852,608.05
5. Receivable financing
Unit: RMB
228
Goertek Inc. Annual Report 2021
Item Closing balance Opening balance
Notes receivable 14,575,230.24
Total 14,575,230.24
Changes in the current period of receivables financing and changes in fair value
□ Applicable √ Not applicable
If the provision for impairment of receivables financing is accrued according to the general model of expected credit loss, please
refer to the disclosure methods for other receivables when disclosing information related to provision for impairment:
□ Applicable √ Not applicable
6. Prepayments
(1) Presentation of prepayments by aging
Unit: RMB
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year 85,353,901.12 87.50% 250,173,008.49 99.93%
1 to 2 years 12,190,916.86 12.50% 176,215.03 0.07%
Total 97,544,817.98 -- 250,349,223.52 --
Explanation of reasons why prepayments aged more than 1 year with significant amount are not settled in time:
Company name Year-end balance Reasons for no settlement
Company 1 12,178,509.88 Prepaid goods payments
Total 12,178,509.88
(2) Advance payment in the five highest closing balance by seller
The sum of the five highest prepayments in the year-end balance ranked by seller is RMB 37,372,531.31, accounting for 38.31%
of the total year-end balance of prepayments.
7. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other receivables 374,669,355.98 56,282,930.78
Total 374,669,355.98 56,282,930.78
229
Goertek Inc. Annual Report 2021
(1) Interest receivable
None
(2) Dividend receivable
None
(3) Other receivables
1) Classification of other receivables by nature of payment
Unit: RMB
Nature of payment Closing book balance Opening book balance
Tax refund for export receivable 107,739,537.40 12,490,314.32
Security deposit 90,839,988.55 57,935,416.76
Current account 164,646,290.05 3,135,180.20
Withholding and remitting social insurance
39,293,343.86
and housing provident fund
Reserve fund 148,313.37
Other 815,580.66 771,845.99
Total 403,334,740.52 74,481,070.64
2) Provision for bad debts
Unit: RMB
First stage Second stage Third stage
Expected credit Expected credit impairment Expected credit impairment
Bad-debt provision impairment losses losses for the entire life losses for the entire life Total
over the next 12 (credit impairment not (credit impairment has
months occurred) occurred)
Balance as of January 1,
18,198,139.86 18,198,139.86
2021:
Balance as of January 1,
2021 in the current —— —— —— ——
period
Accrual in the current
10,478,144.68 10,478,144.68
period
Amount written off in the
10,900.00 10,900.00
current period
230
Goertek Inc. Annual Report 2021
Balance as of December
28,665,384.54 28,665,384.54
31, 2021
Significant changes in the carrying value of changes in the allowances for losses in the current period
□ Applicable √ Not applicable
Disclosed by aging of accounts receivable
Unit: RMB
Aging Book balance
Within 1 year (including 1 year) 359,333,933.07
1 to 2 years 23,443,684.75
2 to 3 years 5,036,365.84
Over 3 years 15,520,756.86
3 to 4 years 8,670,851.36
4 to 5 years 5,156,222.00
Over 5 years 1,693,683.50
Total 403,334,740.52
3) Accrual, recovery or return of bad debt reserve in current period
Provision for bad debts of the current period:
Unit: RMB
Changes in amount of the current period
Opening
Category Withdrawal or Closing balance
balance Accrual Write-off Other
write-back
Accounts
receivable for bad
10,900.00 10,900.00
debt reserves by
item
Accounts
receivable with
18,198,139.86 10,467,244.68 28,665,384.54
bad debts reserves
by group
Total 18,198,139.86 10,478,144.68 10,900.00 28,665,384.54
Among them, significant amount in bad debt reserves written back or withdrawn in the current period:
None
4) Other receivables actually written off in the current period
Unit: RMB
231
Goertek Inc. Annual Report 2021
Item Written off amount
Other receivables actually written off 10,900.00
Among them, write-off of other significant receivables:
None
5) Other receivables of the 5 highest closing balance by debtor
Unit: RMB
Ratio in the total
Closing balance of
Company name Nature of payment Closing balance Aging closing balance of
bad debt provision
other receivables
Company 1 Current account 157,406,315.35 Within 1 year 39.02% 1,574,063.15
Tax refund for export
Company 2 91,830,238.29 Within 1 year 22.77% 918,302.38
receivable - VAT
Withholding and remitting
Company 3 social insurance and housing 39,293,343.86 Within 1 year 9.74% 392,933.44
provident fund
Within 1 year, 2-3
Company 4 Earnest money 31,145,566.89 7.72% 331,613.25
years
Tax refund for export Within 1 year, 1-2
Company 5 15,469,749.17 3.84% 3,057,843.71
receivable - VAT - Vietnam years
Total -- 335,145,213.56 -- 83.09% 6,274,755.93
6) Other receivables involving government subsidies
None
7) Other receivables derecognized due to transfer of financial assets
None
8) Amount of assets and liabilities formed by transferring other receivables and continuing to be involved
None
8. Inventories
Whether the Company needs to comply with disclosure requirements of real estate industry
No
232
Goertek Inc. Annual Report 2021
(1) Inventory classification
Unit: RMB
Closing balance Opening balance
Provision for Provision for
decline in value decline in value
of inventories or of inventories or
Item
Book balance provision for Book value Book balance provision for Book value
impairment of impairment of
contract contract
performance cost performance cost
Raw
5,166,920,234.13 110,350,236.94 5,056,569,997.19 2,281,283,533.83 85,486,871.76 2,195,796,662.07
materials
Products in
2,315,184,723.77 59,814,311.48 2,255,370,412.29 1,191,893,176.31 19,025,767.50 1,172,867,408.81
process
Goods in
4,408,510,122.04 59,150,749.51 4,349,359,372.53 5,479,699,670.13 23,194,817.12 5,456,504,853.01
stock
Revolving
421,008,703.37 421,008,703.37 345,562,979.30 345,562,979.30
materials
Total 12,311,623,783.31 229,315,297.93 12,082,308,485.38 9,298,439,359.57 127,707,456.38 9,170,731,903.19
(2) Provision for decline in value of inventories and provision for impairment of contract performance cost
Unit: RMB
Increased amount in the current Decreased amount in the current
period period
Item Opening balance Closing balance
Write-back or
Accrual Other Other
resale
Raw materials 85,486,871.76 112,760,089.91 87,896,724.73 110,350,236.94
Products in
19,025,767.50 64,384,648.25 23,596,104.27 59,814,311.48
process
Goods in stock 23,194,817.12 63,931,452.38 27,975,519.99 59,150,749.51
Total 127,707,456.38 241,076,190.54 139,468,348.99 229,315,297.93
(3) Explanation of the closing balance of inventory containing the capitalized amount of borrowing costs
None
233
Goertek Inc. Annual Report 2021
(4) Explanation of amortization amount of contract performance cost in current period
None
9. Non-current assets due within one year
Unit: RMB
Item Closing balance Opening balance
Non-current assets due within one year 67,724.41
Total 67,724.41
Significant debt investments/other debt investments
None
10. Other current assets
Unit: RMB
Item Closing balance Opening balance
Input tax retained for VAT 326,273,163.10 379,913,842.53
Input tax to be verified and to be deducted 129,974,831.71 116,105,675.19
Advance payment of enterprise income tax 6,833,590.83 26,715,612.43
Prepaid IPO fees 8,983,655.49
Prepaid housing property tax and stamp tax 123,606.53
Other 3,706,986.47
Total 475,772,227.60 522,858,736.68
11. Long-term equity investments
Unit: RMB
Increase or decrease in the current period Closin
Othe g
Provisi
Inve Recognized r Balance at the balanc
Opening Other Cash on for
Invested Investm stme investment chan Ot end of the e of
balance (book comprehensiv dividends or impair
entity ent nt gain and loss ges he period (book impair
value) e income profits ment
addition redu under equity in r value) ment
adjustments declared reserv
ction method equit provis
e
y ion
I. Joint Venture
II. Affiliated enterprises
AKM 295,656,242.7 25,611,552.36 1,189,723.34 4,310,075.40 318,147,443.07
234
Goertek Inc. Annual Report 2021
Industrial 7
Company
Limited
Qingdao
Virtual
Reality 41,754,559.79 -2,542,104.19 39,212,455.60
Institute
Co., Ltd.
Enkris
80,000,0
Semicond 42,305.24 80,042,305.24
00.00
uctor Inc.
337,410,802.5 80,000,0
Sub-total 23,111,753.41 1,189,723.34 4,310,075.40 437,402,203.91
6 00.00
337,410,802.5 80,000,0
Total 23,111,753.41 1,189,723.34 4,310,075.40 437,402,203.91
6 00.00
12. Investments in other equity instruments
Unit: RMB
Item Closing balance Opening balance
Investment projects of the Fund Company 318,163,764.54 174,609,853.97
Mobvoi Inc. 127,514,000.00 130,498,000.00
Shenzhen New Radio Technology Co.,
20,000,000.00
Ltd.
WaveOptics Ltd. 52,199,202.68
Total 465,677,764.54 357,307,056.65
Disclose investments in non-trading equity instruments of the period by item
Unit: RMB
Reasons for
Reasons for
Dividen other
Amount of other designation of
d Accumu comprehensiv
Accumulative consolidated income financial assets at fair
Name of project income lative e income
gains transferred to retained value through other
recogniz losses transferred to
earnings comprehensive
ed retained
income
earnings
Investment projects of the Fund Non-trading equity Disposal of
95,817,145.93 26,771,103.27
Company instrument equity
Non-trading equity
Mobvoi Inc.
instrument
Shenzhen New Radio Non-trading equity
235
Goertek Inc. Annual Report 2021
Technology Co., Ltd. instrument
Non-trading equity Disposal of
WaveOptics Ltd. 148,122,883.71 148,122,883.71
instrument equity
Total 243,940,029.64 174,893,986.98
Other explanations:
The accumulative gain from the disposal of the equity holded by Fund Company is RMB 34,803,826.41, of which RMB
26,771,103.27 is transferred to retained earnings, and shareholder’s equity attributable to minority shareholders is RMB
8,032,723.14.
13. Other non-current financial assets
Unit: RMB
Item Closing balance Opening balance
Financial assets classified as measured at fair value with
201,430,042.13
changes recorded in current profits and losses
Total 201,430,042.13
14. Fixed assets
Unit: RMB
Item Closing balance Opening balance
Fixed assets 18,123,352,480.76 14,674,535,924.15
Total 18,123,352,480.76 14,674,535,924.15
(1) Overview of fixed assets
Unit: RMB
Building and Production Transportation
Item Test equipment Office equipment Total
construction equipment equipment
I. Original
book value:
1. Opening
7,121,398,847.56 12,070,283,197.03 1,795,312,380.94 521,767,194.82 25,875,255.77 21,534,636,876.12
balance
2. Amount
increased in 1,795,834,230.50 3,204,456,050.25 676,309,350.27 129,223,313.01 2,285,790.68 5,808,108,734.71
current period
(1)
2,036,092,696.98 390,230,169.19 109,666,214.07 2,291,943.99 2,538,281,024.23
Purchase
236
Goertek Inc. Annual Report 2021
(2) Transfer
from
1,804,564,617.12 1,184,116,991.99 286,722,503.39 23,055,792.94 3,298,459,905.44
construction
in progress
(3) Increase
in business
combinations
(4) Impact
of difference
from
translation of -8,730,386.62 -15,753,638.72 -643,322.31 -3,498,694.00 -6,153.31 -28,632,194.96
statements in
foreign
currency
3. Amount
decreased in 8,653,046.23 514,503,615.68 200,999,682.94 23,665,682.00 4,768,653.94 752,590,680.79
current period
(1)
Disposal or 143,415.86 505,251,114.04 142,281,695.71 23,665,682.00 4,768,653.94 676,110,561.55
scrap
(2) Others 8,509,630.37 9,252,501.64 58,717,987.23 76,480,119.24
4. Closing
8,908,580,031.83 14,760,235,631.60 2,270,622,048.27 627,324,825.83 23,392,392.51 26,590,154,930.04
balance
II.
Accumulated
depreciation
1. Opening
1,049,234,767.80 4,861,162,487.45 668,695,109.01 262,240,878.17 18,767,709.54 6,860,100,951.97
balance
2. Amount
increased in 273,335,622.88 1,482,974,003.26 271,115,007.30 83,455,591.99 1,691,119.26 2,112,571,344.69
current period
(1) Accrual 274,144,247.96 1,485,053,048.65 271,252,103.77 85,426,423.54 1,691,449.78 2,117,567,273.70
(2) Impact
of
difference
from
translation -808,625.08 -2,079,045.39 -137,096.47 -1,970,831.55 -330.52 -4,995,929.01
of
statements
in foreign
currency
237
Goertek Inc. Annual Report 2021
3. Amount
decreased in 64,716.38 373,347,283.58 108,054,980.82 20,430,045.24 3,972,821.36 505,869,847.38
current period
(1)
Disposal or 64,716.38 368,079,520.59 84,303,154.85 20,430,045.24 3,972,821.36 476,850,258.42
scrap
(2) Others 5,267,762.99 23,751,825.97 29,019,588.96
4. Closing
1,322,505,674.30 5,970,789,207.13 831,755,135.49 325,266,424.92 16,486,007.44 8,466,802,449.28
balance
III.
Impairment
provision
1. Opening
balance
2. Amount
increased in
current period
3. Amount
decreased in
current period
4. Closing
balance
IV. Book
Value
1. Closing
7,586,074,357.53 8,789,446,424.47 1,438,866,912.78 302,058,400.91 6,906,385.07 18,123,352,480.76
book value
2. Opening
6,072,164,079.76 7,209,120,709.58 1,126,617,271.93 259,526,316.65 7,107,546.23 14,674,535,924.15
book value
Explanation on Other Matters
Other decrease in fixed assets represents the estimated amount of fixed assets adjusted after upgrade and renovation, as
transferred to construction in progress and houses and buildings.
(2) Temporarily idle fixed assets
None
(3) Fixed assets leased out through operating leases
Unit: RMB
238
Goertek Inc. Annual Report 2021
Item Book value at the end of the reporting period
Houses and buildings 362,897,570.63
(4) Overview of the fixed assets for which certificates of title to be obtained
Unit: RMB
Reasons for not obtaining the certificate of
Item Book value
title
Qingdao 1# Office building 1,208,044,858.90 Property rights certificate under processing
Approval in progress by the housing
9# Factory building 149,942,591.23
authority
55# Factory building 88,592,184.60 Property rights certificate under processing
56# Factory building 88,253,422.34 Property rights certificate under processing
57# Factory building 155,315,454.77 Property rights certificate under processing
23# Apartment 2,707,332.15 Property rights certificate under processing
(5) Liquidation of fixed assets
None
15. Construction in progress
Unit: RMB
Item Closing balance Opening balance
Construction in progress 2,127,055,853.77 2,078,910,639.92
Total 2,127,055,853.77 2,078,910,639.92
(1) Overview of construction projects in progress
Unit: RMB
Closing balance Opening balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Self-made
453,794,330.67 453,794,330.67 158,433,023.54 158,433,023.54
equipment
Unaccepted
705,426,549.35 705,426,549.35 205,919,906.36 205,919,906.36
equipment
2# Office
160,023,622.42 160,023,622.42 91,982,146.20 91,982,146.20
building
239
Goertek Inc. Annual Report 2021
Sporadic projects 157,044,940.34 157,044,940.34 77,163,481.14 77,163,481.14
39# Factory
106,641,302.22 106,641,302.22 63,400,326.60 63,400,326.60
building
42# Factory
78,086,553.66 78,086,553.66 43,602,044.74 43,602,044.74
building
52# Factory
77,142,513.20 77,142,513.20 1,920,779.74 1,920,779.74
building
37# Factory
65,991,667.31 65,991,667.31 58,643,938.12 58,643,938.12
building
46# Factory
56,866,174.61 56,866,174.61 35,435,572.74 35,435,572.74
building
63# Factory
38,623,187.09 38,623,187.09
building
38# Factory
27,185,507.14 27,185,507.14 18,875,165.69 18,875,165.69
building
76# Factory
22,751,748.04 22,751,748.04
building
73# Factory
18,061,783.67 18,061,783.67
building
74# Factory
17,779,539.88 17,779,539.88
building
43# Factory
17,137,354.45 17,137,354.45 14,607,806.39 14,607,806.39
building
75# Factory
15,726,428.05 15,726,428.05
building
69# Factory
13,084,558.18 13,084,558.18
building
68# Factory
13,063,930.16 13,063,930.16
building
67# Factory
12,688,314.15 12,688,314.15
building
72# Factory
12,277,054.11 12,277,054.11
building
49# Factory
10,804,751.93 10,804,751.93 5,911,524.61 5,911,524.61
building
48# Factory
9,111,894.09 9,111,894.09 1,975,767.13 1,975,767.13
building
47# Factory 8,653,090.45 8,653,090.45 4,225,214.79 4,225,214.79
240
Goertek Inc. Annual Report 2021
building
64# Factory
8,103,133.65 8,103,133.65
building
70# Factory
6,883,803.12 6,883,803.12
building
71# Factory
5,376,869.24 5,376,869.24
building
65# Factory
4,363,631.55 4,363,631.55
building
66# Factory
4,361,621.04 4,361,621.04
building
Qingdao 1#
1,230,265,550.05 1,230,265,550.05
Office building
55# Factory
24,550,734.57 24,550,734.57
building
56# Factory
24,550,571.55 24,550,571.55
building
Reconstruction
and expansion of 15,829,092.92 15,829,092.92
factory buildings
57# Factory
1,047,196.58 1,047,196.58
building
Unaccepted
570,796.46 570,796.46
software
Total 2,127,055,853.77 2,127,055,853.77 2,078,910,639.92 2,078,910,639.92
241
Goertek Inc. Annual Report 2021
(2) Increase or decrease of significant construction projects in progress in current period
Unit: RMB
Including:
Proportion Interest
Amount Accumulated Amount of
Increased Other amount of total capitalization Source
Name of transferred to Project amount of interest
Budget amount Opening balance amount in the decreased in Closing balance project rate for of
project fixed assets in progress interest capitalization
current period current period input to current funds
current period capitalization in current
budget period
period
Self-made
158,433,023.54 916,542,693.28 621,181,386.15 453,794,330.67 Other
equipment
Unaccepted
205,919,906.36 1,373,401,618.69 873,894,975.70 705,426,549.35 Other
equipment
2# Office
357,080,000.00 91,982,146.20 68,041,476.22 160,023,622.42 44.81% 40% Other
building
Sporadic
77,163,481.14 296,869,053.18 165,275,117.11 51,712,476.87 157,044,940.34 Other
projects
39# Factory
109,909,600.00 63,400,326.60 43,240,975.62 106,641,302.22 97.03% 95% Other
building
42# Factory
82,826,867.00 43,602,044.74 34,484,508.92 78,086,553.66 94.28% 95% Other
building
52# Factory
235,771,400.00 1,920,779.74 75,221,733.46 77,142,513.20 32.72% 35% Other
building
37# Factory
69,905,933.00 58,643,938.12 7,347,729.19 65,991,667.31 94.40% 95% Other
building
46# Factory
94,000,000.00 35,435,572.74 21,430,601.87 56,866,174.61 60.50% 70% Other
building
242
Goertek Inc. Annual Report 2021
Including:
Proportion Interest
Amount Accumulated Amount of
Increased Other amount of total capitalization Source
Name of transferred to Project amount of interest
Budget amount Opening balance amount in the decreased in Closing balance project rate for of
project fixed assets in progress interest capitalization
current period current period input to current funds
current period capitalization in current
budget period
period
63# Factory
172,939,700.00 38,623,187.09 38,623,187.09 22.33% 25% Other
building
38# Factory
28,625,600.00 18,875,165.69 8,310,341.45 27,185,507.14 94.97% 95% Other
building
76# Factory
48,563,124.77 22,751,748.04 22,751,748.04 46.85% 70% Other
building
73# Factory
49,331,582.51 18,061,783.67 18,061,783.67 36.61% 40% Other
building
74# Factory
64,324,249.13 17,779,539.88 17,779,539.88 27.64% 30% Other
building
43# Factory
18,670,000.00 14,607,806.39 2,529,548.06 17,137,354.45 91.79% 92% Other
building
75# Factory
56,944,053.31 15,726,428.05 15,726,428.05 27.62% 30% Other
building
69# Factory
38,939,639.23 13,084,558.18 13,084,558.18 33.60% 45% Other
building
68# Factory
38,888,118.50 13,063,930.16 13,063,930.16 33.59% 45% Other
building
67# Factory
37,476,058.32 12,688,314.15 12,688,314.15 33.86% 45% Other
building
72# Factory 38,708,355.93 12,277,054.11 12,277,054.11 31.72% 45% Other
243
Goertek Inc. Annual Report 2021
Including:
Proportion Interest
Amount Accumulated Amount of
Increased Other amount of total capitalization Source
Name of transferred to Project amount of interest
Budget amount Opening balance amount in the decreased in Closing balance project rate for of
project fixed assets in progress interest capitalization
current period current period input to current funds
current period capitalization in current
budget period
period
building
49# Factory
32,000,000.00 5,911,524.61 4,893,227.32 10,804,751.93 33.76% 45% Other
building
48# Factory
9,200,000.00 1,975,767.13 7,136,126.96 9,111,894.09 99.04% 95% Other
building
47# Factory
24,500,000.00 4,225,214.79 4,427,875.66 8,653,090.45 35.32% 45% Other
building
64# Factory
99,555,800.00 8,103,133.65 8,103,133.65 8.14% 10% Other
building
70# Factory
24,554,153.73 6,883,803.12 6,883,803.12 28.04% 45% Other
building
71# Factory
18,474,099.31 5,376,869.24 5,376,869.24 29.10% 45% Other
building
65# Factory
90,000,000.00 4,363,631.55 4,363,631.55 4.85% 5% Other
building
66# Factory
90,000,000.00 4,361,621.04 4,361,621.04 4.85% 5% Other
building
Qingdao 1#
Office 1,500,000,000.00 1,230,265,550.05 478,756.44 1,230,744,306.49 82.05% 100% 34,278,258.45 3,809,576.72 Other
building
55# Factory 99,670,000.00 24,550,734.57 64,041,450.03 88,592,184.60 88.89% 100% Other
244
Goertek Inc. Annual Report 2021
Including:
Proportion Interest
Amount Accumulated Amount of
Increased Other amount of total capitalization Source
Name of transferred to Project amount of interest
Budget amount Opening balance amount in the decreased in Closing balance project rate for of
project fixed assets in progress interest capitalization
current period current period input to current funds
current period capitalization in current
budget period
period
building
56# Factory
99,670,000.00 24,550,571.55 63,702,850.79 88,253,422.34 88.55% 100% Other
building
Reconstruction
and expansion
15,829,092.92 59,373,965.36 75,203,058.28 Other
of factory
buildings
57# Factory
211,081,300.00 1,047,196.58 154,268,258.19 155,315,454.77 73.58% 100% Other
building
Unaccepted
570,796.46 570,796.46 Other
software
Total 3,841,609,634.74 2,078,910,639.92 3,398,888,392.62 3,298,459,905.44 52,283,273.33 2,127,055,853.77 -- -- 34,278,258.45 3,809,576.72 --
Explanation on Other Matters
Construction in progress – Other amounts decreased in the year represent the transfer of house construction fees arising from the original construction in progress to long-term deferred
expenses upon completion and the transfer of accepted software to intangible assets.
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Goertek Inc. Annual Report 2021
(3) Provision for impairment of construction in progress in current period
None
(4) Construction materials
None
16. Right-of-use assets
Unit: RMB
Item Building and construction Total
I. Original book value:
1. Opening balance 462,821,988.61 462,821,988.61
2. Amount increased in current period 16,290,960.23 16,290,960.23
(1) New lease of current year 22,944,855.42 22,944,855.42
(2) Impact of change in the exchange rate -6,653,895.19 -6,653,895.19
3. Amount decreased in current period 37,447,701.56 37,447,701.56
(1) Amount disposed in current year 37,447,701.56 37,447,701.56
4. Closing balance 441,665,247.28 441,665,247.28
II. Accumulated depreciation
1. Opening balance
2. Amount increased in current period 122,484,411.95 122,484,411.95
(1) Accrual 122,484,411.95 122,484,411.95
3. Amount decreased in current period 11,615,685.33 11,615,685.33
(1) Disposal 11,615,685.33 11,615,685.33
4. Closing balance 110,868,726.62 110,868,726.62
III. Impairment provision
1. Opening balance
2. Amount increased in current period
(1) Accrual
3. Amount decreased in current period
(1) Disposal
4. Closing balance
IV. Book Value
1. Closing book value 330,796,520.66 330,796,520.66
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Goertek Inc. Annual Report 2021
2. Opening book value 462,821,988.61 462,821,988.61
17. Intangible assets
(1) Overview of intangible assets
Unit: RMB
Non-patent
Item Land-use right Patent right Other Total
technology
I. Original book value
1. Opening balance 1,404,807,112.85 8,964,410.00 2,922,489,842.67 178,444,433.82 4,514,705,799.34
2. Amount increased in
34,692,287.94 529,007,097.09 56,735,888.98 620,435,274.01
current period
(1) Purchase 37,057,706.34 1,698,113.16 56,772,444.84 95,528,264.34
(2) Internal R&D 528,007,923.88 528,007,923.88
(3) Increase in
business combinations
(4) Impact of
difference from translation
-2,365,418.40 -698,939.95 -36,555.86 -3,100,914.21
of statements in foreign
currency
3. Amount decreased in
146,000,482.71 146,000,482.71
current period
(1) Disposal 146,000,482.71 146,000,482.71
(2) Others - disposal
of subsidiaries
4. Closing balance 1,439,499,400.79 8,964,410.00 3,305,496,457.05 235,180,322.80 4,989,140,590.64
II. Accumulated
amortization
1. Opening balance 145,186,227.00 1,942,288.83 1,527,411,079.54 109,750,663.62 1,784,290,258.99
2. Amount increased in
30,517,816.04 896,441.00 529,247,511.90 27,289,760.40 587,951,529.34
current period
(1) Accrual 30,606,695.89 896,441.00 529,934,168.35 27,317,171.44 588,754,476.68
(2) Impact of
difference from translation
-88,879.85 -686,656.45 -27,411.04 -802,947.34
of statements in foreign
currency
3. Amount decreased
145,894,986.54 145,894,986.54
in current period
247
Goertek Inc. Annual Report 2021
(1) Disposal 145,894,986.54 145,894,986.54
(2) Others
4. Closing balance 175,704,043.04 2,838,729.83 1,910,763,604.90 137,040,424.02 2,226,346,801.79
III. Impairment provision
1. Opening balance
2. Amount increased in
current period
3. Amount decreased
in current period
4. Closing balance
IV. Book value
1. Closing book value 1,263,795,357.75 6,125,680.17 1,394,732,852.15 98,139,898.78 2,762,793,788.85
2. Opening book value 1,259,620,885.85 7,022,121.17 1,395,078,763.13 68,693,770.20 2,730,415,540.35
At the end of this period, the proportion of intangible assets created through internal research and development of the Company to the
balance of intangible assets is 59.04%.
(2) Overview of land-use right without certificates of title
None
18. Development expenditure
Unit: RMB
Increased amount in the current
Decreased amount in the current period
period
Item Opening balance Closing balance
Internal development Recognized as Transfer to current
Other
expenses intangible assets profit and loss
Self-developed
technologies for
107,970,366.02 4,301,342,763.66 528,007,923.88 3,638,349,113.36 242,956,092.44
electroacoustic
products
Total 107,970,366.02 4,301,342,763.66 528,007,923.88 3,638,349,113.36 242,956,092.44
19. Goodwill
(1) Original book value of goodwill
Unit: RMB
Name of the invested entity or matter Opening balance Increase in the current period Decrease in the Closing balance
248
Goertek Inc. Annual Report 2021
forming goodwill current period
Formed by business
Other Disposal Other
combinations
Goertek Electronics, Inc. 1,743,540.56 1,743,540.56
Weifang Goertek Communication
15,115,644.52 15,115,644.52
Technology Co., Ltd.
GoerTek Audio Technologies Aps 8,831,473.29 8,831,473.29
Total 25,690,658.37 25,690,658.37
(2) Impairment provision for goodwill
Unit: RMB
Increase in the current Decrease in the current
Name of the invested entity or matter
Opening balance period period Closing balance
forming goodwill
Accrual Other Disposal Other
Goertek Electronics, Inc.
Weifang Goertek Communication
Technology Co., Ltd.
GoerTek Audio Technologies Aps 8,831,473.29 8,831,473.29
Total 8,831,473.29 8,831,473.29
Information about the asset group or portfolio of asset groups of goodwill
At December 31, 2021, net value of goodwill is RMB 16,859,185.08, of which RMB 15,115,644.52 related to acquisition of
Weifang Goertek Communication Technology Co., Ltd. No goodwill impairment is recognized in the year, as the recoverable
amount of the relevant group of assets valued under the equity method is higher than its carrying value (including part of carrying
value of goodwill apportioned).
Explain the goodwill impairment test process, key parameters (such as the forecast period growth rate, stable period growth rate,
profit rate, discount rate, forecast period, etc. when the present value of the future cash flow is expected) and the recognition method
of goodwill impairment loss
None
Impact of goodwill impairment test
None
20. Long-term deferred expenses
Unit: RMB
Increased amount in Amortized amount Other decreased
Item Opening balance Closing balance
the current period in the current period amount
249
Goertek Inc. Annual Report 2021
Expenditure on
128,720,931.07 134,846,196.62 71,121,615.84 192,445,511.85
house improvement
Electric power
5,867,336.48 5,867,336.48
facility
Bank commission
16,767,021.31 8,574,246.81 8,192,774.50
and arrangement fee
Financing guarantee
3,030,000.00 1,262,500.00 1,767,500.00
fee
IT project service fee 6,146,685.59 1,707,412.70 4,439,272.89
Other 859,743.42 509,312.41 350,431.01
Total 152,215,032.28 144,022,882.21 89,042,424.24 207,195,490.25
21. Deferred tax assets/liabilities
(1) Deferred tax assets not offset
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
difference difference
Provision for impairment of
286,270,259.14 45,253,703.58 201,145,010.02 31,772,246.81
assets
Unrealized profit from
1,058,642,169.31 161,021,024.99 917,195,852.09 146,690,522.89
internal transaction
Deductible loss 1,291,424,655.49 204,109,171.19 105,178,529.87 25,019,797.35
Government subsidies 299,191,717.99 46,916,190.75 322,711,738.03 49,690,387.77
Held-for-trading financial
assets - changes in fair value 49,624,038.43 7,443,605.78
of equity instrument
Changes in the fair value of
derivative financial 15,190,564.34 2,285,343.12 43,578,775.71 7,190,497.99
instruments
Temporary differences of
46,297,192.22 6,944,578.83 51,682,581.01 7,752,387.15
fixed assets
Expenses of share-based
190,629,395.67 28,594,409.35
payment
Total 3,187,645,954.16 495,124,421.81 1,691,116,525.16 275,559,445.74
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Goertek Inc. Annual Report 2021
(2) Deferred tax liabilities not offset
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
difference difference
Asset appreciation after re-evaluation
following the combination with an 4,338,259.81 1,084,564.94 4,549,882.24 1,137,470.56
enterprise under different control
Changes in the fair value of
29,721,944.30 4,739,855.81 171,872,843.02 26,894,130.21
derivative financial instruments
Difference in time point for
recognition of interest income of 5,581,895.45 1,395,473.86 2,503,977.04 625,994.26
factoring business
Difference between the book value of
2,536,133,275.63 380,419,991.34 1,962,722,098.44 294,408,314.77
fixed assets and their tax bases
Held-for-trading financial assets -
changes in fair value of equity 15,290,023.02 2,293,503.45
instrument
Total 2,591,065,398.21 389,933,389.40 2,141,648,800.74 323,065,909.80
(3) Deferred tax assets or liabilities presented in net amount after offsetting
Unit: RMB
Amount of deferred tax Amount of deferred tax
Closing balance of Opening balance of
assets and liabilities assets and liabilities
Item deferred tax assets or deferred tax assets or
mutually offset at the end mutually offset at the
liabilities after offsetting liabilities after offsetting
of the period beginning of the period
Deferred tax assets 495,124,421.81 275,559,445.74
Deferred tax liabilities 389,933,389.40 323,065,909.80
(4) Details of unrecognized deferred tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible temporary difference 98,037,802.83 52,506,297.00
Deductible loss 916,176,966.88 655,499,213.78
Government subsidies 3,972,247.35 4,940,624.12
Unrealized profit from internal transaction 198,600,822.88 155,348,350.40
251
Goertek Inc. Annual Report 2021
Total 1,216,787,839.94 868,294,485.30
(5) Deductible loss of unrecognized deferred tax assets will expire in the following years
Unit: RMB
Year Closing balance Opening balance Notes
2021 44,036,312.92
2022 9,008,881.10 11,479,583.03
2023 58,999,159.63 98,173,819.34
2024 77,929,325.94 182,554,710.09
2025 160,630,241.51 319,254,788.40
2026 172,308,560.69
2027 718,056.78
2028 37,679,003.68
2029 76,312,985.99
2030 125,931,259.51
2031 196,659,492.05
Total 916,176,966.88 655,499,213.78 --
22. Other non-current assets
Unit: RMB
Closing balance Opening balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Contract assets 119,469.27 1,194.69 118,274.58 187,877.77 1,878.78 185,998.99
Prepayment for long-term
366,744,190.26 366,744,190.26 235,100,069.21 235,100,069.21
assets
Input tax to be deducted
but expected not to be 17,036,311.11 17,036,311.11 15,732,285.26 15,732,285.26
deducted within one year
Certificate of deposit of
122,540,194.44 122,540,194.44
large sums
The part due within one
-68,408.50 -684.09 -67,724.41
year
Total 506,440,165.08 1,194.69 506,438,970.39 250,951,823.74 1,194.69 250,950,629.05
252
Goertek Inc. Annual Report 2021
23. Short-term borrowings
(1) Types of short-term borrowings
Unit: RMB
Item Closing balance Opening balance
Secured borrowings 1,008,216,693.01 666,463,000.00
Credit borrowings 3,276,642,654.01 2,523,402,281.20
Total 4,284,859,347.02 3,189,865,281.20
Explanation of the types of short-term borrowings:
The year-end balance of secured borrowing is RMB 1,008,216,693.01, consisting of principle of RMB 1,005,956,500.00 and
interest of RMB 2,260,193.01. A part of the amount, RMB 719,050,000.00, is secured by a guarantee provided by Goertek Group Co.,
Ltd., and the remainder is secured by a guarantee provided by its subsidiary, Goertek (HongKong) Co., Limited.
(2) Short-term borrowings that are overdue and not repaid
None
24. Held-for-trading financial liabilities
Unit: RMB
Item Closing balance Opening balance
Held-for-trading financial liabilities 15,190,564.34 43,578,775.71
Including:
Derivative financial
15,190,564.34 43,578,775.71
liabilities
Total 15,190,564.34 43,578,775.71
25. Notes payable
Unit: RMB
Type Closing balance Opening balance
Bank acceptance notes 2,742,876,464.23 1,797,630,927.08
Total 2,742,876,464.23 1,797,630,927.08
The amount of bills payable due and unpaid at the end of this period is RMB 0.00.
253
Goertek Inc. Annual Report 2021
26. Accounts Payable
(1) Presentation of accounts payable
Unit: RMB
Item Closing balance Opening balance
Material cost and others 16,391,404,094.29 14,068,333,091.24
Payment for equipment 1,663,151,657.69 866,620,185.20
Payment for construction projects 475,053,903.42 590,401,812.84
Total 18,529,609,655.40 15,525,355,089.28
(2) Important accounts payable aged above 1 year
Unit: RMB
Item Closing balance Reasons for outstanding or carry-over
Payment for equipment 4,553,236.38 Unsettled
Payment for construction projects 3,945,515.10 Unsettled
Payment for equipment 3,890,450.75 Unsettled
Payment for construction projects 3,456,102.47 Unsettled
Payment for construction projects 2,677,659.08 Unsettled
Payment for equipment 2,428,715.42 Unsettled
Payment for construction projects 2,057,801.58 Unsettled
Payment for material 1,785,884.72 Unsettled
Payment for equipment 1,757,381.39 Unsettled
Payment for equipment 1,394,369.95 Unsettled
Payment for construction projects 1,304,059.07 Unsettled
Payment for material 1,255,434.07 Unsettled
Total 30,506,609.98 --
27. Contract liabilities
Unit: RMB
Item Closing balance Opening balance
Goods payments received in advance 2,210,825,761.69 772,033,187.85
Total 2,210,825,761.69 772,033,187.85
254
Goertek Inc. Annual Report 2021
28. Payroll payable
(1) Presentation of payroll payable to employees
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
I. Short-term payroll 1,136,453,967.56 7,477,012,054.66 7,546,895,862.59 1,066,570,159.63
II. Post-employment 552,597,537.13 552,597,537.13
benefits—defined
contribution plans
Total 1,136,453,967.56 8,029,609,591.79 8,099,493,399.72 1,066,570,159.63
(2) Presentation of short-term payroll
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
1. Salaries, bonuses,
1,126,479,091.79 6,610,396,096.58 6,681,966,133.52 1,054,909,054.85
allowances and subsidies
2. Employee welfare fee 426,845,347.70 426,845,347.70
3. Social insurance 234,362,594.89 234,362,594.89
premium
Incl.: Medical 225,409,289.39 225,409,289.39
insurance premium
Work injury 7,404,777.31 7,404,777.31
insurance premium
Maternity
1,548,528.19 1,548,528.19
insurance premium
4. Housing provident
182,639,259.43 182,639,259.43
fund
5. Labor union
expenditure and
9,974,875.77 22,768,756.06 21,082,527.05 11,661,104.78
employee education
expenses
Total 1,136,453,967.56 7,477,012,054.66 7,546,895,862.59 1,066,570,159.63
(3) Presentation of defined contribution plans
Unit: RMB
255
Goertek Inc. Annual Report 2021
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
1. Basic endowment
530,270,151.16 530,270,151.16
insurance premium
2. Unemployment
22,327,385.97 22,327,385.97
insurance premium
Total 552,597,537.13 552,597,537.13
Other explanations:
The Group contributes to mandatory pension program and unemployment benefit program established by governmental
authority. Under these programs, the Group makes monthly contributions to these programs respectively at 16% and 0.70% of the
2021 basis for social insurance contributions. Except the above monthly contributions, the Group is not under other payment
obligations. Corresponding expenditures are recorded in the current profits and losses, or related asset costs when incurred.
29. Taxes payable
Unit: RMB
Item Closing balance Opening balance
VAT 35,791,727.76 20,952,053.68
Enterprise income tax 254,141,624.62 131,731,154.94
Personal income tax 9,980,898.05 7,376,446.64
City maintenance and construction tax 19,989,711.74 9,791,014.76
Education surcharge 8,056,604.31 3,670,236.25
Local education surcharges 5,766,024.57 2,474,306.23
Local water conservancy construction fund 0.00 703,565.32
Housing property tax 16,792,720.42 11,797,756.21
Land use tax 2,926,628.84 4,682,015.07
Stamp duties tax 3,141,644.18 1,905,608.50
Water resource tax 20.00 32,414.00
Environmental protection tax 5,024.73 19,282.98
Withholding taxes 17,371.06 362,463.14
Total 356,610,000.28 195,498,317.72
30. Other payables
Unit: RMB
Item Closing balance Opening balance
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Goertek Inc. Annual Report 2021
Interest payable 8,911,319.91
Other payables 80,187,733.17 58,933,389.73
Total 80,187,733.17 67,844,709.64
(1) Interest payable
Unit: RMB
Item Closing balance Opening balance
Interest on long-term borrowings with
payment of interest by installments and 1,925,046.99
repayment of principal upon maturity
Corporate bond interest 4,381,543.10
Interest payable on short-term borrowings 2,604,729.82
Total 8,911,319.91
Important overdue and unpaid interest:
None
(2) Dividends payable
None
(3) Other payables
1) Presentation of other payables by nature of payment
Unit: RMB
Item Closing balance Opening balance
Current accounts payable 30,175,265.11 48,644,678.41
Payroll payable 4,246,920.21 6,104,492.63
Deposit payable 44,029,093.10 1,869,467.99
Various security deposits payable 1,736,454.75 2,314,750.70
Total 80,187,733.17 58,933,389.73
2) Other important payables aged above 1 year
None
31. Non-current liabilities due within one year
Unit: RMB
257
Goertek Inc. Annual Report 2021
Item Closing balance Opening balance
Long-term borrowings due within one year 400,000,000.00
Lease liabilities due within one year 101,408,170.04 113,350,154.66
Total 501,408,170.04 113,350,154.66
32. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
Notes receivable endorsed, undue and not
1,709,928.75 3,901,143.75
de-recognized
VAT payable—tax on items to be resold 13,134,430.26 3,111,451.58
Total 14,844,359.01 7,012,595.33
33. Long-term borrowings
(1) Types of long-term borrowings
Unit: RMB
Item Closing balance Opening balance
Secured borrowings 1,613,294,229.18 2,754,299,262.02
Credit borrowings 990,921,555.56
Long-term borrowings due within one year -400,000,000.00
Total 2,204,215,784.74 2,754,299,262.02
Description of types of long-term borrowings:
The year-end balance of secured borrowing is RMB 1,613,294,229.18, consisting of RMB 1,611,383,000.00 of principle and
RMB 1,911,229.18 of interest. A part of the amount, RMB 400,000,000.00 of borrowing is secured by a guarantee provided by
Goertek Group Co., Ltd., and the remaining borrowings is secured by a guarantee provided by its subsidiary, Goertek (HongKong)
Co., Limited.
Other explanations, including interest rate range:
Closing balance Opening balance
Foreign Local Foreign Local
Borrowing Borrowing Interest Currenc currency currency currency currency
Creditor
Starting date Closing date rate (%) y amount amount amount amount
(RMB (RMB (RMB (RMB
10,000) 10,000) 10,000) 10,000)
258
Goertek Inc. Annual Report 2021
Standard
Chartered Bank 1/16/2020 1/16/2023 1.65-3.46 USD 19,000.00 121,138.30 30,000.00 195,747.00
syndicate
China
Development 9/29/2020 9/28/2022 3.54-3.79 RMB 40,000.00 40,000.00
Bank
Shandong
Province Branch
of The 3/11/2021 2/24/2023 2.70 RMB 50,000.00
Export-Import
Bank of China
Shandong
Province Branch
of The 5/28/2021 5/26/2023 3.40 RMB 49,000.00
Export-Import
Bank of China
Syndicated loans 9/20/2018 9/21/2026 5.39 RMB 39,682.93
34. Bonds payable
(1) Bonds payable
Unit: RMB
Item Closing balance Opening balance
Convertible bond 3,031,391,335.56
Total 3,031,391,335.56
(2) Changes in bonds payable (excluding preferred shares, perpetual bonds and other financial instruments
classified as financial liabilities)
Unit: RMB
Issue
Premium Share
in the Provisio Repayme Redempt
Bond or conversi
Bond Face Issuing Issued Opening curre n interest nt in ion in Closing
perio discount on in
name value date amount balance nt at face current current balance
d amortizat current
perio value period year
ion year
d
Friday,
Converti 4,000,00 6 4,000,000,00 3,031,391,3 687,779. 12,132,7 3,029,10 14,418,8
June 12, 0.00
ble bond 0,000.00 years 0.00 35.56 54 69.38 5,297.84 07.10
2020
Total -- -- -- 4,000,000,00 3,031,391,3 687,779. 12,132,7 3,029,10 14,418,8 0.00
259
Goertek Inc. Annual Report 2021
0.00 35.56 54 69.38 5,297.84 07.10
(3) Explanation of conversion conditions and time of convertible bonds
As approved by the CSRC in its Reply on Approving Public Offering of Convertible Bonds by Goertek Inc. (CSRC Permit No.
780/[2020]), the Group issued 40,000,000 convertible bonds with par value of RMB 100 on June 12, 2020. The coupon rate of the
bonds is 0.20% for the first year, 0.40% for the second year, 0.60% for the third year, 1.50% for the fourth year, 1.80% for the fifth
year and 2.00% for the sixth year. Annual interest payment dates are each anniversary of the issuance date of convertible bonds, and
the principal and all interests accrued will be paid at maturity date.
The conversion period starts from the first trading day after the expiration of six months from the issuance date of the
convertible bonds until the maturity date of the convertible bonds (from December 18, 2020 to June 11, 2026). The initial conversion
price is RMB 23.27 per share and remains unchanged up to date.
For the Company’s A shares (stock abbreviation: Goertek; stock code: 002241), the closing price in more than ten trading days
in twenty consecutive trading days from December 18, 2020 to January 15, 2021 was not lower than 130% of the current “Goertek
Convertible Bonds NO.2” conversion price at RMB 23.27 per share, i.e. RMB 30.26 per share. The conditional redemption of
“Goertek Convertible Bonds NO.2” according to the Prospectus has been triggered.
According to the Proposal on Early Redemption of “Goertek Convertible Bonds NO.2” reviewed and approved at the thirteenth
session of the fifth Board of Directors and the eleventh session of the fifth Board of Supervisors held by the Company on January 15,
2021, it was resolved to exercise the conditional redemption right of “Goertek Convertible Bonds NO.2” to redeem after close of
market on the redemption registration date (March 2, 2021) all “Goertek Convertible Bonds NO.2” bonds at the price of the nominal
value of the bonds plus the accrued interest for the current period. As of March 3, 2021, “Goertek Convertible Bonds NO.2” was no
longer traded and converted, and was delisted on March 11, 2021.
(4) Explanation of other financial instruments classified as financial liabilities
None
35. Lease liabilities
Unit: RMB
Item Closing balance Opening balance
Lease payment 327,964,908.57 441,150,002.41
Unrecognized financing fees -16,346,783.13 -28,969,348.91
Lease liabilities due within one year -101,408,170.04 -113,350,154.66
260
Goertek Inc. Annual Report 2021
Total 210,209,955.40 298,830,498.84
36. Deferred income
Unit: RMB
Increase in the Decrease in the
Item Opening balance Closing balance Cause of formation
current period current period
Government
538,922,331.52 198,381,126.00 196,982,376.87 540,321,080.65
subsidies
Total 538,922,331.52 198,381,126.00 196,982,376.87 540,321,080.65 --
Items involving government subsidies:
Unit: RMB
Amount
included
in Amount
Amount
Amount of new non-oper of cost Other Asset-related
included in other
Liability item Opening balance subsidies in ating offset in chang Closing balance /income-rela
income in
current period revenue current es ted
current period
of the period
current
period
Special funding for
corporate
innovation, Income-relat
7,784,270.58 140,206,700.00 147,990,970.58
technical ed
transformation and
industrial upgrading
Special funding for
corporate
innovation,
489,411,393.69 58,174,426.00 47,364,779.64 500,221,040.05 Asset-related
technical
transformation and
industrial upgrading
Awards and
subsidies for public 41,726,667.25 1,626,626.65 40,100,040.60 Asset-related
leasehold houses
37. Share capital
Unit: RMB
Opening balance Increase or decrease in the change (+, -) Closing balance
261
Goertek Inc. Annual Report 2021
Transferred
New shares Bonus shares from Other Sub-total
reserves
Total shares 3,275,438,427.00 140,882,609.00 140,882,609.00 3,416,321,036.00
Other explanations:
(1) Due to the convertible bond holders’ request for conversion in 2021, the equity capital of the Company was changed to RMB
3,416,321,036.
(2) As of December 31, 2021, the 115,400,305 shares of the Company held by the controlling shareholders and their persons
acting in concert have been pledged, representing 3.38% of total shares of the Company. Including:
① Mr. Jiang Long, a shareholder of the Company, pledged his 15,000,000 shares of the Company to China Merchants
Securities Co., Ltd. for the period from August 3, 2021 to August 3, 2022.
② Goertek Group Co., Ltd., a shareholder of the Company, pledged its 100,400,305 shares of the Company to Zhongtai
Securities Co., Ltd. for the period from March 30, 2021 until the procedures for pledge release are completed.
38. Other equity instruments
(1) Basic information of other financial instruments such as preferred stocks and perpetual bonds issued at
the end of the period
As approved by the CSRC in its Reply on Approving Public Offering of Convertible Bonds by Goertek Inc. (CSRC Permit No.
780/[2020]), the Company issued 40,000,000 convertible bonds with par value of RMB 100 on June 12, 2020. The coupon rate of the
bonds is 0.20% for the first year, 0.40% for the second year, 0.60% for the third year, 1.50% for the fourth year, 1.80% for the fifth
year and 2.00% for the sixth year. Annual interest payment dates are each anniversary of the issuance date of convertible bonds, and
the principal and all interests accrued will be paid at maturity date.
According to the Proposal on Early Redemption of “Goertek Convertible Bonds NO.2” reviewed and approved at the thirteenth
session of the fifth Board of Directors and the eleventh session of the fifth Board of Supervisors held by the Company on January 15,
2021, it was resolved to exercise the conditional redemption right of “Goertek Convertible Bonds NO.2” to redeem all “Goertek
Convertible Bonds NO.2” bonds which were not converted to shares at the price of the nominal value of the bonds plus the accrued
interest for the current period. As of March 3, 2021, “Goertek Convertible Bonds NO.2” was no longer traded and converted, and was
delisted on March 11, 2021.
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Goertek Inc. Annual Report 2021
(2) Changes in financial instruments such as preferred shares and perpetual bonds outstanding at the end
of the period
Unit: RMB
Outstanding Increase in the current
Beginning of the period Decrease in the current period End of period
financial period
instruments Quantity Book value Quantity Book value Quantity Book value Quantity Book value
Convertible
141,560,665 317,690,852.25 141,560,665 317,690,852.25
bond
Total 141,560,665 317,690,852.25 141,560,665 317,690,852.25
Changes of other equity instruments in the current period, explanation of reasons for changes, and basis for relevant accounting
treatment:
The decrease in the amount of other equity instruments relates to the conversion and redemption of the convertible bonds in the
year.
39. Capital reserves
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Capital premium (Equity
3,282,034,618.76 5,520,332,302.70 128,809,946.78 8,673,556,974.68
premium)
Other capital reserves 529,624,172.52 871,368,483.26 596,443,436.16 804,549,219.62
Total 3,811,658,791.28 6,391,700,785.96 725,253,382.94 9,478,106,194.30
Other explanations, including the increase and decrease in the current period and explanation of reasons for changes:
① Capital reserves-equity premium increased by RMB 5,520,332,302.70 for the year, attributable to: 1. the conversion of
convertible bonds, causing an increase in capital reserves-equity premium by RMB 3,209,305,793.20; 2. the share-based payment for
the first exercise related to “Homeland No. 4”, whereby other capital reserves of RMB 596,443,436.16 recognized during the waiting
period was transferred into equity premium; and 3. an increase of RMB 1,714,583,073.34 in capital reserves-equity premium related
to the increased holdings of the Company in a subsidiary, Goertek Microelectronics Inc. as a result of the minority shareholders’
capital increase.
② Capital reserves-equity premium decreased by RMB 128,809,946.78, attributable to: 1. the non-trading transfer of the
11,000,000 shares in the special securities account for repurchase to the special account for “Homeland No. 5” employee stock
program at RMB 10 per share in the year, causing an increase in capital reserves-equity premium by RMB 114,033,093.83; and 2. the
share-based payment of Goertek Microelectronics Inc. in the year, causing an increase in minority equity and thus a decrease in
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Goertek Inc. Annual Report 2021
capital reserves-equity premium by RMB 14,776,852.95.
③ Capital reserves–other capital reserves increased by RMB 871,368,483.26 for the year, all related to the share-based
payment. For the details, please see this Note XIII–Share-based Payment–2. Equity-settled share-based payment.
④ Capital reserves–other capital reserves decreased by RMB 596,443,436.16 for the year, all related to the share-based
payment for the first exercise related to “Homeland No. 4”, with other capital reserves being transferred into equity premium.
40. Treasury shares
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Shares of the Company
acquired for employee
516,007,644.95 1,999,998,595.63 224,033,093.83 2,291,973,146.75
stock programs or equity
incentives
Total 516,007,644.95 1,999,998,595.63 224,033,093.83 2,291,973,146.75
Other explanations, including the increase and decrease in the current period and explanation of reasons for changes:
As of December 31, 2021, the cumulative treasury shares are 74,265,451, representing 2.17% of total equity of the Company.
Details are as follows:
1. Treasury shares buyback
At the 24th meeting of the 4th Board of Directors of the Company held on October 18, 2019, the Proposal on the Plan to
Re-purchase Shares of the Company and other related proposals were deliberated and adopted, approving the Company to repurchase
its own shares at a price no higher than RMB 21.00 per share for employee stock programs or equity incentives through centralized
bidding, where the total amount of funding for share repurchase shall be no less than RMB 500 million and no more than RMB 1
billion. The share repurchase proposal shall be implemented within 12 months after reviewed and adopted by the Board of Directors
of the Company. As of April 27, 2020, the share repurchase plan was completely implemented, and the 25,335,918 shares were
re-purchased in total. The treasury shares acquired from this share repurchase represent 0.74% of the total equity of the Company at
the year end.
At the 15th and 16th meetings of the 5th Board of Directors of the Company held on January 29, 2021 and February 9, 2021
respectively, the Proposal on the Deliberation of the Plan to Re-purchase Shares of the Company and the Proposal on the
Amendment of the Plan to Re-purchase Shares of the Company were deliberated and adopted successively, approving the Company to
use its own funds to repurchase its shares through centralized bidding for the later implementation of employee stock plans or equity
incentives. The total amount of funding for share repurchase shall be no less than RMB 1,000 million (inclusive) and no more than
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Goertek Inc. Annual Report 2021
RMB 2,000 million, and the re-purchase price may not exceed RMB 39.00 per share. The share repurchase proposal shall be
implemented within 6 months after reviewed and adopted by the Board of Directors of the Company. As of February 23, 2021, the
implementation of share repurchase plan was completed, and the 59,929,533 shares were re-purchased in total. The treasury shares
acquired from this share repurchase represent 1.75% of the total equity of the Company at the year end.
2. Treasury shares transfer
On July 26, 2021, the Company received the Confirmation of Securities Transfer Registration issued by China Securities
Depository and Clearing Corporation Limited Shenzhen Branch. The 11,000,000 shares in the special securities account for
repurchase of the Company were transferred to the special account for “Homeland No. 5” employee stock program at RMB 10 per
share on July 23, 2021. As of the reporting date, there are a total of 11,000,000 shares in the special account for “Homeland No. 5”
employee stock program, accounting for 0.32% of the Company's total share capital at the end of the period
41. Other comprehensive income
Unit: RMB
2021
Less:
Recorde
d in
Less:
other
Recorded in
compreh
other
ensive
comprehensi
income Amount
Amount ve income Attributed
for the Less: after tax
incurred before for the after tax to Closing
Item Opening balance previous Income attributabl
income tax in previous minority balance
period tax e to the
the current period and shareholde
and expenses parent
period transferred rs
transferr company
in retained
ed in
earnings for
profit or
the current
loss for
period
the
current
period
I. Other comprehensive
income that cannot be 173,914,158 979,828.8 39,220,07 19,800,78 46,931,4
7,711,365.44 233,914,853.56
subsequently reclassified .16 2 9.94 6.64 45.38
into profit and loss
Changes in the 7,711,365.44 233,914,853.56 173,914,158 979,828.8 39,220,07 19,800,78 46,931,4
265
Goertek Inc. Annual Report 2021
fair value of other equity .16 2 9.94 6.64 45.38
instruments
II. Other comprehensive
income that will be -27,356,83 -2,010,497 -147,078
-119,721,377.96 -29,367,334.40
reclassified into profit or 6.99 .41 ,214.95
loss
Including: other
comprehensive income
7,950,273. 27,351,3
that can be converted into 19,401,067.14 7,950,273.16
16 40.30
gains and losses under the
equity method
Difference from
translation of financial -35,307,11 -2,010,497 -174,429
-139,122,445.10 -37,317,607.56
statements in foreign 0.15 .41 ,555.25
currency
Total other 173,914,158 979,828.8 11,863,24 17,790,28 -100,146
-112,010,012.52 204,547,519.16
comprehensive incomes .16 2 2.95 9.23 ,769.57
Other explanations, including the adjustment of the effective part of cash flow hedging gains and losses into the initially recognized
amount of the hedged item:
None
42. Surplus reserves
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Statutory surplus
1,370,122,868.85 76,413,252.66 1,446,536,121.51
reserves
Total 1,370,122,868.85 76,413,252.66 1,446,536,121.51
Explanation of surplus reserves, including the increase and decrease in the current period and explanation of reasons for changes:
According to the Company Law and its Articles of Association, the Company allocates 10% of net profits to the statutory
surplus reserves. The Company does not need to allocate further amounts if the cumulative amount of the statutory surplus reserves
reaches more than 50% of the registered capital.
The Company may extract any surplus reserves after extracting the statutory surplus reserve. Any surplus reserves may be used
to cover the losses of previous years or increase the share capital wafter approval.
The surplus reserves increased by RMB 76,413,252.66 for the period. The 10% of the Company's net profit is allocated to the
surplus reserves, i.e. RMB 75,858,016.34, and the surplus reserves increased by RMB 555,236.32 as a result of the disposal of other
equity instrument investments.
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Goertek Inc. Annual Report 2021
43. General risk reserve
Unit: RMB
Items Opening balance Increase in the Decrease in the Closing balance
current period current period
Reserve for risks in 6,081,200.00 6,081,200.00
financing factoring business
Explanation on Other Matters
According to the Notice by the General Office of the China Banking and Insurance Regulatory Commission of Strengthening the
Supervision and Administration of Commercial Factoring Enterprises (YBJBF [2019] No. 205), the Group allocates 1% of the
closing balance of financing factoring business to the provision for risks.
44. Retained earnings
Unit: RMB
Item 2021 2020
Retained earnings at the end of last period before
11,500,277,791.35 9,163,016,394.27
adjustment
Total retained earnings at the beginning of the
196,303.24
adjustment period (increase+, decrease-)
Retained earnings at the beginning of the period
11,500,277,791.35 9,163,212,697.51
after adjustment
Plus: net profit attributable to the owner of the
4,274,702,999.38 2,848,007,269.61
parent company in the current period
Less: Withdrawal of statutory surplus reserves 75,858,016.34 192,707,582.77
Appropriation of general risk reserve 1,184,800.00
Common stock dividends converted to share
499,658,337.75 317,049,793.00
capital
Add: Disposal of investments in other equity
173,358,921.84
instruments
Retained earnings at the end of the period 15,372,823,358.48 11,500,277,791.35
Details of the adjustment of the retained earnings at the beginning of the period:
1) The retained earnings affected by the retroactive adjustment in accordance with Accounting Standards for Business Enterprises
and the related new regulations at the beginning of the period is RMB 0.00.
2) The retained earnings affected by the change of accounting policy at the beginning of the period is RMB 0.00.
3) The retained earnings affected by the correction of major accounting errors at the beginning of the period is RMB 0.00.
4) The retained earnings affected by the change of combination scope caused by the common control at the beginning of the period is
RMB 0.00.
267
Goertek Inc. Annual Report 2021
5) The retained earnings affected by other adjustments at the beginning of the period is RMB 0.00.
45. Operating revenue and operating cost
Unit: RMB
2021 2020
Item
Income Cost Income Cost
Main business 76,946,324,805.73 66,054,072,404.35 56,531,616,437.84 47,439,733,316.54
Other business 1,275,093,812.29 1,113,594,255.31 1,211,126,456.12 1,044,072,095.20
Total 78,221,418,618.02 67,167,666,659.66 57,742,742,893.96 48,483,805,411.74
Whether the lower of the audited net profit before and the audited net profit after deducting non-recurring profits and losses is
negative
□ Yes √ No
Revenue related information:
Unit: RMB
Classification of contracts Division 1 Division 2 Total
Product types
Including:
Precision components 13,840,133,491.33 13,840,133,491.33
Smart audio device 30,297,084,891.23 30,297,084,891.23
Smart hardware 32,809,106,423.17 32,809,106,423.17
Other business income 1,275,093,812.29 1,275,093,812.29
By business regions
Including:
Domestic 7,571,525,782.78 7,571,525,782.78
Overseas 70,649,892,835.24 70,649,892,835.24
By sales channel
Including:
Direct selling 77,770,329,729.13 77,770,329,729.13
Distribution 451,088,888.89 451,088,888.89
Total 78,221,418,618.02 78,221,418,618.02
Information about performance obligations:
None
Information about the trading price apportioned to remaining performance obligations:
None
268
Goertek Inc. Annual Report 2021
46. Taxes and surcharges
Unit: RMB
Item 2021 2020
City maintenance and construction tax 66,914,986.17 62,611,875.61
Education surcharge 25,069,506.18 26,868,948.83
Housing property tax 62,157,864.15 47,922,731.38
Land use tax 4,928,054.01 15,838,009.95
Vehicle and vessel use tax 52,964.86 40,230.39
Stamp duties tax 45,106,860.23 24,511,331.54
Local education surcharges 17,398,626.51 17,912,632.68
Local water conservancy construction fund 220,917.98 4,567,259.15
Water resource tax 15,694.00 72,626.00
Environmental protection tax 26,511.41 54,824.52
Total 221,891,985.50 200,400,470.05
Explanation on Other Matters
For the details of payment standards for taxes and surcharges, please see this Note VI. Tax.
47. Selling expenses
Unit: RMB
Item 2021 2020
Employee remuneration 269,460,139.20 313,042,495.30
Share-based apportioned payment 63,634,538.59 29,447,134.69
Rental fees 4,474,361.06 23,313,826.11
Sales commission 13,450,128.71 20,884,743.52
Insurance expenses 21,984,424.28 15,271,530.90
Sample expenses 12,221,433.86 14,406,615.59
Entertainment expenses 12,782,841.89 13,210,709.52
Travel expenses 11,173,815.95 10,757,426.34
Office expenses 14,724,830.06 15,878,891.93
Depreciation cost 14,204,718.91 10,031,075.82
Raw and auxiliary materials 1,006,244.40 1,206,442.37
Other expenses 5,752,500.17 8,615,626.55
Total 444,869,977.08 476,066,518.64
269
Goertek Inc. Annual Report 2021
48. Administrative expenses
Unit: RMB
Item 2021 2020
Employee remuneration 917,532,446.14 946,318,870.14
Share-based apportioned payment 495,415,756.61 230,349,331.79
Office expenses 110,998,813.33 120,012,132.17
Consulting fees 50,040,642.58 58,295,036.01
Depreciation cost 113,225,494.49 46,771,658.24
Amortization of intangible assets 49,984,739.09 46,318,817.51
Recruitment and training fees 36,270,849.32 26,018,102.24
Rental fees 7,451,592.83 21,128,830.37
Entertainment expenses 17,746,437.84 19,860,887.78
Travel expenses 21,380,866.38 17,584,655.70
Security expenses 22,040,105.21 14,285,556.34
Property insurance 9,898,802.88 13,060,067.10
Epidemic prevention cost 9,781,437.76 8,216,830.16
Other expenses 89,889,788.86 61,510,017.45
Total 1,951,657,773.32 1,629,730,793.00
49. R&D expenses
Unit: RMB
Item 2021 2020
Employee remuneration 1,816,259,331.16 1,408,075,836.03
Direct input cost 1,321,811,155.22 1,114,489,356.70
Amortization of intangible assets 534,352,849.63 435,340,144.93
Depreciation cost 115,335,756.86 99,421,174.60
Share-based apportioned payment 237,184,411.36 178,305,912.88
Design fees 15,289,807.24 7,934,434.78
Other expenses 129,840,970.63 182,404,151.73
Total 4,170,074,282.10 3,425,971,011.65
50. Financial expenses
Unit: RMB
270
Goertek Inc. Annual Report 2021
Item 2021 2020
Interest expense 213,431,869.57 299,081,520.81
Less: Interest income 91,492,632.72 39,217,451.01
Less: Amount of interest capitalized 3,809,576.72 22,374,919.62
Exchange gains and losses 27,313,452.95 214,005,083.18
Less: Amount of foreign exchange
gain/loss capitalized
Other 21,656,869.28 39,194,538.73
Total 167,099,982.36 490,688,772.09
51. Other income
Unit: RMB
Sources of other income 2021 2020
Government subsidies 464,119,437.91 221,372,903.17
Tax benefit included 1,044,485.08 1,985,732.86
Return of individual tax handling fee 1,558,878.12 1,250,661.69
Total 466,722,801.11 224,609,297.72
52. Investment income
Unit: RMB
Item 2021 2020
Return on long-term equity investments
23,111,753.41 25,126,283.51
measured by the equity method
investments income from disposal of
6,872,916.88 -112,378,182.41
long-term equity investments
Investment income from derivative financial
343,451,879.97 225,805,044.25
instruments
Investment income from disposal of equity 82,457,029.49
Investment income from financial products 20,903,469.99
Profit or loss arising from derecognition of
-7,852,608.05
financial assets measured at amortized costs
Other 295,443.10
Total 469,239,884.79 138,553,145.35
271
Goertek Inc. Annual Report 2021
53. Gains from changes in fair value
Unit: RMB
Sources of gains from changes in fair value 2021 2020
Held-for-trading financial assets -41,409,120.87 198,880,286.92
Including: Gains from changes in fair
value due to derivative financial -104,999,182.31 99,788,033.64
instruments
Held-for-trading financial liabilities -8,763,505.06 -38,665,216.34
Other non-current financial assets 1,324,000.00
Total -48,848,625.93 160,215,070.58
54. Credit impairment losses
Unit: RMB
Item 2021 2020
Credit impairment losses on bad debts of
-10,478,144.68 -6,502,717.39
other receivables
Credit impairment losses on bad debts of
-19,215,532.99 -21,900,107.93
accounts receivable
Total -29,693,677.67 -28,402,825.32
55. Asset impairment losses
Unit: RMB
Item 2021 2020
I. Loss on bad debts
II. Provision for decline in value
of inventories or provision for -241,076,190.54 -124,906,385.59
impairment of contract performance cost
III. Impairment loss of long-term equity
investments
IV. Impairment loss of investment
properties
V. Asset impairment losses
VI. Impairment loss from construction
materials
VII. Impairment loss of projects under
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Goertek Inc. Annual Report 2021
construction
VIII. Impairment loss of productive
biological assets
IX. Impairment loss of oil and gas assets
X. Impairment loss of intangible assets -82,892,206.40
XI. Impairment loss of goodwill
XII. Impairment loss of contract assets 684.09 454.00
XIII. Others
Total -241,075,506.45 -207,798,137.99
56. Gains on disposal of assets
Unit: RMB
Source of income from disposal of assets 2021 2020
Gains on disposal of fixed assets -31,557,333.48 -62,250,234.59
Income from disposal of intangible assets -7,866.28
Income from disposal of right-of-use assets 385,373.77
Total -31,179,825.99 -62,250,234.59
57. Non-operating revenue
Unit: RMB
Amount recorded in current
Item 2021 2020
non-recurring gains and losses
Donations accepted 127,167.72
Gains from damage and
50,066.59 264,634.23 50,066.59
liquidation of non-current assets
Other 22,394,671.59 18,409,225.11 22,394,671.59
Total 22,444,738.18 18,801,027.06 22,444,738.18
Other explanations:
Non-operating income - the rest in this category are mainly unpayable and the liquidated damages collected
58. Non-operating expenses
Unit: RMB
Amount recorded in current
Item 2021 2020
non-recurring gains and losses
Donation given 2,304,955.25 11,280,281.54 2,304,955.25
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Goertek Inc. Annual Report 2021
Losses from damage and
91,018,949.18 45,180,218.55 91,018,949.18
liquidation of non-current assets
Other 6,535,044.63 1,381,477.89 6,535,044.63
Total 99,858,949.06 57,841,977.98 99,858,949.06
59. Income tax expenses
(1) Details of Income tax expenses
Unit: RMB
Item 2021 2020
Current income tax expenses 451,539,809.11 341,769,162.80
Deferred income tax expenses -152,697,496.47 28,309,004.64
Total 298,842,312.64 370,078,167.44
(2) Adjustment process of accounting profit and income tax expenses
Unit: RMB
Item 2021
Total profit 4,605,908,796.98
Income tax expense calculated at statutory/applicable tax rate 690,886,319.55
Impact of different tax rates applied to subsidiaries -191,367,097.77
Impact of adjusting income tax in previous periods -6,876,153.83
Impact of non-taxable income -4,734,987.68
Impact of non-deductible costs, expenses and losses 11,546,808.03
Impact of deductible loss of unrecognized deferred tax assets in
-19,878,789.17
previous period
Impact of deductible temporary differences or deductible losses
65,353,357.68
of unrecognized deferred tax assets in current period
Changes in balance of beginning deferred tax assets/liabilities
6,102,922.67
due to tax rate adjustment
Influence of deductible expenses included -337,574,362.57
Impact of share-based payment 85,384,295.73
Income tax expenses 298,842,312.64
60. Other comprehensive income
See Note VII. 41 for details.
274
Goertek Inc. Annual Report 2021
61. Cash flow statement items
(1) Cash received relating to other operating activities
Unit: RMB
Item 2021 2020
Government subsidies 465,518,187.04 363,513,441.39
Current account 3,315,066,295.04 1,344,344,686.65
Interest income 79,467,922.20 27,361,775.01
Other 156,626,681.14 27,574,746.32
Total 4,016,679,085.42 1,762,794,649.37
(2) Cash paid relating to other operating activities
Unit: RMB
Item 2021 2020
R&D expenses 1,462,687,665.98 1,337,512,674.33
Current account 3,404,842,851.48 1,319,017,827.75
Office expenses 125,723,643.39 129,721,767.60
Rental fees 11,925,953.89 59,285,456.46
Consulting fees 50,040,642.58 58,421,011.33
Entertainment expenses 30,529,279.73 33,071,597.30
Travel expenses 32,554,682.33 28,384,064.43
Insurance expenses 31,883,227.16 28,331,598.00
Sales commission 13,450,128.71 20,481,438.23
Other 255,037,716.46 157,858,078.94
Total 5,418,675,791.71 3,172,085,514.37
(3) Cash received relating to other investing activities
Unit: RMB
Item 2021 2020
Unexpired option premium received 9,258,951.92 46,410,668.35
Total 9,258,951.92 46,410,668.35
(4) Cash paid relating to other investing activities
None
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Goertek Inc. Annual Report 2021
(5) Cash received relating to other financing activities
Unit: RMB
Item 2021 2020
Various securities in other currencies
1,380,340,710.98 1,229,922,718.18
recovered
Interest income on raised funds 12,024,710.52 11,855,676.00
Subscription of employee stock ownership
110,000,000.00
plan
Borrowing of accounts receivable factoring 5,000,000.00
Total 1,507,365,421.50 1,241,778,394.18
(6) Cash paid relating to other financing activities
Unit: RMB
Item 2021 2020
Various security deposit payments for
1,416,013,727.89 1,589,807,032.50
other monetary capital
Repurchase of treasury shares 1,999,998,595.63 477,129,807.72
Rental fees payment 102,991,821.74
Listing expense of the Goertek
8,983,655.49
Microelectronics subsidiary
Buy-out factoring fee 7,852,608.05
Intermediary fee of issuance of bonds 1,940,000.00 3,800,000.00
Total 3,537,780,408.80 2,070,736,840.22
62. Supplementary information for cash flow statement
(1) Supplementary information for cash flow statement
Unit: RMB
Supplementary information 2021 2020
1. Reconciliation of net profit to cash flow from operating
-- --
activities:
Net profit 4,307,066,484.34 2,851,887,114.18
Add: Provision for impairment of assets 241,075,506.45 236,200,963.31
Depreciation of fixed assets, depletion of oil and
2,117,567,273.70 1,653,795,246.56
gas assets and depreciation of productive biological assets
276
Goertek Inc. Annual Report 2021
Credit impairment losses 29,693,677.67
Depreciation of right-of-use assets 122,484,411.95
Amortization of intangible assets 588,754,476.68 483,117,594.62
Long-term deferred expenses 89,042,424.24 51,298,422.57
Losses on disposal of fixed assets, intangible
31,179,825.99 62,250,234.59
assets and other long-term assets (Use "-" for gain)
Loss on retirement of fixed assets (Use "-" for
90,968,882.59 44,915,584.32
gain)
Loss on changes in fair value (Use "-" for gain) 48,848,625.93 -160,215,070.58
Financial expenses (Use "-" for gain) 214,683,875.67 329,201,716.98
Investment loss (Use "-" for gain) -469,239,884.79 -138,553,145.35
Decrease in deferred tax assets (Use "-" for gain) -219,564,976.07 -61,856,118.57
Increase in deferred tax liabilities (Use "-" for
66,867,479.60 90,165,123.21
decrease)
Decrease in inventory (Use "-" for increase) -3,013,184,423.74 -4,052,804,933.21
Decrease of operating receivable items (Use "-"
-1,591,304,230.95 -2,212,278,512.85
for increase)
Increase in operational payables (Use "-" for
5,072,167,615.36 8,032,907,921.12
decrease)
Other 871,368,483.26 472,223,972.78
Net cash flow from operating activities 8,598,475,527.88 7,682,256,113.68
2. Significant investing and financing activities that do not
-- --
involve cash receipts and payments:
Debts transferred to capital
Convertible bonds due within one year
Fixed assets under finance lease
3. Net changes in cash and cash equivalents: -- --
Closing balance of cash 9,137,900,902.04 6,913,191,984.54
Less: Opening balance of cash 6,913,191,984.54 3,094,603,792.32
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents 2,224,708,917.50 3,818,588,192.22
Explanation on Other Matters
The rest RMB 871,368,483.26 results from share-based payment. For details, please see this Note XIII. Share-based Payment 2.
Equity-settled share-based payment.
277
Goertek Inc. Annual Report 2021
(2) Net cash paid for the acquisition of subsidiaries in the current period
None
(3) Net amount of cash received for disposal of subsidiaries in the current period
None
(4) Composition of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 9,137,900,902.04 6,913,191,984.54
Including: Cash on hand 160,703.83 183,125.46
Bank deposits that can be used for
9,137,740,198.21 6,913,008,859.08
payment at any time
II. Cash equivalents
III. Closing balance of cash and cash
9,137,900,902.04 6,913,191,984.54
equivalents
Including: Cash and cash equivalents with
restricted use by the parent company or a
subsidiary of the Group
63. Assets with restricted ownership or right to use
Unit: RMB
Book value at the end of the reporting
Item Reasons for restrictions
period
Cash and bank balances 910,620,794.05 Deposit for bills and borrowings
Notes receivable 6,095,782.39 Bill pledge and others
Re-insurance accounts receivable not
Accounts receivable 5,000,000.00
derecognized
When large-denomination certificates of
Other non-current assets 122,540,194.44 deposit was pledged to the bank, the bank
issued a financing guarantee
Total 1,044,256,770.88 --
278
Goertek Inc. Annual Report 2021
64. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
Closing foreign currency Closing converted RMB
Item Converted exchange rate
balance balance
Cash and bank balances -- -- 4,788,520,304.46
Including: USD 728,656,732.50 6.3757 4,645,696,729.41
EUR 192,495.03 7.2197 1,389,756.38
HKD 40,598,223.59 0.8176 33,193,107.61
JPY 146,833,394.93 0.055415 8,136,772.58
KRW 1,186,032,024.25 0.00536 6,357,131.65
NTD 15,389,830.02 0.230378 3,545,478.26
VDN 314,031,455,432.68 0.00028 87,928,807.52
DKK 2,340,243.00 0.971062 2,272,521.05
Accounts receivable -- -- 10,025,961,604.40
Including: USD 1,569,926,808.24 6.3757 10,009,382,351.29
EUR
HKD
JPY 163,057,986.10 0.055415 9,035,858.30
KRW 1,165,526,919.78 0.00536 6,247,224.29
VDN 4,604,749,535.71 0.00028 1,289,329.87
DKK 7,044.50 0.971062 6,840.65
Long-term borrowings -- -- 1,213,294,229.18
Including: USD 190,299,767.74 6.3757 1,213,294,229.18
EUR
HKD
Other receivables 201,951,496.60
Including: USD 24,843,969.31 6.3757 158,397,695.13
JPY 177,339,532.08 0.055415 9,827,270.17
KRW 183,837,001.87 0.00536 985,366.33
NTD 5,559,638.98 0.230378 1,280,818.51
VDN 108,563,372,535.71 0.00028 30,397,744.31
DKK 1,094,268.08 0.971062 1,062,602.15
279
Goertek Inc. Annual Report 2021
Short-term borrowings 512,628,201.89
Including: USD 80,403,438.35 6.3757 512,628,201.89
Accounts payable 10,127,400,129.15
Including: USD 1,554,897,224.09 6.3757 9,913,558,231.66
EUR 421,365.65 7.2197 3,042,133.60
JPY 604,092,239.47 0.055415 33,475,771.45
KRW 197,451,977.61 0.00536 1,058,342.60
NTD 102,078.02 0.230378 23,516.53
VDN 628,838,335,250.00 0.00028 176,074,733.87
DKK 172,388.00 0.971062 167,399.44
Other payables 12,185,391.02
Including: USD 489,210.52 6.3757 3,119,059.52
JPY 22,982,805.56 0.055415 1,273,592.17
NTD 10,562,613.01 0.230378 2,433,393.66
KRW 51,369,052.24 0.00536 275,338.12
VDN 16,650,695,321.43 0.00028 4,662,194.69
DKK 434,383.04 0.971062 421,812.86
(2) Explanation of overseas operating entities, including, the main overseas operating places, bookkeeping
base currency and selection basis for important overseas operating entities, and the reasons for changes in
bookkeeping base currency.
√ Applicable □ Not applicable
Main location
Name of the important Accounting Accounting currency selection Whether there is any change in
of business
overseas operating entity currency basis the accounting currency
operation
Legal currency of the country
Goertek Vina Co., Ltd Vietnam VDN No
where it is registered
Goertek Technology Vina Legal currency of the country
Vietnam VDN No
Company Limited where it is registered
Goertek (HongKong) Co., Currency adopted in business
Hong Kong USD No
Limited receipts and payments
65. Government subsidies
(1) Basic information of government subsidies
Unit: RMB
Type Amount Reported items Amount recorded in current
280
Goertek Inc. Annual Report 2021
profits and losses
Asset-related 58,174,426.00 Deferred income 1,687,260.72
Income-related 140,206,700.00 Deferred income 140,206,700.00
Income-related 267,137,061.04 Other income 267,137,061.04
(2) Refund of government subsidies
□ Applicable √ Not applicable
66. Others
None
VIII. Change of combination scope
1. Business combination not under common control
None
2. Business combination under common control
None
3. Counter purchase
None
4. Disposal of subsidiaries
None
5. Change of combination scope for other reasons
Explain the changes in the combination scope caused by other reasons (such as newly established subsidiaries, liquidation
subsidiaries, etc.) and relevant information:
During the reporting period, the Company established a subsidiary company GOERTEK MICROELECTRONICS KOREA
CO.,LTD.
6. Others
None
281
Goertek Inc. Annual Report 2021
IX. Interests in other entities
1. Interests in subsidiaries
(1) Composition of the Group
Main location of Percentage
Registration
Name of subsidiary business Business nature Acquisition method
place Direct Indirect
operation
Weifang Goertek Electronics Co., Business combination
Weifang Weifang Production 100.00%
Ltd. under common control
R&D,
Goertek Microelectronics Inc. Qingdao Qingdao production & 85.90% Establishment
sales
R&D,
Qingdao Goertek Microelectronics
Qingdao Qingdao production & 85.90% Establishment
Research Institute Co., Ltd.
sales
R&D,
Qingdao Goertek Intelligent Sensor
Qingdao Qingdao production & 85.90% Establishment
Co., Ltd.
sales
R&D, Business combination
Weifang Goertek Microelectronics
Weifang Weifang production & 85.90% not under common
Co., Ltd.
sales control
R&D,
Rongcheng Goertek Microelectronics
Rongcheng Rongcheng production & 85.90% Establishment
Co., Ltd.
sales
Beijing Goertek Microelectronics
Beijing Beijing Sales 85.90% Establishment
Co., Ltd.
Shenzhen Goertek Microelectronics
Shenzhen Shenzhen R&D and sales 85.90% Establishment
Co., Ltd.
Wuxi Goertek Microelectronics Co.,
Wuxi Wuxi R&D 85.90% Establishment
Ltd.
Shanghai Ganyuzhi Technology Co.,
Shanghai Shanghai R&D 85.90% Establishment
Ltd.
Goertek Microelectronics Holdings
Hong Kong Hong Kong Investment 85.90% Establishment
Co., Ltd.
Goertek Microelectronics (Hong
Hong Kong Hong Kong Trade 85.90% Establishment
Kong) Co., Ltd.
GOERTEK MICROELECTRONICS
USA USA R&D and sales 85.90% Establishment
CORPORATION
282
Goertek Inc. Annual Report 2021
GOERTEK MICROELECTRONICS
Korea Korea R&D and sales 85.90% Establishment
KOREA CO.,LTD.
Import and
Weifang Goertek Trading Co., Ltd. Weifang Weifang 100.00% Establishment
export trade
Production &
Yishui Goertek Electronics Co., Ltd. Yishui Yishui 100.00% Establishment
sales
Yili Precision Manufacturing Co., Production &
Weifang Weifang 100.00% Establishment
Ltd. sales
Business combination
Weifang Goertek Communication Production &
Weifang Weifang 100.00% not under common
Technology Co., Ltd. sales
control
Business combination
Production &
Goertek Optical Technology Co., Ltd. Weifang Weifang 100.00% not under common
sales
control
Goertek Technology Co., Ltd. Qingdao Qingdao R&D 100.00% Establishment
Business combination
Beijing Goertek Technology Co., Ltd. Beijing Beijing R&D 100.00%
under common control
Qingdao Goertek Acoustics R&D and
Qingdao Qingdao 100.00% Establishment
Technology Co., Ltd. trading
Shenzhen Goertek Technology Co., Business combination
Shenzhen Shenzhen R&D and design 100.00%
Ltd. under common control
Shanghai Goertek Technology Co.,
Shanghai Shanghai R&D 100.00% Establishment
Ltd.
Nanjing Goertek Technology Co.,
Nanjing Nanjing R&D 100.00% Establishment
Ltd.
Shenzhen Mototek Smart Technology Production & Business combination
Shenzhen Shenzhen 100.00%
Co., Ltd. sales under common control
Weifang Lokomo Precision Industry Production & Business combination
Weifang Weifang 100.00%
Co., Ltd. sales under common control
Goertek Investment Co., Ltd. Shanghai Shanghai Investment 100.00% Establishment
Beijing Goertek Investment Investment asset
Beijing Beijing 100.00% Establishment
Management Co., Ltd. management
Olive Smart Hardware Investment Equity
Qingdao Qingdao 100.00% Establishment
Center LP investment
R&D,
Dongguan JoyForce Precision
Dongguan Dongguan production & 100.00% Establishment
Manufacturing Co., Ltd.
sales
Goertek Intelligence Technology Co., R&D,
Dongguan Dongguan 100.00% Establishment
Ltd. production &
283
Goertek Inc. Annual Report 2021
sales
R&D,
Rongcheng Goertek Technology Co.,
Rongcheng Rongcheng production & 100.00% Establishment
Ltd.
sales
Qingdao Goertek Commercial Commercial
Qingdao Qingdao 100.00% Establishment
Factoring Co., Ltd. factoring
Kunshan Goertek Electronics Co.,
Kunshan Kunshan R&D 100.00% Establishment
Ltd.
R&D,
Nanning Goertek Electronics Co.,
Nanning Nanning production & 100.00% Establishment
Ltd.
sales
Nanning Goertek Trading Co., Ltd. Nanning Nanning Trade 100.00% Establishment
Xian Goertek Electronic Technology
Xi'an Xi'an R&D 100.00% Establishment
Co., Ltd.
R&D,
Yishui TECO Electronic Technology
Yishui Yishui production & 100.00% Establishment
Co., Ltd.
sales
Production &
Goertek Vina Co., Ltd Vietnam Vietnam 98.00% 2.00% Establishment
sales
R&D and
Goertek Technology Korea Co., Ltd. Korea Korea 100.00% Establishment
trading
Trade
Goertek (HongKong) Co., Limited Hong Kong Hong Kong 100.00% Establishment
investment
Goertek Technology Vina Company Production &
Vietnam Vietnam 100.00% Establishment
Limited sales
Goertek Precision Manufacturing Production &
Vietnam Vietnam 100.00% Establishment
(Vietnam) Co., Ltd. sales
GoerTek Audio Technologies Aps Denmark Denmark Sales services 100.00% Establishment
R&D,
Goertek Seiki Techonology 株式会社 Japan Japan production & 100.00% Establishment
sales
OPTIMAS CAPITAL PARTNERS
Hong Kong Hong Kong Investment 76.92% Establishment
FUND LP
Business combination
R&D and
Goertek Electronics, Inc. USA USA 100.00% not under common
trading
control
R&D and
Goertek Technology Taiwan Co., Ltd. Taiwan Taiwan 100.00% Establishment
trading
Goertek Technology (Japan) Co., Ltd. Japan Japan R&D and 100.00% Establishment
284
Goertek Inc. Annual Report 2021
trading
Goertek Technology (Hong Trade/investmen
Hong Kong Hong Kong 100.00% Establishment
Kong)Co., Ltd. t
Explanation of the shareholding ratio in subsidiaries different from the voting ratio:
The percentages of indirect shareholdings are equal to the sum of all the share proportions of entities within the Group which
hold the equity of the subsidiary.
Basis for holding half or less of the voting power but still controlling the investee, and holding more than half of the voting rights but
not controlling the investee:
None
Basis for controlling important structured entities included in the combination scope:
None
Basis for determining whether a company is an agent or a principal:
None
(2) Important non-wholly-owned subsidiary
Unit: RMB
Gain or loss which Dividends declared and
Balance of minority
Shareholding ratio of belongs to minority distributed to minority
Name of subsidiary interest at the end of the
minority shareholders shareholders in the shareholders in the
period
current period current period
Goertek Microelectronics
14.10% 32,204,132.27 532,193,657.63
Inc.
Explanation of the shareholding ratio of minority shareholders in subsidiaries different from the voting ratio:
None
(3) Main financial information of major non-wholly-owned subsidiaries
Unit: RMB
Closing balance Opening balance
Name of
Non-curr Non-curr Non-curr Non-curr
subsidiar Current Total Current Total Current Total Current Total
ent ent ent ent
y assets assets liabilities liabilities assets assets liabilities liabilities
assets liabilities assets liabilities
Goertek
Microele 3,719,28 1,449,33 5,168,61 1,116,51 278,293, 1,394,81 1,810,96 949,034, 2,760,00 1,296,97 226,803, 1,523,77
ctronics 6,194.06 3,493.18 9,687.24 8,234.62 567.19 1,801.81 5,783.37 763.27 0,546.64 3,732.89 466.70 7,199.59
Inc.
Unit: RMB
285
Goertek Inc. Annual Report 2021
2021 2020
Cash flows Cash flows
Name of Total generated Total generated
Operating Operating
subsidiary Net profit comprehensi from Net profit comprehensi from
revenue revenue
ve income operating ve income operating
activities activities
Goertek
3,345,124,96 329,435,281. 326,211,317. -174,770,880. 3,194,302,73 394,205,003. 394,091,858. 742,460,330.
Microelectro
2.51 13 42 10 7.77 67 83 89
nics Inc.
(4) Major restrictions on using the Group's assets and paying off the Group's debts
None
(5) Financial support or other support provided to structured entities included in consolidated financial
statements
None
2. The share of owner's equity in the subsidiary has changed and still controls the transactions of the
subsidiary
(1) Explanation of changes in the share of owners' equity in subsidiaries
In March 2021, 14 institutional shareholders, including Qingdao Microelectronics Innovation Center Co., Ltd., Gongqingcheng
Chunlin Equity Investment Partnership Corporation (Limited Partnership), Qingdao Henghuitai Industry Development Fund Co.,
Ltd., and Tang Wenbo increased their investments by a total of RMB 2,149,987,749 in the subsidiary, Goertek Microelectronics Inc.
of which RMB 60,580,100 was recorded in the additional registered capital and the remaining in the capital reserves. Upon
completion of this capital increase, the Company’s equity in Goertek Microelectronics Inc. was changed from 95.88% to 85.90%.
The minority shareholders made a premium contribution to increase the capital reserves by RMB 1,714,583,073.34.
(2) The impact of transactions on minority’ equity and the equity attributable to the parent company
Unit: RMB
Goertek Microelectronics Inc.
Purchase cost/disposal consideration 2,149,987,749.00
—Cash 2,149,987,749.00
—Fair value of non-cash assets
Total purchase cost/disposal consideration 2,149,987,749.00
286
Goertek Inc. Annual Report 2021
Less: The net asset share of a subsidiary calculated according to
361,679,118.20
the proportion of the equity acquired/disposed
Difference 1,788,308,630.80
Including: Adjustment of capital reserves 1,714,583,073.34
Adjusted surplus reserves
Retained earnings after adjustment
Explanation on Other Matters
The difference is RMB 1,788,308,630.80, of which RMB 1,714,583,073.34 is recorded in the capital reserves attributable to the
parent company, and the remaining RMB 73,725,557.46 in minority equity.
3. Rights and interests in joint venture arrangements and associated enterprises
(1) Important joint ventures and associated enterprises
None
(2) Main financial information of important joint ventures
None
(3) Main financial information of important associated enterprises
None
(4) Summary of financial information of unimportant joint ventures and associates
Unit: RMB
Closing balance/amount incurred in Opening balance/amount incurred in
current period previous period
Associated enterprises: -- --
Total book value of investment 437,402,203.91 337,410,802.56
The total of the following items calculated
-- --
according to the shareholding ratio
—Net profit 23,111,753.41 25,126,283.51
—Other comprehensive income 1,189,723.34 3,632,422.87
—Total comprehensive income 24,301,476.75 28,758,706.38
287
Goertek Inc. Annual Report 2021
(5) Statement of important restrictions on the ability of joint ventures or associates to transfer capital to the
Company
None
(6) Excess losses incurred by joint ventures or associated enterprises
None
(7) Unrecognized commitments related to the investment in joint ventures
None
(8) Contingent liabilities related to the investment in joint ventures or associates
None
4. Important joint operation
None
5. Rights and interests in structured entities not included in consolidated financial statements
Explanation of structured entities not recorded in the consolidated financial statements:
None
6. Others
None
X. Risks related to financial instruments
The major financial instruments of the Group include equity investments, accounts receivable, borrowings and accounts payable,
etc. For details on the financial instruments, please see this Note VII. Relevant Items. Risks related to the financial instruments and
the Group’s risk management policy used for reducing these risks is stated as follows. The Group’s management manages and
monitors these exposures to ensure that these risks are controlled within a limited scope.
The Group analyzes the reasonableness of risk variables and the impact of potential changes on current loss or profit or
shareholder’s equity using sensitivity analysis techniques. As risk variables rarely change in isolation, and the correlation between
any two of the risk variables will have a great effect on the final impact amount of a certain risk variable, the following disclosures
are made assuming that each variable changes in isolation.
(I) Risk management goals and policies
288
Goertek Inc. Annual Report 2021
The Group’s risk management aims to reach appropriate balancing between risks and benefits, to minimize the negative impact
of risks on the Group's operating results, and to maximize the interests of shareholders and other equity investors. Based on these risk
management goals, the Group’s basic strategy for risk management is to determine and analyze various risks faced by the Group,
establish an appropriate risk tolerance bottom line and conduct risk management, and supervise various risks in a timely and reliable
manner to control the risks within a limited scope.
1. Market risk
(1) Foreign exchange risk
Foreign exchange risk refers to the risk of loss due to exchange rate change. The Group’s exposure to foreign exchange mainly
involves US dollars. Except that the Company and its subsidiaries purchase and sell in USD, EUR, JPY, VND, DKK, HKD, NTD
and KRW, other main business of the Group is measured and settled in RMB. As of December 31, 2021, for the foreign currency
monetary items of the Company, please see this Note VII. 64. Except that the assets or liabilities, held-for-trading financial assets,
long-term equity investments - AKM Industrial Company Limited, other equity instrument investments and some other non-current
financial assets mentioned in the table are foreign currency balances, the Group's assets and liabilities are mainly recorded in RMB.
The foreign exchange risks arising from the assets and liabilities denominated in foreign currencies may have an impact on the
operating results of the Group.
The Group closely monitors the impact of exchange rate changes on the Group's foreign exchange risks. The Company has large
volume of export sales, and needs to import some raw materials. Some equipment for research, development, production and testing
of the Company also needs to be purchased from abroad. The Company's export sales and imported raw materials are mainly settled
in USD. The depreciation of USD and the appreciation of RMB will reduce the procurement cost of imported raw materials, but
adversely affect the competitiveness of the Company's products in overseas markets. Considering the import of raw materials and
export of products, the appreciation of RMB against USD will affect the Company's profitability to some extent.
Sensitivity analysis over foreign exchange risks:
When other variables remain unchanged, the pre-tax impact of possible reasonable changes in USD currency rate on current
profits and losses, and shareholders' equity is as follows:
Unit: RMB
2021 2020
Change in exchange
Item Impact on Impact on
rate Impact on net profit Impact on net profit
shareholders' equity shareholders' equity
3% appreciation
USD 74,152,124.92 71,951,894.19 -46,192,125.00 -46,223,483.50
against RMB
289
Goertek Inc. Annual Report 2021
3% depreciation
USD -74,152,124.92 -71,951,894.19 46,192,125.00 46,223,483.50
against RMB
(2) Interest rate risk - cash flow change risk
The Group's risk of cash flow changes of financial instruments arising from interest rate changes mainly involves floating rate
bank borrowings. At present, the interest rate of the Group's bank borrowings is mainly floating rate.
Interest rate risk sensitivity analysis:
The sensitivity analysis over interest rate risks is conducted based on the following assumptions:
Changes in market interest rates affect the interest income or expense of financial instruments with variable interest rates;
For fixed-rate financial instruments measured at fair value, changes in market interest rates only affect their interest income or
expense;
For derivative financial instruments designated as hedge instruments, changes in market interest rates affect their fair value, and
all interest rate hedging is expected to be highly effective;
Changes in fair values of derivative financial instruments and other financial assets and liabilities are calculated using the
discounted cash flow method at the market interest rate on the balance sheet date.
On the basis of the above assumptions, when other variables remain unchanged, the pre-tax impact of possible reasonable
changes in interest rates on current profits and losses, and shareholders' equity is as follows:
Unit: RMB
2021 2020
Interest rate
Item Impact on Impact on
change Impact on net profit Impact on net profit
shareholders' equity shareholders' equity
Bank
Float up by 10% -16,563,847.02 -16,563,847.02 -24,276,039.79 -24,267,900.11
borrowings
Bank Float down by
16,563,847.02 16,563,847.02 24,276,039.79 24,267,900.11
borrowings 10%
(3) Other price risks
None
2. Credit risk
As of December 31, 2021, the maximum credit risk exposure that may cause the Group's financial loss resulted from the loss in
the Group's financial assets caused by the counterparty's failure to perform its contractual obligations.
290
Goertek Inc. Annual Report 2021
In order to reduce credit risk, the Group sets up a team to determine the credit limit, conduct credit approval, and implement
other monitoring procedures to ensure that necessary measures are taken to recover overdue claims. Additionally, the Company
cooperates with commercial insurance institutions to insure for high-risk customers, so as to reduce the risk of bad debts from credit
sale. In addition, the Group reviews the recovery of each individual receivable on each balance sheet date to ensure that adequate bad
debt provision is made for unrecoverable amounts. Therefore, the Group’s management believes that the credit risk undertaken by the
Group has been greatly reduced.
The Group has put in place necessary policies to ensure that all its customers have good credit records.
The Group's non-cash and bank balances are mainly deposited with financial institutions with good credit. The management
believes that there is no significant credit risk, and it is expected that the default of counterparty will not cause significant losses to
the Group.
(1) There is no overdue and undepreciated amount in the Group's receivables;
(2) The analysis of financial assets with individual impairment involves the judgment on the factors to be considered in the
impairment of the financial assets
None
3. Liquidity risk
When managing liquidity risk, the Group maintains and monitors cash and cash equivalents the management deems sufficient to
meet the Group's business needs and reduce the impact of cash flow fluctuations. The management of the Group monitors the use of
bank borrowings and ensure the compliance with borrowing agreements.
The Group uses bank borrowings and equity instruments as its main sources of funds. As of December 31, 2021, the unused
bank credit line of the Group was RMB 27.495 billion (December 31, 2020: RMB 18.932 billion).
(II) Transfer of financial assets
1. Transferred but not derecognized financial assets
Unit: RMB
Items Amount not derecognized at the end year
Notes receivable 1,709,928.75
Accounts receivable 5,000,000.00
2. Transferred and derecognized financial assets
Unit: RMB
Item Amount derecognized at the end of year
Notes receivable 76,909,941.48
Accounts receivable 1,673,167,869.71
291
Goertek Inc. Annual Report 2021
(III) Offset of financial assets and financial liabilities
None
XI. Disclosure of fair value
1. The ending fair value of assets and liabilities measured at fair value
Unit: RMB
Fair value of closing
Item The first level of fair The second level of fair The third level of fair
Total
value measurement value measurement value measurement
I. Continuous fair value
-- -- -- --
measurement
(I) Held-for-trading
98,804,286.66 20,462,992.36 119,267,279.02
financial assets
1. Financial assets
measured at fair value 98,804,286.66 20,462,992.36 119,267,279.02
through profit and loss
(1) Debt instrument
investment
(2) Equity instrument
98,804,286.66 98,804,286.66
investment
(3) Derivative financial
20,462,992.36 20,462,992.36
assets
2. Financial assets
designated as measured at
fair value through profit or
loss
(II) Other debt investments
(III) Other equity
465,677,764.54 465,677,764.54
instrument investments
(IV) Investment properties
(V) Biological assets
(VI) Other non-current
201,430,042.13 201,430,042.13
financial assets
Total assets consistently
98,804,286.66 20,462,992.36 667,107,806.67 786,375,085.69
measured at fair value
(VII) Held-for-trading
15,190,564.34 15,190,564.34
financial liabilities
292
Goertek Inc. Annual Report 2021
Including: Held-for-trading
bonds issued
Derivative financial
15,190,564.34 15,190,564.34
liabilities
(VIII) Financial liabilities
designated to be measured
at fair value through profit
and loss
Total liabilities
continuously measured at 15,190,564.34 15,190,564.34
fair value
II. Non-continuous fair
-- -- -- --
value measurement
2. Determination basis for the market price of continuous and non-continuous first-level fair value
measurement items
The closing price at the end of the year is used as the basis for determining the market price of the shares of foreign listed
companies held by the Company.
3. Qualitative and quantitative information on the valuation techniques and important parameters used in
continuous and non-continuous second-level fair value measurement items
Directly or indirectly observable input values of related assets or liabilities except first-level inputs.
4. Qualitative and quantitative information on the valuation techniques and important parameters used in
continuous and non-continuous third-level fair value measurement items
Basis for determining fair value according to the value assessed under the income method and the asset-based method and the
net book asset.
5. Adjustment information and sensitivity analysis of non-observable parameters between beginning and
closing book value for continuous third-level fair value measurement items
None
6. Conversion among different levels in the current period, reasons for conversion and the policy for
determining conversion time points in continuous fair value measurement items,
None
293
Goertek Inc. Annual Report 2021
7. Changes in valuation techniques during the current period and reasons for changes
None
8. Fair value of financial assets and financial liabilities not measured at fair value
None
9. Others
None
XII. Related parties and related transactions
1. Information about the parent company of the Company
Proportion of voting
Shareholding ratio of
Parent company rights of the
Registration place Business nature Registered capital the Company to the
name Company in the
Company
Company
Goertek Group Co., Equity investment
Weifang RMB 100 million 15.37% 15.37%
Ltd. management, etc.
Explanation of the parent company of the Company
The Company’s parent company and final parent company is Goertek Group Co., Ltd.
The final controller of the Company is Goertek Group Co., Ltd.
2. Information on subsidiaries of the Company
See Note IX. 1. Interests in subsidiaries for details of the subsidiaries of the Company
3. Information on joint ventures and associated enterprises of the Company
See Note IX. 3. Rights and interests in joint venture arrangements and associated enterprises for details of the important joint
ventures or associated enterprises of the Company
4. Information on other related parties
Name of other related parties Relationship between other related parties and the Company
Jiang Bin Actual controller and board chairman of the Company
Hu Shuangmei Person acting in concert with the actual controller
Goertek Robotics Co., Ltd. Associate of the parent company
294
Goertek Inc. Annual Report 2021
Name of other related parties Relationship between other related parties and the Company
Weifang Shixiang Real Estate Co., Ltd. Associate of the parent company
Weifang Goer Farm Co., Ltd. Business of the same actual controller
Weifang Goer Manor Trading Co., Ltd. Business of the same actual controller
Weifang Goer Manor Food & Beverage Co., Ltd. Business of the same actual controller
Weifang Goer Property Service Co., Ltd Business of the same actual controller
Weifang Point Hotel Management Co., Ltd Business of the same actual controller
Weihai Goer Ecological Agriculture Co., Ltd. Business of the same actual controller
Dotcom Ivestment Co., Ltd Enterprise controlled by an affiliated natural person
Beijing Dotcom Catering Management Co., Ltd Enterprise controlled by an affiliated natural person
Beijing Dotcom Coffee Co., Ltd Enterprise controlled by an affiliated natural person
Beijing Bubble lab Co., Ltd Enterprise controlled by an affiliated natural person
Weifang Daocao Catering Co., Ltd. Business of the same actual controller
Weifang Goer Real Estate Co., Ltd Business of the same actual controller
Weifang Dotcom Catering Management Co., Ltd Enterprise controlled by an affiliated natural person
Beihang Goer (Weifang) Intelligent Robot Co., Ltd Business of the same actual controller
Qingdao Goer Changguang Research Institute Co., Ltd Parent company's associate, de-registered on January 18, 2022
Weifang Goer Education Investment Co., Ltd. Business of the same actual controller
Weifang Goer School Business of the same actual controller
Weifang High-Tech Zone Yasong Linju Kindergarten Business of the same actual controller
Weifang High-Tech Zone Goer Kindergarten Business of the same actual controller
Dynaudio Shanghai Co., Ltd Business of the same actual controller
Dynaudio Holding A/S Business of the same actual controller
Qingdao Pico Technology Co., Ltd. Parent company's associate, disposed of on September 8, 2021.
Little Bird Co., Ltd Business of the same actual controller
Qingdao Realtime Technology Co., Ltd. Parent company's associate, de-registered on May 15, 2020
Business of the same actual controller, de-registered on August
Weifang GoerHome Decoration Engineering Co., Ltd
12, 2021
Qingdao Point Hotel Management Co., Ltd Business of the same actual controller
Wemake (Weihai) Digital Creative Technology Co., Ltd Business of the same actual controller
Weifang Hanzhi Enterprise Management Co., Ltd. Business of the same actual controller
Weihai Point Hotel Management Co., Ltd Business of the same actual controller
Qiangdao Goertek Robotics Co., Ltd Business of the same actual controller
Weihai Goer Real Estate Co., Ltd Business of the same actual controller
295
Goertek Inc. Annual Report 2021
Name of other related parties Relationship between other related parties and the Company
Weifang GoerDyna Electronic Technology Co., Ltd Business of the same actual controller
Wemake (Qingdao) Digital Creative Technology Co., Ltd Business of the same actual controller
Shandong Goer Education Group Co., Ltd. Business of the same actual controller
Weifang Hanhui Enterprise Management Co., Ltd. Business of the same actual controller
Wemake (Beijing) Digital Creative Technology Co., Ltd. Business of the same actual controller
Explanation on Other Matters
Wemake (Beijing) Consulting Service Co., Ltd. was renamed Wemake (Beijing) Digital Creative Technology Co., Ltd in April
2021.
5. Related party transactions
(1) Related transactions involving commodity purchase, and rendering and receipt of services
Statement of purchasing goods/accepting labor services
Unit: RMB
Exceed the
Approved trading
Related parties Related transactions 2021 trading limit 2020
limit
or not
Purchasing raw
AKM Industrial Company Limited 108,622,154.32 250,000,000.00 No 84,627,432.35
materials
Weifang Point Hotel Management Purchasing goods
14,774,953.49 No 12,259,050.79
Co., Ltd and services
Wemake (Beijing) Digital Creative Purchasing goods
No 2,686,233.61
Technology Co., Ltd. and services
Beijing Dotcom Coffee Co., Ltd Purchasing goods 3,216.00
Weifang Goer Property Service Co., Purchasing goods
6,399,062.47 No 4,813,056.62
Ltd and services
Weifang GoerHome Decoration Receiving labor
No 9,258,618.50
Engineering Co., Ltd service
Purchasing goods
Dotcom Ivestment Co., Ltd 1,397,275.64 No 2,337,361.77
and services
Receiving labor
Weifang Goer Real Estate Co., Ltd 37,498,099.41
service
Purchasing goods
Weifang Goer Farm Co., Ltd. 11,559,035.68 No 3,442,382.54
and services
Weihai Goer Ecological Agriculture
Purchasing goods 632,726.75 No 171,040.00
Co., Ltd.
296
Goertek Inc. Annual Report 2021
Weifang Goer Manor Food &
Purchasing goods 2,125,413.79 No 2,212,729.94
Beverage Co., Ltd.
Weifang Shixiang Real Estate Co., Purchasing goods
800.00 366,380.86
Ltd. and services
Weifang Dotcom Catering Purchasing goods
30,550,429.90 No 23,438,086.32
Management Co., Ltd and services
Weifang Goer Manor Trading Co.,
Purchasing goods 2,279,607.11 No 509,069.88
Ltd.
Purchasing goods
Weifang Daocao Catering Co., Ltd. 485,022.00 No 425,240.40
and services
Purchasing goods
Qiangdao Goertek Robotics Co., Ltd 11,022.53
and services
Purchasing goods
Goertek Robotics Co., Ltd. 7,345,708.62 794,392.50
and services
Beijing Dotcom Catering
Purchasing goods 128,750.00
Management Co., Ltd
Purchasing goods
Beijing Bubble lab Co., Ltd 2,068,337.18 No 96,425.00
and services
Qingdao Point Hotel Management Receiving labor
1,973,014.81 No 519,363.79
Co., Ltd service
Qingdao Goer Changguang Research Receiving labor
9,000.00
Institute Co., Ltd service
Wemake (Weihai) Digital Creative
Purchasing goods 261,489.60 No 200,854.43
Technology Co., Ltd
Beihang Goer (Weifang) Intelligent Purchasing goods
2,016,497.00 No 495,049.50
Robot Co., Ltd and services
Purchasing goods
Dynaudio Holding A/S 10,088,269.89 No 3,183,415.26
and services
Little Bird Co., Ltd Purchasing goods 9,895,201.01
Dynaudio Shanghai Co., Ltd Purchasing goods 454,032.00 No
Qingdao Pico Technology Co., Ltd. Purchasing goods 8,172,060.06 No
Qingdao Virtual Reality Institute Co., Receiving labor
13,674,912.95
Ltd. service
Weifang GoerDyna Electronic
Purchasing goods 12,059,629.96 No
Technology Co., Ltd
Weihai Point Hotel Management Co., Receiving labor
38,750.94 No
Ltd service
Statement of sales of goods/rendering of services
297
Goertek Inc. Annual Report 2021
Unit: RMB
Related parties Related transactions 2021 2020
Qingdao Realtime Technology Co., Ltd. Sales of goods 4,524,024.14
Sales of goods and
Goertek Group Co., Ltd. 1,790,210.80 4,526,384.11
services
Sales of goods and
Goertek Robotics Co., Ltd. 114,747.48 249,076.79
services
Dotcom Ivestment Co., Ltd Sales of goods 10,353.98
Beijing Bubble lab Co., Ltd Sales of goods 320,500.00
Sales of goods and
Weifang Goer Real Estate Co., Ltd 784,572.77
services
Weifang Dotcom Catering Management Co., Sales of goods and
1,477,900.21 3,118,178.42
Ltd services
Weifang Goer Farm Co., Ltd. Sales of goods 56,603.76
Beihang Goer (Weifang) Intelligent Robot
Sales of goods 12,156.24 927,329.34
Co., Ltd
Weifang Goer Manor Trading Co., Ltd. Sales of goods 154,535.59 333,314.56
Weifang GoerHome Decoration Engineering
Rendering of service 1,691,619.08 57,728.01
Co., Ltd
Dynaudio Holding A/S Sales of goods 835,047.55 294,064.33
Sales of goods and
Dynaudio Shanghai Co., Ltd 7,809,105.05 1,187,797.81
services
AKM Industrial Company Limited Sales of goods 1,134,756.63 964,951.31
Weihai Goer Real Estate Co., Ltd Sales of goods 1,950.00
Little Bird Co., Ltd Sales of goods 43,567,472.65
Wemake (Beijing) Digital Creative
Rendering of service 42,000.00
Technology Co., Ltd.
Qingdao Point Hotel Management Co., Ltd Rendering of service 238,490.57
Qingdao Pico Technology Co., Ltd. Sales of goods 164,082,292.53
Sales of goods and
Qingdao Virtual Reality Institute Co., Ltd. 1,405,755.94
services
Weifang GoerDyna Electronic Technology Sales of goods and
18,684,849.56
Co., Ltd services
Weifang Goer School Sales of goods 29,339.62
Weifang Point Hotel Management Co., Ltd Sales of goods 1,460.18
Explanation of related party transactions in purchasing and selling goods, rendering and receiving labor services
298
Goertek Inc. Annual Report 2021
For details about the Company’s and its subsidiaries’ estimated trading limit of daily transactions with Goertek Group and its
subsidiaries, please see the Announcement of Estimated Daily Related Transactions in 2021 of Goertek Inc. issued on March 27,
2021 through media for information disclosure.
(2) Related entrusted management/contracting and entrusted management/outsourcing
None
(3) Information of related lease
The Company acts as the lessor:
Unit: RMB
Types of leased Lease income recognized in Lease income recognized in last
Name of lessee
assets current period period
Weifang Goer Real Estate Co., Ltd Building 87,120.89
Weifang High-Tech Zone Yasong Linju
Building 43,885.72 45,714.28
Kindergarten
Weifang Goer Education Investment Co.,
Building 17,142.86
Ltd.
Weifang Point Hotel Management Co., Ltd Building 248,794.77 176,628.57
Beihang Goer (Weifang) Intelligent Robot
Building 186,382.10 76,190.48
Co., Ltd
Weifang Goer School Building 91,721.99 51,935.19
Weifang Dotcom Catering Management
Building 34,285.71
Co., Ltd
Weifang Goer Farm Co., Ltd. Building 571.43
Weifang High-Tech Zone Goer
Building 22,400.00 16,114.29
Kindergarten
Weifang Hanzhi Enterprise Management
Building 39,633.03 54,679.25
Co., Ltd.
Qingdao Point Hotel Management Co., Ltd Building 1,981.13
Weihai Point Hotel Management Co., Ltd Building 1,320.75
Weihai Goer Ecological Agriculture Co.,
Building 137.61
Ltd.
Shandong Goer Education Group Co., Ltd. Building 7,840.44
Weifang GoerDyna Electronic Technology
Building 2,407,111.58
Co., Ltd
The Company acts as the lessee:
299
Goertek Inc. Annual Report 2021
Unit: RMB
Rental expenses recognized in Rental expenses recognized in
Name of lessor Types of leased assets
current period last period
Goertek Group Co., Ltd. Building 444,700.82 5,212,610.80
Weifang Goer Farm Co., Ltd. Building 1,449,000.00
Weifang Hanhui Enterprise
Building 20,078.80
Management Co., Ltd.
(4) Related guarantees
The Company acts as the guarantor
Unit: RMB
Maturity date of Whether the guarantee
Guaranteed party Guarantee amount Starting date of guarantee
guarantee has been performed fully
Goertek (HongKong) Co.,
63,757,000.00 September 10, 2020 September 10, 2021 Yes
Limited
Goertek (HongKong) Co.,
63,757,000.00 September 10, 2021 September 10, 2022 No
Limited
Goertek (HongKong) Co.,
63,757,000.00 October 20, 2020 October 20, 2021 Yes
Limited
Goertek (HongKong) Co.,
63,757,000.00 October 20, 2021 October 20, 2022 No
Limited
Goertek (HongKong) Co.,
726,670,407.50 January 16, 2020 January 16, 2023 No
Limited
Goertek (HongKong) Co.,
32,037,892.50 January 17, 2020 January 16, 2023 No
Limited
Goertek (HongKong) Co.,
701,327,000.00 February 24, 2020 January 16, 2023 Yes
Limited
Goertek (HongKong) Co.,
452,674,700.00 February 24, 2020 January 16, 2023 No
Limited
Goertek (HongKong) Co.,
95,635,500.00 November 29, 2020 May 25, 2021 Yes
Limited
Goertek (HongKong) Co.,
159,392,500.00 August 20, 2020 August 20, 2021 Yes
Limited
Goertek (HongKong) Co.,
159,392,500.00 August 20, 2021 August 20, 2022 No
Limited
Goertek Technology Vina
191,271,000.00 August 16, 2021 December 16, 2021 Yes
Company Limited
Goertek Technology Co., Ltd. 396,829,262.02 September 20, 2018 September 21, 2026 Yes
300
Goertek Inc. Annual Report 2021
Goertek Technology Vina
50,400,000.00 June 10, 2020 June 9, 2021 Yes
Company Limited
Goertek Technology Vina
23,000,000.00 June 6, 2021 June 5, 2022 No
Company Limited
Goertek Technology Vina
4,500,000.00 June 6, 2021 June 5, 2022 No
Company Limited
Goertek Technology Vina
283,900,000.00 February 21, 2020 February 20, 2021 Yes
Company Limited
Goertek Technology Vina
496,413,129.00 July 30, 2021 July 29, 2022 No
Company Limited
Goertek Technology Vina
89,259,800.00 August 27, 2020 August 26, 2021 Yes
Company Limited
Goertek Technology Vina
85,617,550.00 August 20, 2020 July 2, 2021 Yes
Company Limited
Goertek Technology Vina
85,036,553.00 October 18, 2021 October 17, 2022 No
Company Limited
Goertek Technology Vina
56,000,000.00 December 1, 2020 November 30, 2021 Yes
Company Limited
Goertek Technology Vina
55,000,000.00 August 1, 2021 July 30, 2022 No
Company Limited
Goertek Technology Vina
127,514,000.00 June 29, 2021 June 29, 2022 No
Company Limited
Weifang Goertek
30,000,000.00 March 2, 2020 March 2, 2021 Yes
Microelectronics Co., Ltd.
Weifang Goertek
10,000,000.00 March 10, 2020 March 9, 2021 Yes
Microelectronics Co., Ltd.
Weifang Goertek
5,000,000.00 March 27, 2021 March 26, 2022 No
Microelectronics Co., Ltd.
Goertek Microelectronics Inc. 19,127,100.00 November 19, 2020 November 18, 2021 Yes
Goertek Microelectronics Inc. 19,127,100.00 November 19, 2021 November 18, 2022 No
Goertek Intelligence
4,000,000.00 June 10, 2021 June 9, 2022 No
Technology Co., Ltd.
Goertek Technology Vina
60,569,150.00 September 24, 2020 August 31, 2021 Yes
Company Limited
Goertek (HongKong) Co.,
42,398,405.00 May 19, 2020 May 19, 2021 Yes
Limited
Goertek Technology Vina
3,187,850.00 August 14, 2020 August 13, 2021 Yes
Company Limited
301
Goertek Inc. Annual Report 2021
Explanation on Other Matters
The syndicated loan borne by Goertek Technology Co., Ltd., a subsidiary, was RMB 396,829,262.02, which was repaid in
February and March 2021.
The borrowing borne by Goertek (HongKong) Co., Limited, a subsidiary, was USD 110,000,000.00, which was repaid in July
and December 2021.
The Company acts as the guaranteed party
Unit: RMB
Maturity date of Whether the guarantee
Guarantor Guarantee amount Starting date of guarantee
guarantee has been performed fully
Goertek Group Co., Ltd. 10,000,000.00 August 25, 2020 February 24, 2021 Yes
Goertek Group Co., Ltd. 40,000,000.00 September 18, 2020 March 17, 2021 Yes
Goertek Group Co., Ltd. 25,000,000.00 October 16, 2020 April 15, 2021 Yes
Goertek Group Co., Ltd. 25,000,000.00 November 27, 2020 May 26, 2021 Yes
Goertek Group Co., Ltd. 5,520,000.00 October 29, 2020 January 25, 2021 Yes
Goertek Group Co., Ltd. 2,546,000.00 October 29, 2020 April 26, 2021 Yes
Goertek Group Co., Ltd. 9,398,000.00 November 11, 2020 January 25, 2021 Yes
Goertek Group Co., Ltd. 690,000.00 November 11, 2020 February 25, 2021 Yes
Goertek Group Co., Ltd. 3,599,000.00 November 11, 2020 March 25, 2021 Yes
Goertek Group Co., Ltd. 1,069,000.00 November 11, 2020 April 26, 2021 Yes
Goertek Group Co., Ltd. 1,320,000.00 November 26, 2020 January 25, 2021 Yes
Goertek Group Co., Ltd. 3,330,000.00 November 26, 2020 April 26, 2021 Yes
Goertek Group Co., Ltd. 1,100,000.00 November 26, 2020 May 25, 2021 Yes
Goertek Group Co., Ltd. 3,200,000.00 November 27, 2020 February 25, 2021 Yes
Goertek Group Co., Ltd. 6,830,000.00 November 27, 2020 May 25, 2021 Yes
Goertek Group Co., Ltd. 3,500,000.00 December 8, 2020 May 25, 2021 Yes
Goertek Group Co., Ltd. 1,110,000.00 December 8, 2020 February 25, 2021 Yes
Goertek Group Co., Ltd. 1,259,000.00 December 8, 2020 April 26, 2021 Yes
Goertek Group Co., Ltd. 6,017,000.00 January 19, 2021 March 25, 2021 Yes
Goertek Group Co., Ltd. 7,309,000.00 January 19, 2021 May 25, 2021 Yes
Goertek Group Co., Ltd. 3,680,000.00 January 19, 2021 April 26, 2021 Yes
Goertek Group Co., Ltd. 10,000,000.00 February 19, 2021 August 18, 2021 Yes
Goertek Group Co., Ltd. 40,000,000.00 February 26, 2021 August 25, 2021 Yes
Goertek Group Co., Ltd. 6,900,000.00 March 2, 2021 May 25, 2021 Yes
Goertek Group Co., Ltd. 4,790,000.00 March 2, 2021 June 25, 2021 Yes
302
Goertek Inc. Annual Report 2021
Maturity date of Whether the guarantee
Guarantor Guarantee amount Starting date of guarantee
guarantee has been performed fully
Goertek Group Co., Ltd. 7,800,000.00 March 2, 2021 July 26, 2021 Yes
Goertek Group Co., Ltd. 1,769,000.00 March 18, 2021 May 25, 2021 Yes
Goertek Group Co., Ltd. 1,120,000.00 March 18, 2021 June 25, 2021 Yes
Goertek Group Co., Ltd. 4,280,000.00 March 18, 2021 August 25, 2021 Yes
Goertek Group Co., Ltd. 25,000,000.00 April 7, 2021 October 6, 2021 Yes
Goertek Group Co., Ltd. 7,370,000.00 April 27, 2021 July 25, 2021 Yes
Goertek Group Co., Ltd. 7,520,000.00 April 28, 2021 September 25, 2021 Yes
Goertek Group Co., Ltd. 7,925,000.00 April 28, 2021 May 25, 2021 Yes
Goertek Group Co., Ltd. 25,000,000.00 April 29, 2021 October 28, 2021 Yes
Goertek Group Co., Ltd. 1,200,000.00 May 7, 2021 June 25, 2021 Yes
Goertek Group Co., Ltd. 6,990,000.00 May 7, 2021 October 25, 2021 Yes
Goertek Group Co., Ltd. 11,400,000.00 May 31, 2021 November 25, 2021 Yes
Goertek Group Co., Ltd. 11,300,000.00 May 31, 2021 August 25, 2021 Yes
Goertek Group Co., Ltd. 12,230,000.00 July 7, 2021 September 26, 2021 Yes
Goertek Group Co., Ltd. 6,440,000.00 July 7, 2021 December 27, 2021 Yes
Goertek Group Co., Ltd. 4,650,000.00 July 14, 2021 October 25, 2021 Yes
Goertek Group Co., Ltd. 4,350,000.00 July 27, 2021 October 25, 2021 Yes
Goertek Group Co., Ltd.
50,000,000.00 August 19, 2021 February 18, 2022 Yes
(Note 1)
Goertek Group Co., Ltd. 7,500,000.00 September 28, 2021 November 25, 2021 Yes
Goertek Group Co., Ltd. 8,300,000.00 September 28, 2021 December 25, 2021 Yes
Goertek Group Co., Ltd. 400,000,000.00 September 29, 2020 September 28, 2022 No
Goertek Group Co., Ltd. 200,000,000.00 April 1, 2021 March 31, 2022 No
Goertek Group Co., Ltd. 300,000,000.00 October 29, 2021 October 28, 2022 No
Goertek Group Co., Ltd. 50,000,000.00 September 8, 2021 March 7, 2022 No
Goertek Group Co., Ltd. 50,000,000.00 November 18, 2021 May 17, 2022 No
Goertek Group Co., Ltd. 50,000,000.00 December 17, 2021 June 16, 2022 No
Goertek Group Co., Ltd. 10,920,000.00 September 29, 2021 January 25, 2022 No
Goertek Group Co., Ltd. 6,900,000.00 September 29, 2021 March 25, 2022 No
Goertek Group Co., Ltd. 9,980,000.00 September 29, 2021 February 25, 2022 No
Goertek Group Co., Ltd. 5,676,000.00 October 25, 2021 January 25, 2022 No
Goertek Group Co., Ltd. 4,880,000.00 November 8, 2021 April 25, 2022 No
Goertek Group Co., Ltd. 4,550,000.00 November 8, 2021 February 25, 2022 No
303
Goertek Inc. Annual Report 2021
Maturity date of Whether the guarantee
Guarantor Guarantee amount Starting date of guarantee
guarantee has been performed fully
Goertek Group Co., Ltd. 3,870,000.00 November 8, 2021 January 25, 2022 No
Goertek Group Co., Ltd. 2,055,000.00 November 29, 2021 March 25, 2022 No
Goertek Group Co., Ltd. 1,560,000.00 November 29, 2021 April 25, 2022 No
Goertek Group Co., Ltd. 1,710,000.00 November 29, 2021 May 25, 2022 No
Goertek Group Co., Ltd. 4,770,000.00 November 29, 2021 May 25, 2022 No
Goertek Group Co., Ltd. 1,930,000.00 November 29, 2021 May 25, 2022 No
Goertek Group Co., Ltd. 10,249,000.00 November 29, 2021 May 25, 2022 No
Goertek Group Co., Ltd. 1,127,861.48 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,068,368.13 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,104,938.65 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,129,915.25 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,065,232.73 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,119,454.17 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,123,665.45 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,129,030.36 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,120,556.64 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,121,751.25 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,064,858.17 March 30, 2021 September 30, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 1,276,993.58 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 480,671.14 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 2,403,808.73 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 2,950,347.18 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 888,486.29 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 247,254.13 April 27, 2021 October 26, 2021 Yes
304
Goertek Inc. Annual Report 2021
Maturity date of Whether the guarantee
Guarantor Guarantee amount Starting date of guarantee
guarantee has been performed fully
Goertek Group Co., Ltd. 64,788.87 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 517,537.51 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 48,554.09 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 82,094.95 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 90,365.25 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 49,548.24 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 40,815.60 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 47,425.25 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 24,640.25 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 22,675.03 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 88,081.77 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 50,000.00 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 62,851.23 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 30,000.00 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 30,000.00 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 52,155.65 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 13,019.15 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 97,909.53 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 66,444.00 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 83,345.44 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 17,176.00 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 12,431.81 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 21,853.36 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 12,148.52 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 49,350.01 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 1,124,096.48 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 237,777.43 April 27, 2021 October 26, 2021 Yes
Goertek Group Co., Ltd. 1,099,377.00 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 65,257.15 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 12,550.79 April 28, 2021 October 27, 2021 Yes
305
Goertek Inc. Annual Report 2021
Maturity date of Whether the guarantee
Guarantor Guarantee amount Starting date of guarantee
guarantee has been performed fully
Goertek Group Co., Ltd. 23,169.52 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 939,591.68 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 1,004,998.16 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 1,007,649.36 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 976,526.11 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 962,765.54 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 1,106,011.90 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 293,259.50 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 784,664.79 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 540,525.47 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 1,061,574.50 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 1,099,494.91 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 1,027,277.11 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 64,453.05 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 1,099,377.00 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 1,111,950.22 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 695,825.35 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 1,099,377.00 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 1,098,307.10 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 952,299.86 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 33,827.34 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 20,949.86 April 28, 2021 October 27, 2021 Yes
Goertek Group Co., Ltd. 616,643.96 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 586,791.52 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 500,000.00 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 309,061.98 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 500,000.00 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 591,482.62 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 500,000.00 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 603,697.27 May 28, 2021 November 28, 2021 Yes
306
Goertek Inc. Annual Report 2021
Maturity date of Whether the guarantee
Guarantor Guarantee amount Starting date of guarantee
guarantee has been performed fully
Goertek Group Co., Ltd. 807,584.74 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 851,518.57 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 567,479.76 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 500,000.00 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 555,488.21 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 500,000.00 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 942,760.48 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 500,000.00 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 112,998.98 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 54,139.39 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 112,996.95 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 112,996.95 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 112,999.04 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 112,998.98 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 112,998.98 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 112,996.95 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 112,998.98 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 50,000.00 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 31,133.05 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 235,429.08 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 61,175.70 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 50,000.00 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 29,480.80 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 48,849.21 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 112,999.66 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 20,617.62 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 60,410.99 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 40,000.00 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 26,427.26 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 14,831.02 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 10,772.54 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 57,439.38 May 28, 2021 November 28, 2021 Yes
307
Goertek Inc. Annual Report 2021
Maturity date of Whether the guarantee
Guarantor Guarantee amount Starting date of guarantee
guarantee has been performed fully
Goertek Group Co., Ltd. 18,221.25 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 20,918.79 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 50,000.00 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 91,197.71 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 52,348.38 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 30,000.00 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 32,004.57 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 316,786.23 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 96,178.71 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 44,814.95 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 20,247.27 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 31,380.63 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 87,485.08 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 39,210.95 May 28, 2021 November 28, 2021 Yes
Goertek Group Co., Ltd. 1,128,803.54 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 1,129,916.87 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 1,052,906.99 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 1,121,985.68 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 1,126,886.41 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 930,109.53 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 1,129,915.25 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 1,129,915.25 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 1,129,915.25 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 679,882.36 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 281,493.98 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 109,818.28 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 167,823.51 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 1,066,691.49 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 946,602.93 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 1,052,073.47 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 928,117.52 May 31, 2021 November 30, 2021 Yes
308
Goertek Inc. Annual Report 2021
Maturity date of Whether the guarantee
Guarantor Guarantee amount Starting date of guarantee
guarantee has been performed fully
Goertek Group Co., Ltd. 1,108,191.00 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 301,317.50 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 865,435.48 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 4,378,550.51 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 54,069.32 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 15,283.85 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 18,366.21 May 31, 2021 November 30, 2021 Yes
Goertek Group Co., Ltd. 601,647.24 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 1,105,564.64 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 1,127,861.48 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 1,109,525.93 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 1,015,049.17 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 1,008,404.23 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 546,954.14 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 253,542.65 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 1,126,669.99 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 1,129,915.25 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 958,335.53 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 1,129,047.41 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 1,070,204.71 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 1,096,262.33 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 922,474.54 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 1,129,915.25 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 1,129,915.25 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 314,468.47 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 754,519.95 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 64,668.99 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 11,516.96 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 600,148.96 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 69,722.81 June 30, 2021 December 30, 2021 Yes
309
Goertek Inc. Annual Report 2021
Maturity date of Whether the guarantee
Guarantor Guarantee amount Starting date of guarantee
guarantee has been performed fully
Goertek Group Co., Ltd. 250,197.03 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 14,085.30 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 432,225.01 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 878,705.81 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 665,741.12 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 1,060,357.97 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 989,141.03 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 13,632.14 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 157,209.49 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 17,573.76 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 509,518.92 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 388,946.24 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 1,086,363.53 June 30, 2021 December 30, 2021 Yes
Goertek Group Co., Ltd. 522,807.40 May 13, 2021 December 13, 2021 Yes
Goertek Group Co., Ltd. 2,515,213.65 June 17, 2021 December 15, 2021 Yes
Goertek Group Co., Ltd.
1,326,145.60 February 2, 2021 July 20, 2021 No
(Note 2)
Explanation of related guarantee
Note 1: The borrowing was repaid on November 1, 2021.
Note 2: The equipment subject to the security failed to meet the acceptance standards within the validity period of the letter of credit
and was not paid for.
(5) Funds borrowed from related parties
None
(6) Transfer of assets and debt restructuring of related parties
Unit: RMB
Related parties Related transactions 2021 2020
Goertek Robotics Co., Ltd. Purchasing office equipment 943,396.20 16,428.14
Weifang Goer Real Estate Co., Ltd Purchasing office equipment 379,003.54
Purchasing buildings and
Weifang Shixiang Real Estate Co., Ltd. 387,250.60 11,855,533.00
structures
Qingdao Realtime Technology Co., Ltd. Purchasing office equipment 54,797.35
310
Goertek Inc. Annual Report 2021
Beijing Bubble lab Co., Ltd Purchasing office equipment 1,845,155.05
Wemake (Beijing) Digital Creative Technology
Purchasing office equipment 2,237,536.87
Co., Ltd.
Goertek Group Co., Ltd. Purchasing office equipment 6,700,007.82
Weifang GoerHome Decoration Engineering Purchasing buildings and
6,171,794.28
Co., Ltd structures
Wemake (Qingdao) Digital Creative
Purchasing office equipment 215,405.66
Technology Co., Ltd
Wemake (Weihai) Digital Creative Technology
Purchasing office equipment 56,603.77
Co., Ltd
Qingdao Virtual Reality Institute Co., Ltd. Purchasing office equipment 2,606,781.00
Qingdao Virtual Reality Institute Co., Ltd. Disposal of fixed assets 6,485,086.09
Weifang GoerDyna Electronic Technology Co.,
Disposal of fixed assets 9,295,634.00
Ltd
Weifang Point Hotel Management Co., Ltd Disposal of fixed assets 4,760.77
(7) Remuneration of key managers
Unit: RMB
Item 2021 2020
Remuneration of key managers 16,950,000.00 15,520,000.00
(8) Other related transactions
None
6. Receivables and payables of related parties
(1) Items with accounts receivable
Unit: RMB
Closing balance Opening balance
Name of project Related parties Bad-debt Bad-debt
Book balance Book balance
provision provision
Accounts
AKM Industrial Company Limited 516,600.00 5,166.00 404,055.00 4,040.55
receivable
Accounts
Beijing Bubble lab Co., Ltd 362,165.00 3,621.65
receivable
Accounts Weifang Dotcom Catering 2,268,903.97 22,689.04
311
Goertek Inc. Annual Report 2021
receivable Management Co., Ltd
Accounts
Little Bird Co., Ltd 9,233,053.25 92,330.53 14,362,630.76 143,626.31
receivable
Accounts
Qingdao Pico Technology Co., Ltd. 15,820,357.84 158,203.58
receivable
Accounts
Dynaudio Shanghai Co., Ltd 189,133.13 1,891.33 1,327,754.52 13,277.55
receivable
Accounts
Goertek Robotics Co., Ltd. 78,523.44 785.23
receivable
Accounts Qingdao Point Hotel Management
252,800.00 2,528.00
receivable Co., Ltd
Accounts Weifang GoerDyna Electronic
10,925,126.65 109,251.27
receivable Technology Co., Ltd
Other receivables Weifang Goer Farm Co., Ltd. 50,000.00 500.00
Other non-current
Beijing Bubble lab Co., Ltd 1,426,472.10
assets
Other non-current
Dotcom Ivestment Co., Ltd 1,252,224.66
assets
(2) Items with accounts payable
Unit: RMB
Name of project Related parties Closing book balance Opening book balance
Accounts payable AKM Industrial Company Limited 39,135,420.36 29,088,400.44
Accounts payable Weifang Goer Real Estate Co., Ltd 387,506.54
Accounts payable Weifang Goer Property Service Co., Ltd 1,542.00 21,811.87
Weifang Goer Manor Food & Beverage Co.,
Accounts payable 37,890.84 37,554.61
Ltd.
Accounts payable Weifang Goer Manor Trading Co., Ltd. 212,941.81 26,999.93
Weifang Dotcom Catering Management Co.,
Accounts payable 260,375.00 370,798.79
Ltd
Accounts payable Weifang Goer Farm Co., Ltd. 1,747,498.74 591,513.49
Beihang Goer (Weifang) Intelligent Robot
Accounts payable 500,000.00
Co., Ltd
Accounts payable Little Bird Co., Ltd 2,757,461.08 704,088.56
Accounts payable Beijing Bubble lab Co., Ltd 46,561.60 20,642.00
Wemake (Beijing) Digital Creative
Accounts payable 64,788.94
Technology Co., Ltd.
312
Goertek Inc. Annual Report 2021
Wemake (Weihai) Digital Creative
Accounts payable 10,293.85 70,205.77
Technology Co., Ltd
Weihai Goer Ecological Agriculture Co.,
Accounts payable 30,200.00 30,240.00
Ltd.
Accounts payable Dotcom Ivestment Co., Ltd 42,478.00
Accounts payable Weifang Point Hotel Management Co., Ltd 98,568.00
Weifang GoerDyna Electronic Technology
Accounts payable 12,408,592.87
Co., Ltd
Accounts payable Qingdao Virtual Reality Institute Co., Ltd. 4,925,805.03
Wemake (Qingdao) Digital Creative
Accounts payable 404,150.41
Technology Co., Ltd
Contract liabilities Dynaudio Holding A/S 234,908.37
Beihang Goer (Weifang) Intelligent Robot
Other payables 28,248.00
Co., Ltd
7. Commitment of related parties
None
8. Others
None
XIII. Share-based payment
1. Overview of share-based payment
√ Applicable □ Not applicable
Unit: RMB
Total amount of equity instruments granted by the Company in the current
63,460,000.00
period
Total amount of equity instruments exercised by the Company in the
28,730,416.00
current period
Total amount of equity instruments of the Company which are invalid in
4,592,000.00
the current period
The range of exercise price of stock options issued by the Company at the
See Explanation of Other Matters below
end of the period and their remaining period of contract
The range of exercise price of other equity instrument options issued by
the Company at the end of the period and their remaining period of See Explanation of Other Matters below
contract
313
Goertek Inc. Annual Report 2021
Explanation on Other Matters
(1) The range of exercise price of stock options issued by the Company at the end of the period and their remaining period of
contract
A. 2021 Share Option Incentive Plan
To fully arouse the enthusiasm and creativity of employees, attract and retain management talents and people who make up the
backbone of each department, and improve employee cohesion and the Company's competitiveness, according to the resolution of the
19th meeting of the 5th Board of Directors held on April 16, 2021 and the 2020 Annual General Meeting of Shareholders held on
May 7, 2021, the Company shall implement the "2021 Stock Option Incentive Plan" for the important personnel in management and
various departments (excluding directors and senior management) of the Company and its wholly-owned and holding subsidiaries.
The exercise price for the first grant and the reserved stock options under the Incentive Plan is RMB 29.33 per share.
The validity period of the Incentive Plan is 48 months, from the date of grant of stock options until the stock options are full
exercised or de-registered. The 12 months from the day when the stock options are granted initially or when the reserved stock
options are granted under the Incentive Plan shall be the waiting period, and the options may be exercised after the end of the waiting
period. In the exercise period, the grantees will exercise the options in two phases according to the exercise ratio of 50%:50% at
exercisable dates.
B. Equity incentive plan
According to the resolution of General Meeting dated September 29, 2020 and to the resolution of Board of Directors dated
October 27, 2020, Goertek Microelectronics shall grant 17,335,000 stock options to the directors, senior management and key
backbones (excluding supervisors and independent directors) of Goer Microelectronics and its holding subsidiaries to be exercised
them in five phases. The corresponding waiting periods are 18 months, 30 months, 42 months, 54 months and 66 months respectively
from the date of grant.
Goer Microelectronic applies the Black-Scholes option pricing model to measure and determine the fair value of stock options.
The values of stock options for the five phases are respectively RMB 3.41 per share, RMB 4.67 per share, RMB 5.53 per share, RMB
6.28 per share and RMB 7.45 per share.
(2) The range of exercise price of other equity instrument options issued by the Company at the end of the period and their
remaining period of contract
A. “Homeland No.4” employee stock plan
To fully arouse the enthusiasm and creativity of employees, attract and retain management talents and people who make up the
backbone of each department, and improve employee cohesion and the Company's competitiveness, according to the resolution of the
5th meeting of the 5th Board of Directors held on April 21, 2020 and the 2019 Annual General Meeting of Shareholders held on May
314
Goertek Inc. Annual Report 2021
8, 2020, the Company shall implement the “Homeland No.4” employee stock plan for certain directors (excluding independent
directors), supervisors and senior management as well as important personnel in management and various departments.
In order to ensure the efficiency of the incentives, the employee stock plan received the transfer of 49,270,100 shares in the
Company’s special securities account for re-purchase at nil, and no employee was required to pay for the shares.
The validity period of the “Homeland No.4” employee stock plan is 48 months, and the shares shall be released in three stages.
The time of release is the end of 12 months, 24 months or 36 months from the day when the Company declares the transfer of the last
underlying shares of the Company to the name of this employee stock plan.
B. “Homeland No.5” employee stock plan
To fully arouse the enthusiasm and creativity of employees, attract and retain management talents and people who make up the
backbone of each department, and improve employee cohesion and the Company's competitiveness, according to the resolution of the
19th meeting of the 5th Board of Directors held on April 16, 2021 and the 2020 Annual General Meeting of Shareholders held on
May 7, 2021 to implement the “Homeland No.5” employee stock plan for certain directors (excluding independent directors),
supervisors and senior management as well as important personnel in management and various departments who have made
important contributions to the development of the Company.
The “Homeland No.5” employee stock plan received the transfer of shares in the Company’s special securities account for
re-purchase at RMB 10 per share.
The shares under the employee stock plan will be released in two stages. The time of release is the end of 12 months or 24
months from the day of the transfer of the shares under the employee stock plan to this employee stock plan.
C. Equity incentive by way of capital increase
According to the resolution of the General Meeting of Shareholders and the amended Articles of Association of Goertek
Microelectronics, the natural-person shareholders Mr. Jiang Long and Mr. Song Qinglin subscribed for 21,500,000 shares of Goertek
Microelectronics by way of capital increase. The capital increase price was RMB 2 per share, which was lower than the fair value of
Goertek Microelectronics, and the amount constituted share-based payment.
2. Share-based payment settled with equity
√ Applicable □ Not applicable
Unit: RMB
Determination method of the fair value of equity instruments at the Black-Scholes model and fair value of equity instruments at
date of grant the date of grant
Basis for determining the quantity of equity instruments with The Company makes the determination according the equity
vesting instruments corresponding to the current target employees and
315
Goertek Inc. Annual Report 2021
the forecast of the Company's performance in the next year,
etc.
Reason for significant difference in estimation in the current period
None
and estimation in the last period
Accumulative amount of equity-settled share-based payment
1,343,592,456.04
included in capital reserves
Total amount of share-based payment settled with equity in current
871,368,483.26
period
3. Cash-settled payment settled in cash
□ Applicable √ Not applicable
4. Modification and termination of share-based payment
None
5. Others
None
XIV. Commitments and contingencies
1. Important commitments
Important commitments on the balance sheet date
None
2. Contingencies
(1) Important contingencies on the balance sheet date
① Contingent liability derived from pending litigations and arbitrations, and financial influence therefrom
None
② Contingent liabilities and financial impacts from debt guarantees for other organizations
As of the report date, except that the guarantees provided by the Company to its subsidiaries Goertek (Hong Kong) Co., Limited,
Goertek Technology Vina Company Limited, Weifang Goertek Microelectronics Co., Ltd., Goertek Intelligence Technology Co., Ltd.
and Goertek Microelectronics Inc. are not fulfilled as specified in Note XII.5, there is no debt guarantees of the Company provided to
other entities.
③ Contingent liabilities related to investments in joint ventures or associates
316
Goertek Inc. Annual Report 2021
None
④ Other contingent liabilities and financial impacts
None
(2) The Company shall make a statement even if it does not have important contingencies to be disclosed
There are no important contingencies to be disclosed in the Company.
3. Others
None
XV. Matters after balance sheet date
1. Important non-adjustment matters
Unit: RMB
The reason
why the
Impacted amount on financial impacted
Item Content
conditions and operating results amount
cannot be
estimated
AKM Industrial Company Limited (hereinafter referred to as
“AKM”), a company which Goertek (Hong Kong) Co., Limited, a After AKM’s privatization,
wholly-owned subsidiary of the Company holds shares, Goertek (Hong Kong) Co.,
announced on January 14, 2022 that Amway Industrial Limited Limited, a wholly-owned
Matters on the and AKM Meadville (Xiamen) Co., Ltd. (referred to as subsidiary of the Company, will
disposal by “Co-offerers” collectively) proposed before the existing receive a total cancellation price
subsidiaries of shareholders of AKM to privatize AKM by agreement of about HKD 660 million
their interests in arrangement in accordance with Article 673 of the Hong Kong (minus dividend adjustment (if
other companies Companies Ordinance. When the privatization proposal takes any) for its shares in AKM
effect, the issued outstanding shares of AKM will be canceled, canceled, which will help
and the Co-offerers will pay the share cancellation price of HKD improve the Company's
1.82 per share (minus dividend adjustment (if any)) to the profitability and cash flow.
existing shareholders of AKM in cash.
The progress of Goertek Microelectronics Inc., a subsidiary of the Company,
listing of a plans to be listed on the ChiNext of Shenzhen Stock Exchange.
subsidiary, At present, the issuer and sponsor take the initiative to apply for
Not applicable
Goertek suspension of the review procedure for issuance and listing, and
Microelectronic will resume the procedure as soon as possible depending on
s Inc. on SZSE documentary preparation.
317
Goertek Inc. Annual Report 2021
ChiNext
2. Profit distribution
Unit: RMB
Profits or dividends to be distributed 668,411,117.00
Profits or dividend declared after deliberation and approval 668,411,117.00
3. Sales return
None
4. Explanation of other matters after the balance sheet date
None
XVI. Other important matters
1. Correction of early accounting errors
None
2. Debt restructuring
None
3. Asset replacement
None
4. Annuity plan
None
5. Discontinued operation
None
6. Division information
None
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Goertek Inc. Annual Report 2021
7. Other important transactions and matters that have an impact on investors' decisions
None
8. Others
Lease
(1) The Group as lessee
① For information on right-of-use assets and lease liabilities, please see this Note VII. 16 and 35.
② Information on items recorded in current profit or loss and relevant asset costs
Items Reported items Amount (RMB)
Administrative expenses 24,744,987.37
Selling expenses 4,524,724.90
Short-term lease expense (simplified treatment applies)
R&D expenses 2,981,284.67
Cost of main business 23,757,844.04
Interest expenses recognized on lease payment Interest expenses 13,692,320.31
Income derived from the sublease of the right-of-use assets Other business income 3,465,424.78
③ Cash outflows related to leases
Items Category of cash flows Amount in the current year (RMB)
Cash outflows from
Cash for repayment of principal and interest of lease liabilities 102,991,821.74
financing activities
Payment for short-term leases and leases for low-value assets Cash outflows from
56,008,840.98
(simplified treatment applies) operating activities
Total 159,000,662.72
(2) The Group as lessor
① Information on financing lease
None
② Information on operating lease
A. Items recorded in current profit or loss
Items Reported items Amount (RMB)
Lease income Other business income 53,039,818.78
Total 53,039,818.78
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Goertek Inc. Annual Report 2021
XVII. Notes to major items in the financial statements of the parent company
1. Accounts receivable
(1) Accounts receivable disclosed by classification
Unit: RMB
Closing balance Opening balance
Book balance Bad-debt provision Book balance Bad-debt provision
Category
Proportion Book value Proportion of Book value
Amount Proportion Amount Amount Proportion Amount
of accrual accrual
Accounts receivable for bad
531,002.50 0.01% 531,002.50 100.00%
debt reserves by item
Accounts receivable with bad
8,040,359,505.41 100.00% 31,185,331.21 0.39% 8,009,174,174.20 9,771,125,513.47 99.99% 25,588,445.52 0.26% 9,745,537,067.95
debts reserves by group
Including:
Group by aging 3,118,533,121.24 38.79% 31,185,331.21 1.00% 3,087,347,790.03 2,443,254,164.24 25.00% 25,588,445.52 1.05% 2,417,665,718.72
Related party group 4,921,826,384.17 61.21% 4,921,826,384.17 7,327,871,349.23 74.99% 7,327,871,349.23
Total 8,040,359,505.41 100.00% 31,185,331.21 0.39% 8,009,174,174.20 9,771,656,515.97 100.00% 26,119,448.02 0.27% 9,745,537,067.95
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Goertek Inc. Annual Report 2021
Bad debt reserve grouping: Group by aging
Unit: RMB
Closing balance
Name
Book balance Bad-debt provision Proportion of accrual
Within 1 year 3,118,533,121.24 31,185,331.21 1.00%
1 to 2 years
2 to 3 years
Over 3 years
Total 3,118,533,121.24 31,185,331.21 --
Description for basis of determining the group:
Bad debt reserve grouping: Related party group
Unit: RMB
Closing balance
Name
Book balance Bad-debt provision Proportion of accrual
Within 1 year 4,921,826,384.17
1 to 2 years
2 to 3 years
Over 3 years
Total 4,921,826,384.17 --
Disclosed by age of accounts receivable
Unit: RMB
Aging Book balance
Within 1 year (including 1 year) 8,040,359,505.41
Total 8,040,359,505.41
(2) Accrual, recovery or return of bad debt reserve in current period
Provision for bad debts of the current period:
Unit: RMB
Changes in amount of the current period
Category Opening balance Withdrawal or Closing balance
Accrual Write-off Other
write-back
Accounts receivable for bad debt
531,002.50 35,522.78 566,525.28
reserves by item
Accounts receivable with bad debts
25,588,445.52 5,596,885.69 31,185,331.21
reserves by group
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Goertek Inc. Annual Report 2021
Total 26,119,448.02 5,632,408.47 566,525.28 31,185,331.21
Among them, significant information of bad debt reserves withdrawn or written back in the current period:
None
(3) Accounts receivable actually written off in current period
Unit: RMB
Item Written off amount
Accounts receivable actually written off 566,525.28
(4) Accounts receivable of the 5 highest closing balance by debtor
Unit: RMB
Closing balance of accounts Proportion of total closing Closing balance of bad debt
Company name
receivable balance of accounts receivable provision
Company 1 2,327,582,249.84 28.95%
Company 2 1,146,613,449.59 14.26% 11,466,134.50
Company 3 797,260,785.21 9.92%
Company 4 655,536,031.07 8.15%
Company 5 611,058,683.09 7.60%
Total 5,538,051,198.80 68.88% --
(5) Amount of assets and liabilities formed by transferring accounts receivable and continuing to be
involved
None
(6) Accounts receivable derecognized due to transfer of financial assets
Unit: RMB
Transfer method of financial Amount of receivables derecognized Gains or losses related to derecognition of accounts
assets receivable for the current year
Buyout factoring 104,504,742.00 -2,297,194.72
2. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other receivables 3,927,667,930.14 3,761,565,682.66
Total 3,927,667,930.14 3,761,565,682.66
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Goertek Inc. Annual Report 2021
(1) Interest receivable
None
(2) Dividend receivable
None
(3) Other receivables
1) Classification of other receivables by nature of payment
Unit: RMB
Nature of payment Closing book balance Opening book balance
Current account 3,774,035,738.53 3,753,395,937.93
Security deposit 40,178,537.85 8,019,073.86
Tax refund for export receivable 91,830,238.29
Withholding and remitting social insurance
25,693,583.89
and housing provident fund
Other 388,839.91
Total 3,931,738,098.56 3,761,803,851.70
2) Provision for bad debts
Unit: RMB
First stage Second stage Third stage
Expected credit Expected credit impairment Expected credit impairment
Bad-debt provision impairment losses losses for the entire life losses for the entire life Total
over the next 12 (credit impairment not (credit impairment has
months occurred) occurred)
Balance as of January 1,
238,169.04 238,169.04
2021:
Balance as of January 1,
2021 in the current —— —— —— ——
period
Accrual in the current
3,831,999.38 3,831,999.38
period
Balance as of December
4,070,168.42 4,070,168.42
31, 2021
Significant changes in the carrying value of changes in the allowances for losses in the current period
323
Goertek Inc. Annual Report 2021
□ Applicable √ Not applicable
Disclosed by age of accounts receivable
Unit: RMB
Aging Book balance
Within 1 year (including 1 year) 3,798,881,748.08
1 to 2 years 132,652,650.31
2 to 3 years 103,700.17
Over 3 years 100,000.00
3 to 4 years
4 to 5 years
Over 5 years 100,000.00
Total 3,931,738,098.56
3) Accrual, recovery or return of bad debt reserve in current period
Provision for bad debts of the current period:
Unit: RMB
Changes in amount of the current period
Opening
Category Withdrawal or Closing balance
balance Accrual Write-off Other
write-back
Group by aging 238,169.04 3,831,999.38 4,070,168.42
Total 238,169.04 3,831,999.38 4,070,168.42
Among them, significant amount in bad debt reserves written back or withdrawn in the current period:
None
4) Other receivables actually written off in the current period
None
5) Other receivables of the 5 highest closing balance by debtor
Unit: RMB
Ratio in the total
Closing balance of
Company name Nature of payment Closing balance Aging closing balance of
bad debt provision
other receivables
Company 1 Current account 1,249,000,000.00 Within 1 year 31.77%
Company 2 Current account 652,471,412.50 Within 1 year 16.59%
Company 3 Current account 465,600,000.00 Within 1 year 11.84%
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Goertek Inc. Annual Report 2021
Company 4 Current account 382,589,162.71 Within 1 year 9.73%
Company 5 Current account 157,406,315.35 Within 1 year 4.01% 1,574,063.15
Total -- 2,907,066,890.56 -- 73.94% 1,574,063.15
6) Other receivables involving government subsidies
None
7) Other receivables derecognized due to transfer of financial assets
None
8) Amount of assets and liabilities formed by transferring other receivables and continuing to be involved
None
3. Long-term equity investments
Unit: RMB
Closing balance Opening balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Investment in
6,182,937,106.09 6,182,937,106.09 5,896,926,627.12 5,896,926,627.12
subsidiaries
Total 6,182,937,106.09 6,182,937,106.09 5,896,926,627.12 5,896,926,627.12
(1) Investment in subsidiaries
Unit: RMB
Increase or decrease in the current period
Closing
Provisio
balance of
Opening balance n for Closing balance
Invested entity Investment Investment impairme
(book value) impairm Other (book value)
addition reduction nt
ent
provision
reserve
Weifang Goertek
1,442,834,958.47 18,967,497.85 1,461,802,456.32
Electronics Co., Ltd.
Weifang Goertek Trading
50,000,000.00 369,428.17 50,369,428.17
Co., Ltd.
Yishui Goertek Electronics
30,000,000.00 30,000,000.00
Co., Ltd.
325
Goertek Inc. Annual Report 2021
Increase or decrease in the current period
Closing
Provisio
balance of
Opening balance n for Closing balance
Invested entity Investment Investment impairme
(book value) impairm Other (book value)
addition reduction nt
ent
provision
reserve
Yili Precision
330,000,000.00 1,899,916.31 331,899,916.31
Manufacturing Co., Ltd.
Goertek Optical
595,162,190.72 1,826,030.68 596,988,221.40
Technology Co., Ltd.
Goertek Technology Co.,
950,000,000.00 8,337,466.08 958,337,466.08
Ltd.
Beijing Goertek
7,418,835.34 22,741,998.26 30,160,833.60
Technology Co., Ltd.
Qingdao Goertek Acoustics
20,000,000.00 41,876,266.54 61,876,266.54
Technology Co., Ltd.
Shenzhen Goertek
49,597,980.97 16,894,478.05 66,492,459.02
Technology Co., Ltd.
Shanghai Goertek
10,000,000.00 9,953,450.46 19,953,450.46
Technology Co., Ltd.
Nanjing Goertek
50,000,000.00 591,085.07 50,591,085.07
Technology Co., Ltd.
Shenzhen Mototek Smart
4,002,592.81 4,002,592.81
Technology Co., Ltd.
Weifang Lokomo Precision
50,072,733.09 559,419.80 50,632,152.89
Industry Co., Ltd.
Goertek Investment Co.,
75,000,000.00 3,000,000.00 78,000,000.00
Ltd.
Beijing Goertek Investment
2,744,323.56 2,744,323.56
Management Co., Ltd.
Dongguan JoyForce
Precision Manufacturing 30,000,000.00 633,305.44 30,633,305.44
Co., Ltd.
Goertek Vina Co., Ltd 247,634,379.61 247,634,379.61
Goertek Technology Korea
66,148,905.23 594,307.54 66,743,212.77
Co., Ltd.
Goertek Electronics, Inc. 200,999,366.27 5,205,373.50 206,204,739.77
Goertek Technology Taiwan
124,887,709.99 4,190,375.51 129,078,085.50
Co., Ltd.
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Goertek Inc. Annual Report 2021
Increase or decrease in the current period
Closing
Provisio
balance of
Opening balance n for Closing balance
Invested entity Investment Investment impairme
(book value) impairm Other (book value)
addition reduction nt
ent
provision
reserve
Goertek Technology
115,858,424.29 1,298,833.00 114,559,591.29
(Japan) Co., Ltd.
Goertek Seiki Techonology
783,046.43 241,065.13 1,024,111.56
株式会社
Goertek Intelligence
350,000,000.00 2,561,720.50 352,561,720.50
Technology Co., Ltd.
Goertek Microelectronics
805,525,503.90 13,920,239.85 819,445,743.75
Inc.
Beijing Goertek
5,053,458.52 5,053,458.52
Microelectronics Co., Ltd.
Qingdao Goertek
Microelectronics Research 460,436.04 460,436.04
Institute Co., Ltd.
Qingdao Goertek Intelligent
842,096.78 842,096.78
Sensor Co., Ltd.
Rongcheng Goertek
524,895.84 524,895.84
Microelectronics Co., Ltd.
Shanghai Ganyuzhi
2,758,811.23 2,758,811.23
Technology Co., Ltd.
Shenzhen Goertek
1,206,995.30 1,206,995.30
Microelectronics Co., Ltd.
Weifang Goertek
17,208,205.72 17,208,205.72
Microelectronics Co., Ltd.
Wuxi Goertek
940,460.62 940,460.62
Microelectronics Co., Ltd.
Qingdao Goertek
Commercial Factoring Co., 50,000,000.00 802,186.89 50,802,186.89
Ltd.
Kunshan Goertek
150,000,000.00 2,443,503.48 152,443,503.48
Electronics Co., Ltd.
Rongcheng Goertek
3,000,000.00 97,696,635.98 100,696,635.98
Technology Co., Ltd.
Nanning Goertek 80,000,000.00 80,000,000.00
327
Goertek Inc. Annual Report 2021
Increase or decrease in the current period
Closing
Provisio
balance of
Opening balance n for Closing balance
Invested entity Investment Investment impairme
(book value) impairm Other (book value)
addition reduction nt
ent
provision
reserve
Electronics Co., Ltd.
Xian Goertek Electronic
8,000,000.00 263,877.27 8,263,877.27
Technology Co., Ltd.
Total 5,896,926,627.12 287,309,311.97 1,298,833.00 6,182,937,106.09
(2) Investment in associated businesses and joint ventures
None
(3) Explanation of other matters:
None
4. Operating income and operating cost:
Unit: RMB
2021 2020
Item
Income Cost Income Cost
Main business 28,940,399,193.43 25,585,348,376.14 28,159,847,383.06 23,840,771,210.48
Other business 9,630,277,984.27 7,877,421,262.62 5,950,491,456.45 4,511,204,747.65
Total 38,570,677,177.70 33,462,769,638.76 34,110,338,839.51 28,351,975,958.13
Information about performance obligations:
Not applicable
5. Investment income
Unit: RMB
Item 2021 2020
investments income from disposal of long-term
132,058.00
equity investments
Dividend income from long-term equity investments
619,011,093.47
of subsidiaries
investments income from disposal of long-term
-50,327,104.67
equity investments in subsidiaries
328
Goertek Inc. Annual Report 2021
Investment income from derivative financial
127,863,191.52 125,660,675.74
instruments
Investment income from disposal of equity 69,366,960.61
Investment income from financial products 2,488,497.76
Profit or loss arising from derecognition of financial
-2,297,194.72
assets measured at amortised costs
Other 295,443.10
Total 197,716,898.27 694,476,722.54
6. Others
None
XVIII. Supplementary information
1. Statement of non-recurring gains and losses for the current period
√ Applicable □ Not applicable
Unit: RMB
Item Amount Explanation
Loss or gain from disposal of non-current assets -122,148,708.58
Government subsidies included in the current profits
During the reporting period, the Company
and losses (except those closely related to the
mainly obtained special funds for
Company's normal business, comply with national 464,119,437.91
enterprise innovation and development and
policies and regulations, and continuously grant in
other government subsidies.
accordance with a certain standard quota or quantity)
In addition to the effective hedging business related
to normal business of the Company, the profits and
losses from the changes in fair value arising from
holding held-for-trading financial assets and
held-for-trading financial liabilities, as well as the 185,179,920.90
investment income obtained from the disposal of
held-for-trading financial assets, held-for-trading
financial liabilities and available-for-sale financial
assets
Other non-operating revenue and expenditures other
13,554,671.71
than those mentioned above
Other profit and loss items that meet the definition of
2,603,363.20
non-recurring profit and loss
Less: Impact of income tax 84,270,186.15
329
Goertek Inc. Annual Report 2021
Impacted amount of minority shareholders'
16,756,676.88
equity
Total 442,281,822.11 --
Details of other profit and loss items that meet the definition of non-recurring profit and loss：
√ Applicable □ Not applicable
It mainly refers to returned service charge for withholding individual income tax and other fees.
Description of defining the non-recurring profit and loss items, which are listed in Explanatory Announcement No. 1 on Disclosure of
the Information regarding the Companies Offering Their Securities to the Public - Non-recurring Profit and Loss, as recurring profit
and loss
□ Applicable √ Not applicable
2. Net assets income rate and earnings per share
Earnings per share
Profit during the reporting period Weighted average return on net assets Basic earnings per share Diluted earnings per
(RMB / share) share (RMB / share)
Net profit attributable to ordinary
17.61% 1.29 1.28
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after
15.79% 1.15 1.15
deducting non-recurring gains and
losses
3. Differences in accounting data under domestic and foreign accounting standards
(1) Differences in net profits and net assets in the financial reports disclosed pursuant to international
accounting standards and Chinese accounting standards at the same time
□ Applicable √ Not applicable
(2) Differences in net profits and net assets in the financial reports disclosed pursuant to foreign accounting
standards and Chinese accounting standards at the same time
□ Applicable √ Not applicable
(3) Explanation of reasons for differences in accounting data under domestic and foreign accounting
standards; if the data audited by an overseas audit firm is adjusted for differences, the name of the
overseas firm shall be indicated.
None
330
Goertek Inc. Annual Report 2021
4. Others
None
Goertek Inc.
Chairman: Jiang Bin
March 29, 2022
331
